UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                                Form 10-QSB
(Mark one)
 X  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended               September 30, 1996   
           .

      TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                 to
                            
Commission file number                0-13538              

                      NATIONAL AFFILIATED CORPORATION

     (Exact Name of small business issuer as specified in its charter)

               Louisiana                         72-0947819                
(State or other jurisdiction of          (I.R.S. Employer Identification
incorporation or organization)                         Number)

       7228 England Drive, Suite 24, P.O. Box 12190, Alexandria, LA 71315

                 (Address of principal executive offices)

                              (318) 473-4355

             (Insurer'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 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    

                    APPLICABLE ONLY TO ISSUERS INVOLVED
                     IN BANKRUPTCY PROCEEDINGS DURING
                         THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court. Yes     No    

                   APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

Registrant had 3,712,308 Voting Common Shares outstanding on September 30, 1996.

                      PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
          Financial Statements are attached beginning at page  4   .

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATION
          Management's Discussion and Analysis of Financial
          Condition and Results of Operations is attached
          beginning at page    8   .

                        PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
          None

ITEM 2.   CHANGES IN SECURITIES
          None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
          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
          (a)  Exhibit Index

                               Description of        Sequential
                                                  Numberings
          Exhibit Table Number       Exhibit                 
                                                  Location        
                                                   

               11               Statement of           Page 14
                              Computation of
                                   Per Share
                                   Earnings

          (b)  Reports on Form 8-K
                              None

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.

                              NATIONAL AFFILIATED CORPORATION
                              (Registrant)




Date      November 13, 1996             By: Jerry L. Johnston             
                                   Jerry L. Johnston
                                   Vice President and Chief Financial Officer

NATIONAL AFFILIATED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995 
<TABLE>
<S>                                            <C>         <C>
                                                  1996        1995
ASSETS:
Cash                                             $146,975    $306,686
Invested assets:                                           
   Fixed maturities available-for-sale at mark  1,686,649   3,555,962
   Equity securities at market ($32,144 cost)     251,250       1,250
   Mortgage loans                               1,045,715           0
   Collateral loans                               881,822           0
   Other long-term investments at equity          132,232     144,673
   Other long-term investments at market                0      29,000
   Certificates of deposit and time deposits       98,371     239,851
   Restricted assets at market                  1,032,500   1,040,162
Accrued investment income                          51,549      63,360
Finance notes receivable - net                     17,709       8,750
Policy loans                                       99,241      83,571
Reinsurance receivable                          2,679,889   2,759,921
Other amounts receivable:
   Premiums due and uncollected                    14,670      21,028
   Agents' balances (net of allowance for unco             
     account of $131,500 in 1996 and  1995)       147,989     150,009
   Other                                           15,360     398,957
Property - net                                    137,887     192,794
Deferred policy acquisition costs                 100,493     421,962
Other assets                                       19,473     217,890
TOTAL                                          $8,559,774  $9,635,826
LIABILITIES AND STOCKHOLDERS' EQUITY:          
Policy benefit reserves                         3,347,755  $3,429,414
Policy claims                                     563,924     781,256
Unearned premiums                                  22,089      23,980
Dividends left on deposit                         307,071     389,955
Advance premium deposits                          162,678     174,678
Other policyholders' funds                         25,483      17,152
Accounts payable and accruals                     653,668   2,088,754
   Total liabilities                            5,082,668   6,905,189
Commitments and contingent liabilities
Stockholders' equity:
   Non-voting convertible preferred stock, $100 par; 1,500,000
     shares authorized; 5,000 shares outstandi  2,427,700           0
   Voting common shares, no par; 14,000,000 sh             
     authorized; 3,579,489 shares outstanding   5,936,041   5,846,901
   Additional paid-in capital                     154,500     154,500
   Net unrealized investment gains (losses)       (29,146)    171,973
   Accumulated deficit                         (5,011,989) (2,710,237)
        Subtotal                                3,477,106   3,463,137
   Less treasury stock - at cost                        0     732,500
   Total stockholders' equity                   3,477,106   2,730,637
TOTAL                                          $8,559,774  $9,635,826
</TABLE>
See notes to consolidated financial statements.

