SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
(Mark One)
/ X / ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
(FEE REQUIRED)
For the fiscal year ended December 31, 1997
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from _____________to _____________
Commission file number 33-4844-D
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AMERICANA GOLD & DIAMOND HOLDINGS, INC.
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(Name of small business issuer in its charter)
Delaware 84-1023321
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(State or other jurisdiction of (I.R.S. employer identification Nss.)
incorporation or organization)
Calle Los Laboratorios, Torre Beta, Piso 2, Ofic. 208, 1071
Los Ruices, Caracas 1071, Venezuela
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code:(011)-(582)-238-2332 -
Fx: 239-8429
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Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
Check whether the issue (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 registratnt was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes / X /
No / /.
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulaton S-B is not contained in this form, and no disclosure will
be contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ( )
State issuer's revenues for its most recent year. $ 23,903
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State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the voting stock as
sold, or the average bid and asked prices of such stock, as of(See definition of
affiliate in Rule 12b-2 of the Exchange Act). $ 5,800,781
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumption , if the assumptions are stated.
Indicate the number of shares outstanding of the Issuer's Common
Stock, as of the latest practicable date. At March 1, 1997 there was outstanding
12,692,683 shares of the Issuer's Common Stock, $.001 par value.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement (puursuant to Regulation
14A) concerning the Annual Meeting of Shareholders is incorporated by reference
to Part III of this Form 10-KSB.
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PART I
Item 1. Business
(a) Business Development
Americana Gold & Diamond Holdings, Inc. (the "Company" or AGD") in its
current form resulted from the merger (the "Merger") in February 1993 of
Americana Gold & Diamond Mining, Inc., a corporation incorporated in Tortola,
British Virgin Islands in April 1990 ("Americana Gold") with and into Blue
Willow Holdings, Inc., a Colorado corporation incorporated in March 1986 ("Blue
Willows"). In connection with the Merger, Blue Willows changed its name to
Americana Gold & Diamond Holdings, Inc. and issued 2,823,180 shares of common
stock, $.001 par value (the "Common Stock") to the shareholders of Americana
Gold. Prior to the Merger, Blue Willows was a publicly-held shell corporation
and Americana Gold held several mining concessions which generated limited
revenue. Subsequent to the Merger, the Company purchased additional mining
concessions.
The Company has three wholly-owned Venezuelan subsidiaries, Latinvan
Metal Trading L.T.D., C.A., which holds the titles to the Company's mining
concessions, Consorcio Minero Miamo, C.A., which is the original owner of the
Fortuna I concession and AGD Holdings Inc. de Venezuela, C.A., which holds all
of the Company's exploitation and exploratin equipment. Unless the context
requires otherwise, references to the Company and AGD in this Form 10-KSB shall
mean Americana Gold & Diamond Holdings, Inc. and its subsidiaries.
The Company has limited capital resources and is actively seeking other
sources of capital in order to meet its working capital needs. The independent
auditor's report for the fiscal year ended December 31, 1997 has been prepared
assuming that the Company will continue as a going concern. There can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. See "Management's Discussions and Analysis or Plan
of Operation."
(b) Business of Issue:
(1) Principal products or services and their markets.
The Company is engaged in the exploitation, exploration and development
of gold mining concessions in Venezuela's Guayana Shield. The Company currently
has the rights to four concessions (El Bochinchito, Fortuna I, Progresso IV and
Progresso V) which it believes may lead to gold production. However, there can
be no assurance that there will be any gold production from these concessions.
The location and chief characteristics for each of these properties are
discussed below. Estimates for vein deposits on all of the Company's projects
are highly speculative and are based on experience at similar properties. There
can be no assurance that such estimates will in fact be accurate.
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El Bochinchito
Lying across a vast area near the border with Guyana, the Bochinche
zone of Pastora province is believed to have an immense gold reserve. The
Bochinche area has had a history of gold production dating back more than a
century. It is one of the four principal gold-bearing zones in Bolivar State.
Over the past two years, Monarch Resources of Canada and others have introduced
modern mining equipment and methods into the Bochinche area, and are now
producing gold from several deposits in the district.
The Company's El Bochinchito prospect, a 250 acre parcel is a
concession contract with the Venezuelan government and was acquired by the
Company in 1993 from an unaffiliated third party who had controlled the
concession since 1988. There were very limited activities done on the property
prior to the Company's acquisition.
The concession contract terminates in 2003 and can be renewed for an
additional forty years. El Bochinchito is located east of Tumeremo village, in a
region that has been surveyed and explored by the Venezuelan Corporation of
Guyana (C.V.G.), the state-owned mining company. It lies north of Kilometer 88,
and just east of the El Callao mine. El Callao was Venezuela's major nineteenth
century discovery, yielding 151,000 ounces of gold from 1871 to 1874. Mining
continues at the El Callao mine today. Access to the property is by an all
weather gravel road 72 kilometers from Tumeremo to the willage of Bochinche,
thence by a very rough 4 by 4 bush truck, 15 kilometers to the concession.
AGD has completed sampling and geochemical work on El Bochinchito's
alluvial deposits. The alluvial gold plant was installed and fine tuned at
Bochinchito Concession during the First Quarter 1996. Production at El
Bochinchito has been delayed as the Company concentrates on what appears to be a
major discovery in altered gabbro at La Fortuna I, though there can be no
assurance of the extent of the altered gabbro. Trial runs with the plant have
indicated some problems with clay balls which will require some minor
modifications to the plant.
