2018 Q2 Form 10-Q Financial Statement

#000106282218000026 Filed on July 30, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2017 Q2
Revenue $13.80M $12.09M
YoY Change 14.16% -39.83%
Cost Of Revenue $838.0K $537.0K
YoY Change 56.05%
Gross Profit $12.96M $11.55M
YoY Change 12.21% -42.51%
Gross Profit Margin 93.93% 95.56%
Selling, General & Admin $16.80M $18.48M
YoY Change -9.07% 119.52%
% of Gross Profit 129.63% 159.96%
Research & Development $26.48M $26.93M
YoY Change -1.7% -44.14%
% of Gross Profit 204.3% 233.19%
Depreciation & Amortization $1.000M $1.000M
YoY Change 0.0% 100.0%
% of Gross Profit 7.72% 8.66%
Operating Expenses $44.07M $45.95M
YoY Change -4.08% -19.55%
Operating Profit -$30.27M -$33.49M
YoY Change -9.61% -9.54%
Interest Expense $5.187M $1.614M
YoY Change 221.38% -1.47%
% of Operating Profit
Other Income/Expense, Net $910.0K $448.0K
YoY Change 103.13% -18.1%
Pretax Income -$34.71M -$35.06M
YoY Change -1.01% -8.01%
Income Tax $0.00
% Of Pretax Income
Net Earnings -$34.55M -$34.66M
YoY Change -0.31% -9.07%
Net Earnings / Revenue -250.39% -286.73%
Basic Earnings Per Share
Diluted Earnings Per Share -$326.1K -$333.3K
COMMON SHARES
Basic Shares Outstanding 105.8M shares 105.2M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2018 Q2 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $209.7M $231.2M
YoY Change -9.3% -46.16%
Cash & Equivalents $48.90M $30.71M
Short-Term Investments $194.6M $200.5M
Other Short-Term Assets $3.954M $10.17M
YoY Change -61.14% 12.16%
Inventory $2.142M $811.0K
Prepaid Expenses
Receivables $4.406M $5.014M
Other Receivables $0.00 $0.00
Total Short-Term Assets $220.2M $247.2M
YoY Change -10.92% -43.75%
LONG-TERM ASSETS
Property, Plant & Equipment $16.77M $18.59M
YoY Change -9.77% -8.66%
Goodwill $44.54M $44.54M
YoY Change 0.0% 0.0%
Intangibles $51.00M $52.77M
YoY Change -3.35% -1.1%
Long-Term Investments
YoY Change
Other Assets $429.0K $428.0K
YoY Change 0.23% -0.47%
Total Long-Term Assets $112.7M $116.3M
YoY Change -3.08% -1.98%
TOTAL ASSETS
Total Short-Term Assets $220.2M $247.2M
Total Long-Term Assets $112.7M $116.3M
Total Assets $332.9M $363.5M
YoY Change -8.41% -34.87%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $50.45M $43.86M
YoY Change 15.04% 55.38%
Accrued Expenses $12.87M $10.96M
YoY Change 17.39% -54.24%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $12.90M $15.16M
YoY Change -14.91% -12.34%
Total Short-Term Liabilities $81.34M $133.2M
YoY Change -38.92% 1.66%
LONG-TERM LIABILITIES
Long-Term Debt $232.2M $85.38M
YoY Change 171.95% 0.56%
Other Long-Term Liabilities $265.0K $313.0K
YoY Change -15.34% -97.77%
Total Long-Term Liabilities $232.5M $85.70M
YoY Change 171.26% -13.39%
TOTAL LIABILITIES
Total Short-Term Liabilities $81.34M $133.2M
Total Long-Term Liabilities $232.5M $85.70M
Total Liabilities $338.0M $257.2M
YoY Change 31.42% -24.53%
SHAREHOLDERS EQUITY
Retained Earnings -$1.444B -$1.322B
YoY Change 9.2% 11.88%
Common Stock $106.0K $105.0K
YoY Change 0.95% 0.96%
Preferred Stock
YoY Change
Treasury Stock (at cost) $2.876M $1.904M
YoY Change 51.05% -43.47%
Treasury Stock Shares 236.0K shares 122.0K shares
Shareholders Equity -$5.071M $106.3M
YoY Change
Total Liabilities & Shareholders Equity $332.9M $363.5M
YoY Change -8.41% -34.87%

Cashflow Statement

Concept 2018 Q2 2017 Q2
OPERATING ACTIVITIES
Net Income -$34.55M -$34.66M
YoY Change -0.31% -9.07%
Depreciation, Depletion And Amortization $1.000M $1.000M
YoY Change 0.0% 100.0%
Cash From Operating Activities -$52.50M -$32.20M
YoY Change 63.04% -32.78%
INVESTING ACTIVITIES
Capital Expenditures -$100.0K -$100.0K
YoY Change 0.0%
Acquisitions
YoY Change
Other Investing Activities $47.40M $56.90M
YoY Change -16.7% -7.63%
Cash From Investing Activities $47.30M $56.70M
YoY Change -16.58% -7.8%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -200.0K 3.700M
YoY Change -105.41%
NET CHANGE
Cash From Operating Activities -52.50M -32.20M
Cash From Investing Activities 47.30M 56.70M
Cash From Financing Activities -200.0K 3.700M
Net Change In Cash -5.400M 28.20M
YoY Change -119.15% 107.35%
