-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OQNpnVPdkYuQfqO1rUi8zXAv+Dhr0H281GLUONzAVQybNEvupRDlr2Ito9JzOlm1 urxcSwdRrzQE9oW4TUUbsA== 0000943440-02-000521.txt : 20021209 0000943440-02-000521.hdr.sgml : 20021209 20021209162716 ACCESSION NUMBER: 0000943440-02-000521 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANFIELD EDUCATIONAL ALTERNATIVES INC/FL CENTRAL INDEX KEY: 0001085115 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 650386286 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25947 FILM NUMBER: 02852507 BUSINESS ADDRESS: STREET 1: 1025 S. SEMORAN BLVD STREET 2: SUITE 1093 CITY: WINTER PARK STATE: FL ZIP: 32792 BUSINESS PHONE: 5615627389 MAIL ADDRESS: STREET 1: 1025 S. SEMORAN BLVD STREET 2: SUITE 1093 CITY: WINTER PARK STATE: FL ZIP: 32792 FORMER COMPANY: FORMER CONFORMED NAME: INNOVATIVE TECHNOLOGY SYSTEMS INC/FL DATE OF NAME CHANGE: 19990426 10QSB 1 sept02-10q.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2002 [ ] Transition report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from ___________ to _________________ Commission File Number: 000-25947 STANFIELD EDUCATIONAL ALTERNATIVES, INC. ---------------------------------------------- (Name of Small Business issuer in its Charter) Florida 65-0386286 - ------------------------------- ------------------- (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 2771-29 Monument Road, Suite #336 Jacksonville, FL 32225 - -------------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) 904-707-2255 --------------------------- (Issuer's Telephone Number) Securities registered under Section 12(b) of the Exchange Act: Title of each Class: NONE Name of Each Exchange on Which Registered: NONE Securities registered under Section 12(g) of the Exchange Act: Common Stock, no par value -------------------------- (Title of Class) 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-QSB. [ ] The issuer is a developmental stage company, and as such has yet to generate any substantial revenues. As of September 30, 2002, the issuer had 7,055,314 shares of common stock outstanding. Documents incorporated by reference: NONE Transition Small Business Disclosure Format (check one): YES [ ] NO [X] STANFIELD EDUCATIONAL ALTERNATIVES, INC. Form 10-QSB Index September 30, 2002 Page Part I: Financial Information....................................... 1 Item 1. Financial Statements................................ 1 Condensed Balance Sheet - September 30, 2002 (Unaudited)....................................... 1 Condensed Statements of Operations for the three-month periods ended September 30, 2002 and 2001 (Unaudited).............................. 2 Condensed Statements of Operations for the nine-month periods ended September 30, 2002 and 2001 and cumulative for the period from March 23, 1999 (inception) to September 30, 2002 (Unaudited).................................. 3 Condensed Statements of Cash Flows for the nine-month periods ended September 30, 2002 and 2001 and cumulative for the period from March 23, 1999 (inception) to September 30, 2002 (Unaudited).................................. 4 Notes to Financial Statements....................... 5 Item 2. Management's Discussion and Analysis or Plan of Operation................................. 11 Part II: Other Information................................... 13 Item 1. Legal Proceedings................................... 13 Item 2. Change in Securities................................ 13 Item 3. Defaults Upon Senior Securities..................... 13 Item 4. Submission of Matters to a Vote of Security Holders............................................. 13 Item 5. Other Information................................... 13 Item 6. Exhibits and Reports on Form 8-K.................... 13 SIGNATURES.......................................................... 13 PART I. - FINANCIAL INFORMATION Item 1. Financial Statements STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Condensed Balance Sheet September 30, 2002 Current assets: Cash $ - ---------- Total current assets - Property and equipment, net 24,621 ---------- Total assets $ 24,621 ========== Current liabilities: Accounts payable $ 212,819 Accrued expenses 316,728 Due to related parties 426,168 Notes payable 226,466 ---------- Total current liabilities 1,182,181 ---------- Stockholders' deficiency: Series 2001 convertible preferred stock 48,400 Series 2001 A convertible preferred stock - Series 2001 B convertible preferred stock - Common stock 2,702,179 Accumulated deficit (3,908,139) ---------- Total stockholders' deficiency (1,157,560) ---------- Total liabilities and stockholders' deficiency $ 24,621 ========== See accompanying notes to the financial statements. 1 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Condensed Statements of Operations For the three month periods ended September 30, 2002 and 2001
