SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1997
Central Index Key # 856572
Commission File Number: 33-31566
ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
(formerly Aerial Acquisitions Inc.)
Exact Name of Registrant as Specified in its Charter
Delaware 77-0219055
State or Other Jurisdiction of IRS Employer Iden-
Incorporation or Organization tification Number
10096 Sixth Street, Units M-P
Rancho Cucamonga, California 91730
Address of Principal Executive Offices Zip Code
(909) 466-0081
Registrant's Telephone Number,
Including Area Code
N/A
Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report
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
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.Yes No X
As of March 31, 1997, 12,578,826 shares of Common Stock; 11,063,385 Class A
and 11,063,385 Class B common stock purchase warrants were outstanding.
Transitional Small Business Disclosure Format: Yes No X
Item 1. Financial Statements.
See attached.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Since inception in 1989, the Registrant has relied principally on the
proceeds from one public and several private offerings of its securities to
fund operations. The Registrant has used the proceeds from these offerings
and the limited revenues it has received from sales of the Registrant's
products to fund research and development activities and to cover its
recurring operating deficits. From inception in March, 1989 to March 31,
1997, a total of $10,129,438 (net) has been received from these financing
activities. At March 31, 1997, the Registrant had cash and cash equivalents
totaling $21,462 available to cover recurring operating deficits and research
and development expenses.
The Registrant incurs considerable expense in demonstrating and testing
its products. Government approvals for each of the products and adaptations
thereto must be obtained before its products may be marketed. The Registrant
is also incurring substantial expenses in demonstrating its products to
prospective customers, both civilian and governmental. During 1995, the
Registrant's Board of Directors determined that the results of its marketing
efforts in conjunction with its recently developed blend center warranted
concentrating marketing efforts on the distribution of blend centers with
particular concentration on regional and national restaurant chain
franchisees. As a result, it changed its marketing strategy to one whereby it
is currently attempting to establish relationships with owners of regional and
national restaurant chain franchises, while also pursuing relationships with
other potential high volume consumers in both the civilian and governmental
sectors in an effort to broaden its distribution and gain market acceptance.
A significant number of such relationships have been established to date.
Management believes that this approach will result in substantially higher
revenues from product sales and thereby significantly improve the Registrant's
liquidity.
The Registrant's long term viability is dependent upon improving
liquidity through increased product sales. In the interim, Management
believes that the current cash in its account and cash from ongoing operations
should be adequate to meet its research and development, marketing,
administrative expenses and cash commitments through fiscal 1997 or until the
Registrant reaches consistent profitability from ongoing internal operations
if that is later. The Registrant may continue to offer its securities on a
public or private basis as a means of supplementing it liquidity from ongoing
operations.
Other than continuing development expenses related to new products,
estimated to be 3% of the Registrant's net revenues on an annual basis,
commitments under facilities' leases totaling $202,000 through August, 1999,
the Registrant has no other known commitments for its capital resources as of
March 31, 1997. Management believes that cash available from ongoing
operations and, if necessary, from additional financing, will cover these
commitments.
The Registrant's total assets increased from $320,688 at March 31, 1996
and decreased from $1,544,435 at December 31, 1996 to $1,188,702 at March 31,
1997, a total increase/decrease of $868,014 (270.7%) and <$355,733> (23.0%),
respectively. The increase was due primarily to increases in inventories,
investments in fixed maturities, prepaid expenses, notes receivable, accounts
receivable, property, equipment and investment real-estate. The decrease was
due primarily to decreases in investments in fixed maturities, cash and cash
equivalents in order to fund operations.
The Registrant's total liabilities increased from $1,413,136 at March 31,
1996 and decreased from $2,171,376 at December 31, 1996 to $1,788,131 at March
31, 1997, a total increase/decrease of $374,995 (26.5%) and <$383,245>
(17.7%), respectively. The increase was due primarily to increases in notes
payable, accounts payable and capital lease payable. The decrease was due
primarily to decreases in notes payable, accrued payroll and payroll taxes,
and, accrued expenses.