NATIONAL AFFILIATED CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<S>                              <C>       <C>      <C>      <C>
                                       Three Months          Nine Months
                                   1996      1995      1996      1995
REVENUES:
Insurance premiums               $425,160  $476,480 1,428,715 1,786,333
Net investment income              63,875    72,323   378,721   277,373
Finance company interest and fee      159       293       159     1,259
Other income                       13,310    14,600    45,145    54,628
   Total revenues                 502,504   563,696 1,852,740 2,119,593

EXPENSES:
Decrease in policy benefit reser   (4,075)  (28,172)  (44,404)  (31,052)
Claims and other benefits         243,935   254,921   939,458   812,960
Policyholder dividends              2,927     3,643    10,606    11,257
Commission expense                 68,110   140,880   222,879   622,584
Depreciation and amortization      51,008     3,915    65,898    12,672
Interest expense                   10,519    16,182    40,711    48,117
Salaries, wages and taxes         190,464   197,051   558,590   588,038
Other operating expense           732,943   283,877 1,424,785   889,577
Amortization of deferred acquisi   83,772    91,966   321,469   215,607
   Total expenses               1,379,603   964,263 3,539,992 3,169,760

LOSS BEFORE INCOME TAXES        (877,099) (400,567)(1,687,252)(1,050,167)

PROVISION FOR INCOME TAXES              0         0         0         0

NET LOSS                       ($877,099)($400,567)(1,687,252)(1,050,167)

LOSS PER COMMON SHARE              ($0.24)   ($0.12)   ($0.48)   ($0.32)
        (primary and fully diluted)

WEIGHTED AVERAGE COMMON 
     SHARES OUTSTANDING         3,635,586 3,279,489 3,531,521 3,279,489
</TABLE>

See notes to consolidated financial statements.

NATIONAL AFFILIATED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<S>                                           <C>         <C>
                                                  1996        1995
Cash flows from operating activities:
Net loss                                      ($1,687,252)($1,050,167)
Non-cash and non-operating items:
   Gain on sale of invested assets               (244,332)      8,078
   Depreciation and amortization                   65,898      12,672
Change in assets and liabilities:
   Deferred policy acquisition costs              321,469     215,607
   Policy benefit reserves and unearned premiu    (83,550)     43,970
   Policy claims                                 (217,332)   (214,786)
   Equity write-down of other long-term invest     12,441      10,032
   Accounts payable and accruals               (1,435,086)   (102,925)
   Due from reinsurance companies                  80,032           0
   Other                                          608,514    (112,730)
Net cash used in operating activities          (2,579,198) (1,190,249)

Cash flows from investing activities:
Acquisitions of:
   Invested assets
      Fixed maturities available-for-sale      (1,420,120) (1,043,649)
      Common stock                               (250,000)          0
      Mortgage loans                           (1,045,715)          0
      Collateral loans                           (881,822)          0
   Finance notes receivable                       (10,000)          0
   Property                                       (10,991)     (3,786)
Proceeds from:
   Invested assets                                         
      Fixed maturities available-for-sale       3,340,308   1,938,083
      Other long-term investments                  29,000           0
      Certificates of deposit and time deposit    141,480     175,831
   Finance notes receivable                         1,041      38,532
Policy loans                                      (15,670)       (345)
Agent's balances - net                              2,020     (33,880)
Net cash provided from investing activities      (120,469)  1,070,786

Cash flows from financing activities:
Withdrawals of dividends and advance premiums     (94,884)   (138,173)
Sale of preferred and common stock              2,634,840           0
Net cash provided from (used in) financing act  2,539,956    (138,173)
Net decrease in cash                             (159,711)   (257,636)
Cash at beginning of year                         306,686     361,430
Cash at end of period                            $146,975    $103,794

Supplemental cash flows disclosures:
Interest paid                                     $24,085     $35,721
Income taxes paid                                      $0          $0
</TABLE>
See notes to consolidated financial statements.

NATIONAL AFFILIATED CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

NOTE 1 - REPRESENTATION BY MANAGEMENT


The unaudited consolidated financial statements included herein
reflect all normal, recurring adjustments which are necessary to
a fair presentation of the consolidated financial position,
results of operations and cash flows for the interim periods
presented.

The results of operations for the nine month period ended
September 30,1996 are not necessarily indicative of the results
to be expected for the entire year of 1996.

NOTE 2 - ACCOUNTING CHANGE


Effective January 1, 1994 the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." This standard
requires classification of investment securities into three
categories: held-to-maturity, trading, and available for sale.
The Company has classified all of its investment securities as
available for sale. As a result, these securities are now
required to be reported in the balance sheet at their fair value,
with unrealized gains and losses reported in a separate component
of stockholders' equity.

NOTE 3 - PREFERRED STOCK


In the third quarter of 1996, the Company sold 19,277 shares of
Non-voting Convertible Preferred Stock with $100 par value to The
Southern Group.  (See Management's Discussion and Analysis of
Financial Condition and Results of Operations.)

