UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-28378
AMERICAN ASSET ADVISERS TRUST, INC.
MARYLAND CORPORATION IRS IDENTIFICATION NO.
76-0410050
8 GREENWAY PLAZA, SUITE 824 HOUSTON, TX 77046
(713) 850-1400
Indicate by check mark whether the issuer (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the issuer was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited)
ASSETS
Cash and cash equivalents $ 1,295,473
Accounts receivable 38,046
Property:
Escrow deposits 11,000
Land 6,836,971
Land under development 750,000
Buildings 9,958,973
Construction in progress 8,343,617
25,900,561
Accumulated depreciation (398,221)
Total property 25,502,340
Net investment in direct financing leases 3,163,740
Other assets:
Prepaid acquisition costs 401,762
Accrued rental income 198,421
Organization costs, net of accumulated amortization of $239,361 74,407
Total other assets 674,590
TOTAL ASSETS $30,674,189
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 8,918,884
Accounts payable 16,047
Security deposit 15,050
TOTAL LIABILITIES 8,949,981
Minority interest 5,256,065
Commitments (Note 6)
Shareholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized,
none issued
Common stock, $.01 par value, 100,000,000 shares authorized,
1,994,804 shares issued and outstanding 19,948
Capital in excess of par value 17,806,708
Accumulated distributions in excess of earnings (1,358,513)
TOTAL SHAREHOLDERS' EQUITY 16,468,143
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $30,674,189
See Notes to Consolidated Financial Statements.
-2-
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
(Unaudited)
Year to Date
1998 1997
Revenues:
Rental income from operating leases $436,009 $252,610
Earned income from direct financing leases 85,103 84,841
Interest income 19,782 29,528
Total revenues 540,894 366,979
Expenses:
General operating and administrative 68,793 31,544
Reimbursements and fees to related party 17,660 13,692
Interest 26,895 3,000
Depreciation 56,949 28,437
Amortization 15,688 15,688
Potential acquisition costs 182,322 -
Total expenses 368,307 92,361
Income before minority interest in net income of
consolidated joint ventures 172,587 274,618
Minority interest in net income of consolidated
joint ventures (135,359) (93,451)
Net income $ 37,228 $181,167
Basic earnings per share $ 0.02 $ 0.14
Diluted earnings per share $ 0.02 $ 0.13
Weighted average number of common shares
outstanding 1,926,132 1,305,192
Weighted average number of common shares
outstanding plus dilutive potential common shares 1,926,132 1,366,671
See Notes to Consolidated Financial Statements.
-3-
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
(Unaudited)
Year to Date
1998 1997
Cash flows from operating activities:
Net income $ 37,228 $ 181,167
Adjustments to reconcile net income to net cash
flows from operating activities:
Amortization 15,688 15,688
Depreciation 56,949 28,437
Decrease in accounts receivable 86,554 5,119
Increase (decrease) in accounts payable (92,776) 3,409
Cash receipts from direct financing leases
less than income recognized (2,544) (2,284)
Decrease in escrow deposits, net of
minority interest partners 100 -
Increase in accrued rental income (30,242) (19,473)
Increase in minority interest 135,359 93,451
Net cash provided by operating activities 206,316 305,514
Cash flows from investing activities:
Acquisition of real estate:
Accounted for under the operating lease method (2,379,266) (1,999)
Construction in progress (1,352,257) -
Change in prepaid acquisition costs (29,076) (80,444)
Net cash used in investing activities (3,760,599) (82,443)
Cash flows from financing activities:
Proceeds from issuance of stock, net 1,142,674 1,373,907
Proceeds from notes payable 2,787,395 -
Distributions paid to shareholders (341,965) (227,386)
Distributions to minority interest partners (140,088) (94,713)
Net cash provided by financing activities 3,448,016 1,051,808
Net (decrease) increase in cash and cash equivalents (106,267) 1,274,879
Cash and cash equivalents at beginning of period 1,401,740 1,616,311
Cash and cash equivalents at end of period $ 1,295,473 $ 2,891,190
See Notes to Consolidated Financial Statements.
-4-
AMERICAN ASSET ADVISERS TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
American Asset Advisers Trust, Inc. ("the Company") was
incorporated on August 17, 1993 as a Maryland corporation. The
initial issuance of 20,001 shares of stock for $200,010 was to
American Asset Advisers Realty Corporation ("AAA"). Commencing
March 17, 1994, the Company offered up to 2,000,000 additional
shares of common stock together with 1,000,000 warrants. The
warrants were exercisable at $9 per share until March 15,
1998. The offering period of the initial public offering
terminated on March 15, 1996 with 1,008,252 shares being
issued. On June 18, 1996, the Company commenced a follow-on
offering of up to 2,853,659 additional shares of its common
stock. The offering will terminate June 17, 1998, unless
terminated earlier. As of March 31, 1998, 966,551 shares in
this second offering were issued, bringing the total shares
issued and outstanding to 1,994,804 shares.