The Registrant's accounts receivable, net of allowance for doubtful
accounts increased from $19,366 at March 31, 1996 and $28,078 at December 31,
1996 to $162,633 at March 31, 1997, total increases of $143,267 (739.8%) and
$134,555 (479.2%) due primarily to increased sales for the quarter ended March
31, 1997.
The Registrant's accounts payable increased from $74,167 (93.4%) as of
March 31, 1996 and $74,869 (91.6%) as of December 31, 1996 to $143,449 as of
March 31, 1997 due primarily to a decrease in cash available to pay operating
expenses.
The Registrant's accrued expenses decreased from $525,322 at March 31,
1996 and $152,420 at December 31, 1996 to $6,186 at March 31, 1997, total
decreases of $519,154 (98.8%) and $146,252 (96.0%), respectively. These
respective decreases were due primarily to the Registrant's ability to use
available cash proceeds from operations and securities sales to reduce
outstanding debt.
The Registrant's notes and interest receivable less allowance for
doubtful collection (net) increased from $-0- at March 31, 1996 and $26,614 at
December 31, 1996 to $189,484 at March 31, 1997, increases of $189,484
(100.0%) and $162,870 (612.0%), respectively. These respective increases were
primarily due to the Registrant's acceptance of various notes from a
stockholder, an employee and other individuals in exchange for loans and
accrued interest receivable. All of such notes are unsecured and an allowance
for doubtful collection has been established in the amount of $131,949.
The Registrant's notes payable increased from $684,961 at March 31, 1996
and decreased from $1,747,184 at December 31, 1996 to $1,484,209 at March 31,
1997, a total increase/decrease of $799,248 (116.7%) and <$262,975> (15.1%),
respectively. The increase and decrease were each attributable to net amounts
of convertible promissory notes issued versus the conversion of outstanding
promissory notes to common stock or common stock subscribed.
The Registrant's accounts payable increased from $74,167 at March 31,
1996 and $74,869 at December 31, 1996 to $143,449 at March 31, 1997, total
decreases, respectively, of $69,282 (93.4%) and $68,580 (91.6%). These
increases were primarily due to a decrease in available cash to pay operating
expenses.
The Registrant's accrued interest decreased from $91,995 at March 31,
1996 and increased from $50,727 at December 31, 1996 to $56,405 at March 31,
1997, a decrease/increase of <$35,590> (36.7%) and $5,678 (11.2%),
respectively. These changes were due to changes in the amount of notes
payable outstanding.
The Registrant's capital lease payable increased from $-0- at March 31,
1996 and $51,503 at December 31, 1996 to $61,981 at March 31, 1997, increases
of $61,981 (100.0%) and $10,478 (20.3%), due primarily to the Registrant's
acquisition of three capital leases for office and production equipment during
the quarter ended March 31, 1997.
The Registrant's accumulated deficit increased from $7,668,473 at March
31, 1996 and $8,809,047 at December 31, 1996 to $9,240,675 at March 31, 1997,
(20.5%) and (4.9%), respectively, as a result of increased net losses from
operations.
The Registrant's shareholders' common stock and paid in capital, which
was $6,576,025 at March 31, 1996 and $8,186,089 at December 31, 1996,
increased (31.5%) and (5.6%), respectively, to $8,645,229 at March 31, 1997,
principally as a result of equity offerings and the conversion of convertible
promissory notes to equity securities. The Registrant has improved its cash
position through the use of private placements of its securities.
