<PAGE> 1
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 0-26354
LOGAN INTERNATIONAL CORP.
(Exact Name of Small Business Issuer as Specified in Its Charter)
<TABLE>
<CAPTION>
WASHINGTON 91-1636980
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
<S> <C>
#108 - 1201 SW 7th Street
P.O. Box 860, Renton, WA 98055-0860
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Issuer's Telephone Number, Including Area Code: (206) 271-3550
#1250, 400 Burrard Street, Vancouver, British Columbia, Canada, V6C 3A6
(Former Address, if Changed Since Last Report)
Check whether the issuer:(1) filed all reports required to be filed by Section
13 or 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
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
<TABLE>
<CAPTION>
Class Outstanding at June 30, 1996
------------------- ----------------------------
<S> <C>
Common Stock, $0.01 6,620,726
par value
</TABLE>
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
==============================================================================
<PAGE> 2
FORWARD-LOOKING STATEMENTS
Statements in this report, to the extent they are not based on historical
events, constitute forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, evaluation of market
conditions, the outcome of legal proceedings, the adequacy of reserves, or
other business plans. Investors are cautioned that forward-looking statements
are subject to an inherent risk that actual results may vary materially from
those described herein. Factors that may result in such variance, in addition
to those accompanying the forward-looking statements, include changes in
interest rates, commodity prices, and other economic conditions; actions by
competitors; changing weather conditions and other natural phenomena; actions
by government authorities; uncertainties associated with legal proceedings;
technological development; future decisions by management in response to
changing conditions; and misjudgments in the course of preparing forward-
looking statements.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LOGAN INTERNATIONAL CORP.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited)
FORM 10-QSB
QUARTERLY REPORT - PAGE 2
<PAGE> 3
LOGAN INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
ASSETS
<S> <C> <C>
Cash $ 181,236 $ 260,684
Investments in available-for-sale securities 6,315,692 274,685
Real estate 7,534,187 9,340,552
Other assets 103,859 31,066
------------ ------------
$ 14,134,974 $ 9,906,987
============ ============
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
Liabilities
Accounts payable $ 202,548 $ 309,503
Debt
Secured 3,240,744 5,270,816
Due to affiliate - 200,000
Redeemable preferred stock 143,439 143,439
Interest payable 374,964 459,398
------------ ------------
3,961,695 6,383,156
Shareholders' equity
Common shares 66,207 65,207
Preferred shares 6,000,000 -
Additional paid-in capital 6,268,471 6,219,471
Net unrealized gain on investment valuation 74,860 95,986
Retained deficit (2,236,259) (2,856,833)
------------ ------------
10,173,279 3,523,831
------------ ------------
$ 14,134,974 $ 9,906,987
============ ============
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 3
<PAGE> 4
LOGAN INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Revenue
Sale of real estate $ 1,255,000 $ -
Gain from sale of available-
for-sale securities 174,702 -
Other 8,891 9,810
------------ ------------
1,438,593 9,810
Costs and expenses
Cost of real estate sold and
related selling costs 604,806 -
General and administrative 244,131 291,457
Real estate taxes 54,117 115,039
Interest 172,973 384,933
------------ ------------
1,076,027 791,429
------------ ------------
Income (loss) before extraordinary item 362,566 (781,619)
Extraordinary item, Gain on debt extinguishment 258,008 539,711
------------ ------------
Net income (loss) 620,574 (241,908)
Deficit, beginning of period (2,856,833) (519,636)
------------ ------------
Deficit, end of period $ (2,236,259) $ (761,544)
============ ============
Earnings (loss) per share
Before extraordinary item $ 0.05 $ (0.12)
Extraordinary item 0.04 0.08
------------ ------------
$ 0.09 $ (0.04)
============ ============
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 4
<PAGE> 5
LOGAN INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Revenue
Gain from sale of available-for-sale
securities $ 89,133 $ -
Other 91 2,390
------------ ------------
89,224 2,390
Costs and expenses
General and administrative 131,698 103,403
Real estate taxes 14,301 56,707
Interest 67,736 228,355
------------ ------------
213,735 388,465
------------ ------------
Income (loss) before extraordinary item (124,511) (386,075)