Fortuna I Concession
In October 1994, the Company purchased the La Fortuna I Mining
Concession from Inversiones Megold C.A. ("Inversiones"), for a total purchase
price of $2,000,000. Fortuna I is located about 45 kilometers north of Las
Cristinas, Placer Dome's 7.7 million ounce gold find, at kilometer 88 in Bolivar
State. Fortuna I is accessible by a paved road to 34 kilometers then a 4 by 4
gravel road 22 kilometers to the property with a ferry crossing at the Cuyuni
River. The Las Cristinas area is considered by many North American mining
experts to be the prime gold exploration area in Venezuela and significant
exploration activity is taking place at this time. Fortuna I possesses both
alluvial deposits and veins. The petrology of the La Fortuna Concession area is
made up of basic to intermediate volcanics, Pastora-Botanamo Super Group rock,
mainly metabasalts and metagalbroc and Caballape Formation, andesite
agglomerates. The rocks in the mineralized zones are usually sericitized,
pyritized and kaolinized, especially near the
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veins. No attempt has been made by the Company's independent professional
engineer to estimate tonnages for this property.
During the first quarter of 1996 the Trenching Exploration Phase of La
Fortuna I Mining Concession was completed. Two broad zones of mineralization
were identified, both 100 meters (330 feet) in width, and with assay results of
1.05 grams per tonne in saprolite rock. A further trenching program conducted at
La Fortuna I Mining Concession during the second and third Quarter of 1996
confirmed results of previous trenching, and better defined targets for
drill-holes into Central Zone. Additional trenching of Fortuna Zone and other
targets in the concession was completed at the end of the year. During 1997 an
initial drilling program was conducted. A total of 1013 m of drilling was
completed and 770 samples were analysed for gold. Diamond drilling confirmed the
mineralization indicated in the trenching. Additional trenching and drilling has
been recomended by the Company's Geologist and Professional Enginering
Consultant.
Progreso 4 and 5
AGD controls two additional gold concessions, Progreso 4 and 5, in the
Venezuelan State of Bolivar. These concessions total approximately 2500 acres
and are located near the mining town of El Dorado. The area has a long history
of gold production form high-grade ore bodies, and there has been a considerable
amount of small to medium scale gold mining in the concession adjacent to
Progreso 4 and 5. Initial geological studies at Progreso 4 and 5 indicate that
it is the least promising of AGD's properties and therefore no exploration is
planned for this area at this time.
(2) Distribution methods of the products or services.
Currently, the Company has not produced any gold for distribution. If
and when, the Company is in a position to distribute gold, such distribution
will be subjet to regulation by the Venezuelan government. See "Business --
Effect of existing or probable governmental regulations on the business."
(3) Status of any publicly announced new product or services.
See "Business --- Principal Products or Services and Their Markets" for
a description of the current status of the Company's mining operations.
(4) Competitive business conditions and the small business issuer's
competitive position in the industry and methods of competition.
The Company will remain a minor participant among the firms which
engage in gold prospecting. There are many other established firms with
significantly greater capitalization and greater access to business
opportunities. In view of the Company's combined lack of financial resources and
limited managerial experience, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
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(5) Sources and availability of raw material and the names of principal
suppliers.
Not applicable.
(6) Dependence on one or a few major customers.
See "Effect of existing or probable governmental regulations on the
business."
(7) Patents, trademarks, licenses, franchises, concesions, royalty
agreements or labor contracts, including duration.
The Company currently has the following mining concessions: El
Bochinchito, Fortuna I Concession, and Progreso 4 and 5. The Company is also
negotiating to acquire the Bochinche 4 Concession from the Venezuelan
government. For further information with respect to the Company's Concessions
see "Business -- Principal products or services and their markets."
(8) Need for any governmental approval of principal products or
services.
Not applicable.
(9) Effect of existing or probable governmental regulation on the
business.
The regime for the commercialization of gold in Venezuela is
essentially divided into two areas: (i) internal commercialiation of gold; and
(ii) external commercialization of gold. With respect to internal
commercialization, gold may be sold to either third parties or to the Venezuelan
Central Bank (the "VCB") or to one of its agent banks. Generally sales to third
parties in Venezuela require the payment of an exploitation tax of at least 3%
as opposed to 1% if it is sold to the VCB or one of its agents. With respect to
external commercialization, on May 31, 1995, the Central Bank of Venezuela
issued Resolution No.95-05-05 which regulates gold and gold alloy exports. The
most significant aspects of this regulation are as follows:
~ The exportation of gold and gold alloys are authorized. For this
purpose, the interested party must register in the Gold Exporters'
registry maintained by the Central Bank of Venezuela.
~ The authorization request will be effected before the Central Bank
of Venezuela, accompanied by certification that a minimum of fourty
percent (40%) of the amount calculated in kilograms of cast or
refined gold, resulting from adding the amount specified in the
export request to the amount destined
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to the internal market has been sent to the internal market. This
authorization will be granted for a term of 45 consecutive calendar
days.
If and when the Company is in a position to produce and distribute
gold, the effect of these regulations could have a significant impact on the
Company's operations.
(10) Estimate of the amount spent during each of the last two fiscal
years on research and development activities, and if applicable
the extent to which the cost of such activities are borne directly
by consumers.
The Company has spent approximately $ 322,000 in gold deposit
exploration during 1997 and $ 235,429 during 1996.
(11) Costs and effects of compliance with environmental laws.
The Company has spent approximately $1,000 in compliance with
Venezuelan environmental laws.
(12) Number of total employees and number of full time employees.
At March 21, 1997, the Company employed twenty five (25) employees.
Item 2. Description of Property.
The Company's principal executive offices are located in Calle Los
Laboratorios, Torre Beta, Piso 2, Ofic. 208, Urb. Los Ruices, Caracas 1071,
Venezuela. This facility consists of approximately 2,000 square feet and is
occupied under a lease. The Company leases a second facility in Tumeremo, a
small town near the Bochinche, and Fortuna I concessions. This second facility
has office and storage space.
