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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 April 30, 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)
2300 Greene Way
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: 2,774 of the
(no-par) voting common stock.
LINCOLN INTERNATIONAL CORPORATION
INDEX
PAGES
Part I: Financial Information
Item 1. Financial Statements:
Balance Sheets as of April 30, 2003
and July 31, 2002 3
Statements of Operations for the quarters
and year-to-date periods ended April 30, 2003
and April 30, 2002 4 - 5
Statements of Cash Flows for the
year-to-date periods ended April 30, 2003
and April 30, 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)
4/30/03 7/31/02
____________ ____________
ASSETS
Current assets:
Cash $ 33,301 $ 326,995
Accounts receivable, net of allowance for
doubtful accounts of $7,000 for 2002 29,594 49,664
Note receivable, net of allowance for
doubtful accounts of $35,100 46,540 48,462
Other receivables 478 478
Prepaid expenses 5,361 10,120
____________ ____________
Total current assets 115,274 435,719
____________ ____________
Net property, plant and equipment 900,578 976,431
Noncurrent assets:
Goodwill, net 109,208 138,987
Deferred tax asset 235,689 245,644
____________ ____________
Total noncurrent assets 344,897 384,631
____________ ____________
Total assets $ 1,360,749 $ 1,796,781
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 45,434 $ 41,072
Obligation under capital lease 4,322 4,235
Accounts payable 39,055 63,452
Accrued expenses 13,099 43,810
Deferred rental income 1,842 0
____________ ____________
Total current liabilities 103,752 152,569
____________ ____________
Noncurrent liabilities:
Long-term debt, less current maturities 485,355 521,161
Obligation under capital lease 4,045 7,337
Deferred tax liability 235,689 245,644
____________ ____________
Total noncurrent liabilities 725,089 774,142
____________ ____________
Total liabilities 828,841 926,711
____________ ____________
Stockholders' equity:
Common stock, no par value, 3,000,000 shares
authorized, 2,774 issued and outstanding (8,792 in 2002) 1,994,958 1,994,718
Retained earnings (deficit) (1,210,050) (874,648)
Treasury stock (3,000) 0
Accumulated other comprehensive income - unrealized
loss on investment (250,000) (250,000)
____________ ____________
Total stockholders' equity 531,908 870,070
____________ ____________
Total liabilities and stockholders' equity $ 1,360,749 $ 1,796,781
============ ============
The accompanying notes are an integral part of the Consolidated Financial Statements.
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LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED APRIL 30
(UNAUDITED)
4/30/03 4/30/02
____________ ____________
Revenues $ 155,084 $ 331,716
____________ ____________
Costs and expenses:
Cost of revenues 215,989 220,152
Operating, general and administrative expenses 120,380 241,938
____________ ____________
Total costs and expenses 336,369 462,090
____________ ____________
Loss from operations (181,285) (130,374)
____________ ____________
Other income (expense):
Interest income 910 4,562
Loss on uncollectible note receivable 0 (1,838)
Interest expense (10,342) (16,953)
____________ ____________
Total other income (expense) (9,432) (14,229)
____________ ____________
Loss before income taxes (190,717) (144,603)
Benefit from income taxes 0 0
____________ ____________
Net loss $ (190,717) $ (144,603)
============ ============
Net loss per common share $ (47.49) $ (16.45)
============ ============
The accompanying notes are an integral part of the Consolidated Financial Statements.
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LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED APRIL 30
(UNAUDITED)
4/30/03 4/30/02
____________ ____________
Revenues $ 831,044 $ 976,336
____________ ____________
Costs and expenses:
Cost of revenues 656,271 712,642
Operating, general and administrative expenses 482,358 764,390
____________ ____________
Total costs and expenses 1,138,629 1,477,032
____________ ____________
Loss from operations (307,585) (500,696)
____________ ____________
Other income (expense):
Interest income 3,429 22,658
Loss on uncollectible note receivable 0 (5,871)
Interest expense (31,243) (43,467)
____________ ____________
Total other income (expense) (27,814) (26,680)
____________ ____________
Loss before income taxes (335,399) (527,376)
Benefit from income taxes 0 0
____________ ____________
Net loss $ (335,399) $ (527,376)
============ ============
Net loss per common share $ (54.94) $ (59.98)
============ ============
The accompanying notes are an integral part of the Consolidated Financial Statements.