FREE CASH FLOW
Cash From Operating Activities -$52.50M -$32.20M
Capital Expenditures -$100.0K -$100.0K
Free Cash Flow -$52.40M -$32.10M
YoY Change 63.24% -32.99%

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44543000 USD
CY2018Q2 us-gaap Guarantee Obligations Maximum Exposure
GuaranteeObligationsMaximumExposure
2900000 USD
CY2017Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
-35059000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
-78602000 USD
CY2018Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
-34706000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
-76781000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
IncreaseDecreaseInAccountsPayableAndAccruedLiabilities
-22269000 USD
us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
IncreaseDecreaseInAccountsPayableAndAccruedLiabilities
-6644000 USD
us-gaap Increase Decrease In Accounts Receivable
IncreaseDecreaseInAccountsReceivable
-2478000 USD
us-gaap Royalty Income Nonoperating
RoyaltyIncomeNonoperating
64000 USD
us-gaap Increase Decrease In Deferred Revenue
IncreaseDecreaseInDeferredRevenue
-24996000 USD
us-gaap Increase Decrease In Inventories
IncreaseDecreaseInInventories
811000 USD
us-gaap Increase Decrease In Inventories
IncreaseDecreaseInInventories
194000 USD
CY2017Q4 us-gaap Intangible Assets Net Excluding Goodwill
IntangibleAssetsNetExcludingGoodwill
51885000 USD
CY2018Q2 us-gaap Intangible Assets Net Excluding Goodwill
IntangibleAssetsNetExcludingGoodwill
51002000 USD
CY2017Q2 us-gaap Interest Expense
InterestExpense
1614000 USD
us-gaap Interest Expense
InterestExpense
3202000 USD
CY2018Q2 us-gaap Interest Expense
InterestExpense
5187000 USD
us-gaap Interest Expense
InterestExpense
10301000 USD
us-gaap Interest Paid Net
InterestPaidNet
2956000 USD
us-gaap Interest Paid Net
InterestPaidNet
6726000 USD
CY2017Q4 us-gaap Inventory Finished Goods
InventoryFinishedGoods
1183000 USD
CY2018Q2 us-gaap Inventory Finished Goods
InventoryFinishedGoods
1050000 USD
CY2017Q4 us-gaap Inventory Gross
InventoryGross
1948000 USD
CY2018Q2 us-gaap Inventory Gross
InventoryGross
2142000 USD
CY2017Q4 us-gaap Inventory Net
InventoryNet
1948000 USD
CY2018Q2 us-gaap Inventory Net
InventoryNet
2142000 USD
CY2017Q4 us-gaap Inventory Raw Materials
InventoryRawMaterials
616000 USD
CY2018Q2 us-gaap Inventory Raw Materials
InventoryRawMaterials
961000 USD
CY2017Q4 us-gaap Inventory Work In Process
InventoryWorkInProcess
149000 USD
CY2018Q2 us-gaap Inventory Work In Process
InventoryWorkInProcess
131000 USD
CY2017Q4 us-gaap Investments Fair Value Disclosure
InvestmentsFairValueDisclosure
310788000 USD
CY2018Q2 us-gaap Investments Fair Value Disclosure
InvestmentsFairValueDisclosure
209689000 USD
CY2017Q4 us-gaap Liabilities
Liabilities
384437000 USD
CY2018Q2 us-gaap Liabilities
Liabilities
338008000 USD
CY2017Q4 us-gaap Liabilities And Stockholders Equity
LiabilitiesAndStockholdersEquity
436539000 USD
CY2018Q2 us-gaap Liabilities And Stockholders Equity
LiabilitiesAndStockholdersEquity
332937000 USD
CY2017Q4 us-gaap Liabilities Current
LiabilitiesCurrent
124127000 USD
CY2018Q2 us-gaap Liabilities Current
LiabilitiesCurrent
81336000 USD
CY2017Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
14094000 USD
CY2018Q2 us-gaap Long Term Debt Current
LongTermDebtCurrent
12896000 USD
CY2017Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
231576000 USD
CY2018Q2 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
232198000 USD
us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
2586000 USD
us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
-1749000 USD
us-gaap Net Cash Provided By Used In Investing Activities
NetCashProvidedByUsedInInvestingActivities
99241000 USD
us-gaap Net Cash Provided By Used In Investing Activities
NetCashProvidedByUsedInInvestingActivities
54430000 USD
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-117721000 USD
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-99298000 USD
CY2017Q2 us-gaap Net Income Loss
NetIncomeLoss
-35059000 USD
us-gaap Net Income Loss
NetIncomeLoss
