SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
(Mark One)
_X_ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the Quarterly period ended SEPTEMBER 30, 2000
------------------
or
___ Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from ________________ to ___________________.
Commission File No. 1-9727
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FRANKLIN CAPITAL CORPORATION
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(Exact name of registrant specified in its charter)
DELAWARE 13-3419202
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
450 PARK AVENUE, 10TH FLOOR, NEW YORK, NEW YORK 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 486-2323
--------------
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $1.00 par value
Securities registered pursuant to Section 12(g) of the Act:
None
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 Corporation was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
---
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of October 31, 2000 was $5,157,108 based on the last sale price as
quoted by The American Stock Exchange on such date (officers, directors and 5%
stockholders are considered affiliates for the purposes of this calculation).
The number of shares of common stock outstanding as of October 31, 2000 was
1,099,509.
1
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DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE PROSPECTUS OF THE REGISTRANT DATED JULY 31, 1992 (THE
"PROSPECTUS") ARE INCORPORATED BY REFERENCE IN PART I, AND PART II HEREOF.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
Statements of Operations
Statements of Cash Flows
Statements of Changes in Net Assets
Portfolio of Investments
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Statement of Operations
Financial Condition
Investments
Results of Operations
Liquidity and Capital Resources
Risks
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT INDEX
CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
WHEN USED IN THIS QUARTERLY REPORT ON FORM 10-Q, THE WORDS "BELIEVES,"
"ANTICIPATES,""EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS QUARTERLY REPORT ON FORM 10-Q PURSUANT TO THE "SAFE HARBOR" PROVISION OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN THE
CORPORATION'S REGISTRATION STATEMENT ON FORM N-2 (FILE NO. 814-159) AND IN
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS." READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE
CORPORATION UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING
STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES OCCURRING AFTER THE DATE HEREOF OR
TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The information furnished in the accompanying financial statements reflects
all adjustments that are, in the opinion of management, necessary for a fair
presentation of the results for the interim period presented.
3
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FRANKLIN CAPITAL CORPORATION
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BALANCE SHEETS
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SEPTEMBER 30, DECEMBER 31,
2000 1999
(UNAUDITED)
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ASSETS
Marketable investment securities, at market
value (cost: September 30, 2000 - $34,675;
December 31, 1999 - $109,784) (Note 2) $34,675 $891,462
Investments, at fair value
(cost: September 30, 2000 - $4,334,761;
December 31, 1999 - $2,861,563) (Note 2)
eMattress.com -- 100,000
Avery Communications, Inc. 2,727,267 3,471,880
Excom Ventures, LLC 100,000 --
Other investments 6,203,246 3,596,040
---------- ----------
9,030,513 7,167,920
---------- ----------
Cash and cash equivalents (Note 2) 501,904 571,341
Receivable from disposal of investments -- 231,308
Accrued interest and accounts receivable 12,234 15,976
Other assets 106,955 117,958
---------- ----------
TOTAL ASSETS $9,686,281 $8,995,965
========== ==========
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued liabilities $236,876 $204,583
Deferred taxes payable 192,000 351,000
---------- ----------
TOTAL LIABILITIES 428,876 555,583
---------- ----------
Commitments and contingencies (Note 5)
STOCKHOLDERS' EQUITY
Common stock, $1 par value: 5,000,000 shares
authorized; 1,505,888 shares issued, 1,101,509
shares outstanding at September 30, 2000,
1,505,979 shares issued, 1,095,882 outstanding
at December 31, 1999 (Notes 4 and 7) 1,505,888 1,003,986
Convertible preferred stock, $1 par value,
cumulative 7% dividend: 5,000,000 shares authorized;
16,450 issued and outstanding at September 30, 2000,
0 issued and outstanding at December 31, 1999
(Liquidation preference $1,645,000) (Note 4) 16,450 --
Paid-in capital - common stock 8,636,907 8,998,051
preferred stock 1,628,550 --
Unrealized appreciation of investments,
net of deferred income taxes (Notes 2 and 3) 4,503,752 4,737,035
Accumulated deficit (4,670,352) (4,030,368)
---------- ----------
11,621,195 10,708,704
Deduct: 404,379 and 410,097 shares of common stock
held in treasury, at cost, at September 30, 2000
and December 31, 1999, respectively (Note 4) (2,363,790) (2,268,322)
---------- ----------
Net assets, equivalent to $8.40 (diluted $7.54)
per share at September 30, 2000 and $7.70
(diluted $7.55) at December 31, 1999 9,257,405 8,440,382
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,686,281 $8,995,965
========== ==========
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The accompanying notes are an integral part of these financial statements.
