<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED June 30, 1995 COMMISSION FILE NO. 1-7949
REGENCY AFFILIATES, INC.
(Exact Name Of Registrant As Specified In Its Charter)
Delaware 72-0888772
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
5445 D.T.C. Parkway., Suite 300, Greenwood Village, CO 80111
- ------------------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 220-9952
(Former name, former address and former fiscal year, if changed)
Indicate by check mark whether the registrant (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
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-------- ---------
Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
$.40 Par Value Common Stock- 11,188,997 shares as of July 31, 1995.
1
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements............................................................................3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.....................................................................................12
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings..............................................................................15
Item 2. Changes in Securities..........................................................................15
Item 3. Defaults Upon Senior Securities................................................................15
Item 4. Submission of Matters to a Vote of Security Holders............................................15
Item 5. Other Information..............................................................................15
Exhibits and Reports on Form 8-K.................................................................................15
</TABLE>
2
<PAGE> 3
REGENCY AFFILIATES, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following pages contain the information required by Part I, Item 1.
3
<PAGE> 4
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
------ -----
ASSETS (UNAUDITED)
CURRENT ASSETS
<S> <C> <C>
Cash $183,868 $150,027
Accounts receivable 2,129 2,129
Prepaid expenses 33,613 -
--------- ---------
219,610 152,156
--------- ---------
OTHER ASSETS
Investment in partnership 1,037,000 450,000
Inventory 850,000 850,000
Other 83,320 21,676
--------- ---------
1,970,320 1,321,676
--------- ---------
Total Assets 2,189,930 $1,473,832
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $300,000 $300,000
Notes payable - related party 80,000 105,800
Accounts payable 122,401 73,382
Accrued expenses 97.654 5,705
--------- ---------
600,055 484,887
--------- ---------
LONG-TERM DEBT 308,500 296,500
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 108,991 111,391
SERIAL PREFERRED STOCK SUBJECT TO MANDATORY
REDEMPTION 340,454 261,454
SHAREHOLDERS' EQUITY
Serial preferred stock not subject to mandatory redemption (maximum 1,052,988 1,052,988
liquidation preference, $24,885,382)
Common stock, par value $.40, authorized 25,000,000 shares issued and
outstanding 10,788,997 and 10,546,997 shares (net of 22,460 treasury 4,296,308 4,199,508
shares)
Readjustment resulting from quasi-reorganization at December 31, 1987 (1,670,596) (1,670,596)
Accumulated deficit (2,846,770) (3,262,300)
--------- ----------
831,930 319,600
--------- ---------
Total Liabilities and Shareholders' Equity $2,189,930 $1,473,832
========= =========
</TABLE>
4
<PAGE> 5
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ -- $ -- $ -- $ --
OPERATING EXPENSES
General and administrative expenses 80,076 50,086 131,070 84,674
Interest expense 9,425 -- 24,395 --
--------- --------- --------- ---------
INCOME (LOSS) FROM
OPERATIONS 89,501 (50,086) (155,465) (84,674)
INCOME FROM EQUITY
INVESTMENT IN PARTNERSHIP 311,000 -- 687,000 --
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAX EXPENSE AND MINORITY
INTEREST 221,499 (50,086) 531,535 (84,674)
INCOME TAX EXPENSE (40,000) -- (90,000) --
MINORITY INTEREST 900 -- 2,400 --
--------- --------- --------- ---------
NET INCOME (LOSS) $ 182,399 ($ 50,086) $ 443,935 $ (84,674)
========= ========= ========= =========
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK (after accrued
preferred stock dividends of $15,789,
$0, $28,405 and $0 respectively) $ 166,610 ($ 50,086) $ 415,530 $ (84,674)
========= ========= ========= =========
NET INCOME (LOSS) PER SHARE
(primary and fully diluted) $ .02 $ (0.00) $ .04 $ (0.01)
========= ========= ========= =========
</TABLE>
5
<PAGE> 6
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) $ 443,935 $ (84,674)
Adjustments to reconcile net income (loss) to net cash used by
operating activities:
Minority interest (2,400) --
Income from equity investment in partnership (687,000) --
Interest amortization on long-term debt 12,000 --
Changes in operating assets and liabilities:
Prepaid expenses (33,613) --
Other assets (61,644) --
Accounts payable 49,019 --
Accrued liabilities 63,544 (2,218)
--------- ---------
Net cash used by operating activities (216,159) (86,892)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Distribution from partnership 100,000 --
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net short-term borrowings (payments) (25,800) 82,700
Proceeds from issuance of preferred stock 167,200 --
Proceeds from issuance of common stock 52,800 --
Offering costs (44,200) --
--------- ---------
Net cash provided by financing activities 150,000 82,700
--------- ---------
INCREASE IN CASH 33,841 (4,192)
CASH-BEGINNING 150,027 3,922
--------- ---------
CASH-ENDING $ 183,868 $ (270)
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation - The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results
for the six-month period ended June 30, 1995 are not necessarily
indicative of the results that may be expected for the year ended
December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant
Company and Subsidiaries' annual report on Form 10-K for the year ended
December 31, 1994.
