|
|
ITEM
1.
|
FINANCIAL
STATEMENTS.
|
ENXNET,
INC
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
ASSETS
|
June 30,
2017
|
|
March 31,
2017
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash
|
$
|
23,582
|
|
$
|
8,123
|
|
|
Restricted cash
|
|
23,161
|
|
|
52,277
|
|
|
TOTAL CURRENT ASSETS
|
|
46,743
|
|
|
60,400
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
Oil and gas cash bond
|
|
100,000
|
|
|
—
|
|
|
Oil and gas properties, unproven (full cost method)
|
|
83,651
|
|
|
66,396
|
|
|
TOTAL OTHER ASSETS
|
|
183,651
|
|
|
—
|
|
|
TOTAL ASSETS
|
$
|
230,394
|
|
$
|
126,796
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
$
|
643,757
|
|
$
|
636,563
|
|
|
Advances from officer - related party
|
|
10,500
|
|
|
16,500
|
|
|
Advances from stockholder
|
|
31,000
|
|
|
31,000
|
|
|
Note payable – stockholder
|
|
100,000
|
|
|
—
|
|
|
Convertible notes payable - stockholders
|
|
300,000
|
|
|
300,000
|
|
|
Convertible notes payable - related parties
|
|
912,101
|
|
|
890,101
|
|
|
TOTAL CURRENT LIABILITIES
|
|
1,997,358
|
|
|
1,874,164
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
|
|
|
Convertible note payable
|
|
50,000
|
|
|
50,000
|
|
|
TOTAL LIABILITIES
|
$
|
2,047,358
|
|
$
|
1,924,164
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
Common stock, $0.00005 par value; 200,000,000 shares authorized, 54,501,518 and 54,401,528 shares issued and outstanding
|
|
2,725
|
|
|
2,720
|
|
|
Additional paid-in capital
|
|
5,653,699
|
|
|
5,649,704
|
|
|
Accumulated deficit
|
|
(7,373,388
|
)
|
|
(7,349,792
|
)
|
|
Other comprehensive income
|
|
(100,000
|
)
|
|
(100,000
|
)
|
|
TOTAL STOCKHOLDERS’ DEFICIT
|
|
(1,816,964
|
)
|
|
(1,797,368
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
230,394
|
|
$
|
126,796
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
ENXNET,
INC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
Three months Ended
June 30,
|
|
|
|
2017
|
|
2016
|
|
|
EXPENSES
|
|
|
|
|
|
Oil and gas exploration
|
$
|
600
|
|
$
|
650
|
|
|
Payroll
|
|
1,500
|
|
|
1,500
|
|
|
Professional services
|
|
5,516
|
|
|
12,556
|
|
|
Occupancy and office
|
|
1,854
|
|
|
1,265
|
|
|
Travel
|
|
250
|
|
|
131
|
|
|
Other
|
|
507
|
|
|
584
|
|
|
Total Expenses
|
|
10,227
|
|
|
16,686
|
|
|
LOSS FROM OPERATIONS
|
|
(10,227
|
)
|
|
(16,686
|
)
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
Interest expense
|
|
(13,369
|
)
|
|
(8,006
|
)
|
|
NET LOSS
|
$
|
(23,596
|
)
|
$
|
(24,692
|
)
|
|
BASIC AND DILUTED NET LOSS PER SHARE
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED
|
|
54,528,093
|
|
|
54,201,518
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
ENXNET,
INC
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Three Months Ended
|
|
|
|
June 30,
|
|
|
|
2017
|
|
2016
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net loss
|
$
|
(23,596
|
)
|
$
|
(24,692
|
)
|
|
Adjustments to reconcile net loss to net cash used by operations:
|
|
|
|
|
|
|
|
Common stock issued for additional interest
|
|
4,000
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts payable & accrued expenses
|
|
7,194
|
|
|
15,166
|
|
|
Net cash used in operating activities
|
|
(12,402
|
)
|
|
(9,526
|
)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Change in restricted cash
|
|
29,116
|
|
|
8,513
|
|
|
Purchase of cash bond
|
|
(100,000
|
)
|
|
—
|
|
|
Mineral rights, unproven
|
|
(17,255
|
)
|
|
(8,509
|
)
|
|
Net cash (used in)/provided by investing activities
|
|
(88,139
|
)
|
|
4
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from advances from officer
|
|
500
|
|
|
10,000
|
|
|
Payment of advances from officer
|
|
(500
|
)
|
|
—
|
|
|
Proceeds from convertible notes payable – related parties
|
|
16,000
|
|
|
—
|
|
|
Proceeds from note payables
|
|
100,000
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
116,000
|
|
|
10,000
|
|
|
NET INCREASE IN CASH
|
|
15,459
|
|
|
478
|
|
|
CASH - Beginning of period
|
|
8,123
|
|
|
24,608
|
|
|
CASH - End of period
|
$
|
23,582
|
|
$
|
25,086
|
|
|
SUPPLEMENTAL CASH FLOW DISCLOSURES:
|
|
|
|
|
|
|
|
Interest expense
|
$
|
—
|
|
$
|
—
|
|
|
Income taxes
|
$
|
—
|
|
$
|
—
|
|
|
NON-CASH FINANCING AND INVESTING TRANSACTIONS
|
|
|
|
|
|
|
|
Conversion of advances from officer - related party to convertible notes payables – related party