Management's Discussion and Analysis of Financial Condition and
Results of Operations

The Company issues life and accident and health insurance
policies to customers in targeted niche markets in exurban and
rural areas.  The Company's principal life insurance products
include universal life, interest sensitive whole life, adjustable
premium whole life and term insurance policies which target
middle income ($25,000-$75,000) families, senior citizens and
government employees.  The Company's principal accident and
health insurance policies include a group major medical policy,
an association and group hospital and surgical policy and a
supplemental alternative benefit option policy, which target
middle income consumers who do not participate in other full
coverage major medical policies, as well as participants in group
plans who desire supplemental coverages.

The Company's history of operating losses has been attributable
in large part to the failure of NAIL to develop viable insurance
products or a stable field force of agents during the years
following the organization of NAIL in 1984.  Following a
management change in 1991, NAIL has been engaged in efforts to
build a portfolio of accident and health and life insurance
products and to expand its field force of agents.  Management's
efforts in this regard have been hampered by disruptive actions
by prior management during 1992, by NAIL's limited capacity to
incur the costs associated with building insurance sales, and by
the Company's limited management resources.  The Company has
continued to incur losses in 1994, 1995 and 1996 primarily as a
result of the low base of premium revenues of the Company in
relation to its operating costs.  The Company also experienced
unexpected underwriting losses on NAIL's short-term major medical
policies and an acquired block of group hospitalization and
surgical insurance policies in 1994 and 1995.

NAIL has implemented plans intended to reduce its losses,
including expanding and improving the quality of its field force
of agents, terminating NAIL's short-term major medical business
in 1995, modifying the basis of compensation of many of its
accident and health insurance agents, entering into a new
accident and health marketing partnership with Continental
General Life Insurance Company and planning for expansion of
NAIL's presence in states where it was previously not active,
including Texas.  A key element of management's plan during 1995
was to recapitalize the Company either through the sale of its
Senior Convertible Debenture, or its authorized but unissued
common stock.  (See "Liquidity and Capital Resources.")  In
November 1995, the Company signed a "Letter of Intent" with The
Southern Group, a Maryland based financial holding company.  On
January 15, 1996, a definitive stock purchase agreement was
signed with The Southern Group whereby the Company agreed to sell
10,335,045 shares of authorized but unissued shares and treasury
stock to The Southern Group for certain specified assets,
including cash and securities, having an audited value at
December 31, 1995 of approximately $6.8 million.  The Southern
Group would then own approximately 75% of the Company.

The Company has received mortgages and securities worth
$2,827,246 in three preliminary closings.  (See Liquidity and
Capital Resources.)

As of January 1, 1995 the Company established NAMC as its
marketing subsidiary and after recapitalization will transfer
agent relationship and management responsibilities from NAIL to
NAMC.  This action is expected to reduce the business acquisition
costs incurred by NAIL and to facilitate the Company's entry into
marketing relationships with other insurers, which will allow the
Company to efficiently offer its agents additional products and
to realize additional commission income on sales of third party
products.  Effective March 31, 1995, NAMC commenced a marketing
arrangement with Continental General Life Insurance Company which
provides the Company s agents with short-term major medical and
other health policies issued by Continental which will replace
sales of the Company s short-term policies. 

Results of Operations

1996 Compared to 1995

The Company had a net loss for the first nine months of 1996 of
$1,687,252 compared to a loss of $1,050,167 for the nine months
ended September 30, 1995.  The loss per common share was $.48 for
1996 and $.32 for 1995.  Total revenues decreased to $1,852,740
in 1996 from $2,119,593 in 1995.  Premium revenues decreased to
$1,428,715 in 1996 from $1,786,333 in 1995.
<TABLE>
          <S>                       <C>                 <C>
                                   Nine months ended September 30,
                                           1996            1995

          Life premium              $   769,385         $   852,938
          Life reinsurance premiums    (493,092)            (28,936)
          Accident & health premiums  1,292,747           1,042,153
          A & H reinsurance premiums   (140,325)            (79,822)

          Total premium revenues     $1,428,715          $1,786,333
</TABLE>
The decline in life premiums is attributable to continuing lapses
of FLA-100 policies.  The FLA-100 participating life policies
were the primary policies sold from 1984 to 1988.   The Company
ceased paying projected dividends on these policies in 1992 when
the Board of Directors determined the projected dividend to be
excessive.  This action caused the lapse rate of these policies
to increase substantially.  Sales of other life products did not
increase as planned during 1995  and 1996 as the Company focused
more on its recapitalization plan.  When the Company did not
continue to stress marketing and recruiting in 1995 and 1996, the
sale of new life business decreased.  With the proposed sale of
the Company stock to The Southern Group, the Company started an
aggressive recruiting program in the third quarter of 1996 which
should increase the premium income during 1997.

