FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 0-25958
ND HOLDINGS, INC.
(Exact Name of small business issuer as Specified in its Charter)
North Dakota 45-0404061
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number
201 S. Broadway, Minot, North Dakota 58701
(Address of principal executive offices) (Zip Code)
(701) 852-5292
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 of 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
As of September 30, 1996, the Company had 8,161,844 shares of its no
par value common stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
FORM 10-QSB
ND HOLDINGS, INC.
INDEX
Part I: FINANCIAL INFORMATION Page No.
Item 1 Financial Statements 3
Consolidated Balance Sheets-
September 30, 1996 and December 31, 1995 (Unaudited) 5
Consolidated Statements of Operations-
Three months ended September 30, 1996
and 1995 (Unaudited) 6
Consolidated Statements of Operations-
Nine months ended September 30, 1996 and 1995 (Unaudited) 7
Consolidated Statements of Cash Flows-
Nine months ended September 30, 1996 and 1995 (Unaudited) 8
Notes to Unaudited Consolidated Financial Statements 9
Supplementary Information-Consolidated Pro Forma
Statements of Operations (Unaudited) 11
Financial Data Schedule 13
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II OTHER INFORMATION
Item 1 Legal Proceedings 16
Item 6 Exhibits and Reports on Form 8-K 16
Signatures 17
<PAGE>
ND HOLDINGS, INC. AND SUBSIDIARIES
MINOT, NORTH DAKOTA
MANAGEMENT'S UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS
AS OF
SEPTEMBER 30, 1996 AND 1995
<PAGE>
ND HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
SUPPLEMENTAL INFORMATION
Consolidated Proforma Statement of Operations
Financial Data Schedule
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS
September 30, December 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 434,732 $ 4,894,838
Securities available-for-sale 5,693 322,900
Accounts receivable 430,025 161,907
Prepaids 58,280 44,235
$ 928,730 $ 5,423,880
PROPERTY AND EQUIPMENT $ 421,582 $ 100,680
Less accumulated depreciation (131,698) (53,631)
Net property and equipment $ 289,884 $ 47,049
OTHER ASSETS
Deferred sales costs $ 2,709,169 $ 2,840,238
Deferred tax benefit 921,100 1,042,400
Covenant not to compete (net
ofamortization of $75,000
for 1996) 225,000 -
Investment adviser's agreement
(net ofamortization of $175,521
for 1996) 5,246,934 -
Registration costs and other assets 175,769 117,019
$ 9,277,972 $ 3,999,657
$ 10,496,586 $ 9,470,586
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Commissions and service fees payable $ 116,264 $ 17,781
Accounts payable 69,307 64,069
Notes payable 1,100,000 -
Current portion of long-term debt 51,000 10,000
Accrued interest payable 6,205 6,205
Payroll taxes payable 2,697 2,005
$ 1,345,473 $ 100,060
LONG-TERM LIABILITIES
Investment certificates $ 235,100 $ 270,100
Loan - MADC 25,000 -
Less current portion (51,000) (10,000)
$ 209,100 $ 260,100
REDEEMABLE STOCK
Common stock subject to rescission
exchange offer - 4,829,300 and
4,859,207 shares, respectively $ 9,600,000 $ 9,600,000
COMMON STOCK AND ACCUMULATED DEFICIT
Common stock - 20,000,000 shares authorized,
no par value; 3,332,544 shares issued and
outstanding $ 3,149,908 $ 3,149,908
Accumulated deficit (3,807,925) (3,661,382)
Unrealized gain (loss) on securities
available-for-sale 30 21,900
$ (657,987) $ (489,574)
$ 10,496,586 $ 9,470,586
<FN>
The accompanying notes are an intregral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30,
1996 1995 *
<S> <C> <C>
REVENUES
Fee income $ 757,484 $ 554,037
Commissions 61,669 36,766
Total revenue $ 819,153 $ 590,803
OPERATING EXPENSES
Compensation and benefits $ 223,522 $ 213,795
General and administrative expenses 216,992 209,232
Deferred sales costs recognized 255,393 295,535
Depreciation and amortization 94,601 94,516
Interest 46,268 11,725
Total operating expenses $ 836,776 $ 824,803
OPERATING INCOME (LOSS) $ (17,623) $ (234,000)
OTHER INCOME
Interest and dividends $ 8,266 $ 87,552
Trading securities gains (losses), net - (633)
Miscellaneous income 900 360
Total other income (loss) $ 9,166 $ 87,279
INCOME (LOSS) BEFORE INCOME