Since inception, the Registrant has experienced significant losses from
operations in each successive period. For the three months ended March 31,
1997, as compared to the three months ended March 31, 1996, net loss from
operations increased $149,601 (53.0%) to <$431,628> from <$282,027>; gross
sales of products increased $163,085 (658.6%) to $187,848 from $24,763; cost
of product sales increased $79,998 (422.4%) to $98,936 from $18,938; gross
profit percentage increased to 76.5% from 52.7%; selling, general and
administrative expenses increased $194,594 (70.5%) to $470,492 from $275,898;
and, interest expense increased $45,875 (443.1%) to $56,229 from $10,354. The
Registrant achieved a gross profit percentage of approximately 76.5% for the
three month period ended March 31, 1997 as compared to 52.7% for the three
month period ended March 31, 1996.
Management expects to be able to maintain or improve gross profit margins
into the future. Currently, the Registrant sells most of its products by the
gallon in various sized containers and prices its products based on container
size. The Registrant has experienced no price pressure and structures its
prices to be competitive with other products sold in similar markets.
Since inception, the Registrant has primarily used equity financing
transactions and borrowings convertible to equity securities to improve its
liquidity while operations have been unable, until at least early 1996, to
generate adequate working capital. Net cash used in operating activities was
$227,852 for the three months ended March 31, 1997 was $559,790.
As a result of what Management perceives to be an ever-increasing
societal emphasis on the utilization of environmentally responsible products
in a responsible and efficient manner, Management believes that the
Registrant's products, which are principally aqueous based, non-toxic and
biodegradable, have significant future market potential, especially when
considered in conjunction with the Registrant's blend center method of product
distribution, although the extent of that potential can not be determined at
this time.
During the fiscal year ended December 31, 1995, the Registrant Management
determined it would focus on marketing the Registrant's blend centers to
owners of regional and national restaurant chain franchises, while also
pursuing relationships with other potential high volume consumers in both the
civilian and governmental sectors in an effort to broaden its distribution and
gain market acceptance. As a result of this change in focus, the Registrant
has achieved what Management believes to be a significantly enhanced
opportunity to obtain operations sustaining revenues from product sales alone.
A large portion of the developmental expenses experienced by the
Registrant products has resulted from the development of the Registrant's
blend centers and from testing necessary to acquire product credentials,
which, in some cases, must be performed by independent testing laboratories.
Travel and travel related expenses (such as convention attendance), are also
major expenses in the promotion of the Registrant's products to potential
customers. The largest items of selling, general and administrative expense
are salaries, rent, telephone, legal, consulting, accounting, travel, trade
shows, product samples and related marketing expenses. The Registrant also
incurred, during the periods ending December 31, 1995 and 1994, significant
legal and accounting expenses related to its financing and compliance updating
activities. Management does not expect a significant increase in selling,
general and administrative expense as a percentage of overall revenues as its
sales increase.
The Registrant has not experienced, and does not anticipate, any material
effect on its financial condition or results of operations stemming from
seasonal influences.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
During the period covered by this Report, the three months ended March
31, 1997, the Registrant was involved in the following legal proceedings.
In March, 1997, the Registrant filed a legal action against George A.
Money, a former officer and director, seeking to cancel the 659,931 shares of
Registrant's common stock currently held by Mr. Money. The Registrant
contends in its complaint that Mr. Money did not give the promised
consideration underlying the issuance of such shares. That consideration was
to consist of certain real property, fixtures and equipment located in Iowa as
well as certain chemical formulae. As of the date this Report was filed, Mr.
Money had not filed an answer to the Registrant's complaint and a default
judgment has been entered against Mr. Money.
On June 22, 1995, Charles Jamgotchian commenced a legal action against the
Registrant, J.W. Rutherford, George A. Money, Key Kavoussi, Harold P.
Kavoussi, Greater Pacific H.M.O. (an entity with respect to which Harold P.
Kavoussi is affiliated), Innovative Technologies, Inc. and Money Manufacturing
(entities with respect to which Mr. Money is affiliated) and Robert Tierney.
