<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
------------------------------------------
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996.
OR
// TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____.
Commission file number 0-25194
INTERAMERICAS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 87-0464860
(State of Incorporation) (IRS Employer Identification)
104 CRANDON BOULEVARD, SUITE 324 33149
KEY BISCAYNE, FLORIDA (Zip Code)
(Address of principal executive office)
Registrant's telephone number:
(305) 361-8484
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports),
YES X NO
--- ---
and (2) has been subject to such filing requirements for the past 90 days.
YES X NO
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of October 31, 1996-16,152,518 Shares.
NOTE: Page 1 of 15 Sequentially numbered pages
<PAGE>
INTERAMERICAS COMMUNICATIONS CORPORATION
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements:
Balance Sheet - September 30, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . .3
Statement of Operations - Three Months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . .4
Statement of Operations - Nine Months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . .5
Statement of Cash Flows - Nine Months ended
September 30, 1996 and 1995 . . . . . . . . . . . . . . . . .6
Notes to Financial Statements . . . . . . . . . . . . . . . . .7
Item 2. Management's Discussion and Analysis of Results
of Operations, Financial Conditions and
Liquidity of Capital Resources. . . . . . . . . . . . . . . .7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . 14
2
<PAGE>
INTERAMERICAS COMMUNICATIONS CORPORATION
BALANCE SHEET (UNAUDITED)
COMBINED COMBINED
CONSOLIDATED CONSOLIDATED
SEPTEMBER 30, DECEMBER 31,
1996 1995
(UNAUDITED) (AUDITED)
ASSETS
Current Assets:
Cash in Bank $2,505,695 $57,000
Acounts Receivable 207,836 8,000
Other Receivables 79,136 7,000
Inventory 125,169
Prepaid Expenses 193,733 119,000
Due from Related Parties 9,680 93,000
Other Currents Assets 64,394 4,000
-------------- -------------
Total Current Assets 3,185,643 288,000
-------------- -------------
Equipment at cost, less
Accumulated Depreciation 3,163,067 2,885,000
Intangible Assets 8,419,126 1,166,000
Due from Related Parties 35,669
Other Assets 17,030 8,000
-------------- -------------
11,634,892 4,059,000
-------------- -------------
TOTAL ASSETS $14,820,535 $4,347,000
-------------- -------------
-------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short Term Bank Credit Line $32,564
Accounts Payable - Related Parties $698,000
- Other 380,492 423,000
Accrued Expenses 91,967 536,000
Note Payable - Related Parties 634,000
- Other 1,137 1,013,000
Lease obligation-Current 177,239 11,000
Other Current Liabilities 28,199
-------------- -------------
Total Current Liabilities 711,598 3,315,000
Lease Obligation-less current portion 207,257 210,000
Deferred Income Taxes 152,000 152,000
-------------- -------------
Total Liabilities 1,070,855 3,677,000
-------------- -------------
Stockholders' Equity:
Common Stock, $.001 par value,
Authorized 50,000,000 shares
16,152,518 issued and outstanding 16,152 12,000
Additional Paid in Capital 21,507,996 6,153,000
Cumulative Translation Adjustment 87,400 30,000
Accumulated Deficit (7,861,868) (5,525,000)
-------------- -------------
Total Stockholders' Equity 13,749,680 670,000
-------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $14,820,535 $4,347,000
-------------- -------------
-------------- -------------
3
<PAGE>
INTERAMERICAS COMMUNICATIONS CORPORATION
STATEMENT OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1996 1996
------------ ------------
SALES $363,670 $112,027
COST OF SALES 245,073 69,397
------------ ------------
GROSS PROFIT 118,597 42,630
------------ ------------
EXPENSES:
GENERAL AND ADMINISTRATIVE 1,324,117 573,712
------------ ------------
TOTAL EXPENSES 1,324,117 573,712
------------ ------------
LOSS FROM OPERATIONS (1,205,520) (531,082)
INTEREST INCOME 22,515
INTEREST EXPENSE (17,878) (47,633)
FOREIGN EXCHANGE TRANSACTIONS-NET (10,793)
------------ ------------
NET LOSS $($1,211,676) ($578,715)
------------ ------------
------------ ------------
NET LOSS PER SHARE ($0.08) ($0.04)
------------ ------------
------------ ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 16,152,518 11,951,685
------------ ------------
------------ ------------
4
<PAGE>
INTERAMERICAS COMMUNICATIONS CORPORATION
STATEMENT OF OPERATIONS (UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1996 1995
----------- ----------
SALES $476,591 $219,027
COST OF SALES 618,276 335,397
----------- ------------
GROSS PROFIT (141,685) (116,370)
----------- ------------
EXPENSES:
GENERAL AND ADMINISTRATIVE 2,160,539 1,429,712
----------- ------------
TOTAL EXPENSES 2,160,539 1,429,712
----------- ------------
LOSS FROM OPERATIONS (2,302,224) (1,546,082)
INTEREST INCOME 36,274
INTEREST EXPENSE (59,358) (47,633)
FOREIGN EXCHANGE TRANSACTIONS-NET (10,793)
----------- ------------
NET LOSS ($2,336,101) ($1,593,715)
----------- ------------
----------- ------------
NET LOSS PER SHARE ($0.16) ($0.17)
----------- ------------
----------- ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,345,509 9,579,784
----------- ------------
----------- ------------
5
<PAGE>
INTERAMERICAS COMMUNICATIONS CORP.