For information relating to the Company's mining concessions, see
"Business - Business of Issuer."
Item 3. Legal Proceedings.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the holders of the Company's
Common Stock, during the fourth quarter of the Company's fiscal year ended
December 31, 1997.
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PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
As indicated below, the Company's Common Stock has been trading below
$1.00 per share. Under new rules promulgated by the Nasdaq SmallCap Market
("NASDAQ"), a security is subject to delisting from NASDAQ if its trading price
is below $1.00. Trading, if any, of the Common Stock would thereafter be
conducted in the OTC Bulletin Board. As a result of such inelegibility for
quotations, an investor may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of the Common Stock. Furthermore, the
regulations of the Securities and Exchange Commission ("Commission") promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), require
additional disclosure relating to the market for penny stocks. Commission
regulations generally define a penny stock to be an equity security that has a
market price of less than $5.00 per share, subject to certain exceptions. A
disclosure schedule explaining the penny stocks market and the risks associated
therewith is required to be delivered to a purchaser and various sales practice
requirements are imposed on broker-dealers who sell penny stocks to persons
other than established customers and accredited invetors (generally
institutions). In addition, the broker-dealer must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. If the Company's securities become subject to the regulations
applicable to penny stocks, the market liquidity for the Company's securities
could be severely affected. In such an event, the regulations on penny stocks
could limit the ability of broker-dealers to sell the Company's securities and
thus the ability of purchasers of the Company's securities to sell their
securities in the secondary market. In the absence of an active trading market,
holders of the Common Stock may experience substantial difficulty in selling
their securities.
The Common Stock of the Company is currently quoted on NASDAQ. The high
and low bid quotations for each quarterly period for fiscal 1996 and fiscal 1997
are listed below. The quotations set forth in the table reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not necessarily
represent actual.
Fiscal 1996 High Low
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1st quarter . . . . . . . . . . . . . 1.00 .56
2nd quarter . . . . . . . . . . . . . .87 .56
3rd quarter . . . . . . . . . . . . . .75 .50
4th quarter . . . . . . . . . . . . . 1.37 .37
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Fiscal 1997 High Low
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1st quarter . . . . . . . . . . . . . 1.14 .82
2nd quarter . . . . . . . . . . . . . .82 .68
3rd quarter . . . . . . . . . . . . . .83 .73
4th quarter . . . . . . . . . . . . . .64 .45
(b) The Company has not paid any cash dividends on its Common Stock and
does not intend to pay cash dividends on its Common Stock for the foreseeable
future. The Company intends to retain future earnings, if any, to finance future
development.
(c) As of March 20, 1998, there were approximately 325 holders of
record of the Company's Common Stock. The Company believes that at such date
there were in excess of 500 beneficial owners of the Company's Common Stock.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Overview
The Company has only recently begun its business activities and
accordingly has generated limited revenues. The Company has generated an
accumulated deficit of $ 4,514,871 through December 31, 1997, due to its
significant research, development, administrative and exploration expenses and
insufficient revenues in relation to its operating expenses. Management believes
that losses will continue to be incurred until it is able to successfully
acquire or place a property in operation. There can be no assurance that
management will be successful in accomplishing this task. The independent
auditor's report for the fiscal year ended December 31, 1997 has been prepared
assuming that the Company will continue as a going concern.
During 1989, the Company purchased the rights for mining and
exploitation of gold and diamonds on a land extension designated "El Progreso 4"
and "El Progreso 5". Each concession has a surface area of 500 hectares. These
concessions are located in the Jurisdiction of the Dalla Costa Municipality, of
the Sifontes District of the State of Bolivar. The cost of these mining
concessions was approximately $5,400,000 of which the Company has paid
approximately $ 2,833,000, and additional exploration costs have been incurred.
The Company started renegotiating the terms and conditions of the Purchase
Agreement for the El Progreso 4 and 5 concessions. The Company has stopped
payments and suspended exploration activities on such concessions until a new
agreement is reached.
During 1993, the Company purchased the alluvial exploitation and
exploration rights of a gold and diamond mine over a land extension known as
Bochinche. This concession covers a surface area of approximately 250 acres and
is located in the Jurisdiction of the Tumeremo Municipality, District of
Sifontes, in the State of Bolivar. The cost of the concession was approximately
$811,905.
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In October 1994, the Company purchased the La Fortuna I Mining
Concession form Inversiones Megold C.A., for a total purchase price of
$2,000,000 as follows:
1) $500,000 in cash payments, to be paid on the following dates: a)
$100,000 on October 31, 1994; b) $200,000 on February 28, 1995; c)
$200,000 on May 31, 1995. The remaining balance of $1,500,000 was paid
to Inversiones Megold, C.A., through the delivery of capital stock of
the Company, as follows: a) an amount of Series C Convertible Preferred
Stock of the Company equivalent to $500,000 as of the date of the
agreement convetible to Common Stock market after an eighteen (18)
month period; c) an amount of Common Stock equivalent to $500,000 on
October 18, 1994; and c) an amount of Common Stock equivalent to
$500,000 on April 5, 1995. Conversion of dollars into Common Stock is
based on a formula prescribed in the agreement. To date the balance to
be paid in cash to Inversiones Megold, C.A. is $390,000.
Results of Operations
Fiscal year ended December 31, 1997 Compared to Fiscal year ended
December 31, 1996.
Total income for the year ended December 31, 1997 was $ 23,903 compared
to $ 69,774 for the year ended December 31, 1996, a net decrease of $ 45,871.
