U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-30365-C
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EMERALD CAPITAL INVESTMENTS, INC.
(Name of Small Business Issuer as specified in its charter)
Delaware 36-36939936
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
330 East Main, Suite 206 60010
Barrington, Illinois ---------
------------------------------ (Zip Code)
(Address of principal executive
offices)
Issuer's telephone number, including area code: (847) 516-2900
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Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes X
No ___.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Issuer'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. X
The Issuer's revenues for the fiscal year ending December 31,1997 were $0.
As of March 31, 1998, there were 6,608,698 shares of the Company's common
stock issued and outstanding of which 4,301,479 were held by non-affiliates. As
of March 31,1998 there was no active market for the Company's common stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Emerald Capital Investments, Inc. (the "Company") is currently an inactive
publicly held company which intends to attempt to commence active business
operations by acquiring an operating company. The Company has entered in to a
non-binding Letter of Intent to acquire a privately-held corporation in a merger
transaction. The Company has not entered into a definitive merger agreement and
there can be no assurance that the Company will complete such proposed merger.
The Company has conducted no operations since December 31, 1995.
During the year ended December 31, 1997, the Company conducted no
operations and generated no revenue. The Company has no current operations and
is seeking to enter into active business operations by acquiring one or more
other operating companies.
The information contained herein relating to the historical operations of
WRTI and CTR is no longer a current description of the Company's business plan
and is included solely for historical information.
History of the Company
The Company was formed March 22, 1989 for the purpose of investing in any
and all types of assets, properties and businesses. Pursuant to a registration
statement which was declared effective on December 19, 1989, the Company
registered 5,000,000 Units of its securities to be offered and sold in a public
offering. The offering was closed on April 17, 1990 and a total of 1,315,600
Units were sold. The net offering proceeds were approximately $102,052. The
offering was a "blind pool" or "blank check" offering. Each Unit sold in the
public offering consisted of one share of common stock, one Class "A" common
stock purchase warrant and one Class "B" common stock purchase warrant. The
Warrants expired June 30, 1993 without being exercised. In 1992, the Company
effected a 1-for-10 reverse split of its then issued and outstanding shares of
common stock.
Prior to its acquisition of WRTI, the Company attempted to acquire a
number of businesses and attempted to commence business operations in different
industries. However, the Company was unsuccessful in such previous business
operations.
In 1992, the Company acquired an Area Development Franchise to open and
operate Ho Lee Chow restaurants in DuPage County and Kane County, Illinois. In
September 1993, the Company sold its Ho Lee Chow related assets in consideration
for the transfer to the Company of 2,612,500 shares of the Company's common
stock owned by the individuals comprising the group of purchasers and the
cancellation of options to purchase 300,000 shares of the Company's common stock
owned by the purchasers. The purchasers also assumed certain liabilities
relating to the Ho Lee Chow assets and operations.
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From March 1994 to December 29, 1995 the Company, through its subsidiaries,
Waste Reduction Technologies, Inc. ("WRTI") and Continental Tire Recycles, Inc.
("CTR"), was engaged in the business of designing, manufacturing and marketing
waste reduction equipment (primarily shredding machines) and collecting and
recycling used tires. The Company acquired WRTI in March 1994. WRTI was formed
in 1993 and at the time of the acquisition, WRTI's activities had been limited
to developing a business plan and designing various shredding equipment
products. The products offered by WRTI included a variety of sizes of shredding
machines and waste reduction systems designed to meet the needs of specific
customers.
In May, 1994 the Company formed CTR as a wholly-owned subsidiary. CTR was
engaged in the business of collecting and recycling used tires.
The WRTI and CTR operations never generated significant revenue, were
capital intensive and resulted in significant losses to the Company. As of
December 1995, the Company had exhausted all of its working capital, had
exhausted its ability to borrow funds and was unable to continue with the
operations of WRTI and CTR. On December 29, 1995, the Company sold WRTI and CTR
to a group of purchasers which included a former member of the Company's
management.
On December 29, 1995, the Company sold all of its shares of WRTI and CTR
to a group of 20 buyers ("Buyers"). One of the Buyers was William G. Holmes, a
former officer and director of the Company. The purchase price for all of the
shares of WRTI and CTR sold by the Company to the Buyers was $30,000. The total
liabilities of WRTI and CTR as of December 29, 1995 was approximately
$1,758,308, including bank debt of $250,000 and approximately $394,950 owed to
six individual lenders, including the Company's president and secretary.
Current Business Plan
The Company believes that in order to commence active operations, it must
acquire an operating company. The Company has entered into a Letter of Intent to
acquire a specialty chemical company in a merger transaction (see "Item1 -
Letter of Intent"). If the merger described in the Letter of Intent is not
completed, the Company will continue to look for other possible acquisitions,
("Potential Business Opportunity"). The merger transaction described in the
Letter of Intent requires the Company to raise additional capital. Even if the
proposed merger is not completed, it is likely that the Company will be required
to raise additional funds in order to attract a Potential Business Opportunity.
There can be no assurance that the Company will be able to raise additional
capital in sufficient amounts to enable it to acquire a suitable Potential
Business Opportunity.