B. Principles of Consolidation - The consolidated financial statements
include the accounts of Regency Affiliates, Inc. (the "Company") and
its 80% owned subsidiaries National Resource Development Corporation
("NRDC"), Transcontinental Drilling Company ("Drilling") and
RegTransco, Inc. ("RTI"). All significant intercompany balances and
transactions have been eliminated in consolidation.
C. Earnings (Loss) Per Share - Net income (loss) per common share was
determined by dividing the net income (loss) applicable to common stock
by the average number of common shares actually outstanding. The
effects of the outstanding convertible securities were not considered
since the conversion provisions of such securities are "contingent"
provisions and can only be exercised in the event of an occurrence or
non-occurrence of specified future events. In addition, the shares to
be issued in connection with the conversion provisions of certain
securities will be based on the fair value of the Company's common
stock at date of conversion.
D. Inventory - Inventory, which consists of aggregate, is stated at lower
of cost or market. Liens have been attached to the aggregate inventory
by the note payable to the related party and the holders of the zero
coupon bonds. The Company is also subject to a royalty agreement which
requires the payment of certain royalties to a previous owner of the
aggregate inventory upon sales of the aggregate.
7
<PAGE> 8
E. Income Taxes - Effective January 1, 1993, the Company adopted Statement
of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for
Income Taxes," which requires an asset and liability approach to
financial accounting and reporting for income taxes. The difference
between the financial statement and tax basis of assets and liabilities
is determined annually. Deferred income tax assets and liabilities are
computed for those temporary differences that have future tax
consequences using the current enacted tax laws and rates that apply to
the periods in which they are expected to affect taxable income. In
some situations SFAS 109 permits the recognition of expected benefits
of utilizing net operating loss and tax credit carryforwards. Valuation
allowances are established, if necessary, to reduce the deferred tax
asset to the amount that will, more likely than not, be realized.
Income tax expense is the current tax payable or refundable for the
period plus or minus the net change in the deferred tax assets and
liabilities.
8
<PAGE> 9
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 2. INVESTMENT IN PARTNERSHIP
In November 1994, the Company invested $50,000 and a $300,000 note
payable for a limited partnership interest in Security Land and
Development Company Limited Partnership ("Security"), which owns and
operates an office complex. The Company has limited voting rights and
is entitled to be allocated 95% of the profit and loss of the
partnership until October 31, 2003 (the lease termination date of the
sole tenant of the office complex) and 50% thereafter. The Company is
to receive certain limited cash flow after debt service, and a
contingent equity build-up depending upon the value of the project upon
termination of the lease. The Company is also entitled to receive
certain management fees relating to the partnership.
Security was organized to own and operate, for investment purposes, a
building of approximately 717,000 square feet consisting of a two-story
office building and a connected six-story office tower. The building
was purchased by Security in 1986 and is located on approximately 34.3
acres of land which is also owned by Security. The building has been
occupied by the United States Social Security Administration's Office
of Disability and International Operations for approximately 22 years
under leases between the United States of America, acting by and
through the General Services Administration ("GSA"). Effective November
1, 1994, Security and the GSA entered into a nine-year lease (the
"Lease") for 100% of the building. Security has received an opinion of
the Assistant General Counsel to the GSA that lease payments are not
subject to annual appropriation by the United States Congress and the
obligations to make such payments are unconditional general obligations
of the United States Government.