2002 2001 ----------- ----------- Gross revenues $ - 22 Operating expenses 3,433 23,416 Other expenses: Interest expense 12,028 5,875 Impairment of assets 199,457 - ----------- ----------- Net loss $ (214,918) (29,269) =========== =========== Loss per common share: Basic and diluted (0.06) (0.25) =========== =========== Weighted average common shares outstanding: Basic and diluted 3,479,292 117,955 =========== ===========
See accompanying notes to the financial statements. 2 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Condensed Statements of Operations For the nine month periods ended September 30, 2002 and 2001 and the period from March 23, 1999 (inception) to September 30, 2002
Cumulative for the period from March 23, 1999 (inception) through 2002 2001 September 30, 2002 ---------- ---------- ------------------ Gross revenues $ - 9,004 45,744 Cost of sales - - 264 ---------- ---------- ---------- Net revenue - 9,004 45,480 Operating expenses 102,636 551,235 3,353,691 Other expenses: Interest expense 43,428 18,895 84,522 Impairment of assets 199,457 90,949 290,406 Provision for loss on non-cancelable leases - 225,000 225,000 ---------- ---------- ---------- Total expenses 345,521 886,079 3,953,619 ---------- ---------- ---------- Net loss $ (345,521) (877,075) (3,908,139) ========== ========== ========== Loss per common share: Basic and diluted (0.26) (7.43) ========== ========== Weighted average common shares outstanding: Basic and diluted 1,354,230 117,955 ========== ==========
See accompanying notes to the financial statements. 3 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Condensed Statements of Cash Flows For the nine month periods ended September 30, 2002 and 2001 and the period from March 23, 1999 (inception) to September 30, 2002
Cumulative for the period from March 23, 1999 (inception) through 2002 2001 September 30, 2002 ---------- ---------- ------------------ Cash flows from operating activities Net loss $ (345,521) (877,075) (3,908,139) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 50,235 84,006 293,772 Loss on impairment of assets 199,457 90,949 290,406 Provision for loss on non-cancelable leases - 225,000 225,000 Common stock issued for services - - 2,055,405 Increase (decrease) in cash caused by changes in: Other current assets - 5,105 - Other assets - 46,632 - Accounts payable 1,132 80,195 212,819 Bank overdraft - (11,166) - Accrued expenses 37,109 (44,897) 156,735 Due to related parties 57,588 350,000 426,168 ---------- ---------- ----------- Net cash used in operating activities - (51,251) (247,834) Cash flows from investing activities: Acquisition of property and equipment - - (274,453) Cash flows from financing activities Proceeds from issuance of preferred stock - 49,000 49,000 Proceeds from issuance of capital stock - - 646,174 Due to related parties - (22,749) (399,353) Proceeds from issuance of notes payable - 25,000 226,466 ---------- ---------- ----------- Net cash provided by financing activities - 51,251 522,287 ---------- ---------- ----------- Net decrease in cash - - - Cash at beginning of period - - - ---------- ---------- ----------- Cash at end of period $ - - - ========== ========== =========== Supplemental disclosure of cash flow information: Cash paid for interest $ - - 15,310 ========== ========== =========== Noncash activity: Purchase of intangible assets from related party $ - - 399,353 ========== ========== =========== Reduction of capital lease obligation upon impairment of assets $ - - 65,006 ========== ========== ===========
See accompanying notes to the financial statements. 4 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (1) Summary of Significant Business and Accounting Policies (a) Basis of Presentation The accompanying unaudited, condensed financial statements of Stanfield Educational Alternatives, Inc. (the "Company") have been prepared in accordance with the instructions and requirements of Form 10-QSB and Regulation S-B and, therefore, do not include all information and footnotes for a fair presentation of financial position, results of operation and cash flow in conformity with generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary have been included. Operating results for this three-month period ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. (b) Organization In December 1999, Innovative Technology Systems, Inc. ("Innovative") authorized and entered into an agreement effecting a tax-free exchange in a reorganization pursuant to IRS Code 368(a)(1)(A). Pursuant to the agreement, Innovative exchanged one share of its previously authorized but unissued shares of no par common stock in exchange for two shares of Stanfield Educational Alternatives, Inc. ("Stanfield") common stock. In accordance with the agreement, Innovative acquired all of the issued and outstanding shares of Stanfield in exchange for shares of Innovative. For accounting purposes, the acquisition has been treated as an acquisition of Innovative by Stanfield and as a recapitalization ("Reverse Acquisition") of Stanfield. Subsequent to the recapitilization, Innovative changed its name to Stanfield Educational Alternatives, Inc. and is herein referred to as the Company. The Company is in its development stage and needs substantial additional capital to complete its development and to reach an operating stage. