-----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, UcTlL5Suj1jZ+y0ZHZZZ3NuZi5edc23I1pluZ+fW7BR6joaVWw53+z0S1pIEQcwg lgjxti7vWJaB6D3wwfu7VQ== 0000950149-97-002020.txt : 19971111 0000950149-97-002020.hdr.sgml : 19971111 ACCESSION NUMBER: 0000950149-97-002020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEA MARINE CONTAINER INCOME FUND III CENTRAL INDEX KEY: 0000350202 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942717330 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10474 FILM NUMBER: 97711199 BUSINESS ADDRESS: STREET 1: 444 MARKET ST 15TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156778990 MAIL ADDRESS: STREET 1: 444 MARKET ST 15TH FLOOR CITY: SAN FRANCISCO STATE: CA ZIP: 94111 10-Q 1 IEA MARINE CONTAINER FUND III 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ Commission file number 0-10474 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) (Exact name of registrant as specified in its charter) California 94-2717330 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 444 Market Street, 15th Floor, San Francisco, California 94111 (Address of principal executive offices) (Zip Code) (415) 677-8990 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . ---- ---- 2 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 TABLE OF CONTENTS
PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets - September 30, 1997 (unaudited) and December 31, 1996 4 Statements of Operations for the three and nine months ended September 30, 1997 and 1996 (unaudited) 5 Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 (unaudited) 6 Notes to Financial Statements (unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 14
2 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presented herein are the Registrant's balance sheets as of September 30, 1997 and December 31, 1996, statements of operations for the three and nine months ended September 30, 1997 and 1996, and statements of cash flows for the nine months ended September 30, 1997 and 1996. 3 4 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS (UNAUDITED)
September 30, December 31, 1997 1996 ---------- ---------- Assets ------ Current assets: Cash and cash equivalents, includes $359,527 at September 30, 1997 and $656,038 at December 31, 1996 in interest-bearing accounts $ 406,441 $ 656,333 Net lease receivables due from Leasing Company (notes 1 and 2) 96,384 252,850 ---------- ---------- Total current assets 502,825 909,183 ---------- ---------- Container rental equipment, at cost 2,148,765 3,173,384 Less accumulated depreciation 1,482,825 2,201,024 ---------- ---------- Net container rental equipment 665,940 972,360 ---------- ---------- $1,168,765 $1,881,543 ========== ========== Partners' Capital ----------------- Partners' capital: General partners $ 896 $ 3,103 Limited partners 1,167,869 1,878,440 ---------- ---------- Total partners' capital 1,168,765 1,881,543 ---------- ---------- $1,168,765 $1,881,543 ========== ==========
The accompanying notes are an integral part of these financial statements. 4 5 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended --------------------------- ----------------------------- September 30, September 30, September 30, September 30, 1997 1996 1997 1996 ------------ ------------- ------------ ------------ Net lease revenue (notes 1 and 3) $ 78,441 $157,011 $229,030 $522,541 Other operating expenses: Other general and administrative expenses 9,607 9,475 31,029 27,911 -------- -------- -------- -------- Earnings from operations 68,834 147,536 198,001 494,630 Other income: Interest income 4,825 12,706 17,460 34,310 Net gain on disposal of equipment 27,757 73,368 100,075 276,268 -------- -------- -------- -------- 32,582 86,074 117,535 310,578 -------- -------- -------- -------- Net earnings $101,416 $233,610 $315,536 $805,208 ======== ======== ======== ======== Allocation of net earnings: General partners $ 4,835 $ 8,674 $ 13,599 $ 17,853 Limited partners 96,581 224,936 301,937 787,355 -------- -------- -------- -------- $101,416 $233,610 $315,536 $805,208 ======== ======== ======== ======== Limited partners' per unit share of net earnings $ 3.21 $ 7.50 $ 10.06 $ 26.25 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. 5 6 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended ----------------------------- September 30, September 30, 1997 1996 ------------- ------------- Net cash provided by operating activities $ 347,095 $ 640,752 Cash flows provided by investing activities: Proceeds from disposal of equipment 431,327 1,122,439 Cash flows used in financing activities: Distribution to partners (1,028,314) (1,838,608) ----------- ----------- Net decrease in cash and cash equivalents (249,892) (75,417) Cash and cash equivalents at January 1 656,333 837,918 ----------- ----------- Cash and cash equivalents at September 30 $ 406,441 $ 762,501 =========== ===========
