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Form 10-Q
SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C.
__________________
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
__________________
For the Quarter ended January 31, 2003 Commission file No. 0-0767
__________________
LINCOLN INTERNATIONAL CORPORATION
______________________________________________________
(Exact Name of Registrant as specified in its charter)
Kentucky 61-0575092
______________________________ ______________________
(State of other Jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
2200 Greene Way, Suite 101, Louisville, Kentucky 40220
________________________________________________ __________
(Address or principal executive offices) (Zip Code)
(Registrants Telephone Number, Including Area Code) (502) 671-0010
Indicate by check whether the registrant (1) has filed reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or of such shorter period that the registrant was required
to file such reports) and has been subject to such filing requirements for the
past 90 days.
YES [X] NO [ ]
Indicate the numbers of shares outstanding of each of the issuer' classes of
common stock, as of the close of the period covered by this report: 8,792 of the
(no-par) voting common stock.
LINCOLN INTERNATIONAL CORPORATION
INDEX
PAGES
Part I: Financial Information
Item 1. Financial Statements:
Balance Sheets as of January 31, 2003
and July 31, 2002 3
Statements of Operations for the quarters
and year-to-date periods ended January 31, 2003
and January 31, 2002 4 - 5
Statements of Cash Flows for the
year-to-date periods ended January 31, 2003
and January 31, 2002 6
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 11
Part II: Other Information
Item 6 12
Signature 13
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
BALANCE SHEETS
(Unaudited)
1/31/03 7/31/02
________________ ______________
ASSETS
Current assets:
Cash $ 130,293 $ 326,995
Accounts receivable, net of allowance for
doubtful accounts of $7,000 116,984 49,664
Note receivable, net of allowance for
doubtful accounts of $35,100 46,014 48,462
Other receivables 478 478
Prepaid expenses 11,270 10,120
________________ ______________
Total current assets 305,039 435,719
________________ ______________
Net property, plant and equipment 925,863 976,431
________________ ______________
Noncurrent assets:
Goodwill, net 119,134 138,987
Deferred tax asset 236,906 245,644
________________ ______________
Total noncurrent assets 356,040 384,631
________________ ______________
Total assets $ 1,586,942 $ 1,796,781
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 44,483 $ 41,072
Obligation under capital lease 4,188 4,235
Accounts payable 70,301 63,452
Accrued expenses 3,234 43,810
________________ ______________
Total current liabilities 122,206 152,569
________________ ______________
Noncurrent liabilities:
Long-term debt, less current maturities 497,139 521,161
Obligation under capital lease 5,307 7,337
Deferred tax liability 236,906 245,644
________________ ______________
Total noncurrent liabilities 739,352 774,142
________________ ______________
Total liabilities 861,558 926,711
________________ ______________
Stockholders' equity:
Common stock, no par value, 3,000,000 shares
authorized, 8,792 issued and outstanding 1,994,718 1,994,718
Retained earnings (deficit) (1,019,334) (874,648)
Accumulated other comprehensive income - unrealized
loss on investment (250,000) (250,000)
________________ ______________
Total stockholders' equity 725,384 870,070
________________ ______________
Total liabilities and stockholders' equity $ 1,586,942 $ 1,796,781
================ ==============
The accompanying notes are an integral part of the Consolidated Financial
Statements.
3
LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED JANUARY 31
(UNAUDITED)
1/31/03 1/31/02
______________ _____________
Revenues $ 375,097 $ 334,944
______________ _____________
Costs and expenses:
Cost of revenues 212,785 237,208
Operating, general and administrative expenses 176,733 262,512
______________ _____________
Total costs and expenses 389,518 499,720
______________ _____________
Loss from operations (14,421) (164,776)
Other income (expense):
Interest income 542 7,208
Loss on uncollectible note receivable 0 (2,005)
Interest expense (10,090) (15,004)
______________ _____________
Total other income (expense) (9,548) (9,801)
______________ _____________
Loss before income taxes (23,969) (174,577)
Benefit from income taxes 0 0
______________ _____________
Net income (loss) $ (23,969) $ (174,577)
============== =============
Net income (loss) per common share $ (2.73) $ (19.87)
============== =============
The accompanying notes are an integral part of the Consolidated Financial
Statements.