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, and therefore, will recover the reported amount of its assets and satisfy its liabilities on a timely basis in the normal course of its operations. See note 7 for a discussion of management's plans and intentions. (c) Revenue Recognition The Company records revenue as earned when goods or services are provided. 5 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (1) Summary of Significant Business and Accounting Policies (d) Property and Equipment Property and equipment are stated at cost. Depreciation for financial statement purposes is computed using the straight-line method over the estimated useful lives of the individual assets, which range from 3 to 5 years. The Company has reviewed its long-lived assets and intangibles for impairment and has determined that no adjustment is necessary to the carrying value of long-lived assets. (e) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. (f) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. (g) Loss Per Share Basic loss per common share amounts are computed by dividing the net loss for the period by the weighted average number of common shares outstanding for the period. Diluted loss per common share amounts reflect the potential dilution that could occur if convertible preferred shares are converted into common stock. No conversion is assumed if such conversion would have an antidilutive effect on diluted loss per common share amounts. 6 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (2) Property and Equipment At September 30, 2002, property and equipment consists of the following: Furniture and equipment $ 20,000 Computer software 41,201 ----------- Total property and equipment 61,201 Less accumulated depreciation (36,580) ----------- Net property and equipment $ 24,621 =========== The Company's default on certain capital lease obligations and other events and circumstances in 2001 indicated that the book value of certain long-lived assets may not be recoverable. Management estimated the impairment to these assets and reduced the asset balances to their estimated net realizable value at that time. In the opinion of management, no additional impairment has occurred. Depreciation expense for the three-month periods ended September 30, 2002 and 2001 was $3,433 and $3,433, respectively, and for the nine- month periods ended September 30, 2002 and 2001, depreciation expense was $10,299 and $24,102, respectively. (3) Intangible Assets During the quarter ending September 30, 2002, the intangible assets of the Company, with an unamortized cost of $199,457 were determined to have no future value to the Company and were written off to expense. These assets were originally purchased from the National Children's Reading Foundation on December 30, 1999. The National Children's Reading Foundation is a not-for-profit company whose shares are held by Lawrence Stanfield, who is a substantial shareholder of Stanfield Educational Alternatives, Inc. These assets were being amortized utilizing the straight-line method over a five-year life. Amortization expense for the three month periods ended September 30, 2002 and 2001 was $-0- and $19,968, respectively, and for the nine month periods ended September 30, 2002 and 2001, amortization expense was $39,936 and $59,904, respectively. 7 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (4) Capitalization The Company has authorized the issuance of 50,000,000 shares of common stock, having no par value. In accordance with the agreement and plan of share exchange the Company acquired all issued and outstanding shares of common stock of Stanfield in exchange for shares of the Company. For accounting purposes the transaction was treated as a recapitalization ("Reverse Acquisition"). In February 2001, the Company affected an eighty-for-one reverse stock split. At September 30, 2002, the Company had issued 7,055,314 shares of common stock. On January 19, 2001, the Majority Shareholders and the Board of Directors approved the creation of a class of 15,000,000 shares of Preferred Stock and the Board authorized the following issuances after the filing of the Articles of Amendment to the Articles of Incorporation: (i) The Board of Directors has designated three different series of Preferred Stock to be issued to three different groups. Namely, 2,000,000 of Series 2001 Convertible Preferred Stock, 5,593,000 shares of Series 2001A Convertible Preferred Stock and 5,643,175 shares of Series 2001B Convertible Preferred Stock. Series 2001 Convertible Preferred Stock was approved to be issued in a private offering as follows: (i) Holders of Series 2001 Convertible Preferred Stock shall receive preference in the event of liquidation, dissolution or winding up of the corporation. Specifically, in the event of liquidation, dissolution or winding up holders of Series 2001 Preferred Stock shall be paid Five Dollars ($5.00) per share for each Preferred Share, plus all declared and