STATEMENT OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1995 1995
----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS ($2,336,101) ($1,593,715)
ADJUSTMENTS TO RECONCILE LOSS TO CASH
PROVIDED/USED FROM OPERATING
ACTIVITIES:
AMORTIZATION 192,191
DEPRECIATION EXPENSE 278,220 186,382
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE (271,972) (83,252)
(INCREASE) DECREASE IN OTHER CURRENT ASSETS (176,976) 71,157
INCREASE (DECREASE) IN OTHER CURRENT LIABILITIES 28,199 228,366
INCREASE (DECREASE) IN ACCOUNTS PAYABLE
AND ACCRUED EXPENSE (1,184,541) (488,930)
----------- -------------
NET CASH PROVIDED (USED) BY OPERATIONS (3,470,980) (1,679,992)
CASH FLOWS FROM FINANCING ACTIVITIES:
SALE OF COMMON STOCK 1,939 6,000
SHORT TERM LINE OF CREDIT 32,564
REPAYMENT OF NOTES PAYABLE (1,029,612) 195,000
CAPITAL CONTRIBUTION 7,443,437 2,089,000
PROCEEDS FROM NOTES PAYABLE 1,232,800
STOCKHOLDER LOAN 30,000
----------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: 7,681,128 2,320,000
----------- -------------
CASH FLOWS FORM INVESTING ACTIVITIES:
ACQUISITION OF PROPERTY AND EQUIPMENT (334,124) (722,245)
ACQUISITION OF HEWSTER (1,500,000)
ACQUISITION OF OTHER INTANGIBLES (28,192)
ACQUISITION/DISPOSAL IN OTHER ASSETS 43,966 52,000
----------- -------------
NET CASH (USED) BY INVESTING ACTIVITIES (1,818,350) (670,245)
----------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 56,897 (77,000)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,448,695 (107,237)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 57,000 114,000
----------- -------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $2,505,695 $6,763
----------- -------------
----------- -------------
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING ACTIVITIES
CONVERSION OF NOTES PAYABLE TO EQUITY $ 751,827
-----------
-----------
6
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Notes to Financial Statements (Unaudited)
The Consolidated Balance Sheets as of September 30, 1996 and 1995, the
Consolidated Statements of Income for the nine months and three months ended
September 30, 1996 and September 30, 1995 and the Consolidated Statements of
Cash Flows for the nine months ended September 30, 1996 and September 30, 1995,
have all been prepared without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position at September 30,
1996 and for the periods presented, have been made.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been omitted. It is suggested that these condensed consolidated financial
statements and notes be read in conjunction with the financial statements and
notes therein included in Form 10-K - Annual Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the year ended December 31, 1995.
ITEM 2 - MANAGEMENTS DISCUSSIONS AND ANALYSIS OF RESULTS OF OPERATIONS,
FINANCIAL CONDITIONS, AND LIQUIDITY AND CAPITAL RESOURCES:
The following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto. Throughout this
document, InterAmericas Communications Corporation ("ICCA"), Hewster Chile,
S.A. formerly Hewster Servicios Intermedios, S.A. ("HSI"), VISAT
Telecomunicaciones, S.A. ("VISAT") and the newly acquired Red de Servicios
Empresariales de Telecomunicaciones ("RESETEL") are collectively referred to
as the "Company".