4
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FRANKLIN CAPITAL CORPORATION
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STATEMENTS OF OPERATIONS
(UNAUDITED)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
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INVESTMENT INCOME
Dividend income $10,500 $10,500 $31,500 $31,500
Interest income 10,638 4,148 40,134 21,670
Other Income -- -- 22,000 --
---------- -------- -------- ---------
21,138 14,648 93,634 53,170
---------- -------- -------- ---------
EXPENSES
Salaries and employee benefits
(Note 7) 366,020 194,316 1,068,331 584,696
Professional fees 57,400 53,525 270,681 152,714
Appraisal fees -- 10,616 -- 20,616
Rent (Note 5) 31,484 25,172 72,452 64,920
Insurance 10,442 10,473 31,321 30,826
Directors' fees 19,875 12,000 53,625 36,000
Taxes other than income taxes 8,993 3,681 37,802 26,961
Newswire and promotion 1,500 2,499 4,500 7,497
Depreciation and amortization 5,416 5,601 16,052 16,802
General and administrative 62,517 34,663 204,943 116,717
---------- -------- -------- ---------
563,647 352,546 1,759,707 1,057,749
---------- -------- --------- ---------
Net investment loss from operations (542,509) (337,898) (1,666,073) (1,004,579)
Net realized gain on portfolio
of investments:
Investment securities:
Affiliated 43,558 -- 165,254 --
Unaffiliated 3,737 112,301 946,862 529,620
---------- -------- -------- ---------
Total investment securities 47,295 112,301 1,112,116 529,620
Other than investment securities 202 -- 3,819 (111,392)
---------- -------- -------- ---------
Net realized gain on portfolio
of investments 47,497 112,301 1,115,935 418,228
---------- -------- --------- ---------
Provision for current income taxes 1,001 (8,730) 20,001 (942)
---------- -------- -------- ---------
Net realized loss (496,013) (216,867) (570,139) (585,409)
Increase (decrease) in unrealized
appreciation of investments,
net of deferred income taxes:
Investment securities:
Affiliated 968,958 -- (709,163) --
Unaffiliated (3,394,358) (149,322) 1,268,742 203,461
---------- -------- -------- ---------
Total investment securities (2,425,400) (149,322) 559,579 203,461
Other than investment securities -- (42,786) (951,862) 103,100
---------- -------- -------- ---------
Deferred income tax benefit (855,000) -- (159,000) --
---------- -------- -------- ---------
(Decrease) increase in unrealized
appreciation of investments,
net of deferred income taxes (1,570,400) (192,108) (233,283) 306,561
---------- -------- -------- ---------
Net decrease in net assets
from operations ($2,066,413)($408,975) ($803,422) ($278,848)
---------- -------- -------- ---------
Preferred dividends 28,787 -- 69,845 --
---------- -------- -------- ---------
Net decrease in net assets
attributable to common
stockholders ($2,095,200)($408,975) ($873,267) ($278,848)
========== ======== ======== =========
Basic and diluted net decrease
in net assets from operations
per common share (Note 8) ($1.89) ($0.36) ($0.74) ($0.25)
========== ======== ======== ========
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The accompanying notes are an integral part of these financial statements.
5
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FRANKLIN CAPITAL CORPORATION
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STATEMENTS OF CASH FLOWS
(UNAUDITED)
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FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 1999
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Cash flows from operating activities:
Net decrease in net assets from operations ($803,422) ($278,848)
Adjustments to reconcile net decrease in
net assets to net cash used in
operating activities:
Depreciation and amortization 16,052 16,802
Increase (decrease) in unrealized appreciation
of investments, net of deferred income
tax expense 233,283 (306,561)
Net realized gain on portfolio of
investments, net of current income taxes (1,095,934) (418,228)
Non-cash compensation expense from exercise
of officer options 326,505 --
Changes in operating assets and liabilities:
Decrease in receivable from disposal
of investments 231,308 --
Decrease in accrued interest and
accounts receivable 3,742 60,902
Increase in other assets (5,056) (19,105)
Increase (decrease) in accounts payable
and accrued liabilities 12,292 (74,432)
----------- -----------
Total adjustments (277,808) (740,622)
----------- -----------
Net cash used in operating activities (1,081,230) (1,019,470)
----------- -----------
Cash flows from investing activities:
Return of capital from investments -- 103,289
Proceeds from sale of affiliate 357,013 --
Proceeds from sale of other investments 3,819 --
Proceeds from sale of marketable
investment securities 1,228,374 1,773,624
Purchase of investment in majority
owned affiliate -- (303,000)
Purchase of investment in affiliate (100,000) --
Purchases of investments (1,631,936) (124,999)
Purchases of marketable investment securities (139,417) (980,723)
----------- -----------
Net cash (used in) provided by
investing activities (282,147) 468,191
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 1,645,000 --
Payment of preferred dividends (69,845) --
Cash paid to common shareholders in lieu
of fractional shares due to stock split
of common shares (1,449) --
Purchase of treasury stock (279,766) (109,737)
----------- -----------
Net cash provided by (used in)
financing activities 1,293,940 (109,737)
----------- -----------
Net decrease in cash and cash equivalents (69,437) (661,016)
Cash and cash equivalents at beginning of period 571,341 1,100,373
----------- -----------
Cash and cash equivalents at end of period $501,904 $439,357
=========== ===========
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The accompanying notes are an integral part of these financial statements.
6
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FRANKLIN CAPITAL CORPORATION
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STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
--------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
--------------------------------------------------------------------------------
Increase (decrease) in
net assets from operations:
Net investment loss ($542,509) ($337,898) ($1,666,073) ($1,004,579)
Net realized gain on
portfolio of investments,
net of current income taxes 46,496 121,031 1,095,934 419,170
(Decrease) increase in
unrealized appreciation
of investments, net of
deferred income taxes (1,570,400) (192,108) (233,283) 306,561
---------- ---------- ---------- -----------
Net decrease in net
assets from operations (2,066,413) (408,975) (803,422) (278,848)
Capital stock transactions:
Issuance of preferred stock -- -- 1,645,000 --
Payment of dividends on
preferred stock (28,787) -- (69,845) --
Issuance of stock from
treasury to majority owned
affiliate, net -- (166,254) -- 8,747
Issuance of stock from
treasury for exercise of
officer options 129,317 -- 326,505 --
Cash paid to common
shareholers in lieu of
fractional shares -- -- (1,449) --
Purchase of treasury stock (65,215) -- (279,766) (109,737)
---------- ---------- ---------- -----------
Total (decrease)
increase in net assets (2,031,098) (575,229) 817,023 (379,838)
---------- ---------- ---------- -----------
Net assets at beginning
of period 11,288,503 6,510,944 8,440,382 6,315,553
---------- ---------- ---------- -----------
Net assets at end of period $9,257,405 $5,935,715 $9,257,405 $5,935,715
========== ========== ========== ===========
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The accompanying notes are an integral part of these financial statements.