unpaid dividends. (ii) Shares of Series 2001 Convertible Preferred Stock shall have no voting rights. (iii) Each share of Series 2001 Convertible Preferred Stock may, at the option of the holder, be converted into common stock of the corporation at any time after twelve months after the issuance of such shares. The conversion ratio per share of the Series 2001 Convertible Preferred Stock shall be either $5.00 per share or 30% below the trading price of the common stock as priced the prior trading day to conversion. This conversion ratio is subject to change in the event of subdivision of common stock or issuance of a stock dividend. During the quarter ended September 30, 2002, 600 of these shares were converted into 2,679 common shares. At September 30, 2002, 24,600 of these shares were issued and outstanding. 8 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (4) Capitalization, Continued Series 2001A Convertible Preferred Stock was approved to be issued by the Board of Directors to various shareholders in exchange for a like number of common shares, as follows: (i) Each share of 2001A Convertible Preferred Stock entitles the holder thereof to one vote, either in person or by proxy, at meetings of shareholders, and such vote shall be equal to the voting rights of the common stock and shall be counted with the common stock toward election of directors or such other action as the class of common stock shall be entitled. (ii) Each share of Series 2001A Convertible Preferred Stock may, at the option of the holder, be converted into shares of common stock on a one for one basis at any time after February 1, 2002. During the quarter ended September 30, 2002, 4,073,000 of these shares were converted into an equal number of common shares. At September 30, 2002, 1,530,000 of these shares were issued and outstanding. Series 2001B Convertible Preferred Stock was approved to be issued by the Board of Directors pursuant to agreements between the parties, to Coral Ridge, Inc. Series 2001B Convertible Preferred Stock carries the following preferences: (i) Shares of Series 2001B Convertible Preferred Stock shall have no voting rights. However, the Company may not (1) alter or change any of the powers, preferences, privileges or rights of Series 2001B Convertible Preferred Stock; (2) create a new class or series of shares having preferences; or amend the provisions of this paragraph without first obtaining the approval by vote or written consent by at least a majority of the outstanding Series 2001B Convertible Preferred Stock, voting separately as a class. (ii) Each share of Series 2001B Convertible Preferred Stock may, at the option of the holder, be converted into fully paid and nonassessable shares of common stock of the corporation on a one for one basis at anytime after twelve months from the date of execution of the agreement between the Company and Coral Ridge, Inc. (iii) In the event we should at anytime combine the outstanding common stock into a smaller number of shares, such action will have no effect upon the conversion ratio of the Series 2001B Convertible Preferred Stock. During the quarter ended September 30, 2002, 897,148 of these shares were converted into an equal number of common shares. At September 30, 2002, 2,727,444 of these shares were issued and outstanding. 9 STANFIELD EDUCATIONAL ALTERNATIVES, INC. (A Development Stage Company) Notes to Financial Statements September 30, 2002 (5) Income Tax The Company has no provision for taxes as it has a net operating loss of approximately $3,900,000 that expires in varying times through 2016. No deferred asset has been recorded, as the possibility of benefiting from the net operating loss is dependent on the Company achieving profitable operations. (6) Related Party Transactions The president, principal stockholders, and certain employees from time to time make advances to the Company. The advances are non- interest bearing and have been made for financing and working capital purposes. At September 30, 2002, the total of such advances was $426,168. (7) Going Concern Matters The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company has incurred cumulative losses of $3,908,139 during its development stage and has classified all of its debt as current. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is dependent upon its ability to obtain additional financing and ultimately to attain profitability. Management anticipates, through a combination of additional debt but primarily equity financing, that the Company will successfully complete the remaining research and development of its technology and determine and implement its overall marketing strategy. However, as of September 30, 2002, the success of achieving the objectives discussed above, as well as the ultimate profitability of the Company's operations once the development stage has ended, cannot be determined. 