Extraordinary item, Gain on debt extinguishment 1,766 539,711
------------ ------------
Net (loss) income (122,745) 153,636
Deficit, beginning of period (2,113,514) (915,180)
------------ ------------
Deficit, end of period $ (2,236,259) $ (761,544)
============ ============
Earnings (loss) per share
Before extraordinary item $ (0.02) $ (0.06)
Extraordinary item - 0.08
------------ ------------
$ (0.02) $ 0.02
============ ============
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 5
<PAGE> 6
LOGAN INTERNATIONAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities
Income (loss) before extraordinary item $ 362,566 $ (781,619)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Gain from sale of available-for-sale
securities (174,702) -
Amortization 2,520 13,180
Other - 30,385
------------ ------------
190,384 (738,054)
Changes in working capital
Real estate 552,601 -
Prepaid and other assets (77,931) (130,680)
Accounts receivable (311) (3,213)
Payables 37,663 349,420
------------ ------------
702,406 (522,527)
Cash flows from financing activities
Borrowings 230,000 1,905,035
Payment of debts (1,124,423) (179,987)
Issuance of preferred shares 6,000,000 -
------------ ------------
5,105,577 1,725,048
Cash flows from investing activities
Purchase of available-for-sale securities (6,200,000) (1,072,194)
Proceeds from sale of available-for-sale
securities 312,569 -
------------ ------------
(5,887,431) (1,072,194)
Net increase (decrease) in cash (79,448) 130,327
Cash, beginning of period 260,684 172,145
------------ ------------
Cash, end of period $ 181,236 $ 302,472
============ ============
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 6
<PAGE> 7
LOGAN INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The interim period consolidated financial statements have been prepared by the
Registrant pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These interim period statements
should be read together with the statements and the accompanying notes
included in the Registrant's latest annual report on Form 10-KSB. In the
opinion of the Registrant, the accompanying unaudited interim consolidated
financial statements contain all adjustments necessary in order to present a
fair statement of the results for the interim periods presented.
NOTE 2 PREFERRED SHARES
In June 1996, CVD Financial Corporation ("CVD") subscribed for $6 million of
preferred stock of the Registrant (the "Logan Preferred Stock"), subject to
certain conditions which were satisfied on June 27, 1996. The Logan Preferred
Stock provides for, among other things: (i) a cumulative dividend of 5% per
annum; (ii) interest on accrued and unpaid dividends; (iii) redemption by the
Registrant at any time and from time to time; (iv) an issue price of $100 per
share; (v) one vote per share; and (vi) a 10% premium on the amount paid-up
thereon on redemption, liquidation, dissolution or winding-up. CVD and the
Registrant are related parties as two officers and directors of the Registrant
are officers and directors of CVD.
NOTE 3 EARNINGS PER SHARE
Earnings per share is computed on the weighted average number of shares
outstanding during the period, after considering convertible securities,
warrants and options. The weighted average number of shares was 6,601,495 and
6,503,559 for the six months ended June 30, 1996 and 1995, respectively.
NOTE 4 RELATED PARTY TRANSACTIONS
In June 1996, the Registrant acquired $2 million of convertible preferred
shares in the capital of Arbatax International Inc. ("Arbatax"), which owns
approximately 49.9% of the shares of the common stock of the Registrant. Two
officers and directors of the Registrant are also officers and directors of
Arbatax. CVD subscribed for the Logan Preferred Stock as set forth in Note 2
above.
FORM 10-QSB
QUARTERLY REPORT - PAGE 7
<PAGE> 8
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and the
financial condition of Logan International Corp. (the "Company") for the six
months and quarter ended June 30, 1996 should be read in conjunction with the
consolidated financial statements and related notes included elsewhere herein.
Results of Operations - Six Months Ended June 30, 1996
- ------------------------------------------------------
Revenues for the six months ended June 30, 1996 increased to $1.4 million from
$9,810 for the six months ended June 30, 1995, primarily as a result of a sale
of real estate for proceeds of $1.3 million and a gain of $174,702 from the
sale of securities.
Costs and expenses in the first half of 1996 increased to $1.1 million from
$791,429 in the comparable period of 1995, primarily as a result of the cost
of the real estate sold and related selling costs, which totalled $604,806.