Except for the historical information contained herein, this report on
Form 10-Q contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially. Factors
which could cause or contribute to such differences include, but are not
limited to, uncertainty as to sufficiency of funds, management of the
business, technological changes, global economic factors, successful
development of telecommunications network and other factors.
7
<PAGE>
RESULTS OF OPERATIONS
The unaudited Consolidated Statement of Operations reflects a net loss of
$2,336,101 for the nine months ended September 30, 1996. Losses are
attributable primarily to selling, general and administrative expense and
interest expense. The unaudited Consolidated Balance Sheet dated September
30, 1996 reflects an accumulated deficit of $7,861,868.
During the first nine months of 1996, the Company concentrated its
efforts on continuing to connect and provide services to its customers, and
arrange financing for its ongoing business development. The Company's current
development activities include the expansion of its Santiago network to
connect new customers, provide services to newly developed business
districts, and offer additional services. The Company is conducting such
expansion using fiber-optics and once additional financing is obtained, the
Company will expand its operations to use national and international
satellite systems through its subsidiary VISAT. With the acquisition of
Hewster, S.A. in July 1996, the Company now also provides technical services
that help customers to integrate voice, video and data across different
communications protocols and computer architectures. The Company's services
in this area include the design, engineering, installation and maintenance of
local area network for its customers. The Company's operations in Chile now
operate under the name Hewster Chile, S.A.
In addition, the Company is now engineering and has initiated
construction in Lima, Peru of an advanced, fiber-optic private line network
which will be owned and operated by the Company's newly acquired subsidiary,
RESETEL. The construction of the Company's fiber optic network in Peru has
been planned specifically to enable the Company to commence revenue
generation prior to the completion of the entire network. Therefore,
depending upon the timeliness of the proposed additional financing, the
Company could begin recording revenues as early as the first quarter of 1997.
The revenue in the three month period ended September 30, 1996 was
$363,670 versus $112,027 for the same period in 1995, and the revenue for the
nine months ended September 30, 1996 was $476,591 versus $219,027 for the same
period in 1995. The selling, general and administrative expenses for the
Company for the three months ended September 30, 1996 was $1,324,117 versus
$573,712 for the same period in 1995. In addition $59,358 of interest was
accrued for the nine month period ending September 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The business of the Company requires substantial continuing capital
investment to complete the construction and development of its
telecommunications networks and services. Although the Company has been able
to arrange debt and equity financing to date, there can be no assurance that
sufficient additional financing will continue to be available in the future,
nor that it will be available on terms acceptable to the Company.
The Company raised gross proceeds of approximately $6.9 million in a
Private Placement during June 1996. A significant portion of these funds
have been allocated to capital expenditure and working capital requirements
of the Company's operations in both Chile and Peru. In addition, a portion
of these funds have been utilized for the acquisition of Hewster, S.A. (SEE
"Recent Developments - Acquisition of Hewster, S.A.). The balance of the
proceeds have been utilized to pay outstanding debts.
The Company estimates that it will need approximately $17 million in
additional debt and equity financing to fully develop its fiber-optic and
wireless network and expand its customer
8
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base in Chile, to commence operations and network construction in Peru, and
to provide sufficient working capital for its operations over the next year
and a half. There can be no assurances that the Company will be successful
in obtaining all or any of this required financing. Should the Company not
be able to obtain this financing in full, it would be required to delay
capital expenditures on certain projects until such financing were available.
This in turn would delay the revenue streams associated with those projects
until such financing were available. The Company estimates that the present
cash level would allow the Company to continue operations for approximately
two months.
The Company has entered into a letter of intent with an underwriter to
assist the Company in providing financing for the expansion of its operations
in Chile and Peru and is currently reviewing additional opportunities for
strategic acquisitions and alliances.
OPERATING ACTIVITIES
Cash used by operating activities was $3,470,980 for the nine months
ended September 30, 1996 versus $1,679,992 for the same period last year.
The cash flow used by operating activities is related to expenditures made
before the start of significant revenues as the Company has recently come out
of the development stage.
FINANCING ACTIVITIES
Net cash provided by financing activities for the first nine months of
1996 was $7,681,128 which includes net proceeds of $1,022,000 from the
issuance of stock in a private sale to an off shore investor during the
quarter ended March 31, 1996 and $6,424,000 raised in a Private Placement
during June 1996. The cash provided by financing in the same period in 1995
was $2,230,000.