This decrease is primarily attributable to a decrease in gains from foreing
currency exchanges.
Administrative expenses were $ 599,116 for the year ended December 31,
1997 compared to $ 572,836 for the year ended December 31, 1996.
Primarily due to a continued lack of revenues from operations, the net
loss for the year ended December 31, 1997 was $ 572,213 as compared to a net
loss of $ 503,062 for the year ended December 31, 1996.
Liquidity and Capital Resources
The Company had $ 335,712 in working capital as of December 31, 1997,
compared with working capital of $ 677,843 as of December 31, 1996.
The 1997 working capital was primarily due to the receipt of proceeds
from private placements offering described below offset by the funding of
operations and the Company's investments in La Fortuna and Bochinchito
concessions.
At December 31, 1997 the Company had a note payable to a bank
outstanding in the amount of $183,739. The loan bears interest at 7.625% per
annum and matures on July 27, 1998. The Company's subsidiries had
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three notes payable to a Venezuelan Bank for the total equivalent amount of $
49,723. These loans bear interest at 34% per annum and mature on September,
1998. Long-term debt of the Company relating to liabilities assumed by the
Company for the purchase of exploration and explorations rights of mining
concessions currently amounts to $ 2,960,251. Such amount relates to payments
due on the Fortuna I concession, approximately $ 390,000 and the balance relates
to the El Progreso concession, which the Company is currently renegotiating.
In 1995 and January 1996 the Company raised approximately $350,000 from
a private placement of 35 Units, each unit consisting of a $10,000 principal
amount promissory note. The note was due and payable on July 19, 1996 and beared
interest at 8%. The note was converted, into 20,000 shares of the Company's
Common Stock for each unit. In March 1996 the purchasers of the 35 units of the
private placement elected to convert their notes into shares of the Company's
Common Stock.
In 1996 the Company raised approximately $ 677,843 from Private
Placements of Common Stock to investors who reside outside the United States
including officers and directors of the Company. The Company issued 1,250,000
shares of its Common Stock in connection with the Private Placements.
In 1997 the Company raised approximately $285,989 from Private
Placements of Common Stock to investors who reside outside the United States
including officers and directors of the Company. The Company issued 609,952
shares of its Common Stock in connection with the Private Placements.
The Company's management is currently seeking to raise funds to ensure
that the Company's operations will continue and that the Company can operate the
La Fortuna concession. The Company is also exploring whether to enter into joint
ventures or partneships with other mining companies in the La Fortuna area.
There can be no assurance that the Company will be successful in raising the
necesary funds or finding other alternatives to ensure that the Company's
operations will continue or that the Company can operate the La Fortuna
concession. Moreover, the sale of additional equity or convertible debt
securities could result in additional dilution to the Company's stockholders.
The Company will continue to rely upon management until additional
sources of financing are secured or a suitable property is acquired with
sufficient cash flow to sustain the Company.
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Inflation
Venezuela has historically had a high rate of inflation and the Company
is potentially impacted by currency rate exchanges. While neither high inflation
or currency rate exchanges have had a material adverse effect on the Company,
there can be no assurance that such developments will not have a material
adverse effect on the Company in the future.
Forward Looking Statements
This Form 10-KSB contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1993, as amended, and Section
21E of the Securities Exchange Act of 1934, amended. Investors are cautioned
that all forward looking statements involve risks and uncertainty, including
without limitation, the viability of gold mines, exploration cost, foreign
currency exchange rates and general market conditions. Although the Company
believes the assumptions underlying the forward-looking statements contained
herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
contained in the report will prove to be accurate.
Item 7. Financial Statement
See Consolidated Financial Statement listed in the accompaning index to
Consolidated Financial Statements on Page F-1 herein.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
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PART III
Items 9, 10, 11, and 12. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act; Executive
Compensation; Security Ownership of Certain Beneficial Owners and
Management; Certain Relationships and Related Transactions.
The information required by these Items is omited because the Company
will file a definitive proxy statement pursuant to Regulation 14A, which
information is herein incorporated by reference as if set out in full.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibit
No.
3.1 The Company's Amended and Restated Certificate of
Incorporation. **
3.2 The Company's By-laws. **
3.3 Certificate of Designation for the Series A. Series B and
Series C Convertible Preferred Stock. *
4.1 Form of Common Stock Certificate. **
10.1 Agreement between Inversiones Megold, C.A. and the Company.*
10.2 Form of Promisory Note issued in a 1996 Private Placement.
***
27 Financial Data Schedule.****
* Incorporated by reference to the Company's Form 10-KSB
for the fiscal year ended December 31, 1994.
** Incorporated by reference to the Company's Form 8-A,
dated February 10, 1993.
*** Incorporated by reference to the Company's Form 10-KSB
for the Fiscal year ended December 31, 1996.
**** Filed herewith.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Caracas, Country of
Venezuela on the 21st day of March, 1998.
AMERICANA GOLD & DIAMOND HOLDING, INC.
/s/ Henry Bloch
---------------------------------------
Henry Bloch
C.F.O. & Director
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities on
the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Carlos Hausmann
- ------------------------
Carlos Hausmann C.E.O. & Director March 21, 1998
/s/ Jose Pereira
- ------------------------
Jose Pereira Director & General Manager March 21, 1998
/s/ David Zrihen
- ------------------------
David Zrihen Treasurer & Director March 21, 1998
/s/ David Bassan
- ------------------------
David Bassan Director & Controller March 21, 1998
/s/ Clement W. Cohen
- ------------------------
Clement W. Cohen Director March 21, 1998
/s/ Thomaz Klingberg
- ------------------------
Thomaz Klingberg Director & Secretary March 21, 1998
- ------------------------
Alberto Cohen Director March , 1998
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To the Shareholders of
Americana Gold and Diamond Holdings, Inc. and Subsidiaries:
We have audited the consolidated balance sheets of AMERICANA GOLD AND DIAMOND
HOLDINGS, INC. (a company incorporated in Delaware, USA) AND SUBSIDIARIES as of
December 31, 1997 and 1996, and the corresponding consolidated statements of
income, statement of shareholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of Company Management.