Effective December 31, 1995, NAIL and Maryland Southern Life
Insurance Company, (MSLIC), entered into a coinsurance agreement
whereby MSLIC assumed 80% of all the life insurance business
retained by NAIL.  This resulted in a reserve transfer to MSLIC
in the amount of $1,866,475.  MSLIC paid the Company a ceding
commission in the amount of $373,295 for a net decrease to
premium revenues of $1,493,180.  MSLIC is a wholly owned
subsidiary of The Southern Group.

In November 1995, the Company became the insurer on two
association groups in New Mexico.  The groups, which were self-
insured trusts, were told by the New Mexico Insurance Department
that they must be insured by a licensed insurer and that they
could not continue as self-insured.  These two trusts, which are
group major medical plans, are expected to provide over one
million dollars of premium in 1996 for the Company.  One trust
cancelled its policy in September 1996 however, the other trust
has continued to expand and the Company has added group life and
group short term disability to the plan.  This should provide
over $1.5 million of total premium from the trust in 1997.

Net investment income increased to $378,721 as of September 30,
1996 as compared to $277,373 at September 30, 1995.  This is the
result of gain on sales of invested assets disposed of in
completing transfer of assets on MSLIC reinsurance.  

The Company's claims and other benefits increased to $939,458 for
the first nine months of 1996 from $812,960 for the first nine
months of 1995.  The increase is the result of the claims
incurred on the New Mexico trusts described above.  The
composition of benefits and claims and policyholder dividends for
the nine months ending September 30 are as follows:
<TABLE>
          <S>                    <C>                   <C>
                              Nine months ended September 30,
                                        1996            1995

          Life benefits          $     50,383          $  351,463
          Policyholder dividends       10,606              11,257
          A & H benefits              889,075             461,497

          Total benefits          $   950,064          $  824,217
</TABLE>

Commission expense decreased to $222,879 for the first nine
months of  1996 from $622,584 for the first nine months of 1995,
primarily as a result of decreased sales of life policies.  The
composition of commission expense was as follows:
<TABLE>
                                 Nine months ended September 30,
                                     1996                1995
     <S>                         <C>                  <C>
     Life commissions            $ 112,290            $  272,648 
     Accident & health
     commissions                   110,589               349,936

     Total                       $ 222,879            $  622,584
</TABLE>

Other operating expenses increased to $1,487,135 for the first
nine months in 1996 from $889,577 for the first nine months in
1995.  The Company has implemented plans to reduce general
expenses and these reductions should start to be reflected in the
fourth quarter of 1996.  Operating expenses at September 30, 1996
include a charge of $206,000 for a write off of recapitalization
costs.

Deferred policy acquisition costs increased to $321,469 for the
first nine months of 1996 as compared to $215,607 for the first
nine months of 1995.  The lapse of FLA-100 policies is still
causing a decrease in deferred acquisition costs, but the
increase in new business has resulted in the decrease being less
than in previous years.  The decrease in deferred acquisition
costs is allocated between life and health as follows:
<TABLE>
                                  Nine months ended September 30,
         <S>                          <C>             <C>
                                          1996            1995
         Life                         $ 198,702       $ 138,262
         Accident and health            122,767          77,345

         Total                        $ 321,469       $ 215,607
</TABLE>

Liquidity and Capital Resources

The liquidity requirements for the Company's operations generally
arise from the insurance operations of NAIL and the
administrative activities of NAC, and include payment of claims 
to policyholders, payment of commissions and other costs of
acquiring new business, payment of operating costs, and payment
of cash values upon termination of policies.  These demands have
generally been met by NAIL with funds generated by its
operations, from its reserves and liquid assets, and from capital
contributions by NAC.  NAC has funded its operations primarily
through management fees charged to its subsidiaries, including
NAIL.  NAIL is prohibited by Louisiana law from paying any
dividends to NAC other than from statutory profits.

Management fees charged by NAC to NAIL are sufficient to fund
NAC's operating expenses.  NAC does not have any material long
term debt or debt service requirements.  NAIL has incurred
statutory losses in each of 1995 and 1994 and is expected to
continue to incur statutory losses in 1996.

