-----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, QpMAWVPXLLfST/l7FXyTkQ002vi943zC76Z+eAQMijtgzwVLzTMnqk4ayLmlI2q7 FBxvChRiF/uO+dz4Aw8dbw== 0000950147-98-000025.txt : 19980115 0000950147-98-000025.hdr.sgml : 19980115 ACCESSION NUMBER: 0000950147-98-000025 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AVESIS INC CENTRAL INDEX KEY: 0000795574 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 860349350 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15304 FILM NUMBER: 98506429 BUSINESS ADDRESS: STREET 1: 3724 NORTH THIRD ST STREET 2: STE 300 CITY: PHOENIX STATE: AZ ZIP: 85012 BUSINESS PHONE: 6029567287 MAIL ADDRESS: STREET 1: 1001 W CLARENDON STREET 2: NO 2300 CITY: PHOENIX STATE: AZ ZIP: 85013 FORMER COMPANY: FORMER CONFORMED NAME: NBS NATIONAL BENEFIT SERVICES INC DATE OF NAME CHANGE: 19910114 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL VISION SERVICES INC DATE OF NAME CHANGE: 19900117 10QSB 1 QUARTERLY REPORT 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 November 30, 1997 ---------------------------------------- _ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to ---------------- ----------------- Commission File Number 0-15304 ------------------------- AVESIS INCORPORATED ------------------------------------------------------------------------ (Exact name of small business issuer as specified in its charter) Delaware 86-0349350 -------------------------------- -------------------------------- (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 3724 North Third Street, Suite 300 Phoenix, Arizona 85012 ------------------------------------------------------------------------- (Address of principal executive offices) (602) 241 - 3400 ----------------------------------- (Issuer's telephone number) 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 --- --- The number of outstanding shares of the registrant's Common Stock on January 10, 1998 was 4,061,420. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (Check One) Yes X No --- --- 1 of 10 PART I FINANCIAL INFORMATION Item 1 Financial Statements AVESIS INCORPORATED BALANCE SHEET NOVEMBER 30, 1997 (Unaudited) ASSETS ------ Current assets: Cash and cash equivalents $ 759,660 Receivables, net 346,543 Prepaid expenses and other 287,885 ----------- Total current assets 1,394,088 Property and equipment, net 379,329 Deferred debenture issuance costs, net 150 Deposits and other assets 259,900 ----------- $ 2,033,467 =========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 768,645 Accrued expenses- Compensation 49,458 Rent 26,829 Other 23,862 Capital lease, short-term 10,288 Notes payable to stockholders 160,000 Convertible subordinated debentures 189,000 Less unamortized debenture discount (159) Deferred income 7,301 ----------- Total current liabilities 1,235,224 Accrued rent 77,749 Capital lease, long-term 36,102 ----------- Total liabilities 1,349,075 ----------- Stockholders' equity: Preferred stock $.01 par value, authorized 12,000,000 shares: $100 Class A, nonvoting cumulative convertible preferred stock, Series 1, $.01 par value; authorized 1,000,000 shares; none issued and outstanding (liquidation preference of $100 per share) - - - - - $10 Class A, nonvoting cumulative convertible preferred stock, Series 2, $.01 par value; authorized 1,000,000 shares; 388,180 shares issued and outstanding (liquidation preference of $10 per share) 3,882 Class A, voting cumulative convertible preferred stock, Series 3, $.01 par value; authorized 100,000 shares; none issued and outstanding (liquidation preference of $100 per share) - - - - - Common stock of $.01 par value, authorized 12,000,000 shares; 4,090,420 shares issued and outstanding 40,904 Additional paid-in capital 9,946,758 Accumulated deficit (9,307,152) ----------- Net stockholders' equity 684,392 ----------- $ 2,033,467 ===========
The accompanying notes are an integral part of these statements. - 2 - AVESIS INCORPORATED STATEMENTS OF OPERATIONS FOR THE QUARTER AND SIX MONTHS ENDED NOVEMBER 30, 1997 AND 1996 (Unaudited)