Our responsibility is to issue an opinion on these consolidated financial
statements based on our audits.
We performed our audits in accordance with generally accepted auditing
standards. Such standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining on a test basis evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
Management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
As explained in Note 4, in late 1992, the Company suspended exploration
activities of the concessions denominated "El Progreso 4" and "El Progreso 5",
which are recorded for US$ 7,210,141 and US$ 7,190,726 as of December 31, 1997
and 1996, respectively. The Company has not performed an independent technical
appraisal on such concessions, in order to determine their net realization value
at the aforementioned dates, in accordance with generally accepted accounting
principles.
In our opinion, except for the effect of the adjustments, if any, resulting from
obtaining the independent technical appraisal indicated in the preceding
paragraph, the aforementioned consolidated financial statements present fairly,
in all material respects, the consolidated financial position of Americana Gold
and Diamond Holdings, Inc. and Subsidiaries as of December 31, 1997 and 1996,
and the results of its operations and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
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The accompanying consolidated financial statements have been prepared under the
assumption that the Company will continue as a going concern. The Company's main
activity during 1997 has been the exploration of a concession acquired during
1994 for US$ 2,385,249. Additionally, during the year ended December 31, 1997,
the price of gold experienced a significant decrease in the international
market, which has resulted in an uncertainty regarding the attraction of new
investors for obtaining the funds required for exploration and exploitation
activities. Management's plans regarding the development of this and other
concessions are described in Note 4. We do not express an opinion regarding the
feasibility of such studies and plans. The Company's continuity as a going
concern and the recovery of acquisition costs of assets plus capitalized
exploration costs are subject to the success of the Company's future operations.
The financial statements do not include any adjustment that might result from
the outcome of this uncertainty.
DELGADO, FAGUNDEZ & ASOCIADOS
(Representatives of Deloitte & Touche)
/s/ Judith M. Delgado M.
- ------------------------
Judith M. Delgado M.
C.P.C. No. 4036
February 13, 1998
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS--ASSETS
DECEMBER 31, 1997 AND 1996
(Expressed in US dollars)
- --------------------------------------------------------------------------------
1997 1996
------------- ---------
ASSET
CURRENT ASSET:
Cash .......................................... 14,524 133,280
Prepaid expenses and other current assets ..... 61,630 41,215
---------- ----------
Total current assets ............ 76,154 174,495
PROPERTY AND EQUIPMENT, net ........................ 263,538 322,053
MINING CONCESSIONS-
In exploration activities ................ 2,385,249 2,169,235
MINING CONCESSIONS-
Suspended exploration activities ......... 7,210,141 7,190,726
OTHER ASSETS ....................................... 514,879 515,677
---------- ----------
10,449,961 10,372,186
========== ==========
The accompanying notes (1 to 10) form an integral part of these consolidated
financial statements.
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS--LIABILITIES AND SHAREHOLDERS' EQUITY
DECEMBER 31, 1997 AND 1996
(Expressed in U.S. dollars)
- --------------------------------------------------------------------------------
1997 1996
----------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans .................................. 233,462 170,000
Accounts payable ............................ 299,276 15,968
Accrued liabilities ......................... 28,762 13,942
----------- -----------
Total current liabilities ..... 561,500 199,910
LONG-TERM ACCOUNTS PAYABLE ....................... 2,958,604 2,960,251
PROVISION FOR EMPLOYEE SEVERANCE BENEFITS ........ 13,899 6,843
----------- -----------
Total liabilities ............. 3,534,003 3,167,004
----------- -----------
SHAREHOLDERS' EQUITY:
Capital stock ............................... 11,430,829 11,144,840
----------- -----------
Accumulated losses .......................... (4,514,871) (3,939,658)
----------- -----------
Total shareholders' equity .... 6,915,958 7,205,182
----------- -----------
10,449,961 10,372,186
=========== ===========
The accompanying notes (1 to 10) form an integral part of these consolidated
financial statements.
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(Expressed in US dollars)
- --------------------------------------------------------------------------------
1997 1996
--------- --------
INCOME:
Other income ................................ -- 36,635
Adjustment for currency translation ......... 23,903 33,139
-------- --------
Total income .................. 23,903 69,774
-------- --------
ADMINISTRATION EXPENSES .......................... (495,827) (553,874)
FINANCIAL INTEREST EXPENSES ...................... (103,289) (18,962)
-------- --------
Net loss ...................... (575,213) (503,062)
======== ========
The accompanying notes (1 to 10) form an integral part of these consolidated
financial statements.