6 7 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies (a) Nature of Operations IEA Marine Container Income Fund III (A California Limited Partnership) (the "Partnership"), was organized under the laws of the State of California on January 3, 1980 for the purpose of owning and leasing marine dry cargo containers. The managing general partner is Cronos Capital Corp. ("CCC"); the associate general partner is Smith Barney Shearson, Inc. CCC, with its affiliate, Cronos Containers Limited (the "Leasing Company"), manages the business of the partnership. The Partnership commenced operations on April 3, 1981, when the minimum subscription proceeds of $500,000 were obtained. The Partnership offered 30,000 units of limited partnership interest at $500 per unit, or $15,000,000. The offering terminated on June 26, 1981, at which time 30,000 limited partnership units had been purchased. As of September 30, 1997, 11% of the original equipment remained in the Partnership's fleet and was comprised of 777 twenty-foot and 105 forty-foot marine dry cargo containers. Commencing in 1991, the Partnership's 11th year of operations, the Partnership began focusing its attention on the disposition of its fleet in accordance with another of its original investment objectives, realizing the residual value of its containers after the expiration of their economic useful lives, estimated to be between 10 to 15 years after placement in leased service. During this phase, the Partnership has actively disposed of containers within its fleet, while cash proceeds from equipment disposals, in addition to cash from operations, provided the cash flow for distributions to the limited partners. The Partnership, in its 17th year of operations, will focus its attention during the remainder of 1997 and subsequent periods on disposing of its remaining fleet. (b) Leasing Company and Leasing Agent Agreement Pursuant to the Limited Partnership Agreement of the Partnership, all authority to administer the business of the Partnership is vested in CCC. CCC has entered into a Leasing Agent Agreement whereby the Leasing Company has the responsibility to manage the leasing operations of all equipment owned by the Partnership. Pursuant to the Agreement, the Leasing Company is responsible for leasing, managing and re-leasing the Partnership's containers to ocean carriers and has full discretion over which ocean carriers and suppliers of goods and services it may deal with. The Leasing Agent Agreement permits the Leasing Company to use the containers owned by the Partnership, together with other containers owned or managed by the Leasing Company and its affiliates, as part of a single fleet operated without regard to ownership. Since the Leasing Agent Agreement meets the definition of an operating lease in Statement of Financial Accounting Standards (SFAS) No. 13, it is accounted for as a lease under which the Partnership is lessor and the Leasing Company is lessee. (Continued) 7 8 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS (b) Leasing Company and Leasing Agent Agreement - (Continued) The Leasing Agent Agreement generally provides that the Leasing Company will make payments to the Partnership based upon rentals collected from ocean carriers after deducting direct operating expenses and management fees to CCC. The Leasing Company leases containers to ocean carriers, generally under operating leases which are either master leases or term leases (mostly two to five years). Master leases do not specify the exact number of containers to be leased or the term that each container will remain on hire but allow the ocean carrier to pick up and drop off containers at various locations; rentals are based upon the number of containers used and the applicable per-diem rate. Accordingly, rentals under master leases are all variable and contingent upon the number of containers used. Most containers are leased to ocean carriers under master leases; leasing agreements with fixed payment terms are not material to the financial statements. Since there are no material minimum lease rentals, no disclosure of minimum lease rentals is provided in these financial statements. (c) Basis of Accounting The Partnership utilizes the accrual method of accounting. Net lease revenue is recorded by the Partnership in each period based upon its leasing agent agreement with the Leasing Company. Net lease revenue is generally dependent upon operating lease rentals from operating lease agreements between the Leasing Company and its various lessees, less direct operating expenses and management fees due in respect of the containers specified in each operating lease agreement. (d) Financial Statement Presentation These financial statements have been prepared without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting procedures have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and accompanying notes in the Partnership's latest annual report on Form 10-K. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires the Partnership 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 reported period. Actual results could differ from those estimates. The interim financial statements presented herewith reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the financial condition and results of operations for the interim periods presented. (Continued) 8 9 IEA MARINE CONTAINER INCOME FUND III (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS (2) Net Lease Receivables Due from Leasing Company Net lease receivables due from the Leasing Company are determined by deducting direct operating payables and accrued expenses, base management fees and incentive fees payable to CCC and its affiliates from the rental billings payable by the Leasing Company to the Partnership under operating leases to ocean carriers for the containers owned by the Partnership. Net lease receivables at September 30, 1997 and December 31, 1996 were as follows:
September 30, December 31, 1997 1996 ------------ ------------ Lease receivables, net of doubtful accounts of $234,086 at September 30, 1997 and $199,540 at December 31, 1996 $175,310 $368,092 Less: Direct operating payables and accrued expenses 38,687 71,137 Damage protection reserve 40,239 44,105 -------- -------- $ 96,384 $252,850 ======== ========
(3) Net Lease Revenue Net lease revenue is determined by deducting direct operating expenses and base management fees to CCC from the rental revenue billed by the Leasing Company under operating leases to ocean carriers for the containers owned by the Partnership. Net lease revenue for the three and nine-month periods ended September 30, 1997 and 1996, was as follows:
Three Months Ended Nine Months Ended ----------------------------- ----------------------------- September 30, September 30, September 30, September 30, 1997 1996 1997 1996 ------------- ------------- ------------- ------------- Rental revenue $111,104 $235,248 $383,640 $873,641 Less: Rental equipment operating expenses 9,780 36,788 76,363 196,082 Base management fees 22,883 41,449 78,247 155,018 -------- -------- -------- -------- $ 78,441 $157,011 $229,030 $522,541 ======== ======== ======== ========
9 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations It is suggested that the following discussion be read in conjunction with the Registrant's most recent annual report on Form 10-K. 1) Material changes in financial condition between September 30, 1997 and December 31, 1996. As discussed in the Registrant's report for the year ended December 31, 1996, the Registrant entered 1997 with a view towards disposing its remaining container fleet. During the first nine months of 1997, the Registrant disposed of 410 containers as part of its ongoing container operations, contributing to a decline in the Registrant's operating results and related cash balances. At September 30, 1997, 11% of the original equipment remained in the Registrant's fleet, as compared to 16% at December 31, 1996, and was comprised of the following:
20-Foot 40-Foot ------- ------- Containers on lease: Term leases 67 9 Master lease 636 83 --- --- Subtotal 703 92 Containers off lease 74 13 --- --- Total container fleet 777 105 === ===
20-Foot 40-Foot ------------ ---------- Units % Units % ----- --- ----- --- Total purchases 7,257 100% 890 100% Less disposals 6,480 89% 785 88% ----- --- --- --- Remaining fleet at September 30, 1997 777 11% 105 12% ===== === === ===
The Registrant's diminishing fleet size and its related operating performance contributed to a 62% decline in net lease receivables at September 30, 1997, when compared to December 31, 1996. During the third quarter of 1997, distributions from operations and sales proceeds amounted to $267,098, reflecting distributions to the general and limited partners for the second quarter of 1997. This represents a decline from the $305,292 distributed during the second quarter of 1997, reflecting distributions for the first quarter of 1997. The Registrant's efforts to dispose of the remaining fleet should produce lower operating results and, consequently, reduce distributions to its partners in subsequent quarters. Additionally, the Registrant may refrain from distributing cash generated from operations and sales proceeds to its partners, reserving all excess cash as part of its working capital in order to maintain sufficient cash reserves for expenses relating to its final liquidation and subsequent dissolution. 