|
$
|
6,000
|
|
$
|
—
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
ENXNET,
INC
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE
1 - BASIS OF PRESENTATION
The
accompanying unaudited consolidated financial statements of EnXnet, Inc. (“EnXnet” or “the Company”)
for the three months ended June 30, 2017 have been prepared in accordance with generally accepted accounting principles in
the United States of America, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for
interim financial information. Accordingly, the financial statements do not include all information and footnotes
required by generally accepted accounting principles in the United States for complete annual financial statements. In
the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments,
consisting of normal recurring adjustments, considered necessary for a fair presentation. The accompanying unaudited
consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in
the Company’s March 31, 2017 Annual Report on Form 10-K.
Reclassification
Certain amounts in the 20 16 financial statements
have been reclassified to conform to the 201 7 financial presentation. These reclassifications have no impact on net loss.
Recent Accounting Pronouncements
The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the Company's results of operation, financial position
or cash flows.
NOTE
2 – GOING CONCERN
The
Company has a working capital deficit and has incurred losses since inception. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. The financial statements do not include any adjustments that may
be necessary if the Company is unable to continue as a going concern.
Management
of the Company has undertaken certain actions to address these conditions. Funds required to carry out management’s
plans are expected to be derived from future stock sales and borrowings from outside parties. There can be no assurances that
the Company will be successful in executing its plans.
NOTE
3 – NOTES PAYABLE
|
Note payable-stockholder consists of the following:
|
|
|
|
|
|
|
June 30,
2017
|
|
|
March 31,
2017
|
|
|
5.5% note payable to a stockholder, due November 30, 2017
with the Company having a six month optional extension period to May 30, 2018.
|
|
$
|
100,000
|
|
|
$
|
—
|
|
|
Convertible notes payable-related party consists of the following:
|
|
|
|
|
|
|
June 30,
2017
|
|
|
March 31,
2017
|
|
|
2% convertible notes payable to Ryan Corley, President of the Company, due on demand, convertible into a maximum of 36,998,984 common shares
|
|
|
741,455
|
|
|
|
719,455
|
|
|
2% convertible note payable to an entity controlled by Ryan Corley, President of the Company, due on demand, convertible into a maximum of 978,000 common shares
|
|
|
48,900
|
|
|
|
48,900
|
|
|
3% convertible notes payable to an entity controlled by Ryan Corley, President of the Company, due on demand, convertible into a maximum of 1,619,500 common shares
|
|
|
111,350
|
|
|
|
111,350
|
|
|
2% convertible notes payable to Douglas Goodsell, a related party, due on demand, convertible into a maximum of 519,828 common shares
|
|
|
10,396
|
|
|
|
10,396
|
|
|
Total notes payable-related party
|
|
$
|
912,101
|
|
|
$
|
890,101
|
|
|
Convertible notes payable consist of the following:
|
|
|
|
|
|
|
June 30,
2017
|
|
|
March 31,
2017
|
|
|
7% convertible notes payable to stockholders, which is past due, convertible into a maximum of 500,000 common shares,
|
|
|
100,000
|
|
|
|
100,000
|
|
|
7% convertible notes payable to stockholders, due August 12, 2018 convertible into a maximum of 250,000 common shares
|
|
|
50,000
|
|
|
|
50,000
|
|
|
4% convertible notes payable to a stockholder, due on demand, convertible into a maximum of 350,000 common shares
|
|
|
175,000
|
|
|
|
175,000
|
|
|
2% convertible notes payable to stockholders, due on demand, convertible into a maximum of 1,100,000 common shares
|
|
|
25,000
|
|
|
|
25,000
|
|
|
Total notes payable
|
|
$
|
350,000
|
|
|
$
|
350,000
|
|
On
April 1, 2017, the Company converted $6,000 of the advances from an officer into a convertible note payable. The note bears interest
of 2% and is convertible with the accrued interest into common shares of the Company at a rate of $0.05 per share.
