-----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, OyRwVHYB/9z2VI6gihjcop6e/nW1yIpxUufaNjgtztDtJ6gj/4SY08chBaue6YvB QjxIu0Lj9qbJErTdraqRPg== 0001047469-99-020062.txt : 19990514 0001047469-99-020062.hdr.sgml : 19990514 ACCESSION NUMBER: 0001047469-99-020062 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELECTRONIC PROCESSING INC CENTRAL INDEX KEY: 0001027207 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 481056429 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22081 FILM NUMBER: 99620214 BUSINESS ADDRESS: STREET 1: 501 KANSAS AVENUE CITY: KANSAS CITY STATE: KS ZIP: 66105 BUSINESS PHONE: 9133216392 MAIL ADDRESS: STREET 1: 501 KANSAS AVENUE CITY: KANSAS CITY STATE: KS ZIP: 66105 10QSB 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1999 COMMISSION FILE NUMBER 0-22081 -------------------------------------------------- ELECTRONIC PROCESSING, INC. MISSOURI 48-1056429 (State or Other Jurisdiction of (IRS Employer Identification Number) Incorporation or Organization) 501 KANSAS AVENUE, KANSAS CITY, KANSAS 66105-1300 (Address of Principal Executive Office) 913-321-6392 (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 shares outstanding of registrants common stock at April 30, 1999, was 4,635,068 shares. Transitional Small Business Disclosure Format (Check one): Yes No X --- --- ELECTRONIC PROCESSING, INC. FORM 10-QSB QUARTER ENDED MARCH 31, 1999 CONTENTS
Page ---- PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements Statements of Income - Three months ended March 31, 1999 and 1998 3 Balance Sheets - December 31, 1998 and March 31, 1999 4 Statements of Cash Flows - Three months ended March 31, 1999 and 1998 6 Notes to Financial Statements - March 31, 1999 and 1998 7 Item 2. Management's Discussion and Analysis of Financial Condition and 8 Results of Operations PART II - OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11
ELECTRONIC PROCESSING, INC. STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
1999 1998 ----------- ----------- OPERATING REVENUES $ 3,429,910 $ 2,535,796 ----------- ----------- COST OF GOODS SOLD AND DIRECT COSTS Processing costs 1,140,139 891,835 Depreciation and amortization 463,460 285,419 ----------- ----------- 1,603,599 1,177,254 ----------- ----------- GROSS PROFIT 1,826,311 1,358,542 ----------- ----------- OPERATING EXPENSES General and administrative 1,250,201 884,036 Depreciation and amortization 35,065 39,736 ----------- ----------- 1,285,266 923,772 ----------- ----------- INCOME FROM OPERATIONS 541,045 434,770 ----------- ----------- OTHER INCOME (EXPENSE) Interest income 135,332 21,105 Interest expense (7,051) (37,653) Other 71 325 ----------- ----------- 128,352 (16,223) ----------- ----------- NET INCOME BEFORE INCOME TAXES 669,397 418,547 PROVISION FOR INCOME TAXES Current 224,886 147,629 Deferred 32,919 20,371 ----------- ----------- 257,805 168,000 ----------- ----------- NET INCOME PER SHARE $ 411,592 $ 250,547 ----------- ----------- ----------- ----------- Basic $ .09 $ .07 ----------- ----------- ----------- ----------- Diluted $ .09 $ .07 ----------- ----------- ----------- ----------- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 4,634,117 3,409,218 ----------- ----------- ----------- ----------- Diluted 4,784,840 3,592,205 ----------- ----------- ----------- -----------
SEE NOTES TO FINANCIAL STATEMENTS ELECTRONIC PROCESSING, INC. BALANCE SHEETS DECEMBER 31, 1998 AND MARCH 31, 1999 (UNAUDITED) ASSETS
December 31, 1998 March 31, 1999 ----------------- -------------- CURRENT ASSETS Cash and cash equivalents $ 820,256 $ 467,656 Short-term investment 10,700,000 10,400,000 Accounts receivable, trade, less allowance for doubtful accounts of $5,000 1,586,303 2,375,908 Prepaid expenses and other 294,024 187,828 Deferred income taxes 39,345 39,344 ----------- ----------- Total Current Assets 13,439,928 13,470,736 ----------- ----------- PROPERTY AND EQUIPMENT, At cost Furniture and fixtures 526,862 538,920 Computer equipment 7,254,072 7,884,149 Office equipment 329,775 329,775 Leasehold improvements 864,184 864,184 Transportation equipment 14,969 14,969 ----------- ----------- 8,989,862 9,631,997 Less accumulated depreciation 3,233,510 3,623,943 ----------- ----------- 5,756,352 6,008,054 ----------- ----------- SOFTWARE DEVELOPMENT COSTS, Net of amortization 2,016,946 2,047,787 ----------- ----------- INTANGIBLE ASSETS, Net of amortization Excess of cost over fair value of net assets acquired 59,473 58,969 ----------- ----------- OTHER ASSETS 5,912 9,214 ----------- ----------- $21,278,611 $21,594,760 ----------- ----------- ----------- -----------