10 11 During 1996, ocean carriers and other transport companies moved away from leasing containers outright, as declining container prices, favorable interest rates and the abundance of available capital resulted in ocean carriers and transport companies purchasing a larger share of equipment for their own account, reducing their need for leased containers. Once the demand for leased containers began to fall, per-diem rental rates were also adversely affected. Since the beginning of 1997, the container leasing industry has experienced a modest recovery as indicated by an upward trend in container utilization. This trend can also be seen within the Registrant's utilization rate, which remained at a favorable level of 90% at September 30, 1997, consistent with the utilization rate at December 31, 1996. Increasing cargo volumes and continuing equipment imbalances within the container fleets of shipping lines and transport companies have re-established a need for these companies to replenish their leased fleets during 1997. Although there has been an improvement in container utilization rates, per-diem rental rates continue to remain under pressure as a result of the following factors: start-up leasing companies offering new containers and low rental rates in an effort to break into the leasing market; established leasing companies reducing rates to very low levels; and a continuing oversupply of containers. The recent volatility of the Hong Kong and other Asian financial markets and its impact on trade, shipping, and container leasing, especially intra-Asia and Asia-Europe routes, has yet to be determined. While these conditions could impact the Registrant's financial condition and operating performance through the remainder of 1997 and first half of 1998, the Registrant is well positioned to take advantage of further improvements in the container leasing market. 2) Material changes in the results of operations between the three and nine-month periods ended September 30, 1997 and the three and nine-month periods ended September 30, 1996. Net lease revenue for the three and nine-month periods ended September 30, 1997 was $78,441 and $229,030, respectively, a decline of 50% and 56% respectively, from the same three and nine-month periods in the prior year. Approximately 27% and 32% of the Registrant's net earnings for the three and nine-month periods ended September 30, 1997, respectively, were from gain on disposal of equipment, as compared to 31% and 34% respectively, for the same three and six-month periods in the prior year. As the Registrant continues the disposal of its containers in subsequent periods, net gain on disposal may fluctuate and should contribute significantly to the Registrant's net earnings. Gross rental revenue (a component of net lease revenue) for the three and nine-month periods ended September 30, 1997 was $111,104 and $383,640, respectively, reflecting a decline of 53% and 56% from the same three and nine-month periods in 1996, respectively. During 1997, gross rental revenue was impacted by the Registrant's diminishing fleet size and a decline in per-diem rental rates. Average per-diem rental rates decreased approximately 15% and 13% respectively, when compared to the same three and nine-month periods in the prior year. Utilization rates increased when compared to the same three and nine-month periods in the prior year, as the demand for leased containers improved and the Registrant continued disposing of containers, reducing the number of off-hire containers within its fleet. The Registrant's average fleet size and utilization rates for the three and nine-month periods ended September 30, 1997 and September 30, 1996 were as follows:
Three Months Ended Nine Months Ended --------------------------- ---------------------------- September 30, September 30, September 30, September 30, 1997 1996 1997 1996 ------------- ------------- ------------ ------------- Average Fleet Size (measured in twenty-foot equivalent units (TEU)) 1,030 1,838 1,201 2,303 Average Utilization 92% 90% 91% 87%
11 12 Rental equipment operating expenses were 9%, and 20% respectively, of the Registrant's gross lease revenue during the three and nine-month periods ended September 30, 1997, as compared to 16% and 22% respectively, during the three and nine-month periods ended September 30, 1996. Contributing to these declines were reductions in costs associated with higher utilization levels, including storage and handling. The Registrant's decision to dispose of its off-hire containers also contributed to lower rental equipment operating expenses, as well as lower base management fees. As reported in the Registrant's Current Report on Form 8-K and Amendment No. 1 to Current Report on Form 8-K, filed with the Commission on February 7, 1997 and February 26, 1997, respectively, Arthur Andersen, London, England, resigned as auditors of The Cronos Group, a Luxembourg Corporation headquartered in Orchard Lea, England (the "Parent Company"), on February 3, 1997. The Parent Company is the indirect corporate parent of Cronos Capital Corp., the managing general partner of the Registrant. In its letter of resignation to the Parent Company, Arthur Andersen states that it resigned as auditors of the Parent Company and all other entities affiliated with the Parent Company. While its letter of resignation was not addressed to the managing general partner or the Registrant, Arthur Andersen confirmed to the managing general partner that its resignation as auditors of the entities referred to in its letter of resignation included its resignation as auditors of Cronos Capital Corp. and the Registrant. Following Arthur Andersen's