INVESTING ACTIVITIES
The net cash used in investing activities was $1,818,350 for the nine
months ended September 30, 1996 and $670,245 for the corresponding period in
1995. These funds were used primarily to purchase equipment and complete last
mile installations to connect customer locations to the Hewster Chile
network. The Company's operational fiber-optic network currently extends
over 100 kilometers throughout downtown Santiago, Chile.
EFFECTS OF INFLATION
The rate of inflation in Chile has remained one of the lowest in South
America for the past five years, with rates below double digit and falling.
The Company does not believe that inflation had any
9
<PAGE>
significant impact on operations in the first six months of 1996, nor does it
expect that it will have any significant impact on operations throughout the
remainder of the year.
PROMISSORY NOTES
During April and May, 1996, the Company borrowed an aggregate of $173,750
from Laura Investments, Ltd. pursuant to three Promissory Notes (the "Notes").
The principal sum of the Notes, together with simple interest at the rate of 6%
per annum was paid on September 30, 1996. On June 21, 1996, the Company
borrowed an additional $50,000 from Laura Investments, Ltd. pursuant to a
Promissory Note. The principal sum together with simple interest was paid on
July 18, 1996.
RECENT DEVELOPMENTS
ACQUISITION OF RED DE SERVICIOS EMPRESARIALES DE TELECOMUNICACIONES, S.A.
("RESETEL")
On May 7, 1996 InterAmericas Communications Corporation ("the Company")
aquired 100% of the issued and outstanding stock of Red de Servicios de
Telecomunicaciones, S.A., a Peruvian corporation, ("RESETEL") in exchange for
1,250,000 shares of Common Stock of the Company issued to the shareholders of
RESETEL pursuant to a stock purchase agreement dated May 7, 1996. The terms of
the agreement and the consideration paid to the shareholders of RESETEL were
determined through arms-length negotiations among the parties.
RESETEL is the first company to obtain a local carrier concession to
compete with Peru's monopoly carrier, Telefonica. The Concession, issued by
Peru's Ministry of Communications, Transportation, Housing and Construction
authorizes RESETEL to operate a fiber-optic telecommunications network
serving corporate customers in metropolitan Lima, Peru and the port city of
Callao. Together these cities have a population of approximately 7 million.
The Company is now engineering and has commenced the construction and
operation of the fiber-optic network in Peru. The Company intends to use the
network design, engineering, construction, management and marketing expertise
developed through its operations in Chile to construct and operate the
network. Like the Santiago network, the new network will provide
high-bandwidth private line voice, video and data communications services to
corporate customers.
ACQUISITION OF HEWSTER, S.A.
On July 31, 1996 the Company's wholly owned subsidiary, Hewster Servicios
Intermedios, S.A. acquired 99% of Hewster, S.A., a Chilean corporation
controlled by Hernan Streeter Rios, the Company's President and Chairman of the
Board. The transaction was completed in the following manner:
10
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On July 31, 1996, the Company transferred $1,500,000 to its subsidiary
Hewster Servicios Intermedios, S.A. ("HSI") in exchange for 95% of the issued
and outstanding capital stock of VISAT Telecomunicaciones, S.A. ("VISAT")
held by HSI, pursuant to a Stock Purchase and Sale Agreement. As a result of
this transaction, VISAT will now be a direct subsidiary of the Company
instead of a subsidiary of HSI. HSI then used the $1,500,000 to acquire 99%
of the issued an outstanding stock of Hewster, S.A. from its shareholders,
Santiageo Bouza Saavedra and Inversiones Druma, S.A. a Chilean Corporation
controlled by Hernan Streeter Rios, pursuant to the Stock Purchase and Sale
Agreements dated July 30, 1996. The terms of the agreements and the amount
of consideration paid for the Hewster, S.A. stock were determined through
arms-length negotiations among the parties. The $1,500,000 was obtained by
the Company as part of a private placement which closed in June 1996. See
"Liquidity and Capital Resources".
On September 2, 1996, the Company acquired the remaining 1% of the
outstanding stock of Hewster from Hernan Streeter Rios. Hewster was merged into
HSI. The combined entity is operating under the name of Hewster Chile, S.A.