4
LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31
(UNAUDITED)
1/31/03 1/31/02
______________ ______________
Revenues $ 675,960 $ 644,620
______________ ______________
Costs and expenses:
Cost of revenues 440,282 492,490
Operating, general and administrative expenses 361,978 522,452
______________ ______________
Total costs and expenses 802,260 1,014,942
______________ ______________
Loss from operations (126,300) (370,322)
Other income (expense):
Interest income 2,519 18,096
Loss on uncollectible note receivable 0 (4,033)
Interest expense (20,901) (26,514)
______________ ______________
Total other income (expense) (18,382) (12,451)
______________ ______________
Loss before income taxes (144,682) (382,773)
Benefit from income taxes 0 0
______________ ______________
Net loss $ (144,682) $ (382,773)
============== ==============
Net loss per common share $ (16.46) $ (43.56)
============== ==============
The accompanying notes are an integral part of the Consolidated Financial
Statements.
5
LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JANUARY 31
(Unaudited)
1/31/03 1/31/02
_______________ ____________
Cash flows from operating activities:
Net loss $ (144,682) $ (382,773)
Adjustments to reconcile net loss
to net cash used in operating activities
Depreciation and amortization 70,417 96,084
Bad debt expense 11,065 0
(Increase) decrease in:
Receivables (75,937) 2,317
Prepaid expenses (1,150) (5,692)
Increase (decrease) in:
Accounts payable 6,849 2,325
Accrued expenses (40,576) (17,124)
_______________ ____________
Net cash used in operating activities (174,014) (304,863)
_______________ ____________
Cash flows from investing activities:
Purchase of property and equipment 0 (15,820)
_______________ ____________
Cash flows from financing activities:
Principal payments on capital lease obligation (2,077) (2,119)
Principal payments on long-term debt (20,611) (18,826)
_______________ ____________
Net cash provided by (used in) financing activities (22,688) (20,945)
_______________ ____________
Net increase (decrease) in cash (196,702) (341,628)
Cash at beginning of the year 326,995 974,897
_______________ ____________
Cash at end of period $ 130,293 $ 633,269
=============== ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 20,928 $ 26,494
=============== ============
The accompanying notes are an integral part of the Consolidated Financial
Statements.
6
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - MANAGEMENT'S STATEMENT
In the opinion of management the accompanying unaudited financial statements
contain all adjustments (all of which are normal and recurring in nature)
necessary to present fairly the financial position of Lincoln International
Corporation at January 31, 2003 and July 31, 2002 and the results of operations
for the quarters and year to date periods ended January 31, 2003 and January 31,
2002. The notes to the financial statements contained in the 2002 Annual Report
to Shareholders and incorporated by reference into the 2002 Form 10-K should be
read in conjunction with these financial statements.
NOTE 2 - GOING CONCERN
As shown in the accompanying statements of operations, the Company has incurred
continuing losses from operations. Management has developed a plan to increase
sales, as well as their profit margin, and to decrease operating expenses. The
Company is also actively searching for existing bookkeeping companies to
acquire. The ability of the Company to continue as a going concern is dependent
on the success of this plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
7
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 2003
Management's Discussion and Analysis of Financial Conditions and Results of
Operations
The results and the nature of operations for the company changed
dramatically since 1998. Until March 5, 1999 the company had owned and operated
The Bourbon Stockyard, a livestock auction on approximately 21 acres of land
situated in downtown Louisville, Kentucky. The cattle market was changing
significantly as fewer livestock producers were taking their livestock to
auctions such as those operated by the company. There was a definite increasing
trend of selling directly to purchasers or end users such as packing and
slaughterhouses. In July of 1995, the company entered into a ten-year operating
lease with Michigan Livestock Exchange in East Lansing, Michigan, an agriculture
cooperative with sales nearing One Billion Dollars and vast expertise in the
livestock business. It was assumed that Michigan Livestock Exchange, under the
10-year Lease Management Agreement, could provide significantly more capital
resources and expertise than the company itself could provide over the
succeeding ten years. The stockyard facilities necessary to operate the auction
covered approximately sixteen acres of the total 21 acres, and were in dire need
of repairs. It was anticipated that capital expenditures to maintain the
facilities would rise significantly just to maintain the property/facilities in
order to remain certified by the U.S. Department of Agriculture and the
Commonwealth of Kentucky. The lease proceeds from the property were originally
$18,000 per month under the management agreement and this was subsequently
reduced to $13,000 per month as a result of the settlement of litigation. This
cash flow was sufficient to meet the current obligations of the company, which
in fiscal 1998 were approximately $197,000 since the company had only one
employee, rented minimal office space, and its only debt service was on a
mortgage note payable of $380,205 with monthly payments of $3,283. Accordingly,
the proceeds from leases related to the property provided the necessary
liquidity into the near and longer term future in order to allow management the
time to develop other sources of revenue from the property or to develop the
portions of the property not required by the livestock auction operations.