On
May 30, 2017, the Company’s subsidiary, EnXnet Energy Company, LLC, entered into a loan agreement with an individual
to borrow $100,000 for an initial term of 6 months with the option to extend the note for an additional 6 months. The note is
due November 30, 2017 with interest of 5.5% in the amount of $2,750 which was paid in June 30, 2017. The Company also issued
100,000 shares of Common Stock with a fair value of $4,000 which was recognized as interest expense during the three months
ended June 30, 2017. The loan is to be used to secure a one hundred thousand ($100,000) Cash Oil and Gas Blanket Activity Bond
with the State of Colorado.
On
June 16, 2017, the Company borrowed $16,000 from our CEO, Ryan Corley. The note bears interest of 2% and is convertible with the
accrued interest into common shares of the Company at a rate of $0.016 per share.
NOTE
4 – ADVANCES FROM OFFICER AND STOCKHOLDER
Advances
from Stockholder:
Advances
from a stockholder at June 30, 2017 and March 31, 2017 was $31,000.
Advances
from Officer:
Our
CEO, Ryan Corley, has made advances to the Company in prior years. During the quarter ended June 30, 2017 and the year ended March
31, 2017, respectively, the CEO made additional unsecured advances totaling $500 and $21,000. During the quarter ended June 30,
2017 and the year ended March 31, 2017, the Company made payments on these advances of $500 and $-0-, respectively. At June 30,
2017 and March 31, 2017, respectively, advances from the CEO were $-0- and $6,000, respectively.
The
Company has notes payable to the CEO in the aggregate amount of $741,455 and $719,455 as of June 30, 2017 and March 31,
2017, respectively. Accrued interest owed on these notes at June 30, 2017 and March 31, 2017 is $193,680 and $190,007,
respectively. These notes and accrued interest are convertible into 40,206,107 and 38,901,957 shares of restricted common
stock of the Company, as of June 30, 2017 and March 31, 2017, respectively.
At
June 30, 2017 and March 31, 2017, advances from the entity controlled by the CEO was $10,500 and notes payable totaled
$160,250. Accrued interest owed on these notes at June 30, 2017 and March 31, 2017 is $33,134 and $32,449, respectively.
These notes and accrued interest are convertible into 3,119,621 and 3,104,417 shares of restricted common stock of the
Company, as of June 30, 2017 and March 31, 2017, respectively.
The
Company conducts its business from the office of its CEO, Ryan Corley, rent free.
NOTE
5 – STOCK OPTIONS
On
July 24, 2001, the Company filed with the SEC Form S-8, for its 2002 Stock Option Plan, (the Plan). An aggregate amount of common
stock that may be awarded and purchased under the Plan is 3,000,000 shares of the Company’s common stock.