In some instances, a Potential Business Opportunity may involve the
acquisition of or merger with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
Common Stock. Some companies with Potential Business Opportunities may seek to
become a public company through merging with, being acquired by or selling their
assets to an existing public company. There are numerous reasons why an existing
privately-held company would seek to become a public company through a merger or
acquisition
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rather than doing its own public offering. Such reasons include, but are not
limited to, avoiding the time delays involved in a public offering; retaining a
larger share of voting control of the publicly-held company; reducing the cost
factors incurred in becoming a public company; and avoiding any dilution
requirements set forth under various states' blue sky laws. Although there is no
currently a public market for the Company's common stock, the Company is a
reporting company and does have a base of public shareholders.
The Company does not propose to restrict its search for Potential Business
Opportunities to any particular industry or any particular geographic area and
may, therefore, engage in essentially any business to the extent of its limited
resources. It is anticipated that knowledge of Potential Business Opportunities
will be made known to the Company by various sources, including its officers and
directors, professional advisors such as attorneys and accountants, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. The Company may compensate such
parties for services rendered.
There can be no assurance that the Company will ever acquire a Potential
Business Opportunity. Even if the Company is able to acquire a Potential
Business Opportunity, there can be no assurance that any such acquisition will
be profitable to the Company or its Stockholders. Stockholders should be aware
that an investment in the Company could result in a total loss of an investors
investment.
The analysis of a Potential Business Opportunity will be undertaken by or
under the supervision of the officers and directors of the Company. Inasmuch as
the Company will have only limited funds available to it in its search for
Potential Business Opportunities, the Company will not be able to expend
significant funds on a complete and exhaustive investigation of such business or
opportunity. The Company will, however, investigate, to the extent believed
reasonable by its management, such Potential Business Opportunities.
Prior to making a decision to acquire or participate in a Potential
Business Opportunity, the Company will obtain written materials regarding the
Potential Business Opportunity containing such items as a description of
products, services, and company history; management resumes; financial
information; available projections with related assumptions upon which they are
based; evidence of existing patents, trademarks, or service marks or rights
thereto; present any proposed forms of compensation to management; a description
of transactions between the prospective entity and its affiliates during
relevant analysis of risks and competitive conditions; and other information
deemed relevant.
It is anticipated that the investigation of specific Potential Business
Opportunities and the negotiation, drafting, and execution of relevant
agreements, disclosure documents, and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys,
and others. If a decision is made not to participate in a specific Potential
Business Opportunity, the costs theretofore incurred in the related
investigation would not be recoverable. Furthermore, even if an agreement is
reached for the participation in a specific Potential
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Business Opportunity, the failure to consummate that transaction may result in
the loss to the Company of the related costs incurred.
The Company will have unrestricted flexibility in seeking, analyzing, and
participating in Potential Business Opportunities. In its efforts, the Company
will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market
expansion, or new products;
(b) Competitive position as compared to other firms engaged in similar
activities;
(c) Strength of management;
(d) Capital requirements and anticipated availability of required funds to be
provided by the Company from future operations through the sale of
additional securities, through joint ventures or similar arrangements or
from other sources;
(e) Other relevant factors.
Potential Business Opportunities may occur in many different industries
and at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. Potential investors must recognize that due to the
Company's limited capital available for investigation and management's limited
experience in business analysis the Company may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may acquire a Potential Business
Opportunity. It expects, however, that the analysis of specific proposals and
the selection of a Potential Business Opportunity may take several months or
more.
The manner in which the Company participates in a Potential Business
Opportunity will depend upon the nature of the opportunity, the respective needs
and desires of the Company and the promoters of the opportunity, and the
relative negotiating strength of the Company and such promoters. The exact form
or structure of the Company's participation in a Potential Business Opportunity
or venture will be dependent upon the needs of the particular situation. The
Company's participation may be structured as an asset purchase agreement, a
lease, a license, a joint venture, a partnership, a merger or acquisition of
securities. Generally, issuance of the Company's securities in an acquisition
would be undertaken in reliance upon one or more exemptions from the
registration provisions of applicable federal securities laws, including the
exemptions provided for non-public or limited offerings, distributions to
persons resident in only one state, and analogous exemptions provided under
state securities laws. Shares issued in a reorganization transaction based upon
these exemptions would be considered "restricted" securities under the
Securities Act of 1933 and Rule
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144 promulgated thereunder, could not generally be resold for a period of two
years, and would be subject to certain other restrictions. However, the Company
may agree in any such transaction to register securities to be issued either at
the time of the transaction or at certain specified times thereafter.
Some of the individual lenders also had personally guaranteed bank loans
of WRTI and CTR. As payment in full of the $394,950, the individual lenders were
paid a total of $75,000 by the Buyers and were issued a total of 26% equity
interest in a new limited liability company known as Continental Tire Recyclers,
LLC, a company formed by the Buyers to own and operate CTR. In connection with
such transaction, the bank released all parties from their personal guarantee of
the indebtedness of WRTI and CTR. Additionally, the individual lenders acquired,
either directly from the Company or from other shareholders a total of 620,809
shares of the Company's common stock in connection with such transaction (See
"Certain Transactions.")