7
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<TABLE>
<CAPTION>
FRANKLIN CAPITAL CORPORATION
===================================================================================================================================
PORTFOLIO OF INVESTMENTS
(UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
MARKETABLE INVESTMENT SECURITIES
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES OR MARKET
PRINCIPAL VALUE
SEPTEMBER 30, 2000 AMOUNT ($) COST(1) (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Certificate of Deposit - 5.01%, due 10/04/2000 ................................................ 34,675 34,675
======= =======
Total Marketable Investment Securities (0.4% of total investments and 0.4% of net assets) ... $34,675 $34,675
======= =======
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT FAIR VALUE
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES OR DIRECTORS'
EQUITY PRINCIPAL VALUATION
SEPTEMBER 30, 2000 INVESTMENT INTEREST AMOUNT ($) COST(1) (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------------
MAJORITY OWNED AFFILIATE
eMattress.com (0.0% of total investments and
0.0% of net assets) .................................. Common stock 87.19% 1,157 $440,059 $0
(equity in net loss for 9 months ended
September 30, 2000 was approximately $57,000)
AFFILIATE
Avery Communications Inc .............................. Common stock 1,208,438 1,294,327
Avery Communications Inc .............................. Convertible Preferred
Stock - Series E;
12.0% dividend rate(2) 350,000 350,000
-------
Total Avery Communications (30.1% of total investments
and 29.5% of net assets) 8.83% 1,644,327 2,727,267
(Telecommunications) (fully
diluted basis)
Excom Ventures, LLC (1.1% of total investments and 1.1% Units 13.33% 100,000 100,000 100,000
of net assets)
OTHER INVESTMENTS
Data Downlink Corporation (11.0% of total investments Convertible Preferred 1.68% 321,543 1,000,000 1,000,000
and 10.8% of net assets) Stock
(Internet-based information provider)
Go America Inc. (50.2% of total investments and 49.2% Common Stock 1.10% 514,784 499,750 4,552,621
of net assets)
(Wireless internet service provider)
Structured Web, Inc. (3.9% of total investments and Convertible Preferred 2.02% 188,425 350,000 350,000
3.8% of net assets) Stock
(Internet-based application service provider)
TradingNews, Inc ...................................... Common stock 72,000 13,125
TradingNews, Inc ...................................... Convertible Preferred 249,999 75,000
Stock
TradingNews, Inc ...................................... Convertible Promissory
Note 10%(2) 212,500 212,500
-------
Total Trading News, Inc. (3.3% of total investments
and 3.2% of net assets) 2.65% 300,625 300,625
(Investment information provider) -------- -------
Total Other Investments ....................................................................... 2,150,375 6,203,246
--------- ---------
Total Investments, at Fair Value ............................................................ $4,334,761 $9,030,513
========== ==========
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</TABLE>
(1) Book cost equals tax cost for all investments
(2) Income producing security
The accompanying notes are an integral part of these financial statements.
8
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. ORGANIZATION
Franklin Capital Corporation ("Franklin", or the "Corporation") is a Delaware
corporation registered as a Business Development Company ("BDC") under the
Investment Company Act of 1940 (the "Act"). A BDC is a specialized type of
Investment Company under the Act. A BDC must be primarily engaged in the
business of furnishing capital and managerial expertise to companies that do not
have ready access to capital through conventional financial channels. Such
companies are termed "eligible portfolio companies". The Corporation, as a BDC,
may invest in the securities of public companies and other investments that are
not qualifying assets of eligible portfolio companies; however such investments
may not exceed 30% of the Corporation's total asset value at the time of any
such investment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
STATEMENTS OF CASH FLOWS
For purposes of the Statements of Cash Flows, Franklin considers only highly
liquid investments with maturities of 90 days or less at the date of their
acquisition to be cash equivalents.
The Corporation paid no interest during the nine months ended September 30, 2000
and 1999, and paid income taxes of $2,000 during the nine months ended September
30, 1999.
At September 30, 2000, the Corporation held cash and cash equivalents primarily
in overnight commercial paper and money market funds at two commercial banking
institutions.
VALUATION OF INVESTMENTS
Security investments which are publicly traded on a national exchange or NASDAQ
are stated at the last reported sales price on the day of valuation, or if no
sale was reported on that date, then the securities are stated at the last
quoted bid price. The Board of Directors of Franklin (the "Board of Directors")
may determine, if appropriate, to discount the value where there is an
impediment to the marketability of the securities held.
Investments for which there is no ready market are initially valued at cost and,
thereafter, at fair value based upon the financial condition and operating
results of the issuer and other pertinent factors as determined by the Board of
Directors. The financial condition and operating results have been derived
utilizing both audited and unaudited data. In the absence of a ready market for
an investment, numerous assumptions are inherent in the valuation process. Some
or all of these assumptions may not materialize. Unanticipated events and
circumstances may occur subsequent to the date of the valuation and values may
change due to future events. Therefore, the actual amounts eventually realized
from each investment may vary from the valuations shown
9
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
and the differences may be material. Franklin reports the unrealized gain or
loss resulting from such valuation in the Statements of Operations.