SEE NOTES TO FINANCIAL STATEMENTS LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, 1998 March 31, 1999 ----------------- -------------- CURRENT LIABILITIES Current maturities of long-term debt $ 159,151 $ 126,601 Accounts payable 626,577 400,159 Accrued expenses 450,608 459,584 Income taxes payable 12,672 129,360 ----------- ----------- Total Current Liabilities 1,249,008 1,115,704 LONG-TERM DEBT 109,300 139,389 ----------- ----------- DEFERRED INCOME TAXES 529,485 529,483 STOCKHOLDERS' EQUITY Common stock, $.01 par value; authorized 10,000,000 shares; issued and outstanding 4,633,268 shares December 31, 1998 and 4,635,068 shares March 31, 1999 46,333 46,351 Additional paid-in capital 17,660,878 17,668,635 Retained earnings (deficit) 1,683,607 2,095,198 ----------- ----------- 19,390,818 19,810,184 ----------- ----------- $21,278,611 $21,594,760 ----------- ----------- ----------- -----------
ELECTRONIC PROCESSING, INC. STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
1999 1998 ----- ----- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) 411,592 250,547 Items not requiring (providing) cash: Deferred income taxes 1 20,371 Depreciation 390,571 248,415 Amortization of software development costs 107,451 76,237 Amortization of intangible assets 503 503 Changes in: Accounts receivable (789,605) (223,182) Prepaid expenses and other assets 102,894 (29,329) Accounts payable and accrued expenses (217,442) (143,499) ---------- Income taxes payable 116,688 --------- Net cash provided by operating activities 122,652 200,063 --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (671,199) (56,280) Expenditures for software development costs (138,293) (156,706) Equipment sold from fixed assets 95,852 Proceeds from sale of investments 300,000 --------- ---------- Net cash used in investing activities (413,640) (212,986) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under capital lease obligation (65,221) (96,234) Principal payments on long-term debt (4,166) (81,092) Exercise stock options 7,775 6,773 --------- ---------- Net cash provided by financing activities (61,612) (170,553) --------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (352,600) (183,476) CASH AND CASH EQUIVALENTS, BEGINNING PERIOD 820,256 1,835,233 --------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 467,656 $1,651,757 --------- ---------- --------- ----------
SEE NOTES TO FINANCIAL STATEMENTS ELECTRONIC PROCESSING, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND MARCH 31, 1999 AND 1998 NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Electronic Processing, Inc. (the Company) develops, markets, and licenses proprietary software products and provides support services for Chapter 7 and Chapter 13 bankruptcy trustees and other users of the federal bankruptcy system. EPI serves a national client base with specialty products that facilitate the financial and administrative aspects of bankruptcy management and that are accompanied by a high level of coordinated support including network integration, post-installation support and value added services. 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. PROPERTY AND EQUIPMENT Property and equipment are depreciated on a straight-line basis over the estimated useful life of each asset as follows: Furniture and fixtures 10 years Computer equipment 5 years Office equipment 5-10 years Transportation equipment 3-5 years
Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful lives (5-10 years) of the improvements. SOFTWARE DEVELOPMENT COSTS Certain internal software development costs incurred in the creation of computer software products are capitalized once technological feasibility has been established. Prior to the completion of a detail program design, development costs are expensed. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product, not to exceed five years. INTANGIBLE ASSETS The excess of cost over fair value of net assets acquired is being amortized on a straight-line basis over 40 years. NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE RECOGNITION For the Company's Chapter 7 bankruptcy software product, monthly fees are received from a national financial institution after the product is installed and deposits are transferred based on the level of trustees' deposits with that institution. Revenues for Chapter 13 processing and noticing are recorded monthly at the completion of the services based on the trustees' month-end caseloads. All ancillary fees are recognized as the services are provided. INCOME TAXES Deferred tax liabilities and assets are recognized for the tax effects of differences between the financial statement and tax bases of assets and liabilities. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. CASH EQUIVALENTS The Company considers all liquid investments with original maturities of three months or less (primarily money market accounts) to be cash equivalents. INTERIM FINANCIAL STATEMENTS The balance sheet as of March 31, 1999 and the statements of income, shareholders' equity and cash flows for the three month periods ended March 31, 1999 and 1998 have been prepared by the Company without audit. In the opinion of management, all adjustments (which included only normal, recurring adjustments) necessary for fair presentation have been made. The results for these periods are not necessarily indicative of the results to be expected for the full year. NOTE 2: ADDITIONAL CASH FLOW INFORMATION