TAX (EXPENSE) BENEFIT $ (8,457) $ (146,721)
DEFERRED INCOME TAX (EXPENSE) BENEFIT (21,571) 39,970
NET INCOME (LOSS) $ (30,028) $ (106,751)
NET INCOME (LOSS) PER SHARE: $ - $ (.01)
Shares used in computing earnings
per share 8,168,166 8,215,534
* Proforma results (See Note 2)
<FN>
The accompanying notes are an integral oart of these financial statements
</TABLE>
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
1996 1995 *
<S> <C> <C>
REVENUES
Fee income $ 2,216,185 $ 1,539,475
Commissions 188,785 143,552
Total revenue $ 2,404,970 $ 1,683,027
OPERATING EXPENSES
Compensation and benefits $ 622,251 $ 602,756
General and administrative expenses 709,709 627,238
Deferred sales costs recognized 751,908 677,321
Depreciation and amortization 282,242 291,722
Interest 119,467 19,413
Total operating expenses $ 2,485,577 $ 2,218,450
OPERATING INCOME (LOSS) $ (80,607) $ (535,423)
OTHER INCOME (LOSS)
Interest and dividends $ 55,034 $ 239,474
Trading securities gains (losses), net 23,688 (48,829)
Miscellaneous income 8,013 916
Total other income (loss) $ 86,735 $ 191,561
INCOME (LOSS) BEFORE INCOME
TAX (EXPENSE) BENEFIT $ 6,128 $ (343,862)
DEFERRED INCOME TAX (EXPENSE) BENEFIT (98,071) 30,000
NET INCOME (LOSS) $ (91,943) $ (313,862)
NET INCOME (LOSS) PER SHARE: $ (.01) $ (.04)
Shares used in computing earnings
per shares 8,177,298 8,105,356
* Proforma results (See Note 2)
<FN>
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided (used) by
operating activities $ 153,565 $ 2,071,003
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment adviser's
agreement $ (5,422,455) $ -
Purchase of covenant not to compete (300,000) -
Purchase of available-for-sale securities (5,662) (1,361,423)
Proceeds from sale of available-for-sale
securities 324,688 1,206,297
Purchase of equipment (186,892) (17,776)
Other asset (increases) decreases (58,750) (46,040)
Net cash used by investing activities $ (5,649,071) $ (218,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term debt $ 1,500,000 $ -
Payments on short-term debt (400,000) -
Proceeds from long-term debt 25,000 -
Proceeds from issuing common stock
(net of stock issue costs) - 487,211
Redemption of common stock (54,600) (8,967)
Investment certificates redeemed (35,000) (5,000)
Net cash provided by financing
activities $ 1,035,400 $ 473,244
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (4,460,106) $ 2,325,305
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,894,838 1,160,063
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 434,732 $ 3,485,368
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ND HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of ND Holdings, Inc., a North Dakota
corporation, and its subsidiaries (collectively, the "Company"), included
herein, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted.
The consolidated financial statements include the accounts of the Company
and all of its subsidiaries after eliminating all significant intercompany
transactions and reflect all normally recurring adjustments which are, in
the opinion of management, necessary to present a fair statement of the
results of operations of the interim periods reported. The results of
operations for the nine months ended September 30, 1996 and 1995 are not
necessarily indicative of the results expected for the full year.
NOTE 2 - PROFORMA RESULTS
During the nine months ended September 30, 1996, the Company acquired the
outstanding stock of Ranson Company, Inc. (Ranson). The operating results
for the quarter and nine months ended September 30, 1996 include the revenue
and expenses for the Ranson managed portfolios. The operating results for
the quarter and nine months ended September 30, 1995 include proforma
information to include the results of the same period for Ranson, as though
the business combination occurred effective January 1, 1995.
NOTE 3 - SUPPLEMENTAL INFORMATION
The information included in the accompanying pro forma supplemental
information, as shown in the supplementary information, is presented only
to comply with the Securities and Exchange Commission's accounting rule,
Article 11 of Regulation S-X, and should not be used for any other purpose.