The Company was formed with the intention to qualify and to
operate as a real estate investment trust under federal tax
laws. The Company will acquire commercial and industrial
properties using invested and borrowed funds. AAA, a related
party, manages the selection, acquisition and supervision of
the operation of the properties.
The consolidated financial statements include the accounts of
American Asset Advisers Trust, Inc. and its six joint ventures
with related parties. The Company owns greater than 50% of
these joint ventures and exercises control over operations.
The financial records of the Company are maintained on the
accrual basis of accounting whereby revenues are recognized
when earned and expenses are reflected when incurred.
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
There has been no cash paid for income taxes during 1998 or
1997. For the three months ended March 31, 1998, the Company
paid interest of $153,503, of which $126,608 was capitalized
on properties under construction. There was no other cash paid
for interest during the first quarter of 1998 or 1997.
Real estate is leased to others on a net lease basis whereby
all operating expenses related to the properties including
property taxes, insurance and common area maintenance are the
responsibility of the tenant. The leases are accounted for
under the operating method or the direct financing method.
Under the operating lease method, the properties are recorded
at cost. Rental income is recognized ratably over the life of
the lease and depreciation is charged based upon the estimated
useful life of the property.
Under the direct financing lease method, properties are
recorded at their net investment. Unearned income is deferred
and amortized to income over the life of the lease so as to
produce a constant periodic rate of return.
Expenditures related to the development of real estate are
carried at cost plus capitalized carrying charges, acquisition
-5-
costs and development costs. Carrying charges, primarily
interest and loan acquisition costs, and direct and indirect
development costs related to buildings under construction are
capitalized as part of construction in progress.
Management reviews its properties for impairment whenever
events or changes in circumstances indicate that the carrying
amount of the assets, including accrued rental income, may not
be recoverable through operations. Management determines
whether an impairment in value occurred by comparing the
estimated future cash flows (undiscounted and without interest
charges), including the residual value of the property, with
the carrying cost of the individual property. If an
impairment is indicated, a loss will be recorded for the
amount by which the carrying value of the asset exceeds its
fair value.
Buildings are depreciated using the straight-line method over
an estimated useful life of 39 years.
Organization costs incurred in the formation of the Company
are amortized on a straight-line basis over five years.
Issuance costs incurred in the raising of capital through the
sale of common stock are treated as a reduction of
shareholders' equity.
The Company is qualified as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, and is,
therefore, not subject to Federal income taxes provided it
meets all conditions specified by the Internal Revenue Code
for retaining its REIT status, including the requirement that
at least 95% of its real estate investment trust taxable
income is distributed by March 15 of the following year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
The Company believes the carrying value of financial
instruments consisting of cash, cash equivalents, accounts
receivable and accounts and notes payable approximate their
fair value.
The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB
and do not include all of the disclosures required by
generally accepted accounting principles. The financial
statements reflect all normal and recurring adjustments which
are, in the opinion of management, necessary to present a fair
statement of results for the three month periods ended March
31, 1998 and March 31, 1997.
The financial statements of American Asset Advisers Trust,
Inc. contained herein should be read in conjunction with the
financial statements included in the Company's annual report
on Form 10-KSB for the year ended December 31, 1997.
2. RELATED PARTY TRANSACTIONS
AAA owns 20,001 shares of the Company's stock. The common
stock of AAA is wholly owned by the president and director of
the Company. In addition, the Company has entered into an
Omnibus Services Agreement with AAA whereby AAA provides
property acquisition, leasing, administrative and management
services for the Company. Reimbursements and fees of $17,660
and $13,692 were incurred and charged to expense for the first
quarter of 1998 and 1997, respectively.
-6-
AAA has incurred certain costs in connection with the
organization and syndication of the Company. Reimbursement of
these costs become obligations of the Company in accordance
with the terms of the offering. Costs of $18,974 and $37,992
were incurred by AAA for the first quarter of 1998 and 1997,
respectively, in connection with the issuance and marketing of
the Company's stock. These costs are reflected as issuance
costs and are recorded as a reduction to capital in excess of
par value.