Quarters Ended Six Months Ended November 30 November 30 November 30 November 30 ---------------------------- ---------------------------- 1997 1996 1997 1996 ------------- ------------ ------------ ------------- Service revenues: Administration fees $ 1,553,780 $ 764,385 $ 2,918,492 $ 1,676,469 Buying group sales 387,079 370,892 805,609 759,521 Provider fees 28,330 34,284 54,796 68,336 Other 1,103 30,701 2,607 44,978 ------------- ------------ ------------ ------------- Total service revenues 1,970,292 1,200,262 3,781,504 2,549,303 Cost of services 1,467,039 875,251 2,849,689 1,764,060 ------------- ------------ ------------ ------------- Income from services 503,253 325,011 931,815 785,244 General and administrative expenses 230,608 251,979 457,748 506,944 Selling and marketing expenses 189,824 124,566 333,084 290,951 ------------- ------------ ------------ ------------- Income (loss) from operations 82,821 (51,534) 140,983 (12,651) ------------- ----------- ------------ ------------- Non-operating income (expense): Other income (expense) (25,373) (79) (23,662) (79) Interest income 8,664 5,995 17,417 12,233 Interest expense (7,776) (7,359) (15,161) (14,744) Gain/(loss) on asset disposal (2,124) -0- (2,124) -0- ------------- ------------ ------------ ------------- Net non-operating income (expense) (26,609) (1,443) (23,530) (2,590) ------------- ------------ ------------ ------------- Net income (loss) $ 56,212 $ (52,977) $ 117,453 $ (15,241) ============= ============ ============ ============= Net income (loss) per common share $ (0.01) $ (0.03) $ (0.01) $ (0.05) ============= ============= ============ ============= Weighted average common shares and equivalents outstanding 4,097,673 4,100,420 4,099,054 4,100,420 ============= ============ ============ =============
The accompanying notes are an integral part of these statements. - 3 - AVESIS INCORPORATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED NOVEMBER 30, 1997 AND 1996 (Unaudited)
1997 1996 ------------- ------------ Cash flows from operating activities: Net income $ 117,453 $ (15,241) ------------- ------------ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 54,937 84,542 Loss on fixed asset disposal 2,124 -0- Provision for losses on accounts receivable -0- (149) Changes in assets and liabilities: (Increase) decrease in receivables (6,187) 83,349 (Increase) decrease in prepaid expenses (174,271) 36,158 (Increase) decrease in other assets (74,861) -0- Increase in accounts payable 304,268 55,175 (Decrease) in accrued expenses (69,092) (2,683) (Decrease) in deferred income (15,930) (5,991) Increase in accrued rent 12,534 4,899 ------------- ------------ Total adjustments 33,522 255,300 ------------- ------------ Net cash provided by operating activities 150,975 240,059 ------------- ------------ Cash flows from investing activities: Proceeds from dispositions of property and equipment 5,000 -0- Purchases of property and equipment (257,740) (70,939) ------------- ------------ Net cash (used in) investing activities (252,740) (70,939) ------------- ------------ Cash flows from financing activities: Capital lease 48,002 -0- Repayment of capital lease (1,612) -0- Repurchase of capital stock (2,500) -0- ------------- ------------ Net cash provided by financing activities 43,890 -0- ------------- ------------ Net (decrease) increase in cash and cash equivalents (57,875) 169,120 Cash and cash equivalents, beginning of period 817,535 436,083 ------------- ------------ Cash and cash equivalents, end of period $ 759,660 $ 605,203 ============= ============ Supplemental information: - ------------------------- (a) Interest paid during the period - Debentures 8,978 -0- Notes payable to stockholders -0- -0-
The accompanying notes are an integral part of these statements. - 4 - AVESIS INCORPORATED NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1997 AND 1996 (Unaudited) 1. The condensed financial statements included herein have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared at the fiscal year end have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of Management, the adjustments included in the accompanying interim financial statements include all adjustments, which are all of a normal recurring nature, necessary in order to make the financial statements not misleading, and present fairly the Company's financial position and the results of operations and cash flows for the periods indicated. The results of operations for the period ended November 30, 1997, are not necessarily indicative of the results to be expected for any other period or the complete fiscal year. 2. For the quarter and six months ended