United States
Securities and Exchange Commission
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _____________________ to ________________________
Commission File No. 0-23806
I/NET, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 87-0046720
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(State or Other Jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
643 West Crosstown Parkway
Kalamazoo, Michigan 49008
(Address of Principal Executive Officers)
Issuer's Telephone Number: (616) 344-3017
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange during the past 12 months (or for 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.
(1) Yes X No __ (2) Yes X No __
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practical date:
September 30, 1999
31,037,652
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
I/NET, Inc.
Consolidated Balance Sheet
(Unaudited)
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- --------------------------------------------------------------------------------
September 30, 1999
-------------------
Assets (Note 2 and 3)
Current Assets
Cash $ 75,459
Trade Receivables 406,110
----------------
Total Current Assets $ 481,569
Office Furniture and Equipment, Net of
Accumulated Depreciation $93,332 20,706
----------------
Total Assets $ 502,275
================
Liabilities and Capital Deficit
Current Liabilities
Accounts Payable $ 94,399
Accruals:
Commissions (Note 1) 258,000
Interest 174,236
Advances from Stockholders' (Note 2) 95,500
Current maturities of long-term debt (Note 3) 693,000
----------------
Total Current Liabilities $1,315,135
Long-term Debt, less current maturities (Note 3) 421,038
----------------
Total Liabilities $1,736,173
----------------
Commitments and Contingencies (Notes 8 and 11) -
Capital Deficit
Common Stock $.001 par value; Authorized
50,000,000 Shares:
Issued and outstanding 31,037,652 31,038
Additional Paid in Capital 11,886,674
Deficit (13,151,610)
Total Capital Deficit (1,233,898)
Total Liabilities and Capital Deficit $ 502,275
================
See accompanying summary of accounting policies and notes to consolidated
financial statements
<PAGE>
I/NET, Inc.
Consolidated Statements of Earnings
(Unaudited)
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- --------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
Revenues $ 487,325 $ 455,724 $ 1,381,874 $1,338,856
Cost of Revenues 180,021 168,335 635,188 652,740
------------- ------------- ------------- -------------
Gross Profit 307,304 287,389 $ 746,686 $ 686,116
Selling, General, and
Administrative Expenses 159,519 156,754 458,815 391,797
------------- ------------- ------------- -------------
Earnings from
operations $ 147,785 $ 130,635 $ 287,871 $ 294,319
Interest Expense - Net
of interest income (11,498) (17,638) (40,555) (50,696)
------------- ------------- -------------- ------------
Net Earnings 136,287 112,997 $ 247,316 $ 235,623
============= ============= ============== ============
Net Earnings per
share - Basic
and Diluted $ .01 $ .01 $ .01 $ .01
============= ============= ============== ============
See accompanying summary of accounting policies and notes to consolidated
financial statements
<PAGE>
I/NET, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
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- --------------------------------------------------------------------------------
Nine Months Ended
-----------------
September 30 September 30
1999 1998
------------ -------------
Operating Activities
Net Earnings $ 247,316 $ 235,623
Depreciation and Amortization 13,119 22,500
Changes in Assets and Liabilities
Trades Receivables (204,148) (72,815)
Accounts Payable (30,101) 64
Accruals 11,129 961
Cash Provided By Operating Activities $ 37,315 $ 186,333
Investing Activities
Capital Expenditures (2,725) (12,512)
------------ -------------
Cash (Used In) Investing Activities $ (2,725) $ (12,512)
Financing Activities
Repayment of Stockholder Loans (29,543) (33,998)
Principle Payments on Long-Term Debt (33,435) (125,443)
------------ -------------
Cash (Used In) Financing Activities $ (62,978) $(159,441)
Increase (Decrease) in Cash and Cash Equivalents $ (28,388) $ 14,380
Cash and Cash Equivalents, Beginning of Period 103,847 135,939
------------ -------------
Cash and Cash Equivalent, End of Period $ 75,459 $ 150,319
============ =============
See accompanying summary of accounting policies and notes to consolidated
financial statements
<PAGE>
I/NET, Inc.
Summary of Accounting Policies
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Basis of Presentation
- ---------------------
The consolidated financial statements included herein have been prepared by
I/NET, Inc. (the "Company")without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. It is suggested that these
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in I/NET's 1998 annual report on
Form 10-KSB.