-69950000 USD
CY2018Q2 us-gaap Net Income Loss
NetIncomeLoss
-34706000 USD
us-gaap Net Income Loss
NetIncomeLoss
-76781000 USD
CY2017Q2 us-gaap New Accounting Pronouncement Or Change In Accounting Principle Effect Of Adoption Quantification
NewAccountingPronouncementOrChangeInAccountingPrincipleEffectOfAdoptionQuantification
0 USD
us-gaap New Accounting Pronouncement Or Change In Accounting Principle Effect Of Adoption Quantification
NewAccountingPronouncementOrChangeInAccountingPrincipleEffectOfAdoptionQuantification
14212000 USD
CY2017Q2 us-gaap Operating Expenses
OperatingExpenses
45946000 USD
us-gaap Operating Expenses
OperatingExpenses
106724000 USD
CY2018Q2 us-gaap Operating Expenses
OperatingExpenses
44182000 USD
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
978000 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
-19000 USD
CY2018Q2 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
175000 USD
us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
4000 USD
CY2017Q4 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
292000 USD
CY2018Q2 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
265000 USD
CY2017Q2 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
448000 USD
us-gaap Operating Expenses
OperatingExpenses
107355000 USD
CY2017Q2 us-gaap Operating Income Loss
OperatingIncomeLoss
-33893000 USD
us-gaap Operating Income Loss
OperatingIncomeLoss
-76378000 USD
CY2018Q2 us-gaap Operating Income Loss
OperatingIncomeLoss
-30429000 USD
us-gaap Operating Income Loss
OperatingIncomeLoss
-68395000 USD
CY2017Q4 us-gaap Other Assets Current
OtherAssetsCurrent
4434000 USD
CY2018Q2 us-gaap Other Assets Current
OtherAssetsCurrent
3954000 USD
CY2017Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
429000 USD
CY2018Q2 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
429000 USD
CY2017Q2 us-gaap Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax
OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
50000 USD
CY2018Q2 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
910000 USD
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
1915000 USD
CY2014Q4 us-gaap Payment Of Financing And Stock Issuance Costs
PaymentOfFinancingAndStockIssuanceCosts
3400000 USD
us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
1679000 USD
us-gaap Payments For Repurchase Of Common Stock
PaymentsForRepurchaseOfCommonStock
972000 USD
us-gaap Payments To Acquire Investments
PaymentsToAcquireInvestments
59989000 USD
us-gaap Payments To Acquire Investments
PaymentsToAcquireInvestments
49638000 USD
us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
163000 USD
us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
55000 USD
CY2017Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.01
CY2018Q2 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.01
CY2017Q4 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
5000000 shares
CY2018Q2 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
5000000 shares
CY2017Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2018Q2 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2017Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2018Q2 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2017Q4 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2018Q2 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2014Q4 us-gaap Proceeds From Convertible Debt
ProceedsFromConvertibleDebt
87500000 USD
us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
5427000 USD
us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
392000 USD
us-gaap Proceeds From Sale Maturity And Collections Of Investments
ProceedsFromSaleMaturityAndCollectionsOfInvestments
159393000 USD
us-gaap Proceeds From Sale Maturity And Collections Of Investments
ProceedsFromSaleMaturityAndCollectionsOfInvestments
104123000 USD
CY2017Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
17687000 USD
CY2018Q2 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
16772000 USD
us-gaap Realized Investment Gains Losses
RealizedInvestmentGainsLosses
-7000 USD
us-gaap Realized Investment Gains Losses