Letter of Intent
The Company has entered in to a non-binding Letter of Intent to acquire by
merger, a small specialty chemical company. The Letter of Intent sets forth the
basic terms of the proposed transaction which includes a condition that the
Company raise additional capital. The Company's management has had several
meetings with the management of the proposed acquiree and has discussed the
possibility of a private securities offering with a brokerage firm. As of the
date hereof, the Company has not entered into any binding agreement with either
the proposed acquiree or the brokerage firm and there can be no assurance that
the Company will complete the proposed merger.
The current terms of the proposed merger, as set forth in the Letter of
Intent, require the Company to effect a 1-for-10 reverse stock split, raise
additional capital in the amount of $3,750,000, change its name and domicile and
replace management.
The Company's current shareholders will likely be diluted significantly in
their percentage ownership of the Company if the proposed merger is completed.
Even if the proposed merger is agreed upon by the parties in a definitive
agreement, their can be no assurance that the merger will be completed. It is
anticipated that the merger, if it completed, will take several months.
Employees
The Company currently has no employees.
ITEM 2. PROPERTIES
The Company currently operates out of the office of Douglas P. Morris, the
Secretary and a director of the Company. The Company does not pay for the use of
these facilities.
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ITEM 3. LEGAL PROCEEDINGS
There are not presently any material pending legal proceedings to which
the Company is a party or of which any of its property or wholly-owned
subsidiary is subject and no such proceedings are known to the Company to be
threatened or contemplated against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No meetings of the Company's shareholders were held during the last
quarter of the Company's fiscal year.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND WARRANTS
AND RELATED SECURITY HOLDER MATTERS
A. Market for Common Stock. There is no active public market for the
Company's securities. From time-to-time, the Company's common stock has been
traded, on a very limited basis, in the over-the-counter market.
B. Holders. The number of record holders of the Company's common stock as
of March 30, 1998 approximately 170. One of the Company's shareholders is a
brokerage firm which owns securities as a nominee for its customers.
C. Dividends. The Company has not paid any cash dividends to date and does
not anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of the Company's business.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company is currently an inactive company seeking to commence
operations by acquiring another company which is conducting operations. During
the year ended December 31, 1997, the Company conducted no operations and
generated no revenues. Prior to December 29, 1995, the Company had been involved
in the business of recycling used tires and designing, manufacturing and
marketing shredding equipment. The Company's tire recycling and shredding
equipment operations were unsuccessful and the Company generated significant
losses during 1994 and 1995. During 1995 the Company funded its operations with
loans from a commercial bank, from management and from other individuals. By
November 1995, the Board of Directors had concluded that the Company did not
have the capital, or the ability to obtain capital necessary to continue its
current operations. The Company's Board of Directors initiated efforts to sell
the
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Company's WRTI and CTR operations. The Company was able to interest one of its
directors and several other individuals in purchasing WRTI and CTR.
Effective December 29, 1995, the Company sold all of its shares of WRTI
and CTR for $30,000. As a result of such sale, the Company's total liabilities,
on a consolidated basis, decreased from $1,758,308 to approximately $6,500.
The Company currently has no active business operations and is seeking
investments in other business entities made through the issuance of the
Company's securities. The Company has entered into a non-binding Letter of
Intent to acquire a specialty chemical company. However, the proposed
transaction is subject to numerous conditions, including the raising of
significant capital by the Company, and therefore, there can be no assurance
that the Company will ever complete such merger.
As a result of the matters described above, the Company's historical
financial statements and this Management's Discussion and Analysis are not
necessarily reflective of the Company's future operations or financial
condition.
Financial Condition
Total assets at December 31,1997 were $7,273, all of which was cash. The
Company's only assets since the sale of CTR and WRTI has been a limited amount
of cash. On December 31,1997, the Company had liabilities of $8,000. The Company
intends to use such cash to pay for various filing fees and professional fees
relating to its reporting obligations and to fund the costs which may arise from
seeking new business opportunities.
It is likely that the Company will be required to raise additional capital
in order to attract and potential acquisition partner but there can be no
assurance that the Company will be able to raise any additional capital. It is
also likely that any future acquisition will be made through the issuance of
shares of the Company's common stock which will result in the dilution of the
percentage ownership of the current shareholders.
The proposed merger transaction is conditioned upon, among other things,
the completion of a private offering of the Company's securities to raise gross
offering proceeds of approximately $3,750,000. The Company has commenced
discussions with a broker relating to the sale of securities but as of the date
of this 10-KSB, no agreement has been entered into with such broker or with any
other broker.
The auditors' report on the Company's December 31, 1997 financial
statements contains a going concern qualification, which provides that the
Company's ability to continue as a going concern is dependent upon it raising
additional capital. The Company will continue to be an inactive company unless
and until it raises additional capital and acquires an operating company. There
can be no assurance that either will occur.
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Results of Operations
During 1997 and 1996, the Company conducted no operations and generated no
revenues. All of the Company's revenues for the years ended December 31, 1995
and 1994 were derived from the operations of WRTI and CTR. As stated above, the
Company sold WRTI and CTR on December 29,1995 and has treated them as
discontinued operations. Therefore, the revenues of WRTI and CTR have been
excluded from the Statement of Operations which is included in the financial
statements attached hereto. Therefore, excluding the operations of WRTI and CTR,
the Company had no revenues during 1997, 1996, 1995 or 1994. If the revenues of
WRTI and CTR were included in the Statement of Operations, total consolidated
revenues would have been $1,093,283 during 1995 and $305,387 during 1994.