November 30, 1997, loss per common share is computed by dividing net loss, after giving appropriate effect to undeclared preferred stock dividends payable and accrued during the period ($87,342 and $174,684 for the quarter and six months, respectively) by the weighted average number of common shares outstanding during the period. (see Exhibit 11) - 5 - Item 2 Management's Discussion and Analysis or Plan of Operation For the Quarter and Six Months Ended November 30, 1997 and 1996 The statements contained in this discussion and analysis regarding management's anticipation of adequacy of cash for continuing operations, adequacy of reserves for claims, sustained viability of the Company and continued positive cash flows constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon assumptions that involve risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements. Management's anticipation is based upon assumptions regarding the market in which the Company operates, the level of competition, demand for services, stability of costs, retention of sponsors and cardholders enrolled in the Company's benefit programs, and stability of the regulatory environment. Any of these assumptions could prove inaccurate, and therefore there can be no assurance that the forward-looking information will prove to be accurate. Avesis Incorporated, a Delaware corporation (together with its subsidiary, the "Company"), incorporated in June 1978, markets and administers vision, hearing, dental and chiropractic managed care and discount programs ("Programs") nationally. The Programs are designed to enable participants ("Members" or "Cardholders"), who are enrolled through various Sponsoring organizations such as insurance carriers, Blue Cross and Blue Shield organizations, corporations, unions and various associations ("Sponsors"), to realize savings on purchases of products and services through networks of providers such as ophthalmologists, optometrists, opticians, hearing specialists, dentists and chiropractors ("Providers"). The Company derives its administration fee revenue from plan Sponsors who customarily pay a set fee per member per month. There are arrangements with certain Sponsors to pay for services rendered by the Company on a fee for service basis. Based upon the type of program (e.g., managed care, discount, third party administration) the Provider's claim for service provided to Members is paid either by the Company, Sponsor, Member or combination thereof. Buying group revenues are recorded as the total amount billed to participating Providers. Vision Provider fee revenue is based upon a percentage of materials sold by certain participating providers under certain plans. Results of Operations: - ---------------------- The Company's total service revenues totaled $1,970,292 and $3,781,503 for the quarter and six months ended November 30, 1997, compared to $1,200,262 and $2,549,303 for the same periods in the prior year, representing an increase of $770,030 (64%) and $1,232,200 (48%), respectively. The increase is principally due to the addition of a vision plan Sponsor who added approximately 95,000 Cardholders during January 1997 and a second vision plan Sponsor who added approximately 130,000 Cardholders during July 1997. As of November 30, 1997, these two Sponsors have approximately 233,000 Cardholders. Past and future revenues in all lines of business are directly related to the number of Cardholders enrolled in the Company's benefit programs. However, there may be significant pricing differences to Sponsors depending on whether the benefit is funded in part or whole by the plan Sponsor. A substantial portion of the Company's Cardholder base is derived from a limited number of Sponsors. The Company's administration fees from vision and hearing programs accounted for $1,228,662 (62%) and $472,706 (39%) of total service revenues for the quarters ended November 30, 1997 and 1996, respectively, and $2,285,869 (60%) and $973,997 (38%) of total service revenues for the six months ended November 30, 1997 and 1996, respectively. There were approximately 629,000 vision and 6,600 hearing cardholders as of November 30, 1997, compared to approximately 328,000 vision and 40,000 hearing cardholders as of November 30, 1996. The increase in vision and hearing revenue during the current quarter and six