Three Months Ended March 31 December 31, -------------------- 1998 1999 1998 ----------- ------ ------ (unaudited) NONCASH INVESTING AND FINANCING ACTIVITIES Capital lease obligation and notes payable incurred for equipment $ 28,828 $ 66,926 $434,241 ADDITIONAL CASH INFORMATION Interest paid 97,780 7,051 36,144 Income taxes paid 654,438 219,355 110,000
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS QUARTER ENDED MARCH 31, 1999 COMPARED TO QUARTER ENDED MARCH 31, 1998 Operating revenues increased 35.3%, or $894,114 to $3,429,910 in the three-month period ended March 31, 1999, compared to $2,535,796 in the three-month period ended March 31, 1998. Approximately 99.3% of the growth in operating revenues were attributable to revenues generated by Chapter 7. Chapter 7 sales increased 74.7%, or $887,660 to $2,076,245 in the three-month period ended March 31, 1999, compared to $1,188,585 in the three-month period ended March 31, 1998. The increase in Chapter 7 revenue was due in part to the growth in new Chapter 7 trustee business for the Company resulting in higher monthly fees paid to EPI and the release of version 4.0 of TCMS, the Chapter 7 software product. Chapter 13 revenue increased 6.6%, or $80,589 to $1,313,385 in the three- month period ended March 31, 1999 compared to $1,232,796 in the three-month period ended March 31, 1998. The sale of additional hardware to existing Chapter 13 trustee clients as they converted to CASEPOWER contributed to the increase. Total cost of goods sold and direct costs increased 36.2%, or $426,345 to $1,603,599 in the three-month period ended March 31, 1999, compared to $1,177,254 in the three-month period ended March 31, 1998. Total cost of goods sold and direct costs as a percentage of operating revenues was 46.8% in the three-month period ended March 31, 1999 compared to 46.4% in the three-month period ended March 31, 1998. Processing costs increased 27.8%, or $248,304, to $1,140,139 in the three-month period ended March 31, 1999, compared to $891,835 in the three-month period ended March 31, 1998. The increase in 1999 resulted principally from an increase in customer service expense to support the growth in Chapter 7 sales and the cost of computer hardware for the trustee clients converting to CASEPOWER. Processing costs as a percentage of operating revenues decreased to 33.2% in the three-month period ended March 31, 1999 compared to 35.2% in the three-month period ended March 31, 1998. Depreciation and amortization increased 62.4%, or $178,041, to $463,460 in the three-month period ended March 31, 1999, compared to $285,419 in the three-month period ended March 31, 1998, primarily due to the purchase of computer equipment for the Company's Chapter 7 product. Operating expenses increased 39.1%, or $361,494 to $1,285,266 in the three-month period ended March 31, 1999, compared to $923,772 in the three-month period ended March 31, 1998. Operating expenses as a percentage of operating revenues was 37.5% in the three-month period ended March 31, 1999 compared to 36.4% in the three-month period ended March 31, 1998. The increase in operating expenses was due to increases in general and administrative infrastructure necessary to support a higher level of revenues, including additional sales and marketing expenses related to growth of the Company's Chapter 7 product. Sales and marketing expenses include sales and marketing salaries, trade show costs, travel associated with Chapter 7 installations, and advertising costs. Sales and marketing expenses increased 48.1%, or $137,559 to $423,416 in the three-month period ended March 31, 1999, compared to $285,857 in the three-month period ended March 31, 1998. Other income (expense) which includes interest income and interest expense, was $128,352 in the three-month period ended March 31, 1999 compared to ($16,223) in the three-month period ended March 31, 1998. This resulted from a reduction in net interest expense due to interest income from the investment of the net proceeds from the sale of 1,140,500 shares of Common Stock in a secondary public offering completed in June of 1998. Outstanding debt was paid off with a portion of the net