resignation, the Parent Company subsequently received notification from the Securities and Exchange Commission that it was conducting a private investigation of the Parent Company regarding the events and circumstances leading to Arthur Andersen's resignation. The results of this investigation are still pending. Accordingly, the Registrant does not, at this time, have sufficient information to determine the impact, if any, that the Securities and Exchange Commission investigation of the Parent Company and the concerns expressed by Arthur Andersen in its letter of resignation may have on the future operating results and financial condition of the Registrant or the Leasing Company's ability to manage the Registrant's fleet in subsequent periods. However, the managing general partner of the Registrant does not believe, based upon the information currently available to it, that Arthur Andersen's resignation was triggered by any concern over the accounting policies and procedures followed by the Registrant. Arthur Andersen's report on the financial statements of Cronos Capital Corp. and the Registrant, for either of the previous two years, has not contained an adverse opinion or a disclaimer of opinion, nor was any such report qualified or modified as to uncertainty, audit scope, or accounting principles. During the Registrant's previous two fiscal years and the subsequent interim period preceding Arthur Andersen's resignation, there have been no disagreements between Cronos Capital Corp. or the Registrant and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. The Registrant retained a new auditor, Moore Stephens, P.C. ("Moore Stephens") on April 10, 1997, as reported in the Registrant's Current Report on Form 8-K, filed April 14, 1997. The President of the Leasing Company, a subsidiary of the Parent Company, along with two marketing Vice Presidents, resigned in June 1997. These vacancies were filled by qualified, long-time employees who average over 15 years of experience in the container leasing industry, therefore providing continuity in the management of the Leasing Company. The Registrant and managing general partner do not believe these changes will have a material impact on the future operating results and financial condition of the Registrant. 12 13 Cautionary Statement This Quarterly Report on Form 10-Q contains statements relating to future results of the Registrant, including certain projections and business trends, that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in: economic conditions; trade policies; demand for and market acceptance of leased marine cargo containers; competitive utilization and per-diem rental rate pressures; as well as other risks and uncertainties, including but not limited to those described in the above discussion of the marine container leasing business under Item 2., Management's Discussion and Analysis of Financial Condition and Results of Operations; and those detailed from time to time in the filings of Registrant with the Securities and Exchange Commission. 13 14 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Exhibit No. Description Method of Filing ------- ----------- ---------------- 3(a) Limited Partnership Agreement of the Registrant, * amended and restated as of February 11, 1981 3(b) Certificate of Limited Partnership of the Registrant ** 27 Financial Data Schedule Filed with this document
(b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter ended September 30, 1997. - ------------- * Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant dated February 12, 1981, included as part of Registration Statement on Form S-1 (No. 2-70401) ** Incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1 (No. 2-70401) 14 15 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. IEA MARINE CONTAINER INCOME FUND III (A California Limited Partnership) By Cronos Capital Corp. The Managing General Partner By /s/ JOHN KALLAS ---------------------------------------- John Kallas Vice President, Treasurer Principal Finance & Accounting Officer Date: November 10, 1997 15 16 EXHIBIT INDEX
Exhibit No. Description Method of Filing ------- ----------- ---------------- 3(a) Limited Partnership Agreement of the Registrant, amended and * restated as of February 11, 1981 3(b) Certificate of Limited Partnership of the Registrant ** 27 Financial Data Schedule Filed with this document
- ------------- * Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant dated February 12, 1981, included as part of Registration Statement on Form S-1 (No. 2-70401) ** Incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1 (No. 2-70401) EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AT SEPTEMBER 30, 1997 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD SEPTEMBER 30, 1997 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 406,441 0 96,384 0 0 502,825 2,148,765 1,482,825 1,168,765 0 0 0 0 0 1,168,765 1,168,765 0 229,030 0 31,029 0 0 0 0 0 0 0 0 0 315,536 0 0
-----END PRIVACY-ENHANCED MESSAGE-----