SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: August 31, 2004
|_| TRANSITION REPORT PURSUANT TO SECTION 13(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to________
COMMISSION FILE NUMBER: 0-29346
FRMO CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3754422
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
320 MANVILLE ROAD, PLEASANTVILLE, NY 10570
(Address of principal executive offices) (Zip Code)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE): (914) 632-6730
--------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by checkmark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, at October 1, 2004: 36,088,361
FRMO CORP.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2004
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1 Financial Statements......................................................................... 2
Balance Sheets - August 31, 2004 (Unaudited) and February 29, 2004 .......................... 3
Statements of Income (Unaudited) - Three and six months ended August 31, 2004 and 2003 ...... 4
Statements of Cash Flows (Unaudited) - Six months ended August 31, 2004 and 2003 ............ 5
Notes to Financial Statements (Unaudited) ................................................... 6
ITEM 2 Management's Discussion and Analysis of Results of Operations and Financial Condition ....... 8
ITEM 3 Quantitative and Qualitative Disclosures about Market Risk ..................................10
ITEM 4 Controls and Procedures .....................................................................10
PART II - OTHER INFORMATION
ITEM 4 Submission of Matters to a Vote of Security Holders .........................................11
ITEM 6 Exhibits and Reports on Form 8-K ............................................................11
SIGNATURES .........................................................................................11
CERTIFICATIONS .....................................................................................12
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FRMO CORP.
BALANCE SHEETS
AUGUST 31, FEBRUARY 29,
2004 2004
--------------------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 527,283 $ 406,110
Accounts receivable 55,930 41,637
Investments 221,438 36,900
--------------------------
Total current assets 804,651 484,647
--------------------------
Other assets:
Intangible assets, net of accumulated
amortization 56,036 56,458
--------------------------
Total other assets 56,036 56,458
--------------------------
Total assets $ 860,687 $ 541,105
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities $ 30,724 $ 20,188
Income taxes payable 62,902 22,112
Deferred income 10,546 12,031
--------------------------
Total current liabilities 104,172 54,331
Stockholders' equity:
Preferred stock - $.001 par value;
Authorized - 2,000,000 shares;
Issued and outstanding - 50 shares Series R -- --
Common stock - $.001 par value;
Authorized - 90,000,000 shares;
Issued and outstanding - 36,088,361 and 36,083,774
shares, respectively 36,088 36,084
Capital in excess of par value 3,343,571 3,334,135
Unrealized gain (loss) on marketable securities (14,426) 1,036
Retained earnings 241,186 109,144
--------------------------
3,606,419 3,480,399
Less: Receivables from shareholders for
common stock issuance 2,849,904 2,993,625
--------------------------
Total stockholders' equity 756,515 486,774
--------------------------
Total liabilities and stockholders' equity $ 860,687 $ 541,105
==========================
See notes to interim financial statements.
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FRMO CORP.
STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
2004 2003 2004 2003
----------------------- -----------------------
Revenues
Sub-advisory fees $ 930 $ -- $ 930 $ --
Consulting 35,321 17,153 75,453 35,679
Research fees 20,666 7,607 49,928 11,337
Subscription fees 1,909 1,667 3,818 2,667
Income from investments in
unconsolidated subsidiaries 48,989 -- 97,746 --
----------------------- -----------------------
Total Income 107,815 26,427 227,875 49,683
----------------------- -----------------------
Costs and expenses
Amortization 1,931 1,931 3,863 3,863
Contributed services 3,000 3,000 6,000 6,000
Accounting 7,805 2,250 10,305 4,500
Shareholder reporting 6,695 10,363 13,088 15,363
Office expenses 147 285 324 246
Other 18 116 18 236
----------------------- -----------------------
Total costs and expenses 19,596 17,945 33,598 30,208
----------------------- -----------------------
Income from operations 88,218 8,482 194,277 19,475
Dividend income 1,043 198 12,123 474
----------------------- -----------------------
Income from operations before provision
for income taxes 89,261 8,680 206,400 19,949
Provision for income taxes 36,240 2,613 74,358 5,807
----------------------- -----------------------
Net income $ 53,021 $ 6,067 $ 132,042 $ 14,142
========== ========== ========== ==========
Basic earnings per common share $ 0.01 $ 0.00 $ 0.02 $ 0.00
========== ========== ========== ==========
Diluted earnings per common share $ 0.01 $ 0.00 $ 0.02 $ 0.00
========== ========== ========== ==========
Average shares of common stock outstanding:
Basic 6,904,651 3,897,524 6,526,087 3,897,524
========== ========== ========== ==========
Diluted 6,954,651 3,947,524 6,576,087 3,947,524
========== ========== ========== ==========
See notes to interim financial statements.