proceeds from the stock offerings resulting in a reduction in interest expense. The Company's effective tax rates were 38.5% and 40.1% for the three-month periods ended March 31, 1999 and March 31, 1998, respectively. Net income increased 64.3%, or $161,045, to $411,592 in the three-month period ended March 31, 1999, compared to net income of $250,547 in the three-month period ended March 31, 1998. Net income as a percentage of operating revenues increased to 12.0% in the three-month period ended March 31, 1999 from 9.9% in the three-month period ended March 31, 1998. LIQUIDITY AND CAPITAL RESOURCES The Company had total cash and short-term investments of $10,867,656 at March 31, 1999 and working capital of $12,355,032. In June of 1998, the Company sold 1,140,500 shares of Common Stock, which resulted in cash proceeds of $12,727,980. The Company generated cash from operations of $122,652, and $200,063 for the three-months ended March 31,1999, and March 31, 1998, respectively. The cash flow from operations in the three-months ended March 31, 1999 consisted primarily of net income before deferred taxes of $411,592, depreciation and amortization of $498,525, offset by an increase in accounts receivable of $789,605 and an decrease in accounts payable and accrued expenses of $217,442. The increase in depreciation and amortization relates primarily to the purchase of computer equipment for the installations of the Company's Chapter 7 product. Accounts receivable increased primarily due to increased revenues. The cash flow from operations in the three-months ended March 31, 1998 consisted primarily of net income before deferred taxes of $270,918, depreciation and amortization of $325,155, offset primarily by an increase in accounts receivable of $223,182, and a decrease in accounts payable and accrued expenses of $143,499. The Company invested in property and equipment totaling $738,125 and $490,521 for the three-month period ended March 31, 1999, and March 31, 1998, respectively, which related principally to the installation of computer equipment for the Company's Chapter 7 product. The Company incurred expenditures for software costs totaling $138,292 and $156,706 for the three-months ended March 31, 1999, and March 31, 1998, respectively. These expenditures are capitalized and are being amortized on a straight-line basis over a maximum five-year period. Internal software costs incurred in the creation of computer software products are capitalized as soon as technological feasibility has been established. Prior to the completion of a detailed program design, development costs are expensed. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to straight-line amortization over the remaining estimated economic life of the product, not to exceed five years. Additionally, the Company anticipates future software development will be at or above the spending levels of prior years. The Company believes that the net proceeds from the June 1998 stock offering, together with funds that may be generated from operations, will be sufficient to finance the Company's currently anticipated working capital and property and equipment expenditures for the foreseeable future. YEAR 2000 Many currently installed computer systems and software products are coded to accept only two-digit entries to represent years. For example, the year "1998" would be represented by "98." These systems and products will need to be able to accept four digit entries to distinguish 21st century dates from 20th century dates. Any programs that have time sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in the computer shutting down or performing incorrect computations. As a result, in less than one year, computer systems and software products used by many companies, that do not accept four-digit year entries, will need to be upgraded or replaced to comply with such "Year 2000" requirements. The Company believes that its currently marketed software products are Year 2000 compliant. In the first quarter of 1998, the Company began shipping release 3.0 of TCMS, as part of the Company's continual process of enhancing and upgrading its existing software products. Although release 3.0 of TCMS was written to be Year 2000 compliant, the impetus for its design was the Company's desire to further streamline Chapter 7 case administration for trustees. The Company introduced release 4.0 of TCMS in March, 1999, which release was also introduced for market and enhancement purposes unrelated to Year 2000 issues, but was written to be Year 2000 compliant. Similarly, in 1997 the Company began shipping CASEPOWER, a new proprietary Windows95/NT-based client-server software application for Chapter 13 trustees. Like TCMS, CASEPOWER was written to