A
summary of the status of the Company’s stock options as of June 30, 2017 is presented below:
|
|
|
June 30, 2017
|
|
|
Options outstanding at beginning of year
|
|
|
1,590,000
|
|
|
Options granted
|
|
|
—
|
|
|
Options exercised
|
|
|
—
|
|
|
Options canceled
|
|
|
—
|
|
|
Options outstanding at end of year
|
|
|
1,590,000
|
|
The
following table summarizes the information about the stock options as of June 30, 2017:
|
Range
of
Exercise Price
|
|
|
Number
Outstanding
|
|
|
Weighted
Average
Remaining
Contractual Life
Years
|
|
|
Weighted
Average
Exercise Price
(Total shares)
|
|
|
Number
Exercisable
|
|
|
Weighted
Average
Exercise Price
(Exercisable
shares)
|
|
|
$
|
.12
|
|
|
|
1,590,000
|
|
|
|
0.05
|
|
|
$
|
.12
|
|
|
|
1,590,000
|
|
|
$
|
.12
|
|
NOTE
6
-
SUBSEQUENT EVENTS
On
July 13, 2017, the Company modified outstanding options that were expiring. The Company modified the terms to extend 1,190,000
options for 11 years with a strike price of $.08. The Company also modified the terms to extend and reprice 300,000 for 6 to
7 years at a strike price of $. 12.
On
July 3 I, 2017, the Company issued 125,000 valued at $2,250 to a member of the Board of Directors. Also, the Company issued 300,000
common shares valued at $5,400 to the Chief Financial Officer.
|
|
ITEM
2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS.
This
Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Exchange Act which
represent the expectations or beliefs concerning future events that involve risks and uncertainties, including but not limited
to the demand for Company products and services and the costs associated with such goods and services. All other statements other
than statements of historical fact included in this Quarterly Report including, without limitation, the statements under “Management’s
Discussion and Analysis or Plan of Operations” and elsewhere in the Quarterly Report, are forward-looking statements. While
the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to have been correct.
The
following discussion of the results of operations and financial conditions should be read in conjunction with the financial statements
and related notes appearing in this report.
EnXnet,
Inc. was formed under the laws of the State of Oklahoma on March 30, 1999. On August 7, 2015, the Company incorporated EnXnet
Energy Company LLC. in the State of Colorado as a wholly owned subsidiary. EnXnet Inc. and its wholly owned subsidiary, EnXnet
Energy Company, LLC. (“the Company”) is a natural gas and petroleum exploitation, development and production company
engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region. The Company’s principal
business strategy is to enhance stockholder value by generating and developing high-potential exploitation resources in these
areas. The Company’s principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either
directly or indirectly, and the exploitation and development of properties subject to these leases. The Company has leased property
in Colorado and is currently searching for additional opportunities in the natural gas and petroleum industry. Our initial goal
has been to lease the mineral rights of acreage that has a high likelihood of becoming a producing property. We will require additional
funding to drill and complete a producing natural gas and petroleum well.
The
Company currently can satisfy its current cash requirements for approximately 90 days and has a plan to raise additional working
capital by the sale of shares of the Company common stock to select perspective individuals and from additional borrowings. This
plan should provide the additional necessary funds required to enable the Company to continue exploration and drilling program
until the Company can generate enough cash flow from sales to sustain its operations.
The
Company does not anticipate any significant cash requirements for the purchase of any facilities.
The
Company has no full-time employee and two consultants. The president and CEO of the Company is not receiving or accruing a salary
at this time.
Results
of Operations – Three months ended June 30, 2017 and 2016.
The
Company incurred operating expenses of $10,227 and $16,686 for the three months ended June 30, 2017 and 2016, respectively, a
decrease of $6,459 or 39%. The decrease in operating expenses for the three months ended June 30, 2017 when compared to the three-month
period ended June 30, 2016 is attributed to a decrease of $6,740 in professional services from our auditors and SEC reporting
service. All other expenses increased $281 over the prior period.
During
the three months ended June 30, 2017 and 2016 we incurred interest expenses of $13,369 and $8,006, respectively. The current period
expense includes $4,000 of interest expense from the issuance of 100,000 common shares as additional interest to the note holder.
During
the three months ended June 30, 2017 and 2016 we incurred net losses of $23,596 and $24,692, respectively.
Liquidity
and Capital Resources.