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FRMO CORP.
Statements of Cash Flows
(Unaudited)
SIX MONTHS ENDED
AUGUST 31,
2004 2003
----------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 132,042 $ 14,142
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization of research agreements 3,863 3,863
Non-cash compensation 6,000 6,000
Changes in operating assets and liabilities:
Accounts receivable (14,293) 500
Accounts payable and accrued expenses 51,325 (15,867)
Deferred income (1,485) (2,341)
----------------------
Net cash provided by operating activities 177,452 6,297
----------------------
Cash flows from investing activities
Investment in limited partnership (200,000) --
----------------------
Net cash used in investing activities (200,000) --
----------------------
Cash flows from financing activities
Payment for release of stock held in escrow 143,721 --
----------------------
Net cash provided by financing activities 143,721 --
----------------------
Net increase in cash and cash equivalents 121,173 6,297
Cash and cash equivalents, beginning of period 406,110 135,003
----------------------
Cash and cash equivalents, end of period 527,283 141,300
======================
ADDITIONAL CASH FLOW INFORMATION
Interest paid $ -- $ --
======================
Income taxes paid $ 31,050 $ 5,840
======================
In June 2004, the Company issued common stock, valued at $3,440, to acquire an
interest in future advisory fee revenues.
See notes to interim financial statements.
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FRMO CORP.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED AUGUST 31, 2004
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information in response to the requirements of Article 10 of
Regulation S-X. Accordingly they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring items) necessary to present fairly the financial
position as of August 31, 2004; results of operations for the three months and
six months ended August 31, 2004 and 2003; and cash flows for the six months
ended August 31, 2004 and 2003. For further information, refer to the Company's
financial statements and notes thereto included in the Company's Form 10-K for
the year ended February 29, 2004. The balance sheet at February 29, 2004 was
derived from the audited financial statements as of that date. Results of
operations for interim periods are not necessarily indicative of annual results
of operations.
2. INVESTMENTS
In August 2004, FRMO made a $200,000 limited partner investment in a hedge fund
known as Jordan Partners, LP. This is a value oriented fund that presently
focuses on income-oriented securities and strategies. These are publicly traded
securities, and the investment capital may be withdrawn on a quarterly basis.
Horizon Asset Management, Inc. is a member both of the General Partner and of
the Manager of Jordan Partners, LP.
3. INTANGIBLE ASSETS
RESEARCH AGREEMENTS
In March 2001, the Company acquired the research service fees that Horizon
Research Group receives from The Kinetics Paradigm Fund in exchange for 80,003
shares of common stock. The value of the shares issued in this transaction was
$51,003. The Company is amortizing the cost of The Kinetics Paradigm Fund
research agreement over ten years using the straight-line method.
SUBSCRIPTION REVENUES
In October 2001, the Company acquired a 2% interest in the subscription revenues
from subscribers to The Capital Structure Arbitrage Report that Horizon Research
Group and another third party receive. Consideration for this interest consisted
of the issuance of 50 shares of Series R preferred stock. The value of the
shares issued in both of these transactions aggregated $26,250. The Company is
amortizing the purchase of these subscription agreements over ten years using
the straight-line method. At the time of these transactions, a 2% interest in
the subscription revenues amounted to $3,018 per annum.
Intangible assets consist of the following:
AUGUST 31, FEBRUARY 29,
2004 2004
-----------------------
Research agreements $51,003 $51,003
Subscription revenue 26,250 26,250
Sub-advisory revenue 3,440 --
-----------------------
80,693 77,253
Less accumulated amortization 24,657 20,795
-----------------------
Intangible assets, net $56,036 $56,458
=======================
For each of the six months ended August 31, 2004 and 2003, amortization of
intangible assets was $3,863.