Statutory losses by NAIL have had a substantial negative impact
on the amount of its surplus.  Due to the decline of surplus and
continued operating losses, NAIL has been notified that its
license was suspended in the states of Alabama, Tennessee and
Wyoming.  The Company has been working on a plan to recapitalize
the Company to alleviate this surplus problem and to give the
Company funds for expansion.  In November 1995, the Company
entered a letter of intent with The Southern Group for the
purchase of authorized but unissued stock of the Company.  In
January 1996, a definitive stock purchase agreement was signed
whereby The Southern Group will purchase 10,153,506 shares of
authorized but unissued common stock and 181,539 shares of
treasury stock for certain specified assets, including cash and
securities, having an audited value at December 31, 1995 of
approximately $6.8 million.

In December 1995, NAIL and Maryland Southern Life Insurance
Company, a wholly owned subsidiary of The Southern Group, entered
into an 80-20 reinsurance contract with Maryland Southern Life
assuming 80% of all life insurance reserve liabilities held by
NAIL.  With the payment of a $373,295 ceding commission to NAIL
by Maryland Southern Life in February 1996, the surplus of NAIL
was increased by $373,295.

On February 26, 1996, The Southern Group made an initial purchase
of 300,000 shares of NAC stock for cash and government securities
having a value of approximately $400,000.  The Company Board of
Directors then approved a surplus contribution to NAIL of
$400,000 to increase its surplus.

On May 14, 1996, The Southern Group purchased 5,000 shares of
National Affiliated Corporation Class A Preferred Stock with a
par value of $100.  This preferred stock will be converted into
common stock based on $.65 per share at the closing of the
already mentioned 10,335,045 share purchase.  The converted
shares will be a part of the 10,335,045 shares.  The $500,000
received by the Company was immediately contributed to National
Affiliated Investors Life.  The statutory capital and surplus for
National Affiliated Investors Life at March 31, 1996 totaled
$1,761,884.

On August 13, 1996, the Company approved the sale to The Southern
Group of 19,277 shares of Class A Non-Voting Convertible
Preferred Stock with a par value of 100.   This preferred stock
will be converted into common stock based on $.65 per share at
the closing of the already mentioned 10,335,045 share purchase. 
The converted shares will be a part of the 10,335,045 shares. 
The Company received mortgage loans and collateralized loans
totaling $1,927,700 as payment for the Preferred Stock.  The
Board of Directors has voted to transfer the mortgage loans and
one collateral loan which total $1,486,888 to NAIL as a surplus
contribution.  The statutory capital and surplus for National
Affiliated Investors Life at September 30, 1996 totaled
$3,067,982.

As previously mentioned, The Southern Group and the Company
signed an agreement whereby The Southern Group was to purchase
10,335,045 shares of the Company for $6.8 million pending
regulatory approval.  On October 31, 1996, the Louisiana
Insurance Department approved the transaction.  With the 300,000
shares The Southern Group purchased on February 1996 and with the
conversion of the 24,277 shares of Preferred Stock into 3,734,923
of Common Stock, The Southern Group would own approximately 56%
of the Company's Common Stock.  It is expected that this
conversion and the closing on this transaction will take place
shortly.  The Southern Group has indicated that between November
15, 1996 and April 30, 1997 they expect to purchase the remaining
shares up to the 10,335,045 as stated in the contract.

Management is also taking steps to control administrative costs,
reduce policy claims and increase the Company premium revenues. 
With the surplus increase due to the proposed sale of stock to
The Southern Group and with the new direction and leadership from
The Southern Group, the Company expects to see improvement in the
Company's operations by the end of 1996.  Any failure of the
Company to complete the stock purchase transaction with The
Southern Group would have a material negative impact on the
Company's operations, and would likely result in regulatory
action by the Louisiana Insurance Commissioner to take over
supervision of NAIL, the loss of NAIL's licenses in most or all
jurisdictions in which it presently operates, and would possibly
require the Company to seek protection under United States
bankruptcy laws.

                                                                 EXHIBIT 11

             NATIONAL AFFILIATED CORPORATION AND SUBSIDIARIES

              STATEMENT OF COMPUTATION OF PER SHARE EARNINGS

The weighted average number of shares outstanding for the nine
months ended September 30, 1996 was computed as follows:

     Shares outstanding, beginning of period           3,279,489

     Shares issued, first quarter, 1996                  118,461
     Treasury shares reissued, first quarter, 1996       181,539

     Shares issued, second quarter, 1996                     0

     Shares issued, third quarter, 1996                  132,819

     Shares outstanding, end of period                 3,712,308




Nine months ended 9-30-96

[2(3,279,489)+4(3,579,489)+3,592,342+3,602,107+3,712,308]/9 =
3,531,521 shares


Three months ended 9-30-96

[3,592,342+3,602,107+3,712,308]/3 = 3,635,586 shares