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments necessary to present fairly the financial
position of the Company as of September 30, 1999, the results of its operations
for the nine month and three month periods ended September 30, 1999 and 1998,
and its cash flows for the nine month period ended September 30, 1999 and 1998.
All such adjustments are of normal and recurring nature.
The consolidated financial statements include the accounts of the Company,
I/NET, Inc., (a Delaware Corporation), and its wholly-owned subsidiary I/NET,
Inc., (a Michigan Corporation). Only the subsidiary remains an active Company
and therefore the consolidated financial statements presented within are those
of the subsidiary.
Description of the Business
---------------------------
The Company operates as one business segment consisting of Website consulting
services and development of Internet computer software products. The Company
does not operate based upon product lines but as one business unit. Its major
customers are International Business Machines (IBM), International Marketing
Strategies (IMS) and Career/NET L.L.C. (See Note 5)
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.
Cash and Cash Equivalents
- ---------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid investments with maturity of three months or less when purchased to be
cash equivalents.
<PAGE>
I/NET, Inc.
Summary of Accounting Policies
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Office Furniture, Equipment and Depreciation
- --------------------------------------------
Office equipment and furniture are stated at cost. Depreciation is computed
principally by the straight-line method for financial reporting purposes over
the estimated useful lives of the assets and by accelerated methods for tax
purposes.
Developed Computer Software
- ---------------------------
Software development costs are accounted for in accordance with the provisions
of Statement of Financial Accounting Standard (SFAS) No. 86, "Accounting for the
Cost of Computer Software To Be Sold, Leased or Otherwise Marketed." Software
development costs and certain product enhancements, when significant, are
capitalized subsequent to the establishment of technological feasibility for the
product and prior to the products general release to customers.
Costs incurred prior to technological feasibility or subsequent to the product's
general release to customers, as well as selling, general, and administrative
costs associated with the products, are expensed as incurred.
Fair Value of Financial Instruments
- -----------------------------------
The Company's financial instruments consist of cash, receivables, notes payable,
accounts payable and long-term debt. Due to the short-term nature of the items,
other than long-term debt and the variable interest rates on a substantial
portion of the long-term debt, management estimates that carrying amounts of the
Company's financial instruments approximate their fair values at September 30,
1999.
Revenue Recognition
- -------------------
Revenues for the sale of the Company's Internet products are recognized when the
customer has accepted the product. The Company's records it's revenue from
Websight consulting contracts as billed on a monthly basis as time and expenses
are incurred. Revenues from Career/NET are recorded as earned.
Earnings Per Share
- ------------------
Earnings per share amounts have been calculated using the weighted average
number of common shares outstanding, for the respective periods. Outstanding
warrants and options were not dilutive at September 30, 1999 and 1998.
See accompanying notes to consolidated financial statements.
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
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- --------------------------------------------------------------------------------
1. Commissions
During a prior year, the Company agreed to release a distributor from its
exclusive contract to distribute certain I/NET products. In exchange for this
release, I/NET agreed to pay a 7.5% commission to the distributor of I/NET's
sales of certain products sold through September 30, 1999 but at a minimum of
$250,000.
2. Short-term Advances from Stockholders
Advances from stockholders consist of:
September 30, 1999
- --------------------------------------------------------------------------------
Non-interest bearing notes payable to
stockholders, due on demand $ 20,500
Secured stockholder's advances bearing
interest at 8%, and are due on demand 75,000
- --------------------------------------------------------------------------------
$ 95,500
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3. Long-term Debt Long-term debt consists of:
September 30, 1999
- --------------------------------------------------------------------------------
Notes payable to vendors (see below) $ 797,732
Notes payable to stockholders bearing interest
at 8% and due in December, 2001, secured by all
the Company's assets 316,306
- --------------------------------------------------------------------------------
1,114,038
Less current maturities 693,000
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Total Long-term Debt $ 421,038
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<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes Payable to Vendors
- ------------------------
Unsecured notes payable to various vendors totaling $797,732 are due in various
installments and at varying interest rates.
Two notes totaling $440,655 are due on demand. These notes bear interest at the
prime rate plus 2% (effectively 10.25% at September 30, 1999).
Another note in the amount of $82,610 is due in monthly installments at the rate
of 5% of the previous months cash receipts (as defined) but at a minimum of
$2,000 bi-monthly. The principle balance of this note, which the Company was
unable to pay, was due in September 1996. The Company continues to make monthly
payments as required by the original note. This note bears interest at 8% and is
classified as current.