The lawsuit was filed in San Bernardino Superior Court at the Rancho
Cucamonga, California branch. In the amended complaint, Mr. Jamgotchian
alleged that he made a $100,000.00 loan to Ultra Shield Products
International, Inc. a California corporation that is a subsidiary of the
Registrant. He also alleges that he was defrauded in that he did not receive
promised security for the loan consisting of certain securities certificates
or a security interest in certain real property. The complaint further
alleged that Messrs. Tierney and Rutherford breached certain guarantee
agreements. The Registrant denied that it was a party to the loan agreement.
It also denied the allegation that the other defendants acted as its agents
and that it had any liability to Mr. Jamgotchian. The Registrant filed a
cross-complaint against Mr. Jamgotchian and sought to cancel certain
securities issued in connection with the loan and to have the transaction
declared by the court as not binding upon the Registrant and as a usurious
loan transaction. The Registrant also sought to impose liability against Mr.
Jamgotchian for his failure to perform certain duties owing the Registrant in
connection with his agreement to supervise the Registrant's marketing efforts.
The court issued a temporary protective order against the Registrant
preventing it from selling its assets outside the normal course of business.
The defendants contended that they did not have any liability to Mr.
Jamgotchian and in the case of the Registrant, it contended that its claim for
damages exceeded the claim for damages asserted by Mr. Jamgotchian. The
dispute was settled on January 29, 1997 by the execution of a mutual release;
Ultra Shield's payment to Mr. Jamgotchian in the amount of $125,000; and, Mr.
Jamgotchian's return to Ultra Shield of 162,000 shares of common stock and
137,000 each of Class A and B common stock purchase warrants.
On June 27, 1991, Starbound Management, Inc. filed a lawsuit in the 20th
Judicial District Chancery Court in the State of Tennessee against the
Registrant's California corporate subsidiary and obtained a default judgment
against it in the amount of $286,895.65. A sister-state judgment was entered
against the California corporate subsidiary in California. The plaintiff
recently attempted to discover the bank records from the Registrant which
filed a motion to quash the subpoena served upon it on the grounds, among
other things, that the court did not have jurisdiction over it because it was
not a party to the Tennessee or sister-state proceedings. The court agreed
and issued an order quashing service of the subpoena and also issued a
protective order against the discovery of the Registrant's bank records.
Management does not believe that the sister-state judgment applies to the
Registrant.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
The Registrant was formed on March 21, 1989, to evaluate, structure and
complete a merger with, or acquisition of, other entities. The Registrant
initially conducted organizational matters followed by the sale of 32,000,000
shares of common stock, to insiders, for a total of $3,200; and, the sale of
37,275,000 Units in a public offering, completed August 6, 1990, which raised
$372,750 in gross proceeds. Each Unit consisted of one share of the
Registrant's no par value common stock, one (1) Class A common stock purchase
warrant and one (1) Class B common stock purchase warrant. Originally, each A
Warrant entitled the holder to purchase, at a price of $.04, one share of the
Registrant's common stock during the two year period commencing February 6,
1990; and, each B Warrant entitled the holder to purchase one share of the
Registrant's common stock, at a price of $.07 per share, during the three year
period commencing February 6, 1990. The Class A and Class B Warrants have
been extended to February 6, 1998 and 1999, respectively; and, due to a one
for one hundred (1:100) reverse split of the Registrant's outstanding
securities effected March 25, 1994, the exercise prices of the Class A and
Class B Warrants have been adjusted to $4.00 and $7.00, respectively. The
Registrant has the right to redeem the A and B Warrants upon 30 days written
notice at a price of $.01 per Warrant.
On August 24, 1990, the Registrant entered into an agreement to acquire
an approximately ninety-five percent (94.9%) ownership interest in Ultra
Shield Products International, Inc., a California corporation, of Rancho
Cucamonga, California ("USPIC"). The acquisition was effected through an
exchange of 132,397,000 (65.2%) of the Registrant's authorized, but unissued,
shares of common stock for 47,453,256 (94.9)% shares of the common stock of
USPIC, which shares were then owned by the individuals serving as the officers
and directors of USPIC at that time. In accordance with the Registrant's
acquisition of USPIC, the Registrant subsequently changed its name to Ultra
Shield Products International, Inc., a Delaware corporation.