months was the result of the two new vision plan Sponsors mentioned above. The decrease in hearing cardholders was largely due to the discontinuation of services for one hearing plan Sponsor with approximately 32,000 total cardholders. The loss of hearing cardholders did not have a material impact on total service revenues. The other changes in the number of vision and hearing cardholders were due to Sponsors' employee or Member fluctuations in the normal course of business. -6- Vision provider fee revenue declined by $5,954 (17%) and $13,540 (20%) during the quarter and six months ended November 30, 1997, as compared to the same periods in fiscal 1996 largely due to a modification of the Company's agreements with its Providers in response to competitive pressures. Under the modified agreement, for new Sponsors, the Providers are not required to pay a fee based on gross sales to that Sponsor's Members. Administration fees from the Company's dental program accounted for $324,847 (16%) and $290,778 (24%) of total service revenues during the quarters ended November 30, 1997 and 1996, respectively and $622,236 (16%) and $700,669 (27%) of total service revenues during the six months ended November 30, 1997 and 1996, respectively. There were approximately 127,000 and 72,000 dental cardholders as of November 30, 1997 and 1996, respectively. The Company's dental program revenue has increased during the current quarter compared to the same period in the prior fiscal year, and the number of dental cardholders has increased. Due to pricing differences among the different plan benefits, as discussed above, revenue did not increase at a rate proportional to the increase of cardholders, which accounted for the decrease in revenue in the current six month period. The changes in the number of dental cardholders were due to two new Sponsors and significant increases in two other Sponsors' Members. The Company makes available to its vision Providers a buying group program that enables the Provider to order eyeglass frames from the manufacturers at discounts from wholesale costs. These discounted prices are generally lower than a Provider could negotiate individually, due to the large volume of purchases of the buying group. Buying group revenues accounted for $387,079 (20%) and $370,892 (31%) of total service revenues for the quarters ended November 30, 1997 and 1996, respectively, and $805,609 (21%) and $759,521 (30%) of total service revenues for the six months ended November 30, 1997 and 1996, respectively. Cost of services were $1,467,039 (74%) and $875,251 (73%) for the quarters ended November 30, 1997 and 1996, respectively, and $2,849,689 (75%) and $1,764,060 (69%) for the six months ended November 30, 1997 and 1996, respectively. These costs relate to servicing Members, Providers, and Sponsors under the Company's vision, hearing, dental and chiropractic benefit programs as well as the cost of frames that are sold through the Company's buying group program as discussed above. The increase in cost of services was primarily due to the payment of benefits for Members of the new plan Sponsors of approximately $549,000 and $981,000, for the quarter and six months ended November 30, 1997, which did not exist in the prior year. The Company's cost of services increased as a percentage of total service revenues due to a shift in product mix from discount to managed care programs which have greater associated costs due to additional customer service and claims payment functions. General and administrative expenses were $230,608 (12%) and $251,979 (21%) for the quarters ended November 30, 1997 and 1996, respectively, and $457,748 (12%) and $506,944 (20%) for the six months ended November 30, 1997 and 1996, respectively. The decrease in general and administrative expenses in the quarter and six months ended November 30, 1997, as compared to the same periods in fiscal 1996 is due to a decrease in rent expense resulting from the relocation of the Company's principal office and a decrease in depreciation expense as the Company abandoned a significant portion of software prior to the start of the current year. Selling and marketing expenses were $189,824 (10%) and $124,566 (10%) for the quarters ended November 30, 1997 and 1996, respectively, and $333,084 (9%) and $290,951 (11%) for the six months ended