General and administrative expenses decreased to $244,131 in the current
period from $291,457 in the comparative period of 1995. Interest expense in
the six months ended June 30, 1996 decreased to $172,973 from $384,933 in the
same period of 1995 as a result of reduced indebtedness.
In the first half of 1996, the Company transferred ten registered pieces of
land to a lender in exchange for an extinguishment of a loan of $1.4 million
and related property taxes and assessment payments which resulted in the
Company recognizing an extraordinary gain of $258,008.
The Company had net income of $620,574 or $0.09 per share in the first six
months of 1996 compared to a net loss of $241,908 or $0.04 per share in the
first six months of 1995.
Results of Operations - Three Months Ended June 30, 1996
- --------------------------------------------------------
Revenues for the three months ended June 30, 1996 increased to $89,224 from
$2,390 for the three months ended June 30, 1995, primarily as a result of a
gain of $89,133 from the sale of securities.
Cost and expenses in the second quarter of 1996 decreased to $213,735 from
$388,465 in the comparable period of 1995, primarily as a result of a decrease
in interest expense. Interest expense in the three months ended June 30, 1996
decreased to $67,736 from $228,355 in the same period of 1995 as a result of
reduced indebtedness.
FORM 10-QSB
QUARTERLY REPORT - PAGE 8
<PAGE> 9
The Company had a net loss of $122,745 or $0.02 per share in the second
quarter of 1996 compared to net income of $153,636 or $0.02 per share in the
second quarter of 1995. During the three months ended June 30, 1995, the
Company transferred one parcel of property, which the Company carried on its
balance sheet at a historical cost of $167,000, to a creditor in exchange for
$678,000 of debt relief, which resulted in income from an extraordinary item
of $539,711 or $0.08 per share.
Liquidity and Capital Resources
- -------------------------------
The Company had cash of $181,236 at June 30, 1996, compared to $253,726 at
March 31, 1996 and $260,684 at December 31, 1995. At June 30, 1996, the
Company had available-for-sale securities of $6.3 million, compared to $0.3
million at December 31, 1995, primarily as the result of the investment of the
proceeds from the sale of 60,000 shares of second series of preferred stock
(the "Logan Preferred Stock") to CVD Financial Corporation ("CVD") for $6
million in June 1996. The Logan Preferred Stock provides for, among other
things: (i) a cumulative dividend of 5% per annum; (ii) interest on accrued
and unpaid dividends; (iii) redemption by the Company at anytime; (iv) an
issue price of $100 per share; (v) one vote per share; and (vi) a 10% premium
on the amount paid up thereon on redemption, liquidation, dissolution or
winding-up. The Company and CVD have two common directors and the transaction
was approved by the disinterested directors of the Company.
The Company has a $4 million line of credit of which $0.7 million was utilized
as at June 30, 1996. The line of credit is secured by certain parcels of real
estate, matures on December 30, 1997 and bears interest at a rate of prime
plus 4% per annum. As the Company's principal source of revenue has been the
sale of real estate, and is therefore unpredictable, the Company utilizes its
credit facility to cover its cash short falls. The Company believes that this
credit facility is adequate for its needs. The Company's ability to satisfy
its long-term liquidity needs is dependant on its ability to sell its real
estate assets in a timely and orderly fashion. If the Company is unable to
accomplish the sale of its real estate assets in this manner, it will have to
sell or dispose of investments, renegotiate the terms of financing with
current mortgage holders or decide to allow certain mortgage holders to
foreclose on one or more of their properties.
Operating activities provided cash of $702,406 in the first six months of
1996, compared to using cash of $522,527 in the comparable period of 1995,
primarily as a result of proceeds of $1.3 million from the sale of real estate
properties. Financing activities provided cash of $5.1 million in the first
half of 1996, compared to $1.7 million in the comparative period of 1995,
primarily as a result of the sale of the Logan Preferred Stock. Investing
activities used cash of $5.9 million in the first six months of 1996, compared
to using cash of $1.1 million in the same period of 1995. Investing
activities in the current period included the acquisition of $2 million of
convertible preferred shares of Arbatax. Subsequently, the Company agreed to
acquire an additional $4 million of such preferred shares.