On May 4, 1998, the Board of Directors of the company approved, but put on
hold, an Intrastate Stock Offering aimed at raising a minimum of $400,000 to be
used for working capital and capital expenditures related to maintaining the
property for operations and at the same time, developing warehouses or office
rental space on the perimeter of the property. By the end of fiscal 1998, the
company had been approached by Home of the Innocents, Inc., a not-for-profit
health care provider to special needs children, with an expressed interest in
purchasing 5 to 7 acres of the site. The company did not desire to break up the
property and thereby diminish its value and the company had serious concerns
about environmental issues because of past uses of the property, for example
about 6 acres had been used as a railroad bed for many decades. Accordingly, the
company later proceeded with an Intrastate Stock Offering which culminated
January 4, 1999, raising $597,000 in capital to be used for maintenance and
improvements, of possible rentable warehouses and/or office/warehouse on the
portion of the property not used in the livestock auction operations.
In late 1998, the company received an offer to purchase part of the Bourbon
Stock Yard real estate. On March 5, 1999 Lincoln International Corporation sold
The Bourbon Stockyards providing $3,377,991 in capital net of expenses. Out of
those sale proceeds the first Mortgage on the property to Stock Yard Bank in the
amount of $385,605 was paid off. The company began evaluating various investment
and acquisition options.
8
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
JANAURY 31, 2003
Faced with significant capital gains on the sale proceeds as well as the
lost revenue stream from leasing the property, the company sought to purchase
professional office rental property under United States Code Section 1031, which
allows deferral of capital gains if the sales proceeds are timely reinvested in
property. Accordingly, on May 3, 1999 the company purchased a 3,500 square foot
office/warehouse at 11860 Capital Way in Louisville, Kentucky. Then on June 18,
1999 the company purchased approximately 44,311 square feet of professional
office space in three (3) buildings located at 2200, 2310, and 2211 Greene Way
in Louisville, Kentucky. The combined gross revenue from the four pieces of
property had the potential to generate gross revenue of $560,694 or $332,488 in
revenue net of expenses using historically provided expenses representing 37.77%
of gross income. This represented a cash flow larger than existed under leasing
the livestock auction business and more than adequate to meet existing
obligations and long term obligations, given the company had only one (1)
employee and at that time, no debt.
The company received a One Million Dollar line of credit, secured by a
mortgage against the property located at 2200, 2300, and 2211 Greene Way to be
used for property improvement, working capital and expenses related to seeking
new opportunities for the company. The acquisitions of commercial real estate by
the company resulted in a revenue stream and improved liquidity. They also
represent a capital resource, which if subsequently sold, could result in the
capital gains from such sale being totally obviated by the company's net
operating losses. It was anticipated the $1,000,000 line of credit could easily
be converted to a long-term, fixed rate mortgage given the fact that the
property purchased for $2,800,000 at 2200, 2211, and 2300 Greene Way had no debt
against it other than that represented by the line of credit.
On August 6, 1999 the Board of Directors of Lincoln approved the investment
of up to 1.5 million dollars in a newly formed corporation, Accounting USA, Inc.