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(Expressed in US dollars)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------------ ------------
CASH FLOWS USED IN OPERATING ACTIVITIES:
<S> <C> <C>
Net loss (575,213) (503,062)
Adjustments to reconcile net loss with net cash
used in operating activities-
Depreciation of property and equipment 58,515 59,188
Gain in translation of foreign currency (23,903) (69,774)
Provision for employee severance benefits 7,056 3,652
---------- ----------
(533,545) (509,996)
NET CHANGES IN OPERATING ASSETS AND LIABILITIES:
(Decrease) increase in prepaid expenses
and other current assets (20,415) 24,092
Increase (decrease) in accrued liabilities 14,820 (40,062)
Increase (decrease) in accounts payable 288,190 (65,107)
Payments of employee severance benefits (4,882) (2,671)
---------- ----------
Net cash used in operating activities (255,832) (593,744)
---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment -- (33,276)
Increase in mining concessions (235,429) (322,226)
Retirement of property and equipment -- 9,471
(Decrease) increase in other assets 798 (7,742)
---------- ----------
Net cash used in investing activities (234,631) (353,773)
---------- ----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
(Decrease) in long term account payable (1,647) (3,058)
Increase (decrease) in bank loans 63,462 (57,931)
Increase in shareholders' equity 285,989 1,027,843
---------- ----------
Net cash provided by financing activities 347,804 966,854
EFFECT OF EXCHANGE RATE VARIATIONS ON CASH 23,903 69,774
---------- ----------
(DECREASE) INCREASE IN CASH (118,756) 89,111
CASH AT BEGINNING OF YEAR 133,280 44,169
---------- ----------
CASH AT YEAR END 14,524 133,280
========== ==========
</TABLE>
The accompanying notes (1 to 10) form an integral part of these consolidated
financial statements.
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS, INC. AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(Expressed in US dollars)
- --------------------------------------------------------------------------------
Total
Capital Accumulated shareholders'
stock losses equity
------------------------ ------------------
BALANCES, as of December 31, 1995 9,488,886 (3,436,596) 6,052,290
Capital increase 1,655,954 -- 1,655,954
Net loss -- (503,062) (503,062)
---------- ---------- ----------
BALANCES, as of December 31, 1996 11,144,840 (3,939,658) 7,205,182
Capital increase 285,989 -- 285,989
Net loss -- (575,213) (575,213)
---------- ---------- ----------
BALANCES, as of December 31, 1997 11,430,829 (4,514,871) 6,915,958
========== ========== ==========
The accompanying notes (1 to 10) form an integral part of these consolidated
financial statements.
<PAGE>
AMERICANA GOLD AND DIAMOND HOLDINGS INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
NOTE 1 - INCORPORATION, PURPOSE AND OPERATION OF THE COMPANY
The Company was incorporated in 1993, through the merger of Americana Gold and
Diamond Mining Corporation (incorporated in Tortola, British Virgin Islands on
April 3, 1990) and Blue Willow, Holdings Inc. (incorporated in the United States
of America) with the purposes of negotiating, exploration, exploiting,
transporting and performing all those activities related to the handling of
gold, diamonds, and precious metals and stones, as well as participating in any
activity of this same nature (see Note 5).
NOTE 2 - ACCOUNTING PRINCIPLES AND PRACTICES
The most significant accounting principles and practices followed by the Company
in the recording of its operations and in the preparation of its consolidated
financial statements are summarized as follows:
a) Consolidation Principles-
The consolidated financial statements include the accounts of Americana
Gold and Diamond Holdings, Inc. and those of its wholly owned
subsidiaries: Latinvan Metal Trading Ltd., C.A., Consorcio Minero
Miamo, C.A., and A.G.D. Holdings Inc. de Venezuela, C.A. (companies
domiciled in Venezuela) as of December 31, 1997 and 1996. All balances
and transactions between the companies have been eliminated in the
consolidation.
b) Property and Equipment-
Property and equipment are recorded at acquisition cost. Repairs and
maintenance expenses are charged directly to income, and improvements
and renovations are added to the cost of the corresponding property.
Depreciation is determined based on the straight-line method, in
accordance with the estimated useful lives of the assets. When assets
are sold or retired, the corresponding cost and accumulated
depreciation are eliminated from the accounts, and the gain or loss is
reflected in the year's income.
c) Mining Concessions-
The mining concessions are owned by the subsidiaries Latinvan Metal
Trading Ltd., C.A. and Consorcio Minero Miamo, C.A. and are recorded at
the acquisition cost, consisting of the price agreed upon to obtain the
rights of exploration and exploitation, plus exploration costs
incurred. As of December 31, 1997 and 1996, there is no charge for
depletion, due to the fact that the capacity of the mines to be
exploited has not been determined, and the Companies have not initiated
extraction activities.
<PAGE>
d) Provision for employee severance benefits-
The provision for employee severance benefits is recorded based on the
actual obligation on this account, in accordance with the Organic Labor
Law (see Note 10-g).
e) Provision for Income Taxes and Business Assets Tax of subsidiaries-
The provision for income taxes is calculated based on net taxable
income. Additionally, the current tax legislation establishes the
business assets tax, which is determined by applying 1% to the annual
average of the net value of the Company's inflation adjusted tangible
and intangible assets, invested in income production during the fiscal
year.
The business assets tax is subject to income tax calculation,
considering as a business assets tax expense the surplus generated from
the comparison to income taxes. The business assets tax paid during the
period represents a credit against income taxes caused in the three (3)
following fiscal years (see Note 10-b).
Additionally, the Company paid as of December 31, 1997 the amount of
US$ 5,413 for Delaware State taxes.
f) Translation of financial statements into foreign currency-
The financial statements of the subsidiaries are denominated in
bolivars and have been translated into US dollars using the following
procedure: all monetary assets and liabilities denominated in bolivars
were translated at the official exchange rates of Bs. 502.79 and Bs.
476.50 to US$ 1, in effect as of December 31, 1997 and 1996; property
and equipment, other assets and shareholders' equity at historical
exchange rates; and transactions included in the statement of income at
an average of the exchange rate in each month of the period in which
the transactions were effected. Subsidiaries operate in a
hyperinflationary economy.
g) Presentation of the financial statements-
Certain items of the financial statements as of December 31, 1996 have
been reclassified in order to conform their presentation with those of
1997.
h) Use of estimates-
The preparation of the financial statements in conformity with
generally accepted accounting principles requires that Management make
estimations and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingency assets and liabilities
at the date of the financial statements and the income and expenses
reported during the report period. Actual results may differ from these
estimates.