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FRMO CORP.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED AUGUST 31, 2004
(UNAUDITED)
4. NET INCOME PER COMMON SHARE AND PER COMMON SHARE EQUIVALENT
Basic earnings per common share for the six and three months ended August 31,
2004 and 2003 are calculated by dividing net income by weighted average common
shares outstanding during the period. Diluted earnings per common share for the
six and three months ended August 31, 2004 and 2003, are calculated by dividing
net income by weighted average common shares outstanding during the period plus
dilutive potential common shares, which are determined as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
2004 2003 2004 2003
--------------------- ---------------------
Weighted average common shares 6,904,651 3,897,524 6,526,087 3,897,524
Effect of dilutive securities:
Conversion of preferred stock 50,000 50,000 50,000 50,000
--------------------- ---------------------
Dilutive potential common shares 6,954,651 3,947,524 6,576,087 3,947,524
===================== =====================
5. COMPENSATION FOR CONTRIBUTED SERVICES
Two officers/shareholders performed services for the Company during the six
months ended August 31, 2004 and 2003 for which no compensation was paid. The
Company recorded a charge to operations for these contributed services of $6,000
and a corresponding credit to paid-in-capital for each period.
6. INCOME TAXES
The provision for income taxes consists of the following:
SIX MONTHS ENDED
AUGUST 31,
2004 2003
---------------------------
Current:
Federal $57,334 $ 3,554
State 17,024 2,253
---------------------------
Total current 74,358 5,807
---------------------------
Deferred:
Federal -- --
State -- --
---------------------------
Total deferred -- --
---------------------------
Total $74,358 $ 5,807
===========================
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
All statements contained herein that are not historical facts, including but not
limited to, statements regarding future operations, financial condition and
liquidity, capital requirements and the Company's future business plans are
based on current expectations. These statements are forward looking in nature
and involve a number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to differ
materially are changes in the financial markets, which affect investment
managers, investors, mutual funds and the Company's consulting clients, and
other risk factors described herein and in the Company's reports filed and to be
filed from time to time with the Commission. The discussion and analysis below
is based on the Company's unaudited Financial Statements for the three and six
months ended August 31, 2004 and 2003. The following should be read in
conjunction with the Management's Discussion and Analysis of results of
operations and financial condition included in Form 10-K for the year ended
February 29, 2004.
OVERVIEW
By reason of the spin-off transaction described in Form 10-K for the year ended
February 28, 2002, the Company had a new start in terms of its continuing
business and its financial statements. After the spin-off, its balance sheet
consisted of $10,000 in assets, no liabilities and 1,800,000 shares of common
stock. On January 23, 2001 the Company issued an additional 34,200,000 shares of
common stock for $3,258,000 to be paid as set forth in Item 1 of Form 10-K for
the year ended February 28, 2001.
Since its new start on January 23, 2001, FRMO completed the following
transactions through August 31, 2004:
i. The Company invested $5,000 in FRM NY Capital, LLC, a limited
liability venture capital company whereby the substantial investment
of financial capital will be made by unrelated parties but where
FRMO will have a carried interest based on leveraging the creative
services of its personnel (its intellectual capital). This interest
was inactive and the investment was sold at cost during the fiscal
2004 year.
ii. A consulting agreement was signed effective January 1, 2001, whereby
FRMO is currently receiving approximately $27,000 a year from the
manager of Santa Monica Partners, LP, a director and shareholder of
FRM, for access to consultations with the Company's personnel
designated by Murray Stahl and Steven Bregman. Santa Monica
Partners, L.P. is a private fund, which owns 218,000 shares of
common stock of FRMO.
iii. In March 2001 FRMO acquired the research service fees that Horizon
Research Group had received from The Kinetics Paradigm Fund in
exchange for 80,003 shares of FRMO common stock. Management believes
that the growth of that Fund in the current fiscal year and future
years will increase the current level of research fees for which the
stock consideration was paid. The Paradigm Fund outperformed the S&P
500 Index by approximately 13 percentage points in its first fiscal
year of operation, Calendar 2000. From inception through Calendar
2003, it outperformed the S&P 500 Index by 68 percentage points, or
in the parlance of investment professionals, by 6,800 basis points.
