incurred a net loss of $2,291,585 for the year to June 30, a delayed annual report has detailed.

But chairman and acting CEO, William J. Midon, said the company has built sustainable quality which will result in significant future shareholder value.

In the just-released document, he complained that trading of the company's shares on the Bermuda Stock Exchange, like that of many other stock, continues to be minimal. Just 2,271 shares changed hands in the year to June 30.

He said, "We remain concerned that local companies listed on the Bermuda Stock Exchange appear to be undervalued, and that the majority of local company shares listed are so thinly traded.

"Discussions with various officials and local professionals do not suggest any near term change to this local exchange experience.'' The company's strategy is to be a non-dividend-paying, growth-orientated company realising increased shareholder value through appreciation of its company sponsored investments.

This strategy, he said, maximises the company's reinvestment opportunities allowing it to selectively broaden its deployment of relevant technologies in an environment of rapid change.

Mr. Midon said the company is now exceeding its business plan and will report profitable operating results for the first six months of the current fiscal year, "excluding the attribution of the start-up losses that accounting rules require us to report from our investment in the US based Attitude Network Ltd.'' The BSL loss was attributed in part to investment costs associated with start-up operations of Internet subsidiaries in Bermuda and the Bahamas. BSL subsidiary, Internet (Bermuda) Ltd. (IBL), projected 3,000 dial-based subscriptions by last month.

The company also was required to accept a proportionate share of initial start-up and operating losses in Attitude ($953,670).

There were also revenue shortfalls and one-time costs associated with the transition of the company from hardware sales to a provider of professional information technology services.

Mr. Midon said the transition required substantial redirection and staff recruitment, taking longer than originally planned.

Attitude, the US incorporated successor to Internet (Americas) Ltd., has happypuppy.com, what Mr. Midon called, "the recognised world leading web site in electronic games business, independently ranked consistently as one of the top 20 web sites in the world.'' He said, "Losses to date reflect expenses associated with start-up operations and developing the site content and audience.

"Attitude has enjoyed substantial growth in its advertising revenue, and is tracking to achieve month-to-month profitability early in its second full year of operations.

"A joint venture with Ford Modeling of New York was announced in November, 1996 to create a breakthrough health and lifestyle web site for the young female audience.

"Attitude recently completed a second round of financing raising capital of $1.5 million in a private placement of 600,000 shares of common stock at $2.50 per share.

"As a founding shareholder, the company continues to be the largest shareholder in Attitude, with 4,023,260 common shares. Based on the most recent sale price of stock at $2.50 in the private placement, the value of the company's equity in Attitude is $10,058,150 substantially in excess of the book value of its investment in Attitude.'' BSL's share holding in Attitude of 45.47 percent at June 30, was reduced to 42.23 percent subsequently, as a pre-condition of a private placement during this fiscal year.

BSL garnered revenues of $8.8 million, with gross profit near $4,000,000 after sales costs of $4.8 million. Expenses of $5.4 million yielded an operating loss of nearly $1.5 million. No dividends were paid relating to the period under review.