The Company's total loss for 1997 was $13,465 compared to a loss of $10,597
during 1996.
It is unlikely that the Company will be able to generate any revenues
unless and until it acquires an operating company, of which there can be no
assurance.
Plan of Operation
Commencing in the fourth quarter of 1995, the Company's Plan of Operation
was essentially the plan to sell its WRTI and CTR operation. Effective December
29, 1995 these operations were sold. The Company's current plan of operation is
to acquire another operating company. (See "Item 1 - Description of Business -
Current Business Plan.")
It is likely that any acquisition will be a "reverse merger" acquisition
whereby the Company acquires a larger company by issuing shares of the Company's
common stock to the shareholders of the larger company. Although the Company
would be the surviving or parent company from a corporate law standpoint, the
shareholders of the larger company would be the controlling shareholders of the
Company and the larger company would be treated as the survivor or parent
company from an accounting point of view. It can be expected that any company
which may desire to be acquired by the Company will do so as method of
potentially becoming a public company more quickly and less expensively than if
such company undertook its own public offering.
The Company has entered in to a non-binding Letter of Intent to acquire by
merger, a small specialty chemical company. The Letter of Intent sets forth the
basic terms of the proposed transaction which includes a condition that the
Company raise additional capital. The Company's management has had several
meetings with the management of the proposed acquiree and has discussed the
possibility of a private securities offering with a brokerage firm. As of the
date hereof, the Company has not entered into any binding agreement with either
the proposed acquiree or the brokerage firm and there can be no assurance that
the Company will complete the proposed merger. If the proposed merger is
completed, the Company will likely change its, name, domicile, management and
capital structure. The Company's current shareholders will likely be diluted
significantly in their percentage ownership of the Company if the proposed
merger is completed.
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Even if the proposed merger is agreed upon by the parties in a definitive
agreement, their can be no assurance that the merger will be completed. It is
anticipated that the merger, if it completed, will take several months.
Even if the Company is able to acquire another company such as the
chemical company, there can be no assurance that the Company will ever operate
at a profit.
ITEM 7. FINANCIAL STATEMENTS
Index to Financial Statements
Financial Statements
Independent Accountants' Report
Year Ended December 31,1997
Balance Sheet
December 31,1997
Statement of Operations
Years ended December 31,1997 and 1996
Statement of Changes in Stockholders' Equity From January 1, 1996 through
December 31,1997
Statement of Cash Flows -
Years ended December 31,1997 and 1996
Notes to Financial Statements
Financial Statement Schedules All schedules are omitted because they are not
applicable or the required information is shown in the financial statements or
notes thereto.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Stockholders of Emerald Capital Investments, Inc.
We have audited the accompanying balance sheet of Emerald Capital Investments,
Inc., (a development stage company) as of December 31, 1997 and the related
statements of operations, stockholders' equity (deficit), and cash flows for the
years ended December 31, 1997 and 1996 and the cumulative amounts since December
29, 1995 (commencement of development stage). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Emerald Capital Investments,
Inc. (a development stage company) as of December 31, 1997, and the results of
its operations and its cash flows for the years ended December 31, 1997 and 1996
and the cumulative amounts since December 29, 1995 (commencement of development
stage), in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses that raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters also are described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
TANNER + COMPANY
Salt Lake City, Utah
February 10, 1998, except for Note 7
which is dated February 25, 1998
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Balance Sheet
December 31, 1997
- ------------------------------------------------------------------------------
Assets
Current assets -
cash $ 7,273
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Total assets $ 7,273
============
- ------------------------------------------------------------------------
Liabilities and Stockholders' Deficit
Current liabilities - accounts payable $ 8,000
------------
Commitments -
Stockholders' equity:
Common stock - $.001 par value. 100,000,000 shares
authorized; 5,808,698 shares issued and outstanding 5,809
Additional paid-in capital 2,600,656
Accumulated deficit (2,607,192)
------------
Total stockholders' deficit (727)
------------
Total liabilities and stockholders' deficit $ 7,273
=============
- ------------------------------------------------------------------------------
See accompanying notes to financial statements. 12
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Operations
Years Ended December 31, and Cumulative Amounts
- ------------------------------------------------------------------------------
Cumulative
1997 1996 Amounts
------------------------------------
Revenue $ - $ - $ - -
Selling, general and administrative
expenses 13,465 10,597 24,062
------------------------------------
Loss from continuing operations (13,465) (10,597) (24,062)
------------------------------------
Loss before income taxes (13,465) (10,597) (24,062)
Income tax expense - - -
------------------------------------
Net loss $ (13,465) $(10,597) $(24,062)
====================================
Net loss per share $ (.00) $ (.00) $ (.00)
====================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements. 13
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
Years Ended December 31, 1997 and 1996
- ------------------------------------------------------------------------------
Common Stock Additional
------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
-------------------------------------------------------
Balance,
January 1, 1995 5,808,698 $5,809 $2,600,656 $(2,583,130) $23,335
Net loss - - - (10,597) (10,597)
-------------------------------------------------------
Balance,
December 31, 1996 5,808,698 5,809 2,600,656 (2,593,727) 12,738
Net loss - - - (13,465) (13,465)
-------------------------------------------------------
Balance,
December 31, 1997 5,808,698 $5,809 $2,600,656 $(2,607,192) $ (727)
=======================================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements. 14
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Cash Flows
Years Ended December 31, and Cumulative Amounts
- ------------------------------------------------------------------------------
Cumulative
1997 1996 Amounts
--------------------------------------
Cash flows from operating activities:
Net loss $ (13,465) $ (10,597) $ (24,062)
Adjustment to reconcile net loss to
net cash used in operating activities:
Decrease in accounts receivable - 30,000 30,000
Increase (decrease) in accounts 8,000 (6,665) 1,335
payable
----------------------------------
Net cash (used in) provided by
operating activities (5,465) 12,738 7,273
----------------------------------
Cash flows from investing activities - - -
----------------------------------
Cash flows from financing activities - - -
----------------------------------
Net increase in cash (5,465) 12,738 7,273
Cash, beginning of period 12,738 - -
----------------------------------
Cash, end of period $ 7,273 $ 12,738 $ 7,273
=====================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements. 15
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Cash Flows
Continued
- ------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Years Ended
December Cumulative
------------------------
1997 1996 Amounts
------------------------------------
Cash paid during the year for:
Interest $ - $ - $ -
===================================
Income taxes $ - $ - $ -
===================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements. 16