Such information has been compiled by management, without independent audit
or review.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES AND
RANSON COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended September 30, 1995
ND Holdings, Ranson Company,
Inc. and Inc. and Pro Forma Pro Forma
Subsidiaries Subsidiaries Adjustment Results
<S> <C> <C> <C> <C>
REVENUES
Fee income $ 379,067 $ 174,970 $ - $ 554,037
Commissions 14,090 22,676 - 36,766
Total revenue $ 393,157 $ 197,646 $ - $ 590,803
OPERATING EXPENSES
Compensation and benefits $ 175,175 $ 38,620 $ - $ 213,795
General and administrative
expenses 131,870 77,362 - 209,232
Deferred sales costs recognized295,535 - - 295,535
Depreciation and amortization 3,000 696 90,820 94,516
Interest 11,725 - - 11,725
Total operating expenses $ 617,305 $ 116,678 $ 90,820 $ 824,803
OPERATING INCOME (LOSS) $ (224,148) $ 80,968 $ (90,820) $ (234,000)
OTHER INCOME (LOSS)
Interest and dividends $ 87,552 $ - $ - $ 87,552
Trading securities gains
(losses), net (957) 324 - (633)
Miscellaneous income 360 - - 360
Total other income (loss) $ 86,955 $ 324 $ - $ 87,279
INCOME (LOSS) BEFORE
INCOME TAX (EXPENSE)
BENEFIT $ (137,193) $ 81,292 $ (90,820) $ (146,721)
DEFERRED INCOME
TAX (EXPENSE) BENEFIT 71,670 - (31,700) 39,970
NET INCOME (LOSS) $ (65,523) $ 81,292 $ (122,520) $ (106,751)
<FN>
The accompanying notes are an integral part of the proforma supplemental information
</TABLE>
<PAGE>
<TABLE>
ND HOLDINGS, INC. AND SUBSIDIARIES AND
RANSON COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS (CONTINUED)
(UNAUDITED)
<CAPTION>
Nine Months Ended September 30, 1995
ND Holdings, Ranson Company,
Inc. and Inc. and Pro Forma Pro Forma
Subsidiaries Subsidiaries Adjustment Results
<S> <C> <C> <C> <C>
REVENUES
Fee income $ 1,072,944 $ 466,531 $ - $ 1,539,475
Commissions 66,557 76,995 - 143,552
Total revenue $ 1,139,501 $ 543,526 $ - $ 1,683,027
OPERATING EXPENSES
Compensation and benefits $ 486,300 $ 116,456 $ - $ 602,756
General and administrative
expenses 468,689 158,549 - 627,238
Deferred sales costs recognized 677,321 - - 677,321
Depreciation and amortization 17,161 2,101 272,460 291,722
Interest 19,413 - - 19,413
Total operating expenses $ 1,668,884 $ 277,106 $ 272,460 $ 2,218,450
OPERATING INCOME (LOSS) $ (529,383) $ 266,420 $ (272,460) $ (535,423)
OTHER INCOME (LOSS)
Interest and dividends $ 239,474 $ - $ - $ 239,474
Trading securities gains
(losses), net (53,708) 4,879 - (48,829)
Miscellaneous income 916 - - 916
Total other income (loss) $ 186,682 $ 4,879 $ - $ 191,561
INCOME (LOSS) BEFORE
INCOME TAX (EXPENSE)
BENEFIT $ (342,701) $ 271,299 $ (272,460) $ (343,862)
DEFERRED INCOME
TAX (EXPENSE) BENEFIT 134,000 - (104,000) 30,000
NET INCOME (LOSS) $ (208,701) $ 271,299 $ (376,460) $ (313,862)
<FN>
The accompanying notes are an integral part of the proforma supplemental information
</TABLE>
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three Months ended September 30, 1996 compared to three months ended
September 30, 1995. (Management's Unaudited Statements of Operations)
Total operating revenues for the three months ended September 30, 1996
were $819,153 representing a 39% increase from the $590,803 for the
comparable period of 1995. Fee revenues were $757,484 in July through
September of 1996; (92% of operating revenues) as compared to $554,037
for the third quarter of 1995 (94% of operating revenue), representing
a 37% increase over the previous period. Commission income totaled
$61,699 and $36,766 for the three months ended September 30, 1996 and
1995 respectively, a $24,903 increase between periods.
The substantial increase in management fee revenues in the first three
quarters of 1996 from the same period in 1995 can be directly attributed
to the increase of the fund asset base upon which the fees are based as
a result of the acquisition of The Ranson Company, Inc. in January of 1996.
The acquisition of The Ranson Company brought an additional $180,000,000 of
fund assets under the Company's management.