The Company accounts for the investment in partnership on the equity
method, whereby the carrying value of the investment is increased or
decreased by the Company's allocable share of income or loss. The
investment in partnership included in the Consolidated Balance Sheet at
June 30, 1995 was $1,037,000. The income and undistributed earnings
from the Company's equity investment in the partnership for the three
months and six months ended June 30, 1995 were $311,000 and $687,000,
respectively.
9
<PAGE> 10
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Summarized operating data for Security for the three months and six
months ended June 30, 1995 is as follows:
<TABLE>
<CAPTION>
Three Months Six Months
<S> <C> <C>
Revenues $ 3,043,167 $ 6,270,391
Operating Expenses (663,515) (1,415,159)
Depreciation and Amortization (1,025,200) (2,052,240)
Interest Expense, Net (1,027,216) (2,080,080)
--------- ---------
Net Income $ 327,236 $ 722,912
========= =========
</TABLE>
NOTE 3. STOCK OFFERING
Through a private placement memorandum dated November 18, 1994, the
Company offered for sale 80 units of securities, each unit consisting
of 88.5 shares of 12.5% cumulative convertible Series E preferred stock
and 6,000 shares of common stock. The units were priced at $10,000 per
unit. As of June 30, 1995, subscriptions for 57 units were received
netting the Company $477,254 after offering costs of $92,746.
Purchasers of units were issued financial statements containing certain
errors resulting from the improper accounting treatment of the
acquisition of NRDC. (The acquisition was recorded at the appreciated
market value of NRDC's inventory whereas the cost of such inventory to
NRDC was substantially lower). Management intends to offer such
purchasers rescission, however, because the appraised fair value of the
underlying net assets of NRDC are significantly in excess of the
carrying value for accounting purposes, management believes the
likelihood of rescission is remote.
NOTE 4. INCOME TAXES
As referred to in Note 1, the Company adopted SFAS 109, "Accounting for
Income Taxes," effective January 1, 1993. The deferred taxes are the
result of long-term temporary differences between financial reporting
and tax reporting for earnings from the Company's partnership
investment in Security Land and Development Company Limited Partnership
related to depreciation and amortization and the recognition of income
tax carryforward items.
10
<PAGE> 11
REGENCY AFFILIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
At June 30, 1995, the Company's net deferred tax asset, utilizing a 34%
effective tax rate, consists of:
Deferred tax assets:
Investment partnership earnings $ 1,855,000
Net operating loss carryforwards 15,375,000
----------
Total deferred tax assets before valuation
allowance 17,230,000
Valuation allowance (17,230,000)
----------
Net deferred tax asset $ -0-
==========
The valuation allowance was established to reduce the net deferred tax
asset to the amount that will more likely than not be realized. This
reduction is necessary due to uncertainty of the Company's ability to
utilize the net operating loss and tax credit carryforwards before they
expire.
For regular federal income tax purposes, the Company has remaining net
operating loss carryforwards of approximately $47,700,000. These losses
can be carried forward to offset future taxable income and, if not
utilized, will expire in varying amounts beginning in the year 2000.
For the six months ended June 30, 1995, the tax effect of net operating
loss carryforwards reduced the current provision for federal income
taxes by approximately $400,000.
NOTE 5. NOTE PAYABLE
The $300,000 note payable issued in connection with the acquisition of
the Partnership interest, at the election of the Company, was paid by
the issuance of 400,000 shares of the Company's Common Stock on or
about July 14, 1995.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources.
On June 4, 1993, the Company entered into an Acquisition Agreement with
Statesman Group, Inc., a Bahamian international business corporation
("Statesman"), and National Resource Development Corporation (Delaware) (the
"Acquisition Agreement"), which provided for Statesman or its nominees to
acquire 2,975,000 shares of the Company's $0.40 par value common stock, 208,850
shares of the Company's Series C Preferred stock and 20% of the outstanding
shares of Transcontinental Drilling Co., a subsidiary of the Company. Statesman
undertook to deliver to the Company 80% of the issued and outstanding common
shares of National Resource Development Corporation (Delaware), the owner of
approximately 75 million short tons of previously quarried and stock piled rock
located at the site of the Groveland Mine in Dickinson County, Michigan (the
"Aggregate").