A vendor note in the amount of $216,808 as of September 30, 1999, calls for
monthly installments of 5% of the previous month's cash receipts (as defined)
but at a minimum rate of $10,000 bi-monthly and bears interest at the prime rate
plus 2%. Final payment, assuming minimum payments only, is March 2004.
Another vendor note in the amount of $57,659 is due in monthly installments of
5% of the previous month's cash receipts (as defined) but at a minimum rate of
$3,000 monthly and bears interest at 10%. Final payment, assuming minimum
payments only, is June 2001.
Aggregate maturities of long-term debt over the next five years assuming
repayment of stockholders' advances (Note 2) and notes are as follows:
2000 $693,000
2001 $385,000
2002 $ 50,000
2003 $ 55,000
2004 $ 27,000
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
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- --------------------------------------------------------------------------------
4. Stock Warrants
During prior years, the Company sold common stock for cash, trademark, and
extinguishment of debt. In connection with these sales, underwriters were issued
warrants for 550,000 shares of common stock at a weighted average price of $.35
that are exercisable for five years, expiring in November,1999. In 1997, the
Company issued 460,000 additional warrants at prices ranging from $.50 to $1.00
with a weighted average price of $.69. These warrants were issued in connection
with obtaining the right for the Company to port certain Netscape Communications
Corporation Netscape Internet Products to the IBM AS/400 platform. These
warrants expire in 2000. Outstanding warrants were not dilutive at September 30,
1999.
5. Major Customers
The Company provided Internet products, and websight consulting services and
Career/NET support services to major customers as follows:
Nine months ended September 30, 1999 1998
- --------------------------------------------------------------------------------
Internet Products:
IMS $434,000 $376,000
IBM $ 10,000 $375,000
- --------------------------------------------------------------------------------
$444,000 $751,000
- --------------------------------------------------------------------------------
Websight Consulting Services:
IBM $643,000 $506,000
- --------------------------------------------------------------------------------
Career/NET Support Services
Career/NET L.L.C. $258,000 $ -
- --------------------------------------------------------------------------------
6. Taxes on Income
Income taxes are calculated using the liability method specified by Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Significant components of the Company's deferred tax assets are as follows:
September 30, 1999
- --------------------------------------------------------------------------------
Deferred Tax Assets:
Accruals $ 40,000
Trademark 56,000
Net operating loss carryforwards 3,357,000
Tax Credit carryforwards 42,000
Capital loss carryforwards 24,000
- --------------------------------------------------------------------------------
Total Deferred Tax Assets $3,519,000
Valuation Allowance (3,519,000)
- --------------------------------------------------------------------------------
$ -
- --------------------------------------------------------------------------------
As of September 30, 1999, the Company had a net operating loss carryforward of
approximately $9,874,000 and investment tax credit carryforwards of
approximately $42,000 available to reduce future taxable income and taxes,
respectively. These carryforwards expire from 1999 through 2011.
7. Employee Benefit Plan
The Company has a profit sharing defined contribution pension plan covering
substantially all employees. Under the plan, employees may make tax deferred
voluntary contributions which, at the discretion of the Company Board of
Directors, may be matched within certain limits by the Company. In addition, the
Company may make additional discretionary contributions to the plan as profit
sharing contributions. All contributions to the plan are limited by applicable
Internal Revenue Code regulations. There were no Company contributions charged
against operations during the nine months ended September 30, 1999 or 1998.
8. Operating Leases The Company leases its facilities and certain equipment
under non-cancelable operating leases. Rental expense under these leases was
approximately $84,000 and $79,000 for the nine months ended September 30, 1999
and 1998 respectively. Future minimum annual lease payments subsequent to
September 30, 1999 are as follows:
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2000 $ 95,000
2001 $ 81,000
9. Incentive Stock Option Plan
The Company maintains an incentive stock option plan that provides for the
granting of options to officers and other key employees at an exercise price not
less than 100% of the fair market value on the date of the grant. Twenty percent
of the options become exercisable each year following the date they were
granted, and can remain outstanding for five years following the day they become
fully vested. Options outstanding are summarized as follows:
Weighted Average
Shares Price Per Share
- --------------------------------------------------------------------------------
September 30, 1999 115,000 $ .65
- --------------------------------------------------------------------------------
At September 30, 1999, 582,255 shares of common stock are reserved for the
incentive stock option plan and 55,000 options were vested and exercisable. The
remaining weighted average contractual life on these options is six years. The
remaining weighted average contractual life of all of the 60,000 options
outstanding is eight years.