AGREEMENT WITH DEVONO COMPANY LIMITED
The Company signed an agreement with Devono Company Limited to explore
joint venture opportunities in local access and other telecommunications
businesses in Ecuador and other Latin American nations. This agreement
supersedes the Company's earlier agreement to acquire Centro Empresariales,
S.A. ("Cempresa"), the owner of 52.6% of Consorcio Ecuatoriano de
Telecomunicaciones, S.A. ("Conecel"), an Ecuadorian cellular operator. The
parties determined that it was in their best interest to discontinue ICC's
effort to acquire Devono's interest in Conecel, and instead work together on
joint venture opportunities that they may develop.
OTHER INFORMATION
Appointment of Chairman and Chief Executive Officer
On November 13, 1996, the Company appointed Mr. Patricio Northland to
the position of Chairman and Chief Executive Officer. Mr. Northland is the
founder and former Chief Executive of AmericaTel, a Miami based international
telecommunications carrier with operations throughout Latin America. Mr.
Northland founded AmericaTel in 1993 and successfully completed a joint
venture agreement between AmericaTel and Entel, Chile's major long distance
carrier. Under his leadership, AmericaTel grew to provide satellite based
voice, data and fax telecommunications services to corporate customers in
several Latin American nations. In 1996, Mr. Northland sold his interest in
AmericaTel to Entel-Chile.
Between 1988 and 1991 Mr. Northland served as an executive of Panamsat
Corporation, a U.S. based provider of satellite services. While at Panamsat,
he held executive positions with responsibilities in the areas of marketing,
sales, regulatory affairs and Latin American business development. Mr.
Northland led a successful Panamsat marketing effort which generated over $30
million in new revenues from customers including Latin American telephone
companies and multinational corporations. Between 1983 and 1987, Mr.
Northland served as IntelSat's Regional Executive and Business Executive for
Europe and the Middle East. In this position, he was responsible for the
implementation of marketing programs in Italy, Israel, Norway, Gabon, Iran
and Sweden that generated over $45 million in sales in less than two years.
Between 1980 and 1983, Mr. Northland held engineering positions for COMSAT
and Northrop/Page where he designed cellular, fiber-optic, microwave and
satellite network systems.
Mr. Northland holds engineering degrees from the University of Chile and
George Washington University, and is completing a Masters of Business
Administration at the University of Chicago. As Chairman and Chief Executive
Officer of the Company he will focus on the development of the Company's
network and marketing activities in Chile and Peru, and on the Company's
continuing pursuit of business development opportunities in other Latin
American countries and the United States.
Appointment of Chief Operating and Financial Officer
On September 30, 1996, the Company appointed Mr. Carlos M. Menendez to
be its Chief Operating Officer and Chief Financial Officer. Mr. Menendez is
a highly experienced international financial and administrative executive
with a strong background in foreign markets, strategic planning, divestitures
and acquisitions, compensation systems, financial reporting and investor
relations. Mr. Menendez's successful 26 year career includes 15 years as an
international executive of Merck & Co. where he most recently served as the
Vice President of Kelco Company, a $300MM international subsidiary where he
held responsibility for all staff functions encompassing finance, information
technology, human resources, business evaluations, public affairs and total
quality management. Prior to joining Merck, Mr. Menendez held financial
and audit positions with Beecham Products, Du Pont and Price Waterhouse.
Mr. Menendez's international management skills will help the company to more
rapidly integrate and expand the business operations of the Company.
NASDAQ Approval
The company was approved for trading on the NASDAQ Small Cap Market, one of
the largest trading exchanges in the world. The company stock began trading on
NASDAQ on Wednesday, November 6, 1996. NASDAQ stock quotes are included on most
quotation systems utilized worldwide.
11
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PART II
OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits filed as part of this Report.
(b) Reports on Form 8-K
(i) The company filed Form 8-K on October 15, 1996 regarding the
acquisitions of Red de Servicios Empresariales de Telecomunicaciones,
S.A. ("Resetel") and Hewster, S.A. ("Hewster") including Financial
Statements and Proforma Financial Information.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERAMERICAS COMMUNICATIONS CORP.
/s/ Carlos M. Menendez DATE 11-14-96
- --------------------------------------- ------------------
Carlos M. Menendez
Chief Operating and Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT TO STOCKHOLDERS FOR THE QUARTER ENDED SEPTEMBER 20,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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