November 30, 1997 and 1996, respectively. Selling and marketing expenses include marketing fees, broker commissions, inside sales and marketing salaries and related expenses, travel related to the Company's sales activities and an allocation of other overhead expenses relating to the Company's sales and marketing functions. The increase in expenses during the current period was primarily due to the addition of personnel involved in the Company's sales and marketing activities and the increase of commissions directly related to the Company's increased administrative fee revenues. A significant amount of the Company's marketing activities has been outsourced to management consultants, National Health Enterprises, for a cost lower than the Company incurred when performing the functions internally. Effective March 18, 1998, the cash compensation paid to National Health Enterprises will increase by $50,000 per year to $250,000 per year. Other expense of $25,373 for the quarter ended November 30, 1997 includes the write-off of unamortized moving expenses of $25,835 related to the Company's previous relocation of the principal office. The Company capitalized $14,588 of moving expenses, included in deposits and other assets, related to the relocation of the Company's principal office during October 1997, which will be amortized over the five year life of the current lease agreement. -7- Liquidity and Capital Resources - ------------------------------- The Company had cash and cash equivalents of $759,660 as of November 30, 1997, compared to $817,535 as of May 31, 1997. The decrease of $57,875 was due primarily to the Company's financing of the development of new software systems, and the purchase of necessary new computer hardware, from cash provided by operations. As of November 30, 1997, the Company had paid approximately $170,000 for software development and related hardware of the projected total of $250,000. The project is anticipated to be completed and operational by the end of the Company's fiscal year. Current cash on hand and cash provided from operations is expected to allow the Company to sustain operations for at least the next twelve months. As of November 30, 1997, the Company had $768,645 of Accounts Payable, compared to $279,085 in the prior fiscal year. The increase is predominately due to reserves for claims of $375,500 in the current year for the two new Sponsors for claim reimbursements to Providers who participate in their managed care programs. The Company believes this reserve is conservative and adequate. The remaining increase in Accounts Payable was due to the timing of invoices received in the normal course of business. The Company is current and in good standing with its vendors. As of November 30, 1997, the Company had $189,000 of Convertible Subordinated Debentures, less $159 of unamortized discount, due December 1, 1997 and $160,000 of subordinated notes payable to stockholders due March 18, 1998. The Company has transmitted the required funds to the Trustee for payment of the Debentures and has reflected the transaction as a prepaid current asset on the Balance Sheet as of November 30, 1997. -8- PART II OTHER INFORMATION Item 3. Defaults Upon Senior Securities (b) The Company determined not to pay the quarterly dividend otherwise scheduled for payment in January 1998, on shares of its Series 2 Preferred Stock. The dividend is cumulative. The arrearage is $1,805,568 as of November 30, 1997. Item 4. Submission to Matters to a Vote of Security Holders (a) An annual meeting of stockholders of the Company was held on December 17, 1997. (c) There was one matter voted upon at the meeting, as follows: The following nominees were elected for one-year terms as directors of the Company: William R. Cohen William L. Richter Gerald L. Cohen Samuel A. Oolie Kenneth L. Blum, Sr. The results of voting for each nominee were as follows: Number of votes cast for: 2,906,377 Number of votes cast against: 106,361 Number of abstentions 0 Number of non-votes 0 Item 5. Other Information - Retirement of Stock Information On November 5, 1997, the Company bought back and retired 10,000 shares of common stock, reducing total outstanding shares to 4,090,420 as of November 30, 1997. On December 16, 1997 and January 5, 1998 the Company bought back and retired 17,000 and 12,000 common