GAINS ON PORTFOLIO OF INVESTMENTS
Amounts reported as realized gains are measured by the difference between the
proceeds of sale or exchange and the cost basis of the investment without regard
to unrealized gains reported in the prior periods. Gains are considered realized
when sales or dissolution of investments are consummated.
INCOME TAXES
Franklin does not qualify as a Regulated Investment Company for income tax
purposes. Therefore, the Corporation is taxed as a regular corporation.
Franklin accounts for income taxes in accordance with the provision of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). The significant components of deferred tax assets and liabilities are
principally related to the Corporation's net operating loss carryforward and its
unrealized appreciation of investments.
DEPRECIATION AND AMORTIZATION
Depreciation is recorded using the straight-line method at rates based upon
estimated useful lives for the respective assets. Leasehold Improvements are
included in other assets and are amortized over their useful lives or the
remaining life of the lease, whichever is shorter.
NET INCREASE (DECREASE) IN NET ASSETS PER COMMON SHARE
Basic and diluted net increase (decrease) in net assets per common share is
calculated in accordance with the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings per Share". See Note 7 for discussion of
Stock Options.
3. INCOME TAXES
For the nine months ended September 30, 2000 and 1999, Franklin's tax
(provision) benefit was based on the following:
2000 1999
----------- -----------
Net investment loss from operations .............. $(1,666,073) $(1,004,579)
Net realized gain on portfolio of investments .... 1,115,935 418,228
(Decrease) increase in unrealized appreciation ... (392,283) 306,561
----------- -----------
Pre-tax book loss ........................... $ (942,421) $ (279,790)
=========== ===========
2000 1999
----------- -----------
Tax benefit at 34% on $(942,421) and
$(279,790) respectively ........................ $ 320,000 $ 95,000
State and local, net of Federal benefit .......... (20,000) 1,000
Book losses for which no benefit is provided ..... (141,000) (95,000)
----------- -----------
$ 139,000 $ 1,000
=========== ===========
10
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The components of the tax provision (benefit) are as follows:
2000 1999
----------- -----------
Current state and local tax provision ............ $ (20,000) $ 1,000
Deferred tax benefit ............................. 159,000 --
----------- -----------
Provision benefit for income taxes ............... $ 139,000 $ 1,000
=========== ===========
Deferred income tax benefit (provision) reflects the impact of "temporary
differences" between amounts of assets and liabilities for financial reporting
purposes and such amounts as measured by tax laws.
At September 30, 2000 and December 31, 1999, significant deferred tax assets and
liabilities consist of:
Asset (Liability)
---------------------------
September 30, December 31,
2000 1999
----------- -----------
Deferred Federal and state benefit from
net operating loss carryforward ................ $ 1,781,000 $ 1,481,000
Deferred Federal and state provision on unrealized
appreciation of investments .................... (1,973,000) (1,832,000)
----------- -----------
Deferred taxes ................................... $ (192,000) $ (351,000)
=========== ===========
At December 31, 1999, Franklin had net operating loss carryforwards for income
tax purposes of approximately $4,115,000 that will begin to expire in 2011. At a
36% effective tax rate the after-tax net benefit from this loss would be
approximately $1,481,000.
4. STOCKHOLDERS' EQUITY
The Accumulated Deficit at September 30, 2000, consists of accumulated net
realized gains of $4,569,000 and accumulated investment losses of $9,240,000.
On February 22, 2000, the Corporation issued $1,645,000 of convertible preferred
stock. The stock was issued at a price of $100 per share, has a cumulative 7%
quarterly dividend and is convertible into Franklin Common Stock at a conversion
price of $13.33 per share.
On April 26, 2000, the Corporation declared a three for two stock split of the
Corporation's Common Stock in the form of a stock dividend to shareholders of
record on May 15, 2000, and payable June 7, 2000. The stock split has been
reflected in the accompanying financial statements and all applicable references
as to the number of common shares and per share information have been restated.
The Board of Directors has authorized Franklin to repurchase up to an aggregate
of 525,000 shares of its common stock in open market purchases on the American
Stock Exchange when such purchases are deemed to be in the best interest of the
Corporation and its stockholders. The Corporation issued 30,069 shares of stock
from treasury pursuant to an investment made by Franklin on January 25, 1999. On
September 30, 1999, 28,566 of these shares were canceled and placed back into
treasury (see Note 6 - Transactions with
11
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Affiliates). During the nine months ended September 30, 2000, Franklin purchased
26,050 shares of its common stock. On May 9, 2000, 17,399 shares were issued
from treasury pursuant to the exercise of options by one of Franklin's officers.
On September 11, 2000, 14,369 shares were issued from treasury pursuant to the
exercise of options by one of Franklin's officers. As of September 30, 2000,
Franklin had repurchased 452,650 shares of its Common Stock of which 404,379
shares remain in treasury.
5. COMMITMENTS AND CONTINGENCIES
Franklin is obligated under an operating lease, which provides for annual
minimum rental payments as follows:
December 31,
2000................................................................... $149,600
2001................................................................... 149,600
2002................................................................... 149,600
2003................................................................... 149,600
--------
$598,400
========
Rent expense for the nine months ended September 30, 2000, and 1999 was $72,452
and $64,920 respectively. For the nine months ended September 30, 2000 and 1999,
the Corporation collected rents of $34,000 and $41,532 respectively, from
subtenants under month-to-month leases, for a portion of its existing office
space, which is reflected as a reduction in rent expense for that period. A
portion of the amount collected from subtenants during the nine months ended
September 30, 2000, was received from a corporation included in Franklin's
investment portfolio at September 30, 2000.