Mr. Brian McDonald, MBA/CPA had established a company known as Accounting
Outsource Solutions, LLC, within the preceding 2-1/2 years. Under a Merger
Agreement, Accounting Outsource Solutions, LLC was converted into Accounting
USA, Inc. in return for 25% of the equity. Lincoln International Corporation in
return for its investment received 75% of the equity of Accounting USA. Inc.,
which was incorporated in the State of Nevada on September 30, 1999. On December
1, 2000, Accounting USA, Inc. merged into the Company. In exchange for the
minority interest, the Company issued 600 shares of the Company's common stock
to the minority interest. Accounting USA, Inc. provides accounting/bookkeeping
and payroll services for small to medium sized businesses primarily in the
Louisville area. It does, however, service clients outside of the Louisville
area on a limited basis, including clients in Georgia, Vermont, and New
Hampshire. Accounting USA, Inc. has developed and provides Internet access for
its clients into its accounting platform. The business is not seasonal nor is it
dependant on any particular customers. Direct competition for the outsourcing of
the accounting/payroll business is in effect non-existent in the Louisville,
Kentucky area. Many small to medium sized businesses employ in-house personnel
to perform the accounting/bookkeeping responsibility although this is usually
done on a historical basis as compared with or contrasted to the services
provided by Accounting USA, Inc. on a "real time" basis. Accounting USA, Inc.'s
core functions are: accounts payable; accounts receivable; payroll; job cost;
bank reconciliation; time and billing; and financial statements. Accounting USA,
Inc. also provides numerous customized financial reports to its clients. The
primary market channels for Accounting USA, Inc. are direct sales and business
partnerships with banks, CPA's or other businesses.
9
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
JANUARY 31, 2003
The intent of Lincoln is to refine the services of Accounting USA, Inc. and the
sales of those services so t it can be replicated in other metropolitan markets
around the country. Management believes the services of Accounting USA, Inc.
meets a unique market niche, particularly with the Internet access available to
its clients. Given the outsourcing of accounting/bookkeeping is estimated to
save clients an average of 30% to 40% of the cost of doing the same service
in-house, it is believed by management the outsourcing concept of Accounting
USA, Inc. has potential for future expansion and growth. Accounting USA, Inc.
does not replace the services performed by the client's CPA, such as tax
preparation and audits. Accordingly, CPA's often find the bookkeeping performed
on behalf of their client facilitates the provision of their professional
services. Lincoln will continue to provide assistance and support to the
start-up efforts of Accounting USA, Inc. Subsequently, the Company increased the
amount of investment in Accounting USA.
On August 16, 2002, the CEO for Accounting USA, Mr. Brian W. McDonald, resigned
to pursue other interests. The Company did not have a non-compete agreement with
Mr. McDonald and is unable to assess what adverse impact, if any, might result
from Mr. McDonald's departure. The Company immediately began a search for new
leadership and the operations continued in a stable manner because of the
increased effort of the management team. Approximately one month after Mr.
McDonald's departure one of the Company's Client Account Specialists ("CAS")
resigned and concurrently ten (10) clients left with directions they were moving
their business to a company established by the departing CAS, Ms. Suzanne
Luckett. The Company filed a lawsuit in October 2002, and on March 7, 2003 filed
a Motion to Amend its Complaint to include another former Client Account
Specialist by the name of Stephanie Colin to be named as a Defendant in this
lawsuit. The Company has learned that Ms. Colin is one of the owners of the
company to which Accounting USA business moved concurrent with Ms. Colin's
resignation. Many of those who left Accounting USA had been serviced by Ms.
Colin and Ms. Luckett.
In February 2003, the Company entered into an agreement with Mr. Ken Berryman to
serve as President and CEO of Accounting USA. Mr. Berryman's primary initial
functions will be on marketing efforts and/or service refinement and improvement
as well as implementing a cost reduction plan to get the Company on a break-even
basis.
The Company continues to evaluate its options in regard to the future of
Accounting USA and believes the current leadership brings a much needed
marketing expertise and experience. The Company continues to add new clients and
management believes marketing opportunities exist that have not been effectively
explored.
At the December 6, 2002 Shareholder Annual Meeting a one (1) for three (3)
Reverse Split was approved by a majority of the Shareholders. On February 18,
2003, the Reverse Split terminated, and based upon current results, it is
expected the total number of shares after the Reverse Split will be 2,771 and
the total number of Shareholders reduced from 384 to 101. It is expected the
Company will have to pay out approximately $7,500 for the fractional shares
terminated by the Reverse Split. Completion of the Reverse Split will allow the
Company to be in a position to "go private" and save approximately $40,000 to
$45,000 per year in audit and legal fees. Furthermore, the Company is now in a
position to sell the "Public Shell" at some point in time and will begin efforts
to find a buyer for the Shell.