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
1. Organization and Summary of Significant Accounting Policies.
Organization
Emerald Capital Investments, Inc. (the Company) was organized under the laws of
the state of Delaware on March 22, 1989. On January 10, 1994, the Company
entered into an agreement whereby the Company issued 1,862,427 shares of its
common stock for all of the issued and outstanding shares of Waste Reduction
Technologies, Inc., (WRTI) and its wholly owned subsidiary Continental Tire
Recycles, Inc. (CTR).
Effective December 29, 1995 the Company sold its common stock of WRTI. The
Company ultimately received $30,000 cash from the sale of the WRTI stock. The
purchaser was a company in which a shareholder and former officer of Emerald
Capital Investments, Inc., is a part owner.
Effective with the sale of WRTI on December 29, 1995, the Company became a
development stage company. The Company is considered a development stage Company
as defined in SFAS No. 7. The Company has, at the present, time, not paid any
dividends and any dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Loss Per Common Share
Loss per share of common stock is calculated based on the weighted average
number of shares outstanding during each year and the period December 31, 1995
through December 31, 1997. Stock options were not included in the calculation of
loss per share as the effect would be
antidilutive.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
- ------------------------------------------------------------------------------
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EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
1. Organization and Summary of Significant Accounting Policies (Continued)
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.
2. Going Concern
The accompanying financial statements of Emerald Capital Investments, Inc., have
been prepared on a going-concern basis, which contemplates profitable operations
and the satisfaction of liabilities in the normal course of business. There are
uncertainties that raise substantial doubt about the ability of the Company to
continue as a going concern. As shown in the statement of operations, the
Company reported losses for the years ended December 31, 1997 and 1996, and has
an accumulated deficit.
The Company's continuation as a going concern is dependent upon its ability to
develop sufficient cash flows for operations to meet its obligations. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
3. Income Taxes
The income taxes computed at statutory rates differ from the amount in the
financial statement as follows:
Years Ended
December 31,
------------------- Cumulative
1997 1996 Amounts
-----------------------------
Benefit for income taxes
at statutory rates $ 1,000 $ 2,000 $ 3,000
Change in valuation allowance (1,000) (2,000) (3,000)
-----------------------------
$ - $ - $ -
=============================
- ------------------------------------------------------------------------------
18
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
3. Income Taxes (Continued)
The Company has a deferred tax asset, which consists of the net operating loss
carryforwards of approximately $884,000. A valuation allowance has been
established for the total amount of the deferred tax asset, due to the
uncertainty of realization.
As of December 31, 1997, the Company had a net operating loss carryforward of
approximately $2,599,000 available to offset future income for income tax
reporting purposes. This amount begins to expire in 2004. The ability of the
Company to utilize the net operating loss is dependent upon the tax laws in
effect at the time such loss carryforwards can be utilized. The Tax Report Act
of 1986 significantly limits the annual amount that can be utilized of these
carryforwards as a result of a change in ownership.
4. Stock Options Options
As of December 31, 1997 and 1996, the Company had 1,530,900 options outstanding
to purchase shares of the Company's common stock. The options are exercisable at
amounts between $.25 and $1.00 anytime prior to the expiration date. The options
expire beginning at various dates through December 31, 2002.
5. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS 128) "Earnings Per Share," which
requires companies to present basic earnings per share (EPS) and diluted
earnings per share, instead of the primary and fully diluted EPS as previously
required. The new standard also requires additional informational disclosures,
and makes certain modifications to the previously applicable EPS calculations
defined in Accounting Principles Board No. 15. The new standard is required to
be adopted by all public companies for reporting periods ending after December
15, 1997, and requires restatement of EPS for all prior periods reported. During
the year ended December 31, 1997, the Company adopted this standard.