FORM 10-QSB
QUARTERLY REPORT - PAGE 9
<PAGE> 10
At June 30, 1996, the Company had notes outstanding evidencing indebtedness of
$1.2 million which are non-recourse to the Company and secured by deeds of
trust on substantially all of the Company's real estate assets. Under the
deeds of trust governing the security for this indebtedness, the Company has
an obligation to make property tax and assessment payments on the secured
properties on a timely basis. Except for properties securing two notes in the
aggregate amount of $1,086,232, all of the notes secured by the Company's real
property are in default and the holders of the notes have the right to
foreclose on the properties securing those loans. In the event that any such
holder commences a nonjudicial foreclosure action, under Washington law the
Company has the right to cure its default by paying all past due taxes and
assessments at any time prior to 10 days before the foreclosure sale. In the
event that a holder of a note commences a judicial foreclosure action under
Washington law, the Company will not have the right to cure the default by
paying the past due obligations. If such a holder is successful in a judicial
foreclosure action, the property will be sold at a sheriff's sale and the
Company will have an eight month period following such sale to redeem the
property by paying the sheriff's sale price plus interest at 8% per annum.
As at June 30, 1996, the holder of a $555,051 note secured by 56.6 acres of
the Company's Gig Harbour property (which totals 102.6 acres) with a total
book value of $3.0 million has commenced a legal foreclosure action. Except
as aforesaid, no nonjudicial or judicial foreclosure actions have been
commenced as a result of the Company's failure to make property tax or
assessment payments on a timely basis.
At June 30, 1996, delinquent real estate taxes on the Company's properties
amounted to $745,935. In addition, there is approximately $603,524 in
assessments to local improvement districts ("LIDs") which are delinquent.
Delinquent real estate taxes and LIDs accrue interest at approximately 12% per
annum. Under Washington law, if real estate taxes or LIDs remain delinquent
for three years, the governing jurisdiction can commence foreclosure
proceedings against the property. The Company anticipates that for the
foreseeable future it will permit real estate taxes to remain delinquent, but
may pay such taxes and LIDs as are necessary to prevent foreclosure
proceedings from occurring.
The following table summarizes the repayment schedule of the Company's secured
debt obligations, LIDs and unpaid property taxes at June 30, 1996:
<TABLE>
<CAPTION>
Year Ending
June 30,
-----------
<S> <C>
1997 $ 932,533
1998 1,117,502
1999 110,120
2000 114,212
2001 478,631
Thereafter 487,746
-----------
$ 3,240,744
===========
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 10
<PAGE> 11
Substantially all of the Company's real estate assets are subject to
delinquent LIDs and property taxes and certain parcels are encumbered by deeds
of trust. Based upon appraisals prepared for the Company, it believes that
the value of its real estate assets substantially exceeds the amount of all
such indebtedness. All of the real estate assets are undeveloped, which makes
the appraisal process inherently less certain than with developed properties.
Accordingly, no assurance can be given that upon sale of the properties the
Company will ultimately realize the appraised value of such properties.
The Company may develop two parcels of real estate at Gig Harbour and Federal
Way for residential/commercial and commercial use, respectively. Such
development may be conducted through partnerships, joint ventures or other
economic associations with local developers. The Company expects that its
involvement will be limited to "bare land" development work such as zoning,
subdivision, arranging services and permits and related activities.
Currently, the Company, along with other owners in the area, is endeavouring
to have its Gig Harbour property annexed to the City of Gig Harbour (which is
adjacent to the combined properties) from Pierce County, Washington. The
Company's Gig Harbour property is current zoned for commercial and single
family uses but the intensity of development under Pierce County ordinances
does not make development feasible at this time. If the annexation petition
is successful, the zoning designation within the City of Gig Harbour will
permit increased density and the inclusion of multi-family housing. In
addition, the Company may carry out pre-development work on certain other real
estate assets in order to enhance their marketability and sale value.
The Company may also seek controlling interests in operating businesses as
opportunities arise. The Company has not acquired any such interests to date
and has not identified any opportunities at the date hereof. The Company
anticipates that it may require substantial capital to pursue any such
opportunities and anticipates that such capital will be provided through the
sale or exchange of assets, or through debt or equity financing. No assurance
can be given that any necessary capital requirements will be available when
needed.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Company's annual report on Form 10-KSB for the year
ended December 31, 1995 and quarterly report on Form 10-QSB for the period
ended March 31, 1996 for information concerning certain legal proceedings.