The scheduled closing of July 6, 1993 under the Acquisition Agreement was
deferred to July 7, 1993. At that time, various modifications were made to the
June 4, 1993 Acquisition Agreement, including the substitution of National
Resource Development Corporation ("NRDC"), a Nevada corporation formed on June
29, 1993 for National Resource Development Corporation (Delaware), which newly
formed corporation was wholly owned by Statesman and acquired title to the
Aggregate. On July 7, 1993, 2,975,000 shares of the Company's common stock,
208,850 shares of the Company's Cumulative Contingent Convertible Senior
Preferred Series C stock and 20% of the outstanding shares of Transcontinental
Drilling Co. were delivered to Statesman (the "1993 Transaction").
Statesman, in addition to receiving the rights to 28.78% of the Company's common
stock under the Acquisition Agreement, received irrevocable proxies over 855,991
shares of Regency's $0.40 par value common stock. The proxies, when combined
with the 2,644,710 shares of Regency common stock owned directly by Statesman as
of June 30, 1995, entitled Statesman to vote a total of 3,500,701 shares, or
approximately 32.4% of the10,788,997 outstanding shares as of June 30, 1995.
As reflected in the financial statements of Regency Affiliates, Inc., the
carrying value of NRDC's Aggregate is $850,000. This represents the purchase
cost of NRDC at a figure approximating the historical cost of NRDC's underlying
assets and liabilities and does not reflect the fair market value of the
Aggregate. Management believes that $15 million is a fair appraisal of the
current fair market value of the Aggregate.
On November 18, 1994, Regency Affiliates, Inc. acquired a limited partnership
interest in Security Land and Development Company Limited Partnership
("Security") for an equity investment of $350,000, which investment was used to
pay brokerage fees related to Regency's purchase of its interest in Security.
Regency has no obligation to make any further capital contribution to Security.
Security owns the 34.3 acre complex at 1500 Woodlawn Drive, Woodlawn, MD
containing the Security West Building, an approximately 717,011 square foot,
two-phase office building, consisting of a two-story office building and a
connected six-story office tower occupied by the United States Social Security
Administration Office of Disability and International Operations under a nine
year lease expiring October 31, 2003 (the "Lease"). The construction of the
Security West Building was completed in 1972 and the building has been occupied
12
<PAGE> 13
by the Social Security Administration since then under prior leases between the
U.S. Government and Security.
During 1994, Security completed the placement of a $56,450,000 non-recourse
project note, due November 15, 2003, issued by Security. The placement of the
project note was undertaken by the issuance of 7.90% certificates of
participation and was underwritten by Dillon Read & Co., Inc. The net proceeds
received from the sale of the certificates will be used to refinance existing
debt of Security related to the project, to finance certain alterations to the
project by Security, to fund certain reserves and to pay costs of issue. The
project note is a non-recourse obligation of Security and is payable solely from
the Lease payments from the U.S. Government, which rental payments under the
Lease are not subject to annual appropriation by the United States Congress and
accordingly, the obligations to make such payments are unconditional general
obligations of the government backed by the full faith and credit of the United
States.
The terms of the Security Land and Development Company Limited Partnership
Agreement (as amended) and the project note (which note will be fully amortized
over the term of the lease) call for Regency Affiliates, Inc. to be allocated
95% of the profits and losses of Security until October 31, 2003, and 50%
thereafter. Regency is to receive certain limited cash flow after debt service,
and a contingent equity build-up depending upon the value of the project upon
termination of the Lease. Regency will also receive certain management fees
relating to Security.
The equity investment of $350,000 in Security Land And Development Company
Limited Partnership was financed in part by the delivery of a promissory note to
Security in the amount of $300,000. The note to Security carried interest at the
"prime rate" as set forth in the "Money Rates" section of the Wall Street
Journal and was due July 8, 1995. At the option of the Company, the Note to
Security was paid by the issuance of 400,000 shares of the Company's Common
Stock on or about July 14, 1995.
In the fiscal quarter ending June 30, 1995, the Company's investment income from
Security was $311,000. Management anticipates that the investment in Security
will provide Regency Affiliates, Inc. with limited cash flow, approximating
$100,000 per annum, and a contingent buildup of equity in Security, resulting
from an allocation by Security of 95% of the booked income to the Company, that
could result in a 50% beneficial interest in the Security West Building at the
termination of the lease in 2003. Despite the cash flow from Security and the
working capital raised by the Private Placement, the Company continues to suffer
from a relative lack of liquidity and capital resources.