On December 15, 2002, the Company sold its payroll business to Paychex, Inc. and
under that sales agreement the Company received $58,000 in January 2003 and is
expected to receive and additional $50,000 under the Purchase Agreement. This
business had previously been outsourced to Payday Solutions, Inc. and under the
agreement, Accounting USA was receiving no income from the payroll portion of
the services provided with the revenue simply flowing through Accounting USA.
The winter months of October, November and December traditionally have not been
good sales months for the accounting services provided by Accounting USA. It is
expected that during the spring of 2003 the sales and revenue will increase. The
Company is currently evaluating, as well as implementing, further costs savings
in regard to its sales efforts and expect the results of that to manifest itself
in the next quarter.
10
LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
JANUARY 31, 2003
RESULTS OF OPERATIONS FOR ACCOUNTING USA, INC.
STATEMENT OF INCOME FOR ACCOUNTING USA, INC.
Total revenue increased by $40,153 for the quarter ended January 31, 2003
compared to the same quarter one year ago. The primary factor in this increase
was the proceeds from the sale of the payroll business. The Company's sales
force remains in place and it is expected revenue will increase approximately
$3,000 monthly or $36,000 in annual revenue posted each month. Accounting
department cost decreases reflect the loss of Client Account Specialists ("CAS")
having left in conjunction with lost business.
BALANCE SHEET FOR ACCOUNTING USA, INC.
The company's accounts receivable (net of reserve) increased by 42%, based upon
open receivables at January 31, 2002 of $82,138 compared to open receivables of
$116,984 at January 31, 2003. The increase is attributable to the sale and
receivable from the sale of the payroll business.
Gross tangible fixed assets decreased from their January 31, 2002 position of
$211,988 to the January 31, 2003 position of $105,487, or a decrease of
$106,501, primarily from depreciation. The company is not anticipating making
any significant expenditures in the near future for fixed assets.
The company is currently amortizing an intangible asset referred to as Goodwill
associated with the acquisition of a competitor's client base. As of January 31,
2003, the gross intangible asset basis was $125,322 with accumulated
amortization of $53,788. As of January 31, 2002, the gross intangible asset
basis was $125,322 with accumulated amortization of $30,884.
Trade accounts payables increased from their January 31, 2002 position of
$172,410 to their January 31, 2003 position of $197,470.
Term debt of the company decreased from the prior year, with $60,822 and $91,173
outstanding for the periods of January 31, 2003 and 2002, respectively.
ACQUISITION OR DISPOSITION OF ASSETS
The Company currently has property located at 2211 Greene Way, Louisville,
Kentucky listed for sale for $1,375,000. In December, a new three-year lease was
executed with the tenant occupying most of the building with a $4,000 decrease
in monthly rent over the life of the lease, but it is expected that securing the
long-term tenant will result in a relatively quick sale of the property.
LIQUIDITY AND CAPITAL NEEDS
The company currently has approximately $77,000 in cash, expects to sell its
payroll business for approximately $108,000 and expects to sell the above real
estate to have available the liquidity needed. With Accounting USA, Inc. losses
expected to stop in May of 2003, sufficient liquidity and capital are available
for operations.
LITIGATION
The Company has no litigation current, pending or threatened. It did file a
lawsuit in October of 2002 against a former employee, Suzanne Luckett, in
relation to former Accounting USA, Inc. clients moving to a company she formed
and is servicing. In March 2003, the Company filed a Motion to Amend its
Complaint to include as an additional Defendant, Ms. Stephanie Colin, also a
former employee and a principal in the Company that has received several clients
who were serviced by Ms. Luckett and Ms. Colin when they were employees of
Accounting USA, Inc.
11
LINCOLN INTERNATIONAL CORPORATION
PART II: Other Information
ITEM 6.
NO DIVIDENDS WERE PAID BY THE COMPANY DURING THE INTERIM PERIOD.
Lincoln International Corporation was not required to file a Form 8K during the
current quarter.
12
SIGNATURES
Pursuant to the requirement 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.
LINCOLN INTERNATONAL CORPORATION
/s/ LEE SISNEY
________________________________
Lee Sisney, President
Dated this 12th day of March, 2003
13
CERTIFICATION
I, Lee Sisney, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Lincoln International
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: March 13, 2003
/s/ LEE SISNEY
______________________
Lee Sisney
President and CFO