Following the exchange of shares described above, it was the Registrant's
intent that it prepare a Form S-4 Registration Statement under the Securities
Act of 1933, as amended, for the purpose of attempting to complete the
Registrant's acquisition of all of the outstanding shares (100%) of USPIC in
exchange for an overall total of approximately 81% percent of the Registant's
equity securities.
Item 6. Exhibits and Reports on Form 8-K.
None.
SIGNATURE
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.
Date: May 19, 1997 ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
By /s/ J.W. Rutherford
J.W. Rutherford, President
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1997 and 1996
1997 1996
Revenues
Net Sales $ 187,848 $ 24,763
_____________ ______________
Costs and expenses
Cost of product sales 98,936 18,938
Selling, general and administrative 470,492 275,898
_____________ ______________
Total costs and expenses 569,428 294,836
Other expense
Interest income 7,781
Interest expense (56,229) 10,354
_____________ ______________
Loss before provision for income taxes (430,028) (280,427)
Provision for income taxes 1,600 1,600
_____________ ______________
Net loss $ (431,628) $ (282,027)
_____________ ______________
_____________ ______________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
BALANCE SHEETS
March 31, 1997 December 31, 1996
ASSETS
Current Assets
Cash and cash equivalents $ 21,462 $ 126,520
Investments in fixed maturities,
amortized cost of $301,686 and
$653,890 at March 31, 1997 and
December 31, 1996, respectively,
net of advances on portfolio line
of credit at March 31, 1997 of
$216,259 81,445 649,907
Accounts receivable, net of allowance
for doubtful accounts of $8,000 and
$2,675 at March 31, 1997 and
December 31, 1996, respectively 162,633 28,078
Receivable - other 2,867
Notes receivable due from officers and
stockholders 75,000
Notes receivable due from employees 25,000
Notes receivable - other 215,617 26,614
Accrued interest receivable 2,949
Allowance for doubtful notes and
interest receivable (131,949)
Inventories 264,782 277,545
Prepaid expenses and other current
assets 71,584 70,984
__________________________________
Total Current Assets 791,390 1,179,648
Property and Equipment
Property and equipment, at cost 367,219 333,794
Capital leased equipment 67,923 54,923
__________________________________
435,142 388,717
Less accumulated depreciation 226,336 212,436
__________________________________
Total Property and Equipment 208,806 176,281
Other Assets
Deposits 2,850 2,850
Investment in Real Estate 185,656 185,656
__________________________________
Total Other Assets 188,506 188,506
__________________________________
$ 1,188,702 $ 1,544,435
__________________________________
__________________________________
ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
BALANCE SHEETS
March 31, 1997 December 31, 1996
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 143,449 $ 74,869
Notes payable to stockholders (Note 1) 1,484,209 1,747,184
Capital lease payable - current
portion 11,932 8,874
Accrued Interest 56,405 50,727
Accrued payroll and payroll taxes 35,919 94,673
Accrued expenses 6,168 152,420
__________________________________
Total Current Liabilities 1,738,082 2,128,747
Long-term Liabilities
Capital lease payable - net of current
portion 50,049 42,629
__________________________________
Total Liabilities 1,788,131 2,171,376
Stockholders' Deficit
Preferred stock, $.0001 par value,
10,000,000 shares authorized, no
shares issued and outstanding
Common stock, $.0001 par value,
500,000,000 shares authorized,
11,881,170 and 11,023,891 shares
issued and outstanding at
March 31, 1997 and December 31, 1996,
respectively 1,188 1,102
Common stock subscribed, $.0001 par
value, 102,000 shares to be issued at
March 31, 1997 10
Additional paid in capital 8,644,031 8,184,987
Unrealized holding gain (loss) on
investments (3,983) (3,983)
Accumulated deficit (9,240,675) (8,809,047)
__________________________________
Total Stockholders' deficit (599,429) (626,941)
__________________________________
$ 1,188,702 $ 1,544,435
__________________________________
__________________________________
ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
March 31, 1997
Note 1 - Notes payable to stockholders
Notes payable to stockholders at March 31, 1997 of $1,484,209 are
convertible to units of common stock at the option of the note holders
over various dates through a six month period ending September 30, 1997.