shares, respectively, reducing total outstanding common shares to 4,061,420. Item 6. Exhibits and Reports on Form 8-K (a) See Exhibit Index following the Signatures page, which is incorporated herein by reference. (b) No reports on Form 8-K were filed during the quarter ended November 30, 1997. A report on Form 8-K dated December 12, 1997 was filed to disclose, under Item 5 - Other Events, the extension and amendment of the Company's Management Agreement with National Health Enterprises. -9- 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. AVESIS INCORPORATED - - - - - - - - - - - - - - - - - - - - - - - - - - (Registrant) Date: 1/14/98 /s/ Neal A. Kempler --------------------------------------- Neal A. Kempler, Vice President and Secretary Date: 1/14/98 /s/ Joel H. Alperstein --------------------------------------- Joel H. Alperstein, Director of Finance and Treasurer (Principal Financial Officer) -10- Exhibit Index To Avesis Incorporated Form 10-QSB for the Quarter Ended November 30, 1997 Exhibit No. Description - ----------- ----------- 11 Statement re: Computation of per Share Earnings Filed herewith 27 Financial Data Schedule Filed herewith EX-11 2 CALCULATION OF EARNINGS PER COMMON SHARE EXHIBIT 11 Calculation of Earnings per Common Share For the Quarter and Six Months Ended November 30, 1997
Primary Fully Diluted Quarter Six Months Quarter Six Months -------------------------------------------------------- CSE's: Common Stock 4,097,673 4,097,673 4,099,054 4,099,054 Series 2 Preferred (CSE) 970,450 970,450 970,450 970,450 Debentures (non-CSE): # bonds 189 189 189 189 x conversion rate 200 200 200 200 ------------------------------------------------------- # shares under bonds outstanding 37,800 37,800 37,800 37,800 x exercise price 5 5 5 5 ------------------------------------------------------- = cash generated 189,000 189,000 189,000 189,000 Market price of common stock: Average $ 0.2398 $ 0.2398 Closing $ 0.2344 $ 0.2344 # treasury shares that could be repurchased 788,157 788,157 806,314 806,314 ------------------------------------------------------- Incremental # shares 0 0 0 0 Warrants & options: # options & warrants outstanding 5,360,000 5,360,000 5,360,000 5,360,000 x exercise price = cash generated 2,458,818 2,458,818 2,458,818 2,458,818 Market price of common stock: Average $ 0.2398 $ 0.2398 Closing $ 0.2344 $ 0.2344 # treasury shares that could be repurchased 10,253,620 10,253,620 10,489,839 10,489,839 ------------------------------------------------------- Incremental # shares 0 0 0 0 ------------------------------------------------------- Total CSE 4,097,673 4,099,054 4,097,673 4,099,054 ======================================================= Debentures "if converted" 37,800 37,800 ============================== EARNINGS PER SHARE: PREFERRED STOCK EXCLUDED: Net income 56,212 117,453 56,212 117,453 Subtract: preferred stock dividends 87,342 174,684 87,342 174,684 ------------------------- Add: interest expense on non-CSE debt 4,489 8,978 ------------------------------ (31,130) (57,231) (26,641) (48,254) Divided by #CSEs + non-CSE debt 4,097,673 4,099,054 4,135,473 4,136,854 ------------------------------------------------------- EPS (0.01) (0.01) (0.01) (0.01) ======================================================= PREFERRED STOCK INCLUDED: Net income 56,212 117,453 56,212 117,453 Add: interest expense on non-CSE debt 4,489 8,978 --------------------------------------------- 56,212 117,453 60,701 126,431 Divided by #CSEs + non-CSE debt 5,068,123 5,069,504 5,105,923 5,107,304 ------------------------------------------------------- EPS 0.01 0.02 0.01 0.02 ======================================================= (Preferred Stock is anti-dilutive so it is not included in EPS.) (Debt is determined to be non-CSE due to the interest rate test.)
EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the financial statements in the Company's Form 10-QSB for the quarter ended November 30, 1997, and is qualified in its entirety by reference to such financial statements. 1 U.S. Dollars 6-MOS MAY-31-1998 JUN-1-1997 NOV-30-1997 1 759,660 0 366,394 (19,851) 0 1,394,087 1,255,934 (876,604) 2,033,467 1,235,224 0 0 3,882 40,904 0 2,033,467 0 3,781,504 0 2,849,689 790,832 0 (15,161) 117,453 0 117,453 0 0 0 117,453 (0.01) (0.01)
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