- ------------------------------------------------------------------------------
19
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
5. Earnings Per Share (Continued)
Earnings per share information in accordance with SFAS 128 is as follows:
Year Ended December 31, 1997
----------------------------------------
Loss Shares Per-Share
(Numerator) (Denominator) Amount
------------- -------------- -----------
Net Loss $ (13,465)
Less preferred
stock dividents -
-------------
Basic EPS
Loss available
to common
stockholders (13,465) 5,809,000 $ (.00)
===========
Effect of
Dilutive
Securities
Stock options - -
------------- --------------
Diluted EPS
Loss available to
common
stockholders
plus
assumed
converstions $ (13,465) 5,809,000 $ (.00)
========================================
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
5. Earnings Per Share (Continued)
Year Ended December 31, 1997
----------------------------------------
Loss Shares Per-Share
(Numerator) (Denominator) Amount
------------- -------------- -----------
Net Loss $ (10,597)
Less preferred
stock dividents -
-------------
Basic EPS
Loss available
to common
stockholders (10,597) 5,809,000 $ (.00)
===========
Effect of
Dilutive
Securities
Stock options - -
------------- --------------
Diluted EPS
Loss available to
common
stockholders
plus
assumed
converstions $ (10,597) 5,809,000 $ (.00)
========================================
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
5. Earnings Per Share (Continued)
Year Ended December 31, 1997
----------------------------------------
Loss Shares Per-Share
(Numerator) (Denominator) Amount
------------- -------------- -----------
Net Loss $ (16,062)
Less preferred
stock dividents -
-------------
Basic EPS
Loss available
to common
stockholders (16,062) 5,809,000 $ (.00)
===========
Effect of
Dilutive
Securities
Stock options - -
------------- --------------
Diluted EPS
Loss available to
common
stockholders
plus
assumed
converstions $ (16,062) 5,809,000 $ (.00)
========================================
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes to Financial Statements
Continued
- ------------------------------------------------------------------------------
6. Stock Based Compensation
The Financial Accounting Standards Board has issued Statement of financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123) which established financial accounting and reporting standards for
stock-based compensation. The new standard defines a fair value method of
accounting for an employee stock option or similar equity instrument. This
statement gives entities the choice between adopting the fair value method or
continuing to use the intrinsic value method under Accounting Principles Board
(APB) Opinion No. 25 with footnote disclosures of the pro forma effects if the
fair value method had been adopted. The Corporation has opted for the latter
approach. Accordingly, no compensation expense has been recognized for the stock
option plans.
No options have been granted since SFAS 123 was issued, therefore, the pricing
model assumptions are not applicable.
The following table summarizes information about stock options outstanding at
December 31, 1997:
Options Outstanding Options Exercisable
- -------------------------------------------------------------------------------
Weighted
Average
Number Remaining Weighted Number Weighted
Range of Outstanding Contractual Average Exercisable Average
Exercise at Life Exercise at Exercise
Prices 12/31/97 (Years) Price 12/31/97 Price
- -------------------------------------------------------------------------------
$.25 1,100,000 5.0 $ .25 1,100,000 $ .25
.75 to 1.00 430,900 1.7 .84 430,900 .84
_______________________________________________________________________________
$.25 to 1.00 1,530,900 4.0 $ .42 1,530,900 $ .42
===============================================================================
7. Subsequent Event.
On February 25, 1998, the Company entered into a letter of intent agreement for
a potential acquisition transaction between the Company and an unrelated
company. The agreement would require a 1 for 10 reverse split of issued shares
and options, a private placement of approximately 1,500,000 shares, post split,
at $2.50 per share and an exchange with the target company, which would cause a
change in control of the Company.
- ------------------------------------------------------------------------------
23
<PAGE>
ITEM 8. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
A. Identification of Directors. Background information concerning the
Company's officers and directors is as follows:
Name Age Position
Frank H. Ross, III 52 CEO/President/
Treasurer /Director
Douglas P. Morris 42 Vice President/Secretary/Director
Henry Obartuch, II 49 Director
Frank H. Ross, III. Mr. Ross is a founder of WRTI. Since 1973, he has been
the president of Ross-Payne & Associates, a business consulting firm
specializing in the management of construction and heavy equipment companies.
Mr. Ross has been an officer and director of the Company since March 5, 1994.
Douglas P. Morris. Mr. Morris, is and has been since 1988, the owner of H &
M Capital Investments, Inc. a privately-held business consulting firm. H & M
Capital Investments, Inc. is engaged in consulting with privately-held and
publicly-held companies relating to management, debt financing and equity
financing. Mr. Morris is the president of Celtic Investment, Inc., a publicly
held company engaged in the financial services business. Mr. Morris is also a
director and officer of Millennium Electronics, Inc. and a director of Dauphin
Technology, Inc. From 1984, to 1988, Mr. Morris was self-employed in managing
his own investments. Mr. Morris received his Masters Degree in Public
Administration at the University of Southern California in 1982, and his
Bachelor of Arts Degree in Judicial Administration from Brigham Young University
in 1978.
Henry Obartuch, II. Mr. Obartuch was appointed a director of the Company in
January 1996. Mr. O'bartuch owns and operates a funeral home business in
Chicago, Illinois.