RealizedInvestmentGainsLosses
0 USD
us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
1162000 USD
CY2017Q2 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
26934000 USD
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
70515000 USD
CY2018Q2 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
26589000 USD
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
74372000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-1381404000 USD
CY2018Q2 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-1443973000 USD
CY2017Q2 us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
8104000 USD
us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
25669000 USD
CY2018Q2 us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
6359000 USD
us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
26024000 USD
CY2017Q2 us-gaap Revenues
Revenues
12053000 USD
us-gaap Revenues
Revenues
30346000 USD
CY2018Q2 us-gaap Revenues
Revenues
13753000 USD
us-gaap Revenues
Revenues
38960000 USD
CY2017Q2 us-gaap Royalty Income Nonoperating
RoyaltyIncomeNonoperating
57000 USD
CY2018Q2 us-gaap Royalty Income Nonoperating
RoyaltyIncomeNonoperating
78000 USD
us-gaap Royalty Income Nonoperating
RoyaltyIncomeNonoperating
160000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
4634000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
5972000 USD
CY2017Q4 us-gaap Short Term Investments
ShortTermInvestments
249127000 USD
CY2018Q2 us-gaap Short Term Investments
ShortTermInvestments
194645000 USD
us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
5427000 USD
us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
392000 USD
us-gaap Stock Issued During Period Value Treasury Stock Reissued
StockIssuedDuringPeriodValueTreasuryStockReissued
0 USD
CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
52102000 USD
CY2018Q2 us-gaap Stockholders Equity
StockholdersEquity
-5071000 USD
CY2016Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
157401000 USD
CY2017Q2 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
106313000 USD
CY2017Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
52102000 USD
CY2018Q2 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
-5071000 USD
CY2017Q4 us-gaap Treasury Stock Shares
TreasuryStockShares
122000 shares
CY2018Q2 us-gaap Treasury Stock Shares
TreasuryStockShares
236000 shares
CY2017Q4 us-gaap Treasury Stock Value
TreasuryStockValue
1904000 USD
CY2018Q2 us-gaap Treasury Stock Value
TreasuryStockValue
2876000 USD
us-gaap Treasury Stock Value Acquired Cost Method
TreasuryStockValueAcquiredCostMethod
1679000 USD
us-gaap Treasury Stock Value Acquired Cost Method
TreasuryStockValueAcquiredCostMethod
972000 USD
CY2018Q2 us-gaap Unamortized Debt Issuance Expense
UnamortizedDebtIssuanceExpense
1600000 USD
us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
-19000 USD
us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
4000 USD
CY2017Q2 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
105300000 shares
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
104883000 shares
CY2018Q2 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
105848000 shares
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
105758000 shares
us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Concentration of Credit Risk:</font><font style="font-family:inherit;font-size:10pt;"> Lexicon&#8217;s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. The Company&#8217;s accounts receivable are unsecured and are concentrated in pharmaceutical and biotechnology companies located in Europe and the United States.&#160;&#160;The Company has not experienced any significant credit losses to date.&#160;&#160;</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Use of Estimates:</font><font style="font-family:inherit;font-size:10pt;"> The preparation of financial statements in conformity with U. S. 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 period. Actual results could differ from those estimates.</font></div></div>

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