6. TRANSACTIONS WITH AFFILIATES
On June 26, 2000, the Corporation invested $100,000 in Excom Ventures, LLC.
("Excom"). Excom was formed as a holding company for the purpose of investing in
Expert Commerce, Inc. ("Expert Commerce") a Business-to-Business purchase
evaluation engine that simulates the way people make decisions.
In January 1999, Franklin formed eCom Capital Corporation ("eCom"), a wholly
owned subsidiary of Franklin, for the purposes of investing in Internet related
ventures. On January 25, 1999, eCom invested a total of $387,500 in
eMattress.com Inc. ("eMattress"), consisting of $175,000 worth of Franklin
common stock (30,069 shares from treasury stock valued at the Net Asset Value on
the date of the transaction) and $212,500 in cash. In August 1999, Franklin
invested an additional $87,500 in eCom, pursuant to this transaction, eMattress
was merged into eCom and 28,566 shares of Franklin common stock valued at
$166,252 were returned to Franklin's treasury. In November 1999, Franklin
invested an additional $75,000 into eMattress and as a result of this
transaction Franklin owned 87.2% of eMattress. During the third quarter 2000,
eMattress ceased operations and is in the process of legally dissolving.
Franklin has written off its investment including a loan of $56,311 that was
determined to be non-collectible. Franklin's unrealized gains as of September
30, 2000 are net of unrealized losses related to eMattress of $440,059.
During the nine months ended September 30, 2000, Franklin sold 177,500 shares of
Avery for total proceeds of $357,013 realizing a gain of $165,254. At September
30, 2000, Franklin owned 7.05% of Avery Communications on a fully diluted basis,
and 13.8% of Avery Communications on a primary basis.
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. STOCK OPTIONS
On September 9, 1997, Franklin's stockholders approved two Stock Option Plans: a
Stock Incentive Plan ("SIP") to be offered to the Corporation's consultants,
officers and employees (including any officer or employee who is also a director
of the Corporation) and a Non-Statutory Stock Option Plan ("SOP") to be offered
to the Corporation's "outside" directors, i.e., those directors who are not also
officers or employees of Franklin. 112,500 shares of the Corporation's Common
Stock have been reserved for issuance under these plans, of which 67,500 shares
have been reserved for the SIP and 45,000 shares have been reserved for the SOP.
Shares subject to options that terminate or expire prior to exercise will be
available for future grants under the Plans.
On March 18, 1999, 15,000 forfeited options were reissued under the SIP to three
eligible officers of the Corporation at a strike price of $3.83 per share, which
represented the closing price of Franklin's Common Stock as reported by the
American Stock Exchange on the date of issuance. These options will expire as
originally issued. One-half of the reissued options vested immediately, and
one-half vested on January 27, 2000.
On February 14, 2000, 30,000 options were granted under the SOP to four eligible
"outside" directors. The strike price of the options was $11.50 per share, which
represented the closing price of Franklin's Common Stock as reported by the
American Stock Exchange on that date. One-third of the options granted vested
immediately; another one-third vest one year from the date of issuance; and the
final one-third vest two years after the date of issuance. The options expire
after ten years.
On March 1, 2000, 1,875 forfeited options were reissued under the SIP to an
eligible officer of the Corporation at a strike price of $14.00 per share, which
represented the closing price of Franklin's Common Stock as reported by the
American Stock Exchange on that date. These options will expire as originally
issued. One-half of the reissued options vested immediately, and one-half will
vest on March 1, 2001.
On May 9, 2000, one of Franklin's officers made a cash-less exercise of 29,062
options resulting in a non-cash charge to compensation expense of $197,188. On
September 11, 2000, one of Franklin's officers made a cash-less exercise of
29,062 options resulting in a non-cash charge to compensation expense of
$129,317.
On June 7, 2000, 7,500 options were granted under the SOP to four eligible
"outside" directors. The strike price of the options was $9.67 per share, which
represented the closing price of Franklin's Common Stock as reported by the
American Stock Exchange on that date. One-third of the options granted vested
immediately; another one-third vest one year from the date of issuance; and the
final one-third vest two years after the date of issuance. The options expire
after ten years.
Franklin accounts for the options issued to employees under APB Opinion No. 25,
under which no compensation cost has been recognized. Proforma information
determined consistent with the fair value method required by FASB Statement No.
123, is as follows:
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Nine Months Ended
------------------------------
Net decrease in net assets from operations: September 30, September 30,
2000 1999
------------- -------------
As reported $(803,422) $(278,848)
Pro forma $(848,409) $(304,123)
Net decrease in net assets per common share:
As reported $ (0.74) $ (0.25)
Pro forma - Basic and Diluted $ (0.78) $ (0.27)
September 30, September 30,
2000 1999
------------- -------------
Net Asset Value per share:
As reported $ 8.40 $ 5.41
Pro forma - Basic $ 8.36 $ 5.39
Pro forma - Diluted $ 7.50 $ 5.39
The fair value of the options granted was estimated on the date of the grant
using the Black-Scholes option-pricing model with the following assumptions:
September 30, September 30,
2000 1999
------------- -------------
Stock volatility 41.3% 30.0%
Risk-free interest rate 5.5% 5.5%
Option term in years 4 4
Stock dividend yield -- --
The following is a summary of the status of the Stock Option Plans during the
nine months ended:
September 30, 2000 September 30, 1999
------------------ ------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
------ -------- ------ -------
Outstanding at beginning
of period 65,625 $ 4.59 52,500 $4.67
Granted 39,375 $11.27 15,000 $3.83
Exercised 58,124 $ 4.55 -- --
Forfeited -- -- -- --
Expired -- -- -- --
------ ------
Outstanding at end of period 46,876 $10.25 67,500 $4.48
====== ======
Exercisable at end of period 18,125 $11.61 45,000 $4.53
====== ======
Weighted average fair value
of options granted $ 2.58 $1.65
The options issued under the SIP have a remaining contractual life of 8.25
years. The options issued under the SOP have a remaining contractual life of 9.4
years.