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LINCOLN INTERNATIONAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED APRIL 30
(Unaudited)
4/30/03 4/30/02
____________ ____________
Cash flows from operating activities:
Net loss $ (335,399) $ (527,376)
Adjustments to reconcile net loss
to net cash used in operating activities
Depreciation and amortization 105,629 144,128
(Increase) decrease in:
Receivables 21,992 (16,661)
Prepaid expenses 4,759 7,718
Increase (decrease) in:
Accounts payable (24,397) (76,921)
Accrued expenses (30,711) (27,306)
Income taxes payable 0 (18,433)
Deferred rental income 1,842 1,842
____________ ____________
Net cash used in operating activities (256,285) (513,009)
____________ ____________
Cash flows from investing activities:
Purchase of property and equipment 0 (15,820)
____________ ____________
Cash flows from financing activities:
Proceeds from issuance of common stock 240 600
Purchase of treasury stock (3,000) (4,000)
Principal payments on capital lease obligation (3,205) (3,037)
Principal payments on long-term debt (31,444) (28,846)
____________ ____________
Net cash used in financing activities (37,409) (35,283)
____________ ____________
Net decrease in cash (293,694) (564,112)
Cash at beginning of the year 326,995 974,897
____________ ____________
Cash at end of period $ 33,301 $ 410,785
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 31,400 $ 17,069
============ ============
The accompanying notes are an integral part of the Consolidated Financial Statements.
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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 April 30, 2003 and July 31, 2002 and the results of operations
for the quarters and year to date periods ended April 30, 2003 and April 30,
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.
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LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
APRIL 30, 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.
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
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LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
APRIL 30, 2003
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.
The intent of Lincoln is to refine the services of Accounting USA, Inc. and the
sales of those services so 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. In prior 10Q's it was stated that the former CEO of
Accounting USA, did not have a non-compete agreement to prohibit involvement in
a competitive manner. The Company has learned that Mr. McDonald did in fact have
a non-compete agreement with Accounting USA, Inc. and that non-compete
agreement, by its' terms, survived the merger of Accounting USA, Inc. and
Lincoln International Corporation in December of 2000. The Company is currently
in litigation with two former employees of Accounting USA, Inc. and is
evaluating its' legal options and the effect of the non-compete agreement. The
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LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
APRIL 30, 2003
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. Depositions
of Ms. Luckett and Ms. Colin have been scheduled for June 5, 2003, and legal
counsel is requesting an October or November 2003 trial date.
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 2,774 and
the total number of Shareholders reduced from 384 to 104. It is expected the
Company will have to pay out approximately $13,560 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. The company is responding to an SEC request for
further information and when that is filed the reverse split will be completed.
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 an 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.
RESULTS OF OPERATIONS FOR ACCOUNTING USA, INC.
STATEMENT OF INCOME FOR ACCOUNTING USA, INC.
Total revenue decreased by $176,632 for the quarter ended April 30, 2003
compared to the same quarter one year ago. The primary factor in this decrease
was the departure of two Client Account Specialists who took clients with them.
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.
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LINCOLN INTERNATIONAL CORPORATION
PART 1: FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
APRIL 30, 2003
BALANCE SHEET FOR ACCOUNTING USA, INC.
The company's accounts receivable (net of reserve) decreased by 72%, based upon
open receivables at April 30, 2002 of $106,276 compared to open receivables of
$29,594 at April 30, 2003. The decrease is attributable to the loss of clients
to the departing Client Account Specialists.
Gross tangible fixed assets decreased from their April 30, 2002 position of
$180,038 to the April 30, 2003 position of $86,369, or a decrease of $93,669,
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 April 30,
2003, the gross intangible asset basis was $125,322 with accumulated
amortization of $59,514., As of April 30, 2002, the gross intangible asset basis
was $125,322 with accumulated amortization of $36,610.
Trade accounts payables decreased from their April 30, 2002 position of $174,872
to their April 30, 2003 position of $168,555.
Term debt of the company decreased from the prior year, with $52,869 and $83,803
outstanding for the periods of April 30, 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. The
company is moving, the first week of June, 2003, its operations in 2211 Greene
Way under a three (3) year lease to not only save rent but also to help sell the
building.
LIQUIDITY AND CAPITAL NEEDS
The company currently has approximately $27,000 in cash, expects to receive an
additional $50,000 from the sale of its payroll business 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. Nevertheless, the company is applying for a
$100,000 line of credit with Commonwealth Bank & Trust to be secured by a second
mortgage on 2211 Greene Way.
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. Discovery in the case begins June 5, 2003 and other parties
may be joined.
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 11th day of June, 2003
13
CERTIFICATION
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: June 11, 2003
/s/ LEE SISNEY
_________________
Lee Sisney
President and CFO
14