In August 2003, The New Paradigm Fund was assigned a five-star
rating by Morningstar, Inc., the fund rating service. This is
Morningstar's highest rating and is often the basis on which mutual
fund investors seek to select funds.
iv. In October 2001, FRMO acquired a 2% interest in the subscription
revenues from The Capital Structure Arbitrage Report that Horizon
Research Group and another third party receive, in exchange for 50
shares of Series R preferred stock. While the subscriptions were
minimal at the time, they have advanced and management believes that
they will continue to expand in future years.
v. In February 2002, FRMO acquired a 7.71% interest in Kinetics
Advisors, LLC and the Finder's Fee Share Interest from the Stahl
Bregman Group, in exchange for 315 shares of FRMO common stock.
Kinetics Advisors, LLC controls and provides investment advice to
Kinetics Partners, LP, a hedge fund and to Kinetics Fund, Inc., an
offshore version of Kinetics Partners. While these funds were quite
small at the time of acquisition, they have expanded significantly
and management believes that they will continue to grow in future
years. During its first year of operation in 2000, and in 2001,
Kinetics Partners returned 23.7 and 21.6 percentage points more than
the S&P 500 Index, net of management and incentive fees. In 2002, it
outperformed the S&P 500 Index by 33 percentage points. Through
December 31, 2003, it has outperformed the S&P 500 Index by a
further 23 percentage points. On a cumulative basis, over the 3-year
4-month period from inception through year-end 2003, the Kinetics
Partners Fund has returned 92%, whereas the S&P 500 Index has lost
(23%).
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vi. On June 1, 2004, FRMO acquired a one-third interest in the advisory
fee revenue that Horizon Asset Management, Inc. receives from the
Lehman Brothers Manager Access Program, in exchange for 4,587 shares
of FRMO Corp. common stock. Under this program, Horizon Asset
Management provides investment advisory services to certain Lehman
Brothers clients, the fees being calculated on the basis of assets
under management. While the revenues were quite modest at the time
of acquisition, they are expanding and management believes that the
future scale of these revenues could be substantially greater.
RESULTS OF OPERATIONS
2004 PERIOD COMPARED TO THE 2003 PERIOD
The Company's revenues from operations for the three months ended August 31,
2004 ("2004") were $107,800, an increase of $81,400, or 308%, as compared to the
three months ended August 31, 2003 ("2003"). The increase in the three-month
period was due to increases in consulting, research and subscription revenues,
as well as revenue from investments in unconsolidated subsidiaries (Kinetics
Advisors, LLC) and from sub-advisory fees (the Lehman Brothers program) from
which there was no revenue in the 2003 quarter. The Company's revenues from
operations for the six months ended August 31, 2004 ("2004") were $227,900, an
increase of $178,200, or 359%, as compared to the six months ended August 31,
2003 ("2003"). The increase in the six-month period was attributable to
increases in consulting, research and subscription fees, as well as revenue from
investments in unconsolidated subsidiaries (Kinetics Advisors, LLC) and from
sub-advisory fees (the Lehman Brothers program) from which there was no revenue
in the 2003 period.
Costs and expenses from operations were $19,600 during the three months ended in
August 2004, an increase of $1,700 or (10%) from the comparable 2003 period.
During the six-month period ended in 2004, costs and expenses increased by
$3,400 (11%) to $33,600. The result for the three-month period was primarily due
to an increase in accounting expenses, partially offset by a decline in
shareholder reporting expenses. The increase for the six months ended in 2004
was primarily due to an increase in accounting expenses, somewhat offset by a
decrease in shareholder reporting expenses.
For the reasons noted above, the Company's net income for the three months ended
August 31, 2004 increased by $46,900 to $53,000, as compared to net income of
$6,100 in 2003. For the same reasons, net income for the six months ended August
31, 2003 was $132,000, as compared to net income of $14,100 for the same period
in 2003.