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FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE
The following table sets forth the computation of basic and diluted change in
net assets per common share:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
-------------------------------------------------------
September 30, September 30,
2000 1999 2000 1999
-------------------------------------------------------
<S> <C> <C> <C> <C>
Numerator:
Net decrease in net assets attributable to
common stockholders per share ($803,422) ($278,848) ($2,066,413) ($408,975)
Preferred stock dividends (69,845) -- (28,787) --
--------- --------- ----------- ---------
Numerator for basic earnings per share -
net loss available for common stockholders ($873,267) ($278,848) ($2,095,200) ($408,975)
Effect of dilutive securities:
Preferred stock dividends 69,845 -- 28,787 --
--------- --------- ----------- ---------
Numerator for diluted earnings per share -
net decrease in net assets available for common
stockholders after assumed conversions ($803,422) ($278,848) ($2,066,413) ($408,975)
========= ========= =========== =========
Denominator:
Denominator for basic decrease in net assets from
operations - weighted - average shares 1,092,779 1,134,431 1,092,346 1,124,138
========= ========= =========== =========
Basic and diluted net decrease in net assets attributable
to common stockholders ($0.74) ($0.25) ($1.89) ($0.36)
========= ========= =========== =========
</TABLE>
Diluted net decrease in net assets attributable to common stockholders is not
presented since the effect of all potentially dilutive securities is
anti-dilutive.
9. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales of investment securities,
including the issuance of treasury stock for September 30, 1999, as discussed in
Note 6 and excluding short term investments, aggregated $1,836,678 and
$1,544,024 respectively, for the nine months ended September 30, 2000;
$1,518,549 and $1,876,913 respectively, for the nine months ended September 30,
1999.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
STATEMENT OF OPERATIONS
The Corporation accounts for its operations under Generally Accepted
Accounting Principles for investment companies. On this basis, the principal
measure of its financial performance is captioned "Net increase (decrease) in
net assets from operations", which is composed of the following: "Net investment
loss from operations," which is the difference between the Corporation's income
from interest, dividends and fees and its operating expenses; "Net realized gain
on portfolio of investments," which is the difference between the proceeds
received from dispositions of portfolio securities and their stated cost; any
applicable income tax provisions (benefits); and "Net increase (decrease) in
unrealized appreciation of investments," which is the net change in the fair
value of the Corporation's investment portfolio, net of any increase (decrease)
in deferred income taxes that would become payable if the unrealized
appreciation were realized through the sale or other disposition of the
investment portfolio.
"Net realized gain (loss) on portfolio of investments" and "Net increase
(decrease) in unrealized appreciation of investments" are directly related. When
a security is sold to realize a gain, the net unrealized appreciation decreases
and the net realized gain increases. When a security is sold to realize a loss,
the net unrealized appreciation increases and the net realized gain decreases.
FINANCIAL CONDITION
The Corporation's total assets and net assets were, respectively,
$9,686,281 and $9,198,405 at September 30, 2000 versus $8,995,965 and $8,440,382
at December 31, 1999. Net asset value per share was $8.40 ($7.54 diluted) at
September 30, 2000 versus $7.70 ($7.55 diluted) at December 31, 1999.
The Corporation's financial condition is dependent on the success of its
investments. A summary of the Corporation's investment portfolio is as follows:
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
Investments, at cost $4,369,436 $2,971,347
Unrealized appreciation, net of
deferred taxes 4,503,752 4,737,035
---------- ----------
Investments, at fair value $8,814,188 $7,708,382
========== ==========
INVESTMENTS
The Corporation has an investment in Avery Communications Corporation
("Avery Communications") valued at $2,727,267 at September 30, 2000, which
represents 28.2% of the Corporation's total assets and 29.5% of its net assets.
Its common stock is quoted on the OTC Electronic Bulletin Board under the symbol
"ATEX". Avery Communications is the public parent of two companies, Primal
Solutions, Inc. ("Primal") and HBS Billing Service, Ltd ("HBS"), both of which
operate in the telecommunications industry. Primal, based in Irvine, California,
is a leading provider of Web-based integrated customer management and
intelligence solutions that allow rapidly evolving communications and Internet
service providers to stay connected with and grow their customers. It does this
through an integrated suite of applications that can track and analyze customer
behavior and preferences, collect usage information, and
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<PAGE>
support billing and customer care back-office requirements, including those of
emerging IP billing markets. HBS, based in San Antonio, Texas is a nationwide
provider of a comprehensive range of Local Exchange Carrier (LEC) Billing and
Collection services through an established billing network of more than 1,300
LECs. HBS has built strong billing and collection relationships with all
Regional Bell Operating Companies (RBOCs), GTE, AllTel, Sprint, and several
hundred independent telephone companies throughout the United States. Through
these billing agreements, HBS provides clearinghouse billing services to its
clients for a variety of telecommunication-related services and products,
including Direct Dialed 1+, Dial-Around 10-10-xxx, and qualified non-regulated
telecommunication services. On August 10, 2000, Avery announced that it had
revised its previously stated plan to spin-off its HBS Subsidiary to its
shareholders. Pending regulatory approval, under the new plan Avery shareholders
of record on October 23, 2000 will receive one share of stock in Primal for
every one Avery common share held on the record date. Primal has filed a
registration statement with the Securities and Exchange Commission to register
the Primal shares to be issued in the spin-off. Avery anticipates that the
distribution will be completed by November 30, 2000, assuming all necessary
approvals are obtained.