Acquisition fees, including real estate commissions, finders
fees, consulting fees and any other non-recurring fees
incurred in connection with locating, evaluating and selecting
properties and structuring and negotiating the acquisition of
properties are included in the basis of the properties.
Acquisition fees of $55,428 and $80,063 were incurred and paid
to AAA for the first quarter of 1998 and 1997, respectively.
Acquisition fees paid to AAA included $401,762 that was earned
prior to purchasing certain properties.
On August 8, 1997, the Company entered into a loan agreement
as the lender with AmReit Development Corp., an entity with
common management, in the amount of $2,247,254 for the purpose
of developing a property in Lake Jackson, Texas that was
acquired by the Company upon completion of the property. As
of March 31, 1998, the loan was repaid in full. The loan had
interest at the prime lending rate.
On October 16, 1997, the Company entered into a joint venture
with AAA Net Realty XI, Ltd., an entity with common
management. The joint venture was formed for the purchase of
a property, which is being operated as a Hollywood Video store
in Lafayette, Louisiana. The property was purchased on October
31, 1997 after the construction was completed. The Company's
interest in the joint venture is 74.58%.
On February 11, 1997, the Company entered into a joint venture
with AAA Net Realty XI, Ltd. The joint venture was formed for
the purchase of a property, which is being operated as a Just
For Feet retail store in Baton Rouge, Louisiana. The property
was purchased on June 9, 1997 after the construction was
completed. The Company's interest in the joint venture is 51%.
On September 23, 1996, the Company entered into a joint
venture with AAA Net Realty XI, Ltd. The joint venture was
formed for the purchase of a parcel of land in The Woodlands,
Texas upon which the tenant, Bank United, constructed a branch
bank building at its cost. At the termination of the lease
the improvements will be owned by the joint venture. The
Company's interest in the joint venture is 51%.
On April 5, 1996, the Company entered into a joint venture
with AAA Net Realty Fund XI, Ltd. and AAA Net Realty Fund X,
Ltd., entities with common management, for the purchase of a
property which is being operated as a Just For Feet retail
store in Tucson, Arizona. The property was purchased on
September 11, 1996 after the construction was completed. The
Company's interest in the joint venture is 51.9%.
On September 12, 1995, the Company entered into a joint
venture agreement with AAA Net Realty Fund XI, Ltd. for the
purchase of a property, which is being operated as a
Blockbuster Music Store in Wichita, Kansas. The Company's
interest in the joint venture is 51%.
3. NOTES PAYABLE
In December 1997, the Company entered into an amended and
restated unsecured revolving credit agreement (the "Amended
Credit Agreement") with a borrowing capacity up to $15,000,000
through February 1999. The actual amount available to the
Company is dependent on certain covenants such as the value of
unencumbered assets. The Amended Credit Agreement currently
bears interest at 2.00% over varying London Interbank Offered
Rates and it is being used to acquire additional properties.
As of March 31, 1998, $8,768,884 was outstanding under the
Amended Credit Agreement.
-7-
In addition, the Company has a note payable to its president
in the amount of $150,000 plus accrued interest totaling
$20,000 as of March 31, 1998. This note is unsecured, payable
upon demand and bears interest at 8%. Interest incurred on
this note was $3,000 in the first quarter of 1998 (which was
capitalized) and $3,000 in the first quarter of 1997.
4. MAJOR TENANTS
The following schedule summarizes rental income by lessee for
the three months ended March 31, 1998 and March 31, 1997:
Year to Date
1998 1997
Tandy Corporation $ 27,225 $ 27,225
America's Favorite Chicken Co. 24,566 24,482
Blockbuster Music Retail, Inc. 94,476 94,476
One Care Health Industries, Inc. 50,409 50,409
Just For Feet, Inc. 184,552 101,410
Bank United 39,449 39,449
Hollywood Entertainment Corp. 72,137 -
OfficeMax, Inc. 28,298 -
$521,112 $337,451
5. EARNINGS PER SHARE
Basic earnings per share has been computed by dividing net
income by the weighted average number of common shares
outstanding. Diluted earnings per share has been computed by
dividing net income (as adjusted) by the weighted average
number of common shares outstanding plus dilutive potential
common shares.
6. COMMITMENTS
At March 31, 1998, the Company is committed to incur
additional costs of approximately $760,000 in connection with
properties under development.
At a special meeting of the Company's Board of Directors held
on December 31, 1997, the Board of Directors, other than Mr.