2
<PAGE>
NOTE 3 - PROPERTY AND EQUIPMENT
The amounts shown in the consolidated balance sheets as property and equipment
as of December 31, 1997 and 1996 are represented as follows:
Annual
Depreciation
1997 1996 rate
------- ------------ -------------
(Expressed in US$)
Machinery and equipment .......... 380,546 380,546 10%
Office furniture and equipment ... 12,061 12,061 10%
Vehicles ......................... 55,277 55,277 10%
Tools and utensils ............... 6,022 6,022 20%
Facilities and improvements ...... 66,564 66,564 6%
Computer equipment ............... 11,316 11,316 20%
-------- --------
531,786 531,786
Less: accumulated depreciation ... (268,248) (209,733)
======== ========
263,538 322,053
======== ========
NOTE 4 - BANK LOANS
The amounts shown as bank loans in the balance sheets as of December 31, 1997
and 1996, are represented by credits contracted with the Bank Leumi with
long-term maturity and interest rate at 7%.
NOTE 5 - MINING CONCESSIONS
The balances for mining concessions shown in the consolidated balance sheets as
of December 31, 1997 and 1996, are represented as follows:
Name of the Concession 1997 1996
- ---------------------------------- --------- --------
(Expressed in US dollars)
In exploration activities-
"Fortuna I" .................................... 2,385,249 2,169,235
--------- ---------
Suspended exploration activities-
"El Progreso 4 and 5" .......................... 5,931,535 5,931,535
"Bochinche" .................................... 1,278,606 1,259,191
--------- ---------
Subtotal .................................. 7,210,141 7,190,726
--------- ---------
9,595,390 9,359,961
========= =========
The cost of these concessions includes exploitation acquisition rights plus
exploration costs incurred.
3
<PAGE>
For the acquisition of the concession known as "Fortuna I", the Company agreed
to pay between 3% and 5% to a third company of the net benefit that would be
obtained from gold ore exploitation. For 1998, Company plans for this concession
are an initial program of 2,000 meters of diamond drilling to test the positive
result found by the trenching in the North-West Zone and some road work required
to assure continued access for the drilling program.
The geochemical and sampling works in the alluvial deposits of "Bochinche" have
ended. Trials runs with the alluvials treatment plan have indicated some
problems with clay balls which will require some modifications to the plant. A
further pit exploration program is being completed within the concession. Once
this program is completed, the Company should reinitiate activity.
Concessions "El Progreso 4" and "El Progreso 5" were acquired for US $5,400,000,
and the Company has capitalized US$ 531,535 for exploration costs incurred until
1992. The acquisition contracts of these concessions establish that, in case the
evaluation of gold reserves of concessions are unfavorable, the transferor of
the exploitation rights of the concession and the Company will mutually agree
the fixing of new values and payment forms for the concessions. In case no
satisfactory agreement for both parties is reached, the Company may just return
the rights on same and all payment obligation, which had become payable on
demand, will cease after notifying the owner of the concession the unfavorable
results of the reserves evaluation. At the ends of 1992, the Company suspended
the exploration activities of these concessions (see Note 2-c). Since initial
geological studies indicate that these concessions are not so promising in
comparison with other properties, Management has decided to postpone investments
in Progreso 4 and 5 until the Company is able to generate a cash flow provided
by its operations.
NOTE 6 - OTHER ASSETS
Balances of other assets shown in the consolidated balance sheets as of December
31, 1997 and 1996 are represented mainly for a plant for future mineral
exploitation for US$ 512,925.
NOTE 7 - LONG-TERM ACCOUNTS PAYABLE
Accounts payable shown in the consolidated balance sheets as of December 31,
1997 and 1996 correspond to liabilities assumed by the Company for the
acquisition of exploitation and exploration rights of the mining concessions "El
Progreso 4" and "El Progreso 5" (see Note 5).
4
<PAGE>
NOTE 8 - CAPITAL STOCK
For the year ended December 31, 1997 and 1996 the following capital
modifications were made:
US $ 285,989 for the issuance of 609,952 common shares of the Company's common
stock paid by different shareholders in cash during 1997.
US $ 1,027,843 for the issuance of 1,950,000 common shares of the Company's
common stock paid by different shareholders in cash during 1996.
US $ 628,111 for payment of debts maintained to the directors and suppliers for
services rendered by the issuance of 952,572 common shares during 1996.
Conversion of C series 500 preferential shares into 800,000 common shares of the
Company's common stock.