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This Quarterly Report on Form 10-QSB contains forward-looking statements. All statements contained herein that are not historical facts, including but not limited to, statements regarding the anticipated impact of future capital requirements and future development plans are based on current expectations. These statements are forward looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Among the factors that could cause actual results to differ materially are the following: amount of revenues earned by the Company's tutorial and teacher training operations; the availability of sufficient capital to finance the Company's business plan on terms satisfactory to the Company; general business and economic conditions; and other risk factors described in the Company's reports filed from time to time with the Commission. The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. During 1999, the Company's focus was to find a suitable partner to execute its business plan. This was realized with the share exchange of Stanfield Educational Alternatives, Inc. on December 10, 1999 with Innovative Technology Systems, Inc. The Company's focus in 2000 was to develop and utilize the Company's proprietary products by opening corporate Ed-vancement Centers and the sale of franchised Ed-vancement Centers. The first Center was opened on April 24, 2000. The results of operations during 2000 and 2001 fell substantially short of management's expectations, and due to financial difficulties, the Company was forced to close this center in March 2001. The Company's focus since that time has been and will be to continue to develop the company's proprietary products and to generate sufficient capital to finance the Company's business plan and satisfy outstanding debt obligations. The Company was formed to commercially provide an alternative learning environment utilizing pioneering work in the field of educating children and adults, especially those with learning disabilities, by Lawrence W. Stanfield, MS. Using proprietary courseware and an innovative Internet-based diagnostic system called "SID," the Company has developed a uniform tutoring model that can be used anywhere in the world. More importantly, it is a model that has raised the reading comprehension of seventy-five percent of students by two grade levels in thirty-six hours of instruction and it is a model that can be adapted to emerging distance learning technologies such as the Internet. The Company is in the business of providing educational services using a combination of proprietary and commercially available materials to offer the widest possible range of tutorial services. The Company has also begun to develop a program under which it will license the Stanfield Reading Program for use to students of subscribing private schools. Anticipated revenue generators for the Company include: * Operating income from corporate owned Ed-vancement centers (includes revenue generated from tutorial, computer, test preparation such as SAT or GMAT, HomeWorkshop and "one-to-one" counseling fees); * Franchise fees from the sale of franchises; * Royalty fees based on a percentage of gross revenues generated from franchised centers; * Transaction fees for accessing Internet diagnostic tool and CBT courses; * Annual licensing fees from the use of the Stanfield Reading Program by subscribing private schools; 11 * Revenue from sales of Stanfield Reading Program training materials; * Merchandising of proprietary characters; and * Video and book sales derived from proprietary characters and information. 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings Due to the financial difficulties, the Company defaulted on a number of debt and lease obligations. The company was evicted from its premises and several judgments totaling approximately $300,000 were issued against the Company. The company is continuing in its efforts to resolve these obligations through settlements. However, there is no assurance that the Company will be able to settle in terms agreeable to the Company and if it does not do so, this will have a material adverse affect on the ability of the company to operate properly in the future. Item 2. Change in Securities During the quarter ended September 30, 2002, 600 of Series 2001 Convertible Preferred Stock were converted into 2,679 common shares, 4,073,000 shares of Series 2001A Convertible Preferred Stock were converted into an equal number of common shares, and 897,148 shares of Series 2001B Convertible Preferred Stock were converted into a like number of common shares. Item 3. Defaults Upon Senior Securities The Company is in default of substantially all of its lease agreements and notes payable. Item 4. Submission of Matters to a Vote of Security Holders No issues were submitted to a vote of security holders during the quarter ended September 30, 2002. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K None SIGNATURES ---------- Stanfield Educational Alternatives, Inc. By /s/ Lawrence W. Stanfield ---------------------------------------------- Lawrence W. Stanfield, Chief Executive Officer Date: 12/03/02 --------------- 13 -----END PRIVACY-ENHANCED MESSAGE-----