During the nine months ended September 30, 2000, Franklin sold 177,500
shares of Avery for total proceeds of $357,013 realizing a gain of $165,254.
Franklin's remaining shares represent 13.80% of Avery Communications outstanding
voting stock on a primary share basis and 7.85% on a fully diluted basis.
Stephen L. Brown and Spencer L. Brown, officers of Franklin, did not stand for
re-election on Avery Communications Board of Directors at the annual meeting
held on September 13, 2000 and are no longer members of the Avery Communications
Board of Directors. Spencer L. Brown serves on the Primal Board of Directors.
At September 30, 2000, the Corporation had an investment in Data Downlink
Corporation ("Data Downlink") valued at $1,000,000, which represents 10.3% of
the Corporation's total assets and 10.8% of its net assets. Data Downlink,
headquartered in New York and London, is a leading provider of Internet-based
online information services. Data Downlink provides a service called .xls, which
aggregates and cross-indexes over 70 premier business databases, delivering
information directly to Microsoft Excel, HTML, Microsoft Word or PDF formats at
the desktop. Other products include privatesuite(TM), a fast, easy,
cost-effective way to identify and retrieve profiles of privately held companies
around the world; compbook(TM), a tool for company peer analysis; and Portal
B(TM), a fully integrated business information portal.
On April 20, 2000, the Corporation purchased $1,000,000 worth of Data
Downlink Series F Preferred Stock. In connection with this investment, Franklin
was granted observer rights for Data Downlink Board of Directors meetings.
At September 30, 2000, the Corporation had an investment in Excom Ventures,
LLC ("Excom") valued at $100,000, which represents 1.0% of the Corporation's
total assets and 1.1% of its net assets. Excom was formed as a holding company
for the purpose of investing in Expert Commerce, Inc. ("Expert Commerce").
Expert Commerce is a Business-to-Business purchase evaluation engine that
simulates the way people make decisions. Based on intelligent and proven
technology, the engine helps structure complex decisions and provides an audit
trail to justify transactions, empowering buyers to make purchase decisions with
confidence.
On June 26, 2000, the Corporation purchased $100,000 worth of Excom Units.
At September 30, 2000 the Corporation owned 514,784 shares of common stock
of Go America, Inc. ("Go America"), a wireless internet service provider valued
at $4,552,621, which
17
<PAGE>
represents 47.0% of the Corporation's total assets and 49.2% of its net assets.
Go America is a leading provider of nationwide wireless Internet services. Go
America enables business and individual subscribers to access remotely the
Internet, email and corporate intranets in real time through a wide variety of
mobile computing and communications devices. Go America's Wireless Internet
Connectivity Center offers subscribers comprehensive and flexible mobile data
solutions for wireless Internet access by providing wireless network services,
mobile devices, software and subscriber service and support.
The Corporation made an initial purchase of $25,000 worth of Go America
common stock in 1996. The Corporation made additional purchases of common stock
of $25,000 and $324,740 in 1998 and in November 1999, respectively.
Additionally, in November 1999, the Corporation purchased $125,000 of
convertible preferred stock. On April 7, 2000, Go America's common stock began
trading on the NASDAQ National Market. All of the convertible preferred stock
owned by Franklin was converted to common on this date as well. Franklin signed
a lockup agreement and is restricted from selling any of its Go America shares
prior to October 4, 2000.
At September 30, 2000, the Corporation had an investment in Structured Web,
Inc. ("Structured Web") valued at $350,000, which represents 3.6% of the
Corporation's total assets and 3.8% of its net assets. Structured Web develops
web building blocks to enable small businesses to create and manage their own
digital nerve system easily and at an affordable price. Structured Web's
object-based proprietary technology enables customers to choose from a growing
selection of "WebBlocks" including content, communication, commerce and
services.
On August 8, 2000, the Corporation purchased $350,000 worth of Structured
Web convertible preferred stock. In connection with this investment, Franklin
was granted observer rights for Structured Web Board of Directors meetings.
At September 30, 2000, the Corporation had an investment in TradingNews,
Inc. ("TradingNews"), D/B/A M4Logic ("M4Logic") valued at $300,625, which
represents 3.1% of the Corporation's total assets and 3.2% of its net assets.
M4Logic is a provider of financial market intelligence for retail investors
based on price and volume movement. M4Logic scans every trade on major stock
exchanges for important technical signals. These signals, published instantly on
the World Wide Web as easy to understand news headlines, help investors identify
key market entry and exit points, spot market trends, and grasp the feel of the
market.
During 1999, the Corporation purchased $75,000 worth of TradingNews
convertible preferred stock. In connection with this investment, Stephen L.
Brown was appointed to the TradingNews six member Board of Directors. In January
2000 the Corporation invested an additional $13,125 for 72,000 shares of
TradingNews common stock. In February 2000, the Corporation invested an
additional $170,000 for a Convertible Promissory Note from TradingNews, Inc.