From
inception through June 30, 2017, the Company has issued 54,501,518 shares of its Common Stock to officers, directors and outside
shareholders. The Company has little operating history and no material assets other than cash and restricted cash and the
oil and gas properties that are unproven. The Company has $23,582 of unrestricted cash and $23,161 of restricted cash as of June
30, 2017.
The
Company has incurred operating losses each year since its inception and has a working capital deficit at June 30, 2017. At June
30, 2017 and March 31, 2017, the working capital deficit was $1,950,615 and $1,813,764, respectively. The working capital deficit
and operating losses raise substantial doubt about the Company’s ability to continue as a going concern. As a result
of these factors, the Company’s independent certified public accountants have included an explanatory paragraph in their
reports on the Company’s March 31, 2017 financial statements which expressed substantial doubt about the Company’s
ability to continue as a going concern.
Contractual
Obligations.
At
the present time, the Company has no material commitments for capital expenditures. If capital expenditures are required
after operations commence, the Company will pay for the same through the sale of common stock, or through loans from third parties. There
is no assurance, however, that such financing will be available and in the event such financing is not available, the Company
may have to cease operations.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES.
Management’s
discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements.
These statements have been prepared in accordance with generally accepted accounting principles in the United States of America.
Use
of estimates in preparation of financial statements
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain
estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, based on historical experience,
and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions. The following critical accounting policies
rely upon assumptions, judgments and estimates and were used in the preparation of our consolidated financial statements:
Cash
and cash equivalents
Cash
equivalents are highly liquid investments with an original maturity of three months or less.
Use
of estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily
requires management to make estimates and assumptions that affect the amounts reported in the financial statements. We regularly
evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Actual results could
differ from those estimates.
Fair
Value of Financial Instruments
Under
FASB ASC 825 the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate
value.
The
Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and debt. The
Company believes that the carrying amounts approximate fair value for all such instruments.
FASB
ASC 820 defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurements. Topic
No. 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (exit price). Topic No. 820 classifies the inputs used
to measure fair value into the following hierarchy:
|
|
Level 1:
|
Quoted prices for identical
assets or liabilities in active markets.
|
|
|
Level 2:
|
Quoted market prices for similar assets or liabilities
in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived
valuations whose inputs are observable or whose significant value drivers are observable.
|
|
|
Level 3:
|
Pricing inputs are unobservable for the assets
and liabilities, including situations in which there is little to no market activity.
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Stock
Based Compensation
FASB
ASC 718 requires that measurement of the cost of employee services received in exchange for an award of equity instruments be
based on the grant-date fair value of the award. Such costs are recorded over the periods employees are required to render services
in exchange for the awards.
Income
taxes
Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected
to reverse.
We
have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss
carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent
that we will not realize a future tax benefit, a valuation allowance is established.
Basic
and diluted net loss per share
Basic
loss per share is computed using the weighted average number of shares of common stock outstanding during each period. Diluted
loss per share includes the dilutive effects of common stock equivalents on an “as if converted” basis. For the periods
ended June 30, 2017 and 2016, potential dilutive securities had an anti-dilutive effect and were not included in the calculation
of diluted net loss per common share
Recent
Accounting Pronouncements
The
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operation, financial position or cash flows.
Unaudited
Financial Statements
The
accompanying unaudited financial statements for the three months ended June 30, 2017 have been prepared in accordance with generally
accepted accounting principles for interim financia1 information. In the opinion of management all adjustments considered
necessary for a fair presentation, which consist of normal recurring adjustments, have been included. The accompanying
unaudited financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s
March 31, 2017 Annual Report on Form 10-K.
Off
Balance Sheet Arrangements
We
currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect
on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources.
CURRENT
TRADING MARKET FOR THE COMPANY’S SECURITIES.
Currently
the Company’s stock is traded under the symbol “EXNT” on the OTC PINK. There can be no assurance that an active
or regular trading market for the common stock will develop or that, if developed, will be sustained. Various factors, such as
operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates by securities
analysts and other factors may have a significant impact on the market of the Company securities. The market price for the securities
of public companies often experience wide fluctuations that are not necessarily related to the operating performance of such public
companies such as high interest rates or impact of overseas markets.