H. Kerr Taylor, who abstained from the vote due to his
interest in the transaction, approved the Company's becoming a
self-managed REIT through the acquisition of AAA. In pursuing
this acquisition, the Company will incur additional costs of
approximately $100,000. Such costs incurred in 1998 of
$182,322 were charged to expense. If approved by the
shareholders and consummated, the Company will initially issue
213,260 shares. The fair market value of the shares paid in
consideration will be charged to expense. In addition, the
Company may issue 686,740 additional shares upon the
achievement of certain goals. The fair market value of such
shares will be charged to expense.
-8-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company was organized on August 17, 1993 to acquire, either
directly or through joint venture arrangements, undeveloped,
newly constructed and existing net-lease real estate that is
located primarily on corner or out-parcel locations in strong
commercial corridors, to lease on a net-lease basis to tenants
having a minimum net worth of $40 million and to hold the
properties with the expectation of equity appreciation producing
a steadily rising income stream for its shareholders.
AAA has conducted a comprehensive review of its computer systems
to identify the systems that could be affected by the Year 2000
Issue. The Year 2000 Issue is the result of computer programs
being written using two digits rather than four to define the
applicable year. Any programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the
year 2000. AAA's hardware and software are believed to be Year
2000 compliant. Accordingly, the Company does not expect to incur
any material costs in connection with the compliance of the Year
2000 Issue.
LIQUIDITY AND CAPITAL RESOURCES
The initial issuance of 20,001 shares of stock for $200,010 was
to AAA. On March 17, 1994, the Company commenced an offering of
2,000,000 Shares of Common Stock, together with 1,000,000
Warrants (collectively "Securities"). Until the completion of the
offering in March 1996, the Securities were offered on the basis
of two (2) Shares of Common Stock and one (1) Warrant for a total
purchase price of $20.00. The Shares and Warrants are separately
transferable by an investor. Each Warrant entitled the holder to
purchase one Share for $9.00 until March 15, 1998. The offering
period for the initial public offering terminated on March 15,
1996 with gross proceeds totaling $10,082,520 (1,008,252 shares).
On June 18, 1996, the Company commenced a follow-on offering of
up to $29,250,000 (2,853,659 shares) of additional shares of its
common stock. The offering will terminate June 17, 1998 unless
terminated earlier. As of March 31, 1998, gross proceeds had
been received for $9,838,388 (966,551 shares) in this second
offering bringing the total gross proceeds to $20,120,918
(1,994,804 shares).
In December 1997, the Company entered into an amended and
restated unsecured revolving credit agreement (the "Amended
Credit Agreement") with a borrowing capacity up to $15,000,000
through February 1999. The actual amount available to the
Company is dependent on certain covenants such as the value of
unencumbered assets. The Amended Credit Agreement currently bears
interest at 2.00% over varying London Interbank Offered Rates and
it is being used to acquire additional properties. As of March
31, 1998, $8,768,884 was outstanding under the Amended Credit
Agreement. These funds were advanced to third parties and
entities with common management to develop properties that will
be acquired by the Company upon completion.
The Company has an investment strategy of acquiring properties
and leasing them under net-leases to corporations having a
minimum net worth of $40 million, which strategy minimizes the
Company's operating expenses. The Company believes that the
leases will continue to generate cash flow in excess of operating
expenses. Due to low operating expenses and ongoing cash flow,
the Company does not believe that large working capital reserves
are necessary at this time. In addition, because all leases of
the Company's Properties are and are intended to continue to be
on a net-lease basis, it is not anticipated that a large reserve
for maintenance and repairs will be necessary. The Company
intends to distribute a significant portion of its funds from
operations unless it becomes necessary to maintain additional
reserves.
-9-
As of March 31, 1998, the Company had acquired seven Properties
directly and five Properties through joint ventures with entities
with common management and had invested $14,649,515, exclusive of
any minority interests, including certain acquisition expenses
related to the Company's investment in these properties. These
expenditures resulted in a corresponding decrease in the
Company's liquidity.
Until the Company acquires Properties, proceeds are held in
short-term, highly liquid investments that the Company believes
to have appropriate safety of principal. This investment strategy
has allowed, and continues to allow, high liquidity to facilitate
the Company's use of these funds to acquire properties at such
time as properties suitable for acquisition are located. At
March 31, 1998, the Company's cash and cash equivalents totaled
$1,295,473.
Inflation has had very little effect on income from operations.
Management expects that increases in store sales volumes due to
inflation as well as increases in the Consumer Price Index
(C.P.I.), may contribute to capital appreciation of the Company
Properties. These factors, however, also may have an adverse
impact on the operating margins of the tenants of the Properties.