Some discussion is required with respect to an asset that is presently carried
at zero cost on the FRMO balance sheet and which had a negligible accounting
impact on fiscal 2003 earnings, yet which had a large impact on revenues (43% of
the total) during the first half of the fiscal 2004, and which has had a much
more significant economic impact on the value of FRMO. This is the investment in
Kinetics Advisors, LLC, ("Kinetics Advisors") that was acquired in February 2002
(as discussed in the preceding Overview). This investment takes the form of a
minority interest in Kinetics Advisors, which controls and provides investment
advice to two hedge funds. Kinetics Advisors has elected to reinvest in these
two funds the major portion of the fees to which it is entitled from them. As a
consequence, FRMO does not receive its proportional interest in those fees until
such time that Kinetics Advisors itself elects to or is required to receive
them. Under generally accepted accounting principles, as they applied in fiscal
2003 and 2004, FRMO must record this investment on a cost basis, which was $0 as
of August 31, 2004. However, on an economic basis, FRMO's proportional share of
Kinetics Advisors' capital accounts in those funds was approximately $1.07
million (pre-tax and unaudited) as of August 31, 2004. FRMO's proportional share
of the increase in the value of Kinetics Advisors' capital accounts in those
funds during the period, predominantly from fee income and appreciation (also
pre-tax and unaudited), was approximately $369,000 during the six months ended
August 2004. In accordance with EITF 03-16, "Accounting for Investments in
Limited Liability Companies", the Company will change its accounting policy
regarding this investment effective September 1, 2004 to the equity method.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities during the six months ended August 31, 2004
resulted in an increase in cash of $177,500. This increase was due to income,
after adjusting for amortization and contributed services, of $141,900,
increased by $35,600 due to fluctuations in operating assets and liabilities
primarily caused by timing differences. Cash used in investing activities for
the six months ended August 31, 2004 was $200,000, representing the Company's
investment in a limited partnership interest in a hedge fund known as Jordan
Partners, LP. Cash provided by financing activities approximated $143,700,
representing payments from shareholders for common shares held in escrow. The
Company expects its business to develop without the outlay of cash, since growth
is expected to be a function of its intellectual property as presently
represented by consulting, research, subscription and sub-advisory fees as well
as its asset-based general partner interest.
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
The Company accounts for its 8.44% investment in Kinetics Advisers, LLC using
the cost method of accounting at February 29, 2004. In March 2004, the FASB
ratified Emerging Issues Task Force Issue No. 03-16, "Accounting for Investments
In Limited Liability Companies". Under EITF 03-16, investments in limited
liability companies that have separate ownership accounts for each investor
greater than 3 to 5 percent should be accounted for under the equity method.
Effective September 1, 2004, the Company will change its method of accounting
for this investment so that it will record its pro rata share of Kinetics
Advisers income (loss) each period. Had EITF 03-16 applied effective March 1,
2004, the Company's assets and pre-tax income would have been increased by
$1,071,300 and $450,600, respectively.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
On January 23, 2001 the Company issued 34,200,000 shares of $.001 par value
stock for $3,258,000. Only $39,375 was paid for at the time, and the balance
remaining as of August 31, 2004 of $2,849,904 will be paid to the Company as set
forth in Item 1 of Form 10-K for the year ended February 28, 2001. The Company's
market risk arises principally from the obligations of the shareholders to pay
for the shares of common stock of the Company based on dividends from outside
sources and the income generated from the management of the mutual and hedge
funds.
ITEM 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures within 90 days of the filing date of this quarterly
report, and, based on their evaluation, our principal executive officer and
principal financial officer have concluded that these controls and procedures
are effective. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.
Disclosure controls and procedures are our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on July 15, 2004, the persons elected
as directors of the Company and the voting for such persons were as follows:
Name Votes For
- ---- ----------
Murray Stahl 27,364,167
Steven Bregman 27,264,167
Peter Doyle 27,364,167
Lawrence J. Goldstein 27,364,167
Allan Kornfeld 27,364,167
Lester Tanner 27,363,968
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
31.1 - Certification by the Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 - Certification by the Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 - Certification of the Chief Executive Officer and Chief Financial
Officer Pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
B) REPORTS ON FORM 8-K
None.
SIGNATURE
Pursuant to the requirements 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.
FRMO CORP.
By: /s/ Steven Bregman
-------------------------------------
Steven Bregman
President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: October 14, 2004
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