be Year 2000 compliant. Also like TCMS, the impetus for CASEPOWER'S design was the Company's commitment to the development and marketing of new and competitive bankruptcy case management conventions. The Company estimates that its national upgrade program for existing Chapter 13 customers, from its older AS/400 legacy product to CASEPOWER, is 90% completed. All Chapter 13 trustees are scheduled to be upgraded by June 1999. The Company is also in the process of discussing with its vendors and customers the potential impact the Year 2000 issue may have on their systems. More specifically, the Company has reviewed and assessed the probability of a material adverse effect from the Year 2000 issue on the Company's exclusive national marketing arrangement with Bank of America. Bank of America has reported that it undertook a process of software inventory, analysis, modification, testing and verification to assess the potential impact of the Year 2000 issue on its systems. Bank of America expects to substantially complete the Year 2000 software conversion projects for its systems by the end of 1999. Bank of America's management believes that its plans for dealing with the Year 2000 issue will result in timely and adequate modifications of systems and technology. Over the next 9 months, the plans of other third parties to address the Year 2000 issue will be monitored and any identified impact on the Company will be evaluated. The Year 2000 issue also affects the Company's internal systems, including information technology (IT) and non-IT systems. The Company has assessed the readiness of its systems for handling the Year 2000. Management currently believes that all material systems are either compliant, or will be upgraded or replaced by the Year 2000. The costs associated with this project are being expensed as incurred and are not expected to be material to the Company's financial position or results of operations. As previously discussed, the Company believes their currently marketed software products and internal systems are Year 2000 compliant or will be by the end of 1999. Additionally, they are not aware of any vendors or customers with Year 2000 problems which could materially impact their operations. Accordingly, the Company has not specifically evaluated a worst-case scenario, nor has it developed contingency plan of such scenario. FORWARD-LOOKING STATEMENTS This Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including those relating to the possible or assumed future results of operations and financial condition of the Company. Because those statements are subject to a number of uncertainties and risks, actual results may differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ from those expressed or implied include, but are not limited to, any material changes in the total asset proceeds on deposit by Chapter 7 trustees served by the Company, changes in the number of bankruptcy filings each year, the Company's reliance on its marketing arrangement for Chapter 7 revenue, the Company's ability to achieve or maintain technological advantages, and any material adverse effect of the Year 2000 issue and other factors described in the Company's filings with the Securities Exchange Commission under the Securities Act of 1933 and the Securities Exchange Act of 1934.. The Company undertakes no obligation to update any forward-looking statements contained herein to reflect future events or developments. 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) EXHIBITS The following Exhibit is filed by attachment to this Form 10-QSB:
Exhibit Number Description of Exhibit Page - --------------------------------------------------------------- 27 Financial Data Schedule 13
(b) REPORTS ON FORM 8-K: None 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. ELECTRONIC PROCESSING, INC. Date: May 15, 1999 /s/ Tom W. Olofson ----------------------------------- Tom W. Olofson Chairman of the Board Chief Executive Officer (Principal Executive Officer) Director Date: May 15, 1999 /s/ Nanci R. Trutna ----------------------------------- Nanci R. Trutna Vice President Finance And Secretary (Principal Financial Officer) EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ELECTRONIC PROCESSING, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE QUARTER ENDED MARCH 31, 1999 AND CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 1999 QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1998 JAN-01-1999 MAR-31-1999 467,656 10,400,000 2,380,908 5,000 0 13,470,736 9,631,997 3,623,943 21,594,760 1,115,704 0 0 0 17,668,635 0 21,594,760 3,429,910 3,429,910 1,603,599 1,603,599 1,149,863 0 7,051 669,397 257,805 411,592 0 0 0 411,592 .09 .09
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