Under SFAS No. 123, "Accounting for Stock Based Compensation", the Company is
required to provide pro forma information regarding net income and earnings per
share as if compensation cost for the Company's stock option plan had been
determined in accordance with the fair based method prescribed in SFAS No. 123.
The Company estimates the fair value of each stock option at the grant date by
using the Black-Scholes option-pricing model with the following assumptions used
for it"s most recent grant in 1997: expected volatility of 93 percent; risk-free
interest rate of 6.4 percent, and an expected option life of 10 years. Net
earnings for 1999 and 1998 would not have been materially affected.
10. Supplemental Disclosure of Cash Flow Information
Interest paid for the nine months ended September 30,1999 and 1998 was $17,000
and $34,000 respectively. The Company paid no income taxes during 1999 and 1998.
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. Contingencies
Royalties
On September 30 1997, the Company entered into a software license agreement
wherein Netscape Communications Corp. (Netscape) granted to the Company the
right to port certain of its Internet Server products to the IBM AS/400
platform. This agreement is for a period of three years and allows the Company
to market and distribute the ported products upon their modification to the
AS/400 platform.
In exchange for this license agreement, I/NET has agreed to pay minimum
royalties to Netscape in the amount of $3,000,000 according to the following
repayment schedule:
Paid by IBM on behalf of I/NET in October 1997 $ 250,000
Paid by IBM on behalf of I/NET in September 1998 $ 750,000
Paid by IBM on behalf of I/NET in September 1999 $1,000,000
September 30, 2000 $1,000,000
IBM Corporation has guaranteed to Netscape the above listed royalties in the
event that product sales are insufficient to repay amounts due under this
agreement.
In addition, I/NET had agreed to pay to Netscape a development support fee in
the amount of $250,000 for a period of three years. Netscape has agreed to waive
its fee for two years. IBM has provided advances against royalties in the amount
of $600,000. These amounts will be reimbursed to IBM after deduction of Netscape
royalties in the amount of 10% of total revenue received from sale of the ported
products. If the revenue from the sales of these Netscape products are
insufficient, I/NET will not have to repay any of these advanced royalties. The
Company recognized $375,000 of revenue from these advances in 1998 and $10,000
in 1999.
Litigation
From time to time the Company has been involved in various legal actions arising
from the normal course of business. Management does not anticipate any material
impact on the Company ot its business as a result of these actions.
<PAGE>
I/NET, Inc.
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. Continued Existence
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The company has suffered
recurring losses from operations in prior years, has a significant working
capital deficit, and requires additional capital to continue its product
development. Management believes the Company will continue as a going concern
and is actively marketing its products, which would enable the Company to meet
its current obligations and provide additional funds for continued new product
development. In addition, management is currently negotiating several additional
contracts for its services and products. However, there can be no assurance
these activities will be successful.
13. Acquisition
The previously announced acquisition of Consolidated Graphics Group, Inc. by the
Company has been terminated by the mutual agreement of both parties.
<PAGE>
I/NET, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Nine months ended September 30, 1999 and 1998.
Results of Operations
Revenues for the nine months ended September 30, 1999 were $1,381,874 compared
to $1,338,856 for the nine months ended September 30, 1998. When analyzed by
product category, revenues of Website consulting services provided to IBM were
$643,000 in 1999, as compared to $506,000 in 1998. Sale of Internet products
accounted for revenues of $434,000 in 1999 and $376,000 in 1998. Revenue from
the porting of Netscape products produced revenue of $10,000 in 1999 and
$375,000 in 1998.
During 1998, I/NET, signed a licensing agreement and supplemental support
services agreement for its previously developed Career/NET product, an Internet
resume management service. These agreements allowed the licensee the perpetual
license to use and sell the product. In consideration for granting the license,
I/NET would receive 30% of the net revenues received by the licensee. In
exchange for these revenues, I/NET would perform all programming, websight
design and development, upgrades and websight improvements.
During March 1999, the licensee decided that it wished to be relieved of the
support agreement. In exchange for this relief, it gave to I/NET a $209,000
demand promissory note, bearing 7% interest per annum. This revenue has been
recorded during 1999 and is included in trade receivables as of September 30,
1999. The Company has negotiated a fee for service agreement for any ongoing
services.