Expenses for the three months ended September 30, 1996 increased only 1%
from the same period of 1995 from $824,803 to $836,776. Compensation and
benefits at $213,795 and $223,522, respectively, comprise 26% and 27%, of
total expenses for the 1995 and 1996 third quarter periods. Compensation
and benefits expenses were not significantly changed from the same period
of 1995. The most significant expense item is "deferred sales costs
recognized." During the three month period ended September 30, 1996 the
expense was $255,393 compared to $295,535 for the same period of 1995.
This amortization expense item is a result of prior accumulations of
capitalized commissions paid on no load funds which are now being amortized
to expense in accordance with the schedule established by the Company.
As a result of the large use of substantial liquid assets to acquire
The Ranson Company in January of 1996, the Registrant recorded substantially
reduced "other income" income from interests and dividends of $8,266 in the
three month period ended September 30, 1996 compared to $87,552 in the same
period of 1995.
As a result of these factors, the Registrant reported a net loss before
income tax (expense) benefit and cumulative effect adjustment of $8,457
for the three months ended September 30, 1996 versus a net loss of $146,721
for the comparable period of 1995.
<PAGE>
Nine Months ended September 30, 1996 compared to nine months ended
September 30, 1995. (Management's Unaudited Statements of Operations)
Total operating revenues for the nine months ended September 30, 1996
were $2,404,970 representing a 43% increase from the $1,683,027 for the
comparable period of 1995. Fee revenues were $2,216,185 in January through
September of 1996; (92% of operating revenues) as compared to $1,539,475 for
the first nine months of 1995 (91% of operating revenue), representing a 44%
increase over the previous period. Commission income totaled $188,785 and
$143,552 for the nine months ended September 30, 1996 and 1995 respectively,
an $45,233 increase between periods.
The increase in management fee revenues in the first three quarters of 1996
from the same period in 1995 can be directly attributed to the substantial
increase in the funds under management resulting from the acquisition of
The Ranson Company, Inc. in January of 1996. Approximately $180,000,000 of
assets managed by The Ranson Company were brought under the Company's
management. The Company's fees income is based upon assets under management.
Expenses for the nine months ended September 30, 1996 increased only 12% from
the same period of 1995 from $2,218,450 to $2,485,577. Compensation and
benefits at $602,756 and $622,251 respectively, comprise 27% and 25%, of
total expenses for the 1995 and 1996 nine month periods. Compensation and
benefits expenses increased 3% as compared to the same period of 1995. The
expansion of the family of Funds and amortization of costs related to past
accumulations of funds under management also resulted in other expenses
increasing over the previous year. The most significant expense item is
"deferred sales costs recognized." During the nine month period ended
September 30, 1996 the expense was $751,908 compared to $677,321 for the
same period of 1995. Interest expense increased substantially from $19,413
to $119,467 as a result of debt incurred to purchase The Ranson Company, Inc.
The Company recorded "other income" income from interests and dividends was
reduced to $55,034 in the nine month period ended September 30, 1996 compared
to $239,474 in the same period of 1995 because the Company's liquid assets
were substantially reduced by the purchase of The Ranson Company, Inc.
As a result of these factors, the Registrant reported net income before
income tax expense of $6,128 for the nine months ended September 30, 1996
versus a net loss of $343,862 for the comparable period of 1995.
Liquidity and Capital Resources
The Company's most liquid assets are cash and cash equivalents. The levels
of these assets are dependent on the Company's operating, financing and
investing activities during any given period.
Cash and cash equivalents at September 30, 1996 totaled $434,732.
<PAGE>
Although the Company has relied upon sales of its common stock for its past
liquidity and growth, management believes that its current liquid position
will be sufficient to meet the short term cash needs of the Company based
on its present operations.
The Ranson Company, Inc. Acquisition Effect Upon Liquidity and
Capital Resources
As described in Part II, Item 5 of the Company's 10QSB report for the period
ended March 31, 1996, the Company completed the acquisition of The Ranson
Company, Inc. on January 5, 1996.
The cost to the Company of the acquisition of The Ranson Company, Inc. on
January 5, 1996 was $6,196,403. $5,083,274 was paid directly to The Ranson
Company, Inc. shareholders on January 5, 1996 and $1,113,129 was placed in
escrow pending final determination of the purchase price on July 3, 1996.
$4,696,403 of the $6,196,403 purchase price came from cash and cash
equivalents held by the Company. $1,500,000 of the purchase price was
borrowed on a short term note obtained January 5, 1996.