This note pays interest at 10% per annum and is convertible into preferred
stock. In August 2000, the Corporation invested an additional $42,500 for a
Convertible Promissory Note from TradingNews, Inc. This note pays interest at
10% per annum and is convertible into preferred stock.
During the third quarter of 2000 eMattress ceased operations and Franklin
has written off its entire investment including a loan of $56,311 that was
determined to be non-collectible. eMattress is in the process of filing for
dissolution.
18
<PAGE>
RESULTS OF OPERATIONS
INVESTMENT INCOME AND EXPENSES:
The Corporation's principal objective is to achieve capital appreciation
through long-term investments in businesses believed to have favorable growth
potential. Therefore, a significant portion of the investment portfolio is
structured to maximize the potential for capital appreciation and provides
little or no current yield in the form of dividends or interest. The Corporation
earns interest income from loans, preferred stocks, corporate bonds and other
fixed income securities. The amount of interest income varies based upon the
average balance of the Corporation's fixed income portfolio and the average
yield on this portfolio.
The Corporation had interest and dividend income of $71,634 and $53,170 for
the nine months ended September 30, 2000 and 1999, respectively. The increase in
interest and dividend income for the nine months ended September 30, 2000 when
compared to September 30, 1999, was primarily the result of Franklin having more
cash on hand during the nine months ended September 30, 2000.
Operating expenses were $1,759,707 and $1,057,749 for the nine months ended
September 30, 2000 and 1999, respectively. A majority of the Corporation's
operating expenses consist of employee compensation, (which for the nine months
ended September 30, 2000 included a non-cash charge of $326,505 due to the
exercise of incentive options) office and rent expense, other expenses related
to identifying and reviewing investment opportunities and professional fees.
Professional fees consist of general legal fees, audit and tax fees and
investment related legal fees.
Net investment losses from operations were $1,666,073 and $1,004,579 for
the nine months ended September 30, 2000 and 1999, respectively.
The Corporation has relied and continues to rely to a large extent upon
proceeds from sales of investments rather than investment income to defray a
significant portion of its operating expenses. Because such sales cannot be
predicted with certainty, the Corporation attempts to maintain adequate working
capital to provide for fiscal periods when there are no such sales.
NET REALIZED GAINS AND LOSSES ON PORTFOLIO OF INVESTMENTS:
During the nine months ended September 30, 2000 and 1999, the Corporation
realized net gains before taxes of $1,115,935 and $418,228 respectively, from
the disposition of various investments.
UNREALIZED APPRECIATION OF INVESTMENTS:
Unrealized appreciation of investments, net of deferred taxes, decreased by
$233,283 during the nine months ended September 30, 2000, primarily from the
realization of gains in CIC and by a decrease in the value of Franklin's
investment in Avery. This decrease was partially offset by unrealized gains due
to the increase in value of Franklin's investment in Go America.
Unrealized appreciation of investments, net of deferred taxes, increased by
$306,561 during the nine months ended September 30, 1999, primarily from
unrealized gains due to the increase in value of Franklin's investments in CIC
and Go America.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Corporation's reported total cash and cash equivalents, accrued
interest and accounts receivable and marketable investment securities (the
primary measure of liquidity) at September 30, 2000 was $548,813 compared to
$1,710,087 at December 31, 1999. Management believes that these assets along
with Franklin's investments in Avery Communication's and Go America's publicly
traded common stock provide the Corporation with sufficient liquidity for its
operations.
RISKS
Pursuant to Section 64(b) (1) of the Investment Corporation Act of 1940, a
BDC is required to describe the risk factors involved in an investment in its
securities inherent in the nature of the Corporation's investment portfolio.
There are significant risks inherent in the Corporation's venture capital
business. The Corporation has invested a substantial portion of its assets in
small private companies and a non-reporting public corporation. Because of the
speculative nature of these investments, there is significantly greater risk of
loss than is the case with traditional investment securities. The Corporation
expects that from time to time its venture capital investments may result in a
complete loss of the Corporation's invested capital or may be unprofitable.
Other investments may appear likely to become successful, but may never realize
their potential. Neither the Corporation's investments nor an investment in the
Corporation is intended to constitute a balanced investment program. The
Corporation has in the past relied and continues to rely to a large extent upon
proceeds from sales of investments rather than investment income to defray a
significant portion of its operating expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A portion of the Corporation's portfolio of investments is in marketable
securities traded on the over-the-counter market. In order to realize the full
market value of a security the market must trade in an orderly fashion. Should
an economic event occur that would not allow the markets to trade in an orderly
fashion, the Corporation may not be able to receive fair value for those
investments.
All investments owned by the Corporation are marked at fair value at
September 30, 2000. For those investments that do not have a ready market, the
Corporation has received valuation information from either an independent third
party or the investee corporation itself. The Corporation has no off-balance
sheet investments or hedging instruments.
20
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities Holders
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The exhibits which are filed with the Form 10-Q or
incorporated herein by reference are set for in the Exhibit Index
on page 22.
(b) Reports on Form 8-K. The Company did not file any reports on Form
8-K during the first nine months of 2000.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Corporation has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN CAPITAL CORPORATION
Date: November 13, 2000 By: /s/ HIRAM M. LAZAR
--------------------------------
Hiram M. Lazar
CHIEF FINANCIAL OFFICER
21
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EXHIBIT INDEX
(27) -- Financial Data Schedule
22