B. Significant Employees. None
C. Family Relationships. None
24
<PAGE>
D. Compliance with Section 16(a). The Company is not subject to Section 16 of
the Exchange Act.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the last three calendar years to the Company's
Chief Executive Officer and other executive officers.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------------------------------------------------------
Name Other
and Annual Restricted All Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank Ross, III(1) 1997 -0- -0- -0- -0- -0- -0- -0-
CEO/ President 1996 -0- -0- -0- -0- -0- -0- -0-
1995 $34,616 -0- -0- -0- -0- -0- -0-
</TABLE>
(1) Mr. Ross was appointed a director and Chief Financial Officer of the
Company in March 1994. In January 1995, Mr. Ross was appointed CEO and
President of the Company. Pursuant to his Employment Agreement. Mr. Ross
earned a monthly salary of $10,000. However, due to the financial
condition of the Company, Mr. Ross was only paid $34,616 in total salary
during the year ended December 31,1995. The liability for the balance of
the salary was eliminated in the transaction wherein WRTI and CTR were
sold by the Company. In March 1994, the Company granted Mr. Ross an Option
to purchase 833,333 shares of the Company's common stock at $.05 per
share. Such option was subject to certain conditions and was not
exercisable in 1994. In 1995, such option was canceled pursuant to the
agreement of the Company and Mr. Ross. During 1994, Mr. Ross was issued
options to purchase 67,500 shares of the Company's common stock at a $1.00
per share for loans and guarantees and not as compensation for services
rendered. During 1995, Mr. Ross was assigned 416,081 shares of common
stock from former officers and was granted options by the Company to
purchase 478,176 shares of the Company's common stock at $.75 per share.
Such shares and options were not issued for services rendered but related
to financing matters. Effective January 9, 1998, all of the options of Mr.
Ross were canceled and he was issued incentive stock options to purchase
500,000 shares of the Company's common stock at $.25 per share. Such
options expire 12/31/2002.
Douglas P. Morris. Mr. Morris was president of the Company until March 5,
1994. He is currently a director and the vice president and secretary of the
Company. Mr. Morris was paid $8,000 as cash compensation by the Company during
1995. In March 1994, the Company granted Mr. Morris an option to purchase
350,000 shares of the Company's common stock at $.05 per share. Such option was
subject to certain conditions and was not exercisable in 1994. In 1995, such
option was canceled pursuant to the agreement of the Company and Mr. Morris.
During 1994. Mr. Morris was issued options to purchase 67,500 shares of the
Company's common stock at $1.00 per share in consideration for loans and
guarantees and not as compensation for services rendered. In 1995, Mr. Morris
was assigned 159,593 shares of the Company's common stock from two former
officers and was granted options by the Company to purchase 202,500 shares of
common stock in connection with
25
<PAGE>
financing matters and not for services rendered. Effective January 9, 1998, all
of the options of Mr. Morris were canceled and he was issued incentive stock
options to purchase 350,000 shares of the Company's common stock at $.25 per
share. Such options expire 12/31/2002.
Mr. Morris is the owner of H & M Capital. On January 9, 1998, H & M
Capital Investment was issued 400,000 shares of the Company's common stock for
services rendered. Such shares were valued at $.01 per share or a total of
$4,000.
Henry Obartuch. Mr. Obartuch is a director if the Company. Prior to January
9, 1998, he had been issued options to purchase 249,667 shares of the Company's
common stock. Effective January 9, 1998, all of the options of Mr. o' bartcuch
were canceled and he was issued incentive stock options to purchase 350,000
shares of the Company's common stock at $.25 per share. Such options expire
12/31/2002.
Stock Options Granted in the Last Fiscal Year
No stock options were granted to management during 1997 or 1996. During
1995, the Company granted Douglas P. Morris an option to purchase 202,500 shares
of the Company's common stock and Frank H. Ross, III an option to purchase
478,176 shares of the Company's common stock in consideration for loans made to
the Company by these individuals and for their guarantee of certain bank
financing. These options were not issued for services rendered. Certain options
were granted in 1998 (see Item 12 "Certain Relationships and Related
Transactions".) Effective January 9, 1998 all of these options were canceled at
new incentive stock options were issued to the Company's current management
which are described above.
Aggregate Option Exercises and Number/Value of Unexercised Options
All options of management outstanding as of December 31, 1997 were
canceled and new options were issued as of January 9, 1998. The Company's
management owns the following options:
Name Option Shares Exercise Price Expiration Date
Frank Ross 500,000 $.25 12/31/2002
Douglas P. Morris 350,000 $.25 12/31/2002
Henry Obartcuch 250,000 $.25 12/31/2002
All of such options carry certain registration rights.
These options are currently exercisable but have not current value
inasmuch as there is no trading in the Company's common stock and the Company
has a negative net worth.