As of December 31, 1997, the Company's capital stock us constituted as follows:
Total
Number of Value in
Class of Shares Shares US$ Manner of Payment
- -------------------- ----------- ------------ -------------------------
Preferential 25 25,000 Cash
----------- ------------
Common 3,764,251 4,416,216 Merger (AGD Mining & Blue
----------- ------------ Willow)
Common 4,285,478 3,280,809 Cash
----------- ------------
Common 1,721,053 1,500,000 Acquisition Fortuna I
----------- ------------
Common 445,455 231,000 Cash (Preferential shares
converted into common
shares)
90,104 Interest paid in shares
----------- ------------
Common 964,960 605,000 Payments to directors
(Preferential shares S-B
converted into common
shares)
78,992
----------- ------------ Interest paid with shares
Common 523,844 400,000 Cash (Preferential shares
S-B converted into common
shares)
21,773 Interest paid with shares
----------- ------------
Common 686,140 429,358 Payments to Directors
----------- ------------
Common 301,502 252,577 Services rendered
----------- ------------
Total Common 12,692,683 11,405,829
----------- ------------
Total 12,692,708 11,430,829
=========== ============
5
<PAGE>
NOTE 9 - ADMINISTRATION EXPENSES
Balances shown in the statement of income as of December 31, 1997 and 1996 as
administration expenses are represented by the following:
1997 1996
---------- ----------
Expressed in US dollars)
Compensation to directors ........................... 135,000 189,359
Professional fees ................................... 77,005 94,212
Salaries, wages and other benefits for personnel ... 106,417 69,179
Other general and administration expenses ........... 177,405 201,124
======= =======
495,827 553,874
======= =======
NOTE 10 - LEGAL ASPECTS OF SUBSIDIARIES
a) Common System for the Treatment of Foreign Capital and Regarding
Trademarks, Patents, Licenses and Royalties-
The most significant matters contained in the aforementioned decree as
follows:
1) Reinvestment of net income, distribution, remittance of dividends
to foreign investors and reexportation of foreign shareholder's
investment without any need of authorization from the
Superintendency of Foreign Investments (SIEX).
2) All agreements regarding the importation of technology and use of
patents and trademarks, regardless of the modality which said
agreements adopt, are authorized. There is a subsequent obligation
to register these with the Superintendency of Foreign Investments
(SIEX).
If said agreements are signed by companies classified as foreign and
their parent companies or subsidiaries, and establish payments
exceeding the limits set forth in the Decree, such payments will have
to be previously authorized by SIEX.
6
<PAGE>
b) Income Taxes-
The current tax legislation allows for the transfer of tax losses
occurred during the fiscal year, up to a three (3) year term. The
Companies have tax losses available to offset future income as
follows:
Year Carryforward
Company Amount incurred up to
- --------------------------------------------------------------------------------
Bs.
Consorcio Minero Miamo, C.A ............ 538,789 1995 1998
A.G.D. Holding Inc. de Venezuela, C.A .. 8,424,032 1995 1998
==========
8,962,821
==========
Latinvan Metal Trading LTD ............. 7,049,251 1996 1999
A.G.D. Holding Inc. de Venezuela, C.A .. 71,589,389 1996 1999
==========
78,638,640
==========
A.G.D. Holding Inc. de Venezuela, C.A .. 10,296,175 1997 2000
Consorcio Minero Miamo, C.A ............ 187,369 1997 2000
==========
10,483,544
==========
c) Business Assets Tax Law:
The taxable basis of this tax is constituted by the average net amount of
values of taxable assets. The tax rate applicable to the taxable basis will
be one percent (1%) annually. Tax payable in accordance with this Law will
be the amount exceeding total income taxes caused on the taxable fiscal
year, if any. Afterwards, this surplus will be carried as a credit against
income taxes caused solely in the three subsequent fiscal years. The
Company's Subsidiaries are exempted from payment of this tax since they are
in preoperating phase.
d) Luxury Consumption and Wholesale Tax:
Taxes the sale of chattel, service rendering and imports of goods and
services. The corresponding tax rate applicable to the corresponding
taxable basis will be set annually by the Budget Law and will be between a
minimum of five percent (5%) and a maximum of twenty percent (20%). The
annual tax rate is established at twelve and a half percent (12.5%). From
August 1, 1996, the tax rate amounts to sixteen and a half percent (16.5%).
e) Exchange controls
On April 17, 1996, the Government reestablished the free translatability of
currency throughout the country, eliminating the exchange control system in
effect in the country since July 27, 1994. Therefore, as of April 22, 1996,
US dollars can be freely acquired at the exchange rate set by the currency
market in accordance with free supply and demand.
As of December 31, 1997 and 1996, the exchange rate was Bs. 502.79 and Bs.
476.50 to US$ 1, respectively.
7
<PAGE>
f) Norms on Gold and Gold Alloys Exports-
On May 31, 1995, Resolution No. 95-05-05 entered into effect, issued by the
Venezuelan Central Bank, establishing the norms on gold and gold alloys
exports. The most significant aspects of this resolution are the following:
- Gold and gold alloys exports are allowed, and interested parties should
be registered in the Gold Exporters Registry to be kept by the
Venezuelan Central Bank.
- Authorization requests will be effected before the Venezuelan Central
Bank, accompanied by a certification to the effect that to the internal
market has been destined, in bars, a minimum equivalent to 40% of the
amount calculated in kilograms of refined or melted gold, resulting
from adding the amount whose authorization to be exported is requested,
and the amount destined for the local market. Said authorization will
be granted in a term of 45 consecutive calendar days.
g) Partial reform of the Labor Law-
On June 19, 1997, the Government decreed the partial reform of the Labor
Law published in Special Official Gazette No. 5152, which includes the
following modifications, among other:
a) The elimination of the retroactive seniority for calculating employee
severance benefits.
b) Establishment of a transfer bonus equivalent to 30 salary days per each
year of service, with a maximum of 10 years for the private sector and
13 years for the public sector, and the calculation basis oscillates
between Bs. 45,000 and Bs. 300,000.
c) Establishment of a seniority indemnization equivalent to 5 salary days
per each month of service.
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Financial Statements as of December 31, 1997 and is qualified in
its entirety by reference to each Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 62
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 76
<PP&E> 10,642
<DEPRECIATION> 268
<TOTAL-ASSETS> 10,450
<CURRENT-LIABILITIES> 575
<BONDS> 2,959
0
25
<COMMON> 11,406
<OTHER-SE> (4,515)
<TOTAL-LIABILITY-AND-EQUITY> 10,450
<SALES> 0
<TOTAL-REVENUES> 24
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 599
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (575)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (575)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