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
For the Three Months Ended March 31, 1997
Common
Common Stock Stock Subscribed
Shares Amount Shares Amount
Balance at
January 1, 1997 11,023,891 $ 1,102 - $ -
Shares issued or
subscribed for cash 56,000 6 102,000 10
Shares issued for payment
on notes payable 697,700 70 - -
Shares issued or subscribed
in lieu of interest 31,844 3 - -
Shares issued for services 71,735 7 - -
Net loss
____________________________________________________
Balance at
March 31, 1997 11,881,170 $ 1,188 102,000 $ 10
__________ _________ _________ _________
__________ _________ _________ _________
Unrealized
Holding Gain Total
Paid - in (Loss) on Accumulated Stockholders'
Capital Investments (Deficit) (Deficit)
Balance at
January 1, 1997 $ 8,184,987 $ (3,983) $(8,809,047) $ (626,941)
Shares issued or
subscribed for cash 78,984 79,000
Shares issued for payment
on notes payable 328,276 - - 328,346
Shares issued or subscribed
in lieu of interest 15,919 - - 15,922
Shares issued for services 35,865 - - 35,872
Net loss (431,628) (431,628)
____________________________________________________
Balance at
March 31, 1997 $ 8,644,031 $ (3,983) $(9,240,675) $ (599,429)
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Ultra Shield Products International, Inc.
Statement of Cash Flows
For The Three Months Ended March 31, 1997
Cash flow from operating activities:
Net Loss ($431,628)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation $13,900
Provision for doubtful accounts $137,274
Consulting expense recorded upon issuance or subscription
of common stock $35,868
Interest expense recorded upon the issuance of
subscription of common stock $36,878
Change in operating assets and liabilities
Accounts receivable ($139,880)
Inventories $12,763
Prepaid expenses ($600)
Accounts payable $68,580
Accrued payroll and payroll taxes ($58,754)
Accrued interest $5,678
Accrued expenses ($146,252)
____________
Net cash used in operating activities ($466,173)
____________
Cash flow from investing activities:
Cash paid for property and equipment additions ($33,425)
Increase in capital leased equipment ($13,000)
Increase in notes receivable from officers and stockholders ($75,000)
Increase in notes receivable from employees ($25,000)
Increase in notes receivable from others ($189,003)
Increase in other receivable ($5,816)
Net proceeds from sale of investments in fixed maturities $352,203
____________
Net cash provided by (used in) investing activities $10,959
____________
Cash flow from financing activities:
Proceeds from the issuance of notes payable to stockholders $235,875
Payments on notes payable to stockholders ($170,500)
Advances on portfolio line of credit $216,259
Payments on capital lease obligations ($10,478)
Proceeds from sale of common stock and stock subscribed $79,000
____________
Net cash provided by financing activities $350,156
____________
Net (decrease) increase in cash ($105,058)
Cash and cash equivalents beginning of year $126,520
____________
Cash and cash equivalents end of period $21,462
____________
____________
ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
DISCLOSURES FOR STATEMENT OF CASH FLOWS
March 31, 1997
Supplemental disclosure of cash flow information:
Interest expense totaling $56,229 recorded during the three
months ended March 31, 1997 was comprised of cash payments in
the amount of $12,437, which includes $8,263 of cash payments
on notes payable.
Cash paid during the three months ended March 31, 1997 for
income taxes was $1,600
Supplemental disclosure of noncash financing:
The company repaid $328,350 of notes payable through the
issuance or subscription of 656,700 shares of common stock
during the three months ended March 31, 1997.
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 21,462
<SECURITIES> 81,445
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