ITEM 2. CHANGES IN SECURITIES
The Logan Preferred Stock ranks in priority to the Company's common stock in
the event of wind-up, dissolution or liquidation and restricts the payment of
dividends on and the redemption or purchase of shares ranking junior to the
Logan Preferred Stock, unless all accrued and unpaid
FORM 10-QSB
QUARTERLY REPORT - PAGE 11
<PAGE> 12
dividends and interest on the Logan Preferred Stock and other shares ranking
prior to or on parity with it have been paid or set aside for payment.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on May 29, 1996. At the
meeting, Mr. M.J. Smith and Mr. J.S.H. Lee were re-elected for three year
terms and joined Mr. G. Elderken and Mr. R. Waldvogel whose terms do not
expire until 1997 and Mr. L. Petersen whose term does not expire until 1998.
The following matters were submitted and voted upon at the meeting:
1. Election of Directors.
<TABLE>
<CAPTION>
Abstentions and
Name Votes For Votes Withheld Broker Non-Votes
--------- --------- -------------- ----------------
<C> <C> <C> <C>
M.J. Smith 3,954,875 49,840 -
J.S.H. Lee 3,954,875 49,840 -
</TABLE>
2. To approve the Company's 1994 Non-Qualified Stock Option Plan.
<TABLE>
<CAPTION>
Abstentions and
Votes For Votes Against Votes Withheld Broker Non-Votes
--------- ------------- -------------- ----------------
<C> <C> <C> <C>
3,753,088 172,895 78,732 -
</TABLE>
ITEM 5. OTHER INFORMATION
None
FORM 10-QSB
QUARTERLY REPORT - PAGE 12
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
- ------- -----------
3.1 Articles of Amendment to Articles of Incorporation of Logan
International Corp. Incorporated by reference from Form 8-K
dated June 27, 1996.
10.1 Subscription Agreement between Logan International Corp. and
CVD Financial Corporation dated for reference June 20, 1996.
Incorporated by reference from Form 8-K dated June 27, 1996.
27 Article 5 Financial Data Schedule for 2nd Quarter 1996 Form 10-QSB.
(b) Reports on Form 8-K:
A report on Form 8-K dated June 27, 1996 was filed reporting under:
Item 1. Changes in Control of Registrant.
Item 5. Other Events.
FORM 10-QSB
QUARTERLY REPORT - PAGE 13
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LOGAN INTERNATIONAL CORP.
/s/ Michael J. Smith
-------------------------
Michael J. Smith, Chief
Financial Officer and Director
Date: August 9, 1996
FORM 10-QSB
QUARTERLY REPORT - PAGE 14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
3.1 Articles of Amendment to Articles of Incorporation of Logan
International Corp. Incorporated by reference from Form 8-K
dated June 27, 1996.
10.1 Subscription Agreement between Logan International Corp.
and CVD Financial Corporation dated for reference June 20, 1996.
Incorporated by reference from Form 8-K dated June 27, 1996.
27 Article 5 Financial Data Schedule for 2nd Quarter 1996 Form 10-QSB.
</TABLE>
FORM 10-QSB
QUARTERLY REPORT - PAGE 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES INCLUDED IN THIS FORM 10-QSB AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 181,236
<SECURITIES> 6,315,692
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 7,534,187
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,134,974
<CURRENT-LIABILITIES> 0
<BONDS> 3,240,744
143,439
6,000,000
<COMMON> 66,207
<OTHER-SE> 4,107,072
<TOTAL-LIABILITY-AND-EQUITY> 14,134,974
<SALES> 1,255,000
<TOTAL-REVENUES> 1,438,593
<CGS> 604,806
<TOTAL-COSTS> 1,076,027
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172,973
<INCOME-PRETAX> 362,566
<INCOME-TAX> 0
<INCOME-CONTINUING> 362,566
<DISCONTINUED> 0
<EXTRAORDINARY> 258,008
<CHANGES> 0
<NET-INCOME> 620,574
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