Cost of revenues decreased by approximately $18,000 to $635,188 as compared to
$652,740 in 1998. The primary cause for this decrease was the renegotiation of
fees charged to I/NET for the use of vendor software.
General and administrative expenses increased by approximately $67,000 as
compared to $91797 in 1998. The cause for this increase was additional travel
expenses and higher state operating taxes as well as increased professional fees
resulting from the now terminated acquisition of Consolidated Graphics Group,
Inc.
Interest expense decreased by approximately $18,000 to $41,555 from $58,696 due
to decreased borrowings in the first nine months of 1999 as interest-bearing
debt continues to be repaid.
<PAGE>
I/NET, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Condition and Liquidity
The Company's primary need for capital has been to invest in computer software
development. As of September 30, 1999 the Company's working capital deficit was
$834,000, as compared to a deficit of $1,052,000 at September 30, 1998. Earnings
have provided the resulting decrease in working capital deficit in 1999 and
1998.
Sales of the Netscape server, which was introduced during the first quarter of
1999, have been less than anticipated. The Company is working with Netscape and
IBM to find additional delivery methods for this product. Sales of this product
have been negligible to date and are not expected to impact earnings until 2000,
if at all.
During April 1999, the Company signed an extension to its current websight
consulting agreement with IBM through the end of March 2000.
In April 1999, the Company announced a 10-year contract with Internet Financial
Services, Ltd. (IFS), a privately held Internet software and services company
based in the Cayman Islands that specializes in web site design, hosting and
servicing of financial transactions for offshore clients. IFS contracted with
I/NET to design and develop the first-ever Internet based offshore asset
management and trading system for one of IFS's clients.
The system is operational and allows trading in stocks, bonds, mutual funds and
options on North American exchanges. IFS earns fee-for-service revenue from its
clients on transactions that flow through the system. These fees are to be split
between IFS and I/NET. There have been no revenues generated from this contract
to date. The Company does not expect revenue from this project until late 1999
or until 2000.
In September 1999, the Company announced the introduction of its newest product,
Net Print/400. This product allows for the seamless ad-hoc printing of AS/400
reports without requiring complex host or client set-up.
<PAGE>
I/NET, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Company believes that the additional sales provided by the above mentioned
agreements, the continued development of new products, together with the
renegotiations of its defaulted debt, should provide the Company with sufficient
working capital to market its products, which would enable the Company to meet
its current obligations and provide additional funds for continued new product
development. In addition, management is currently negotiating several additional
contracts for its services and products. However, there can be no assurance
these activities will be successful.
All I/NET developed software is year 2000 compliant. All I/NET internal computer
software is year 2000 compliant.
The Company is in the process of reviewing the insurance, regulatory and legal
implications as they relate to the year 2000. The Company at this time does not
anticipate that the costs associated with this review will be material to the
Company's financial condition or results of operations.
"Safe Harbor" Provisions Under the Private Securities Litigation Reform Act
Statements in this filing that are not historical facts are forward-looking
statements, which involve risks and uncertainties that could affect the
Company's results of operations, financial position and cash flows. of 1995
Actual results may differ materially from those projected in the forward-looking
statements, due to variety of factors, some of which may be beyond the control
of the Company. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report.
In accordance with the requirements of the Exchange Act of 1934, as amended, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto being duly authorized
I/NET, Inc.
Date: November 2, 1999
By:/s/ Stephen J. Markee
________________________________
Stephen J. Markee
Director, President, CEO and CFO
<TABLE> <S> <C>
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(Replace this text with the legend)
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<NAME> I/NET
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Sep-30-1999
<EXCHANGE-RATE> 1
<CASH> 75,459
<SECURITIES> 0
<RECEIVABLES> 406,110
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 481,569
<PP&E> 114,038
<DEPRECIATION> 93,332
<TOTAL-ASSETS> 502,275
<CURRENT-LIABILITIES> 1,315,135
<BONDS> 0
0
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<COMMON> 31,038
<OTHER-SE> 11,886,674
<TOTAL-LIABILITY-AND-EQUITY> 502,275
<SALES> 1,381,875
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<CGS> 635,188
<TOTAL-COSTS> 635,188
<OTHER-EXPENSES> 458,815
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,976
<INCOME-PRETAX> 247,316
<INCOME-TAX> 0
<INCOME-CONTINUING> 247,316
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