The Rescission Offer Effect on Liquidity and Capital Resources
As described in Part II, Item I hereof the Company has completed an offer
cash rescission to all unaffiliated purchaser's of the Company's Common
Stock after September 1, 1992. By a registration statement effective
August 29, 1996 holders of Common Stock totaling 4,859,207 shares were
offered the option of electing to revoke their ownership of the Company
and receive from the Company such purchaser's cash paid for the unregistered
Common Stock, plus accrued interest at the legal rate in the state of
purchase, or rescind the original purchase and receive (after registration
effectiveness) registered Common Stock on a one share for one share basis.
At the termination of the cash rescission offering, only five persons offered
the cash rescission option accepted such offer, a total of $139,737 in cash
was paid to the five rescinding shareholders for a total of 66,165 common
shares.
Pending Best Effort Offering Effect on Liquidity and Capital Resources
In September 1996, the Company filed and has in process, but not yet
effective, a registration statement on Form S-1 (SEC File No. 333-11509)
for the potential registration and offer to the public of up to 3,000,000
shares of common stock, including 453,581 shares owned by certain shareholders
of the Company. The anticipated offering is a Best Efforts (no minimum)
registration. The offering price is not yet determined and will be established
by a Qualified Independent Underwriter or an unrelated managing underwriter.
<PAGE>
ND HOLDINGS, INC. AND SUBSIDIARIES
PART II-OTHER INFORMATION
Item 1: Legal Proceedings
Except for the regulatory issues described below, the Company is not involved
in any material pending legal proceedings, nor is management aware of any
threatened litigation.
Regulatory matters with the NASD and SEC involving ND Capital, Inc., the
Company's subsidiary, have been resolved. Offers of cash rescission to any
unaffiliated purchaser who purchased the Company's Common Stock between
September 1, 1992 and March 9, 1995 (common shares totaling 4,859,207) was
undertaken and completed by means of a Rescission Exchange Offering on a
Form S-1 registration statement effective August 29, 1996. Only five
shareholders accepted cash rescission. A total of $139,737 was paid to
the five shareholders for a total of 66,165 shares offered for rescission.
Section 5(a) of the Securities Act of 1933 requires that a registration
statement pursuant to the requirements set forth in Section 6 of the
Securities Act of 1933 be filed with the U.S. Securities and Exchange
Commission (the "SEC") and in effect prior to offers or sales of a security.
The Company relied upon the "intrastate" exemption provided by Section 3(11)
of the Securities Act of 1933 and the North Dakota exemption from registration
provided by NDCC 10-04-05(13) for securities issued by a venture capital
corporation organized under Chapter 10-30.1 in making sales of its common
stock from its inception in 1987 until March 9, 1995. As a result of sales
to eleven persons that SEC and NASD examiners consider to be nonresidents of
North Dakota, the exemption from registration required by SEC 5(a) of the
1933 Securities Act may not be available, thereby creating liability under
federal securities laws. The Company does not believe that sales to
nonresidents of North Dakota effects its exemption from registration with
the North Dakota Securities Commission. Federal law claims may be brought
for up to three years after the date of the offer of the unregistered Common
Stock.
Although compliance with the requirements of the applicable state rescission
may bar future state claims, acceptance or rejection of the offer of
rescission may not bar holders from asserting any claims against the Company
for alleged violations of Federal Securities Laws. Contingent liability of
the Company may not necessarily have been eliminated by making the Rescission
Offer.
Item 6: Exhibits and Reports on Form 8-K
No Form 8-K was filed during the reporting period.
<PAGE>
ND HOLDINGS, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Robert E. Walstad November 14, 1996
Robert E. Walstad Date
President and Chairman of the Board
/s/ Dan Korgel November 14, 1996
Dan Korgel Date
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 434,000
<SECURITIES> 6,000
<RECEIVABLES> 430,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 929,000
<PP&E> 422,000
<DEPRECIATION> 132,000
<TOTAL-ASSETS> 10,497,000
<CURRENT-LIABILITIES> 1,346,000
<BONDS> 209,000
0
0
<COMMON> 10,705,000
<OTHER-SE> (1,763,000)
<TOTAL-LIABILITY-AND-EQUITY> 10,497,000
<SALES> 0
<TOTAL-REVENUES> 2,492,000
<CGS> 0
<TOTAL-COSTS> 2,367,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 119,000
<INCOME-PRETAX> 6,000
<INCOME-TAX> 98,000
<INCOME-CONTINUING> (92,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (92,000)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