FUNDS FROM OPERATIONS
Funds from operations (FFO) increased $66,895 or 32% to $276,499
for the three month period ended March 31, 1998 from $209,604 for
the three month period ended March 31, 1997. The Company has
adopted the National Association of Real Estate Investment Trusts
(NAREIT) definition of FFO. FFO is calculated as net income
(computed in accordance with generally accepted accounting
principles) excluding gains or losses from sales of property,
depreciation and amortization of real estate assets, and
nonrecurring items of income or expense. For purposes of the
table below, FFO excludes the nonrecurring potential acquisition
costs. FFO is generally considered by industry analysts to be the
most appropriate measure of performance and does not necessarily
represent cash provided by operating activities in accordance
with generally accepted accounting principles and are not
necessarily indicative of cash available to meet cash needs.
Management considers FFO an appropriate measure of performance of
an equity REIT because it is predicated on cash flow analysis.
The Company's computation of FFO may differ from the methodology
for calculating FFO utilized by other equity REIT's and,
therefore, may not be comparable to such other REIT's. FFO is
not defined by generally accepted accounting principles and
should not be considered an alternative to net income as an
indication of the Company's performance.
Below is the reconciliation of net income to funds from operations for
the three months ended March 31:
1998 1997
Net income $ 37,228 $ 181,167
Plus depreciation 56,949 28,437
Plus potential acquisition costs 182,322 -
Total funds from operations $ 276,499 $ 209,604
Cash flows from operating activities, investing activities, and
financing activities for the three months ended March 31 are
presented below:
1998 1997
Operating activities $ 206,316 $ 305,514
Investing activities $(3,760,599) $ (82,443)
Financing activities $ 3,448,016 $ 1,051,808
-10-
RESULTS OF OPERATIONS
During the three months ended March 31, 1998 and March 31, 1997,
the Company owned and leased 12 and 8 properties, respectively.
During the three months ended March 31, 1998 and March 31, 1997,
the Company earned $521,112 and $337,451, respectively, in rental
income from operating leases and earned income from direct
financing leases. This 54 percent increase in rental income and
earned income is primarily attributable to rental income earned
on the four additional properties owned during 1998.
During the three months ended March 31, 1998 and March 31, 1997,
the Company's expenses were $368,307 and $92,361, respectively.
The $275,946 increase in expenses is primarily attributable to
$182,322 of costs incurred during the first quarter of 1998
related to potential acquisition costs related to the proposed
acquisition of the Company's adviser. The increase is also
attributable to (i) a $37,249 increase in general operating and
administrative expenses primarily attributable to an increase in
legal fees and director fees, and (ii) a $28,512 increase in
depreciation as a result of the depreciation of the additional
properties owned during 1998, and (iii) a $23,895 increase in
interest expense as a result of higher average borrowing levels.
-11-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the issuer has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
American Asset Advisers Trust, Inc.
(Issuer)
May 15, 1998 /s/ H. Kerr Taylor
Date H. Kerr Taylor, President
May 15, 1998 /s/ L. Larry Mangum
Date L. Larry Mangum
(Principal Accounting Officer)
-13-
EXHIBIT 11
AMERICAN ASSET ADVISERS TRUST, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
Year to Date
1998 1997
BASIC EARNINGS PER SHARE:
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,926,132 1,305,192
NET INCOME $ 37,228 $ 181,167
BASIC EARNINGS PER SHARE $ 0.02 $ 0.14
DILUTED EARNINGS PER SHARE:
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,926,132 1,305,192
SHARES ISSUABLE FROM ASSUMED
CONVERSION OF STOCK WARRANTS - 61,479
TOTAL WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING, AS ADJUSTED 1,926,132 1,366,671
NET INCOME $ 37,228 $ 181,167
DILUTED EARNINGS PER SHARE $ 0.02 $ 0.13
-14-
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,295,473
<SECURITIES> 0
<RECEIVABLES> 38,046
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,333,519
<PP&E> 25,900,561
<DEPRECIATION> 398,221
<TOTAL-ASSETS> 30,674,189
<CURRENT-LIABILITIES> 8,949,981
<BONDS> 0
0
0
<COMMON> 19,948
<OTHER-SE> 17,806,708
<TOTAL-LIABILITY-AND-EQUITY> 30,674,189
<SALES> 521,112
<TOTAL-REVENUES> 540,894
<CGS> 0
<TOTAL-COSTS> 368,307
<OTHER-EXPENSES> 135,359
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37,228
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,228
<EPS-PRIMARY> .02
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