In the last quarter of 1994, Regency Affiliates, Inc. commenced a private
placement of its Cumulative Convertible $100 Series-E Preferred Stock and $0.40
p.v. Common Stock (the "Private Placement") in a transaction reported on Form D,
Notice of Sale of Securities Pursuant To Regulation D, filed with the Securities
and Exchange Commission on November 23, 1994, the contents of which are
incorporated herein by reference thereto. As of June 30, 1995, Regency
Affiliates, Inc. had placed 57 Units ($570,000) of the $350,000 minimum,
$800,000 maximum offering. The securities were offered in 80 Units, each
consisting of 88.5 shares in Cumulative Convertible $100 Series-E Preferred
Stock and 6,000 shares of the Common Stock, to accredited investors as defined
in Regulation D for a cost of $10,000 per unit. The proceeds of the offering are
being used to fund the Company's investment in Security Land And Development
Company Limited Partnership, for working capital and to fund acquisitions.
Because of the restatement of the
13
<PAGE> 14
acquisition cost of NRDC, management has determined to offer rescission to the
purchasers in the Private Placement. Management believes there is no substantial
likelihood that the purchasers will exercise rescission because the restatement
does not result from a change in the fair market value of the Aggregate.
As part of the 1993 transaction with NRDC, the Company received a working
capital loan of $100,000 from Statesman Group, Inc., which loan was originally
scheduled to mature on July 7, 1995 and carries a 10% interest obligation
payable quarterly in arrears. Statesman has agreed to extend the maturity of its
loan to January 1, 1996. Effective March 31, 1995, Statesman converted $20,000
of its loan into 12,000 shares of the Company's $0.40 par value Common Stock and
177 shares of the Company's Cumulative Convertible $100 Series E Preferred
Stock, reducing the principal balance on its loan to $80,000.
Regency Affiliates, Inc. is continuing to explore opportunities for the
acquisition of companies with operations that will provide additional liquidity
and cash flow. The Company anticipates that such acquisitions would be financed
by borrowings secured by the assets acquired and by the Aggregate.
Results of Operations.
Operations of Regency Affiliates, Inc. and its subsidiaries in the quarter
ending June 30, 1995 were limited to the Company's ongoing effort to secure
acquisitions and/or business combinations to provide the Company with material
operations and cash flow.
The statement of operations reflects the income from investment in Security of
$311,000 and $687,000 for the three months and six months ended June 30, 1995,
respectively, which represents 95% of the net income of Security Land and
Development Company Limited Partnership. Interest expense includes interest on
NRDC's zero coupon bonds, the loan to Statesman and the note to Security.
14
<PAGE> 15
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company is a party.
ITEM 2. CHANGES IN SECURITIES.
Statesman Group, Inc. has consented to an amendment to the Certificate of
Designation of the Company's Cumulative Contingent Convertible $100 Series-C
Preferred stock which will eliminate the contingent conversion rights of these
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There have been no defaults in the payment of principal or interest with respect
to any senior indebtedness of Regency Affiliates, Inc.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to the vote of security holders during the reporting
period ending June 30, 1995.
ITEM 5. OTHER INFORMATION.
None reported.
EXHIBITS AND REPORTS ON FORM 8-K
Dated-February 10, 1995
Item Reported-
4. Changes in Registrant's Certifying Accountant
Dated-June 28, 1995
Item Reported-
6. Resignations of Registrant's Directors
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
REGENCY AFFILIATES, INC.
----------------------------------------------------
(Registrant)
August 11, 1995 By: /S/ Craig R. Grossman
- --------------- ---------------------
Date Craig R. Grossman, President
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 183,868
<SECURITIES> 0
<RECEIVABLES> 2,129
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 219,610
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,189,930
<CURRENT-LIABILITIES> 600,055
<BONDS> 308,500
<COMMON> 4,296,308
340,454
1,052,988
<OTHER-SE> (4,517,366)
<TOTAL-LIABILITY-AND-EQUITY> 2,189,930
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 131,070
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,395
<INCOME-PRETAX> 531,535
<INCOME-TAX> 90,000
<INCOME-CONTINUING> 443,935
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 443,935
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