26
<PAGE>
Compensation of Directors
The Company's non-employee directors are not paid for Board of Directors
Meeting attended.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
A. Security Ownership of Certain Beneficial Owners. The following table
sets forth information regarding shares of the Company's common stock
beneficially owned as of March 30, 1998 by: (1) each officer and director of the
Company; (ii) all officers and directors as a group; and (iii) each person known
by the Company to beneficially own 5 percent or more of the outstanding shares
of the Company's common stock.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class Ownership
Douglas P. Morris(2) 1,026,259 13%
330 East Main Street
Second Floor
Barrington, Illinois 60010-3218
Frank H. Ross, III(3) 1,481,293 19%
536 Eton Drive
Barrington, IL 60010
Henry Obartuch (4) 499,667 7%
150 South Dundee Road
East Dundee, IL 60118
Northcliffe Consulting LLC 400,000 5%
960 Northcliffe Drive
Salt Lake City, UT 84103
All Officers and
Directors as a
Group (3 persons) 3,007,219 39%
(1) There were 6,608,698 shares issued and outstanding as of March 30,
1998. For purposes of disclosure of shares outstanding and shares owned by
persons listed above, all shares issuable within 60 days are deemed to be
issued and outstanding pursuant to rules and regulations of the Securities
and Exchange Commission. Currently, the above-referenced persons own
options to purchase 1,100,000 shares which are currently exercisable.
Therefore, for the sole purpose of the above set forth chart, there are
deemed to be 7,708,698 shares issued and outstanding.
(2) A total of 676,259 of these shares are shares owned of record by Mr.
Morris or his affiliates. The remaining 350,000 shares listed as own
relate to currently exercisable options to purchase 350,000 shares.
27
<PAGE>
(3) A total of 981,293 of these shares are shares owned of record by Mr.
Ross. The remaining 500,00 shares listed above relate to currently
exercisable options to purchase 500,000 shares.
(4) A total of 249,667 of these shares are shares owned of record by Mr.
Obartuch. The remaining 250,000 shares listed above relate to currently
exercisable options to purchase 250,000 shares.
B. Security Ownership of Management. See Item 11(a) above.
C. Changes in Control. Except for the proposed merger transaction
described in Item 1 above, no changes in control of the Company are
contemplated. If an acquisition is effected, of which there can be no assurance,
the Company would likely issue such number of shares to the owners of the
acquired company which would give them control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 9, 1998, the Company issued 400,000 shares of its common stock
to H & M. Capital valued at $4,000 for services rendered. H & M Capital is owned
by Douglas P. Morris an officer and director of the Company.
On January 9, 1998, the Company issued 400,000 shares of its common stock
to Northcliffe Consulting, LLC valued at $4,000 for services rendered.
Northcliffe Consulting, LLC is owned by A. O. Headman, Jr., an attorney for the
Company.
Sale of WRTI and CTR
In December 1995, the Company completed a recapitalization plan. In
connection with the plan, the Company sold its shares of WRTI and CTR to a group
of Buyers, one of which was William Holmes, who, at the time of such sale, was
an officer and director of the Company. (See "Item 1.") In connection with this
transaction and the forgiveness of certain debt owed to secured creditors of
WRTI and CTR, Mr. Holmes transferred all 620,809 of his shares of the Company's
common stock to the following secured creditors of the Company:
Frank H. Ross, III 259,281
Douglas P. Morris 78,593
Bruce Johnson 78,593
Bill Pragalz 78,593
James Blackburn 78,593
Kirk Ferguson 47,156
The plan also included the assignment of 350,000 shares of the Company's
common stock owned by Thomas F. Katsoulis, a former officer and director, to the
above referenced persons as additional consideration of their forgiveness of
debt owed by the Company. Such shares were assigned to the following persons:
28
<PAGE>
Frank H. Ross, III 156,800
Douglas P. Morris 81,000
Bruce Johnson 81,000
Bill Pragalz 12,000
James Blackburn 12,000
Kirk Ferguson 7,200
In 1995, the Company issued approximately 308,000 shares of stock for
services which had been rendered in 1994 in connection with the initial
acquisition of WRTI by the Company and with a private placement of the Company's
securities. A total of 250,257 of such shares were issued to ACAP Financial for
fees in the Company's 1994 private placement. A total of 58,584 of such shares
were issued to James Blackburn for finders fees related to the acquisition of
WRTI in 1994. These shares were authorized for issuance in 1994 but were not
actually issued until 1995.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits.
3.1 Certificate of Incorporation - incorporated by reference to
Exhibit 3.1 to Registration Statement on Form S-18 (SEC File No.
33-30365-C)
3.2 Bylaws - incorporated by reference to Exhibit 3.2 to
Registration Statement on Form S-18 (SEC File No. 33-30365-C).
10.1 Agreement and Plan of Reorganization - incorporated by
reference to Form 8-K filed March 7, 1994. This Agreement pertains
to the Registrant's acquisition of Waste Reduction Technology, Inc.
10.2 Stock Acquisition Agreement. Attached.
B. The Company filed no Form 8-K's during the quarter ended December
31,1997.
29
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EMERALD CAPITAL INVESTMENTS, INC.
Date: April 1, 1998 By: /s/ Frank H. Ross, III
Frank H. Ross, III
Principal Executive
Principal Financial Officer
In accordance with the Exchange Act, this Report has been signed by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated:
Signature Capacity Date
/s/ Frank H. Ross, III President/ CEO
Frank H. Ross, III Treasurer/Director April 1, 1998
/s/ Douglas P. Morris Secretary/Director April 1, 1998
Douglas P. Morris
Director April 1, 1998
Henry Obartuch, II
30
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
EMERALD CAPITAL INVESTMENT INC.'S FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> 7,200
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 7,200
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,200
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,200
<CURRENT-LIABILITIES> 8,000
<BONDS> 0
0
0
<COMMON> 6,608,698
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> (700)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
