UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE PERIOD ENDED March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD From to .
------------------------ --------------------
Commission File Number 333-88480
PRIME RESOURCE, INC.
--------------------
(Exact name of registrant as specified in its charter)
Utah 04-3648721
--------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1245 East Brickyard Road, Suite 590
Salt Lake City, Utah 84106
----------------------------
(Address of principal executive officers)
(801) 433-2000 (Registrant's
telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check 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 the
court. Yes No Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock: 2,950,000 shares issued as of May 1, 2003, No Par Value.
Authorized - 50,000,000 common voting shares.
INDEX
Prime Resource, Inc.
For The Quarter Ending March 31, 2003
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - March 31 2003 (Unaudited).
Consolidated Statements of Operations (Unaudited) - For the three
months ended March 31, 2003 and for the three months ended March
31, 2002.
Consolidated Statements of Cash Flows (Unaudited) - For the three
months ended March 31, 2003, and for the three months ended March
31, 2002.
Notes to Consolidated Financial Statements (Unaudited) - March
31, 2003.
Item 2. Management's Discussion and Analysis o Financial Condition or
Plan of Operation.
Controls and Procedures
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds
Item 5. Other Matters
Item 6. Exhibits and Reports on Form 8-K
Signatures
Certifications
2
Part I - Financial Information
Item 1. Financial Statements
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED BALANCE SHEET (Unaudited)
March 31, 2003
Assets
Current Assets:
Cash and cash equivalents $ 36,672
Accounts receivable 377,619
---------------
Total current assets 414,291
---------------
Fixed Assets:
Furniture and fixtures 123,963
Office equipment 28,218
Computer equipment 43,900
Software 18,814
Vehicles 92,540
---------------
Total fixed assets 307,436
Less accumulated depreciation (149,495)
---------------
Net fixed assets 157,941
---------------
Advances and notes receivable from related parties 117,408
Other assets 12,769
Deferred income taxes 22,897
---------------
Total assets $ 725,305
===============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 11,298
Accrued expenses 275,104
Current portion of notes payable, related parties 87,149
---------------
Total current liabilities 373,550
Notes payable to related party, less current portion 35,233
Common stock, no par value; authorized 50,000,000 shares;
issued and outstanding 2,800,000 shares -
Additional paid-in capital 197,763
Retained earnings 118,759
---------------
316,522
---------------
Total liabilities and stockholders' equity $ 725,305
===============
See notes to financial statements.
3
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, 2003 and 2002
2003 2002
--------------- -------------
Net Revenues
Commissions $ 819,946 $ 434,852
Investment and business advisory fees 86,385 90,646
--------------- -------------
Total net revenues 906,331` 525,498
Operating Expenses
Commissions 247,463 131,052
Compensation and benefits 278,764 383,440
General and administrative 118,102 114,800
Occupancy and equipment 29,370 25,725
Depreciation and amortization 11,388 12,165
--------------- -------------
Total operating expenses 685,087 667,182
--------------- -------------
Income (loss) from operations 221,244 (141,684)
Interest and dividend income 260 1,945
Interest expense (1,022) -
Other income (expense) (10,328) -
---------------- -------------
Total other income (expense) (11,090) 1,945
Net income (loss) before taxes 210,154 (143,629)
--------------- --------------
Income tax expense (benefit) 83,695 -
--------------- -------------
Net income (loss) $ 126,459 $ (143,629)
=============== ==============
See notes to financial statements.
4
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY
(Unaudited)
January 1, 2002 to March 31, 2003
Members' Common Stock Paid-in Retained
Equity Shares Amount Capital Deficit
-------------- ----------- ----------- ----------- ------------
Balance, January 1, 2002 $ 220,338 - $ - $ - $ -
Net loss through date of
incorporation (April 4, 2002) (135,575) - - - -
Member contribution 113,000 - - - -
Reorganization from LLC to
corporation (April 4, 2002) (197,763) 2,800,000 - 197,763 -
Net loss from April 4, 2002
through December 31, 2002 - - - - (7,700)
-------------- ----------- ----------- ----------- ------------
Balance, December 31, 2002 - 2,800,000 - 197,763 (7,700)
Net income - - - - 126,459
-------------- ----------- ----------- ----------- -----------
Balance, March 31, 2003 $ - 2,800,000 $ - $ 197,763 $ 118,759
============== =========== =========== =========== ===========
See notes to financial statements.
5
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, 2003 and 2002
2003 2002
--------------- ---------------
OPERATING ACTIVITIES
Net Income (loss) $ 126,459 $ (143,629)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 11,388 12,165
Write-off of notes receivable from related parties 5,728 194,845
Change in deferred taxes 3,609 -
Changes in operating assets and liabilities
Accounts receivable (236,992) (35,120)
Other assets 335 (50,026)
Accounts payable (61,054) 43,220
Accrued expenses 107,930 (208,913)
--------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (42,597) (187,458)
INVESTING ACTIVITIES
Purchase of property and equipment (5,466) (6,711)
Proceeds from sale of investment - 50,125
--------------- ---------------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (5,466) 43,414
FINANCING ACTIVITIES
Proceeds from notes payable to related parties - 53,822
Member investments - 113,000
--------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES
- 166,822
INCREASE (DECREASE) IN CASH (48,063) 22,778
Cash and cash equivalents, beginning of period 84,735 32,102
--------------- ---------------
Cash and cash equivalents, end of period $ 36,672 $ 54,880
=============== ===============
Additional required disclosures:
Interest paid in cash $ 1,022 $ -
See notes to financial statements.
6
PRIME RESOURCE, INC. AND SUBSIDIARIES
(Formerly Prime Resource, LLC and Subsidiaries)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003
(1) INTERIM FINANCIAL STATEMENT POLICIES AND DISCLOSURES
The unaudited, consolidated, condensed financial statements of Prime Resource,
Inc. and Subsidiaries (the Company) included herein have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally required in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These consolidated, condensed financial statements reflect all adjustments that,
in the opinion of management, are necessary to present a fair statement of the
results of operations for the interim periods presented. All of the adjustments
that have been made in these consolidated, condensed financial statements are of
a normal recurring nature.
It is suggested that these condensed financial statements be read in conjunction
with the financial statements and the notes thereto included in the Company's
latest Annual Report.
(2) SUBSEQUENT EVENT
The Company commenced an initial public offering of its shares on April 16,
2003, when its registration became effective. The Company raised $750,000
through the sale of 150,000 shares.
7
Item 2. Management's Discussion and Analysis o Financial Condition or Plan of
Operation
Forward-Looking Information
Certain statements in this Section and elsewhere in this report are
forward-looking in nature and relate to trends and events that may affect the
Company's future financial position and operating results. Such statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The terms "expect,""anticipate,""intend," and "project" and
similar words or expressions are intended to identify forward-looking
statements. These statements speak only as of the date of this report. The
statements are based on current expectations, are inherently uncertain, are
subject to risks, and should be viewed with caution. Actual results from
experience may differ materially from the forward-looking statements as a
result of many factors, including changes in economic conditions in the markets
served by the company, increasing competition, fluctuations in raw materials and
energy prices, and other unanticipated events and conditions. It is not possible
to foresee or identify all such factors. The company makes no commitment to
update any forward-looking statement or to disclose any facts, events, or
circumstances after the date hereof that may affect the accuracy of any forward-
looking statement.
Plan of Operation
Prime Resource, Inc. ("Prime") is a Utah Corporation which was organized and
filed of record on March 29, 2002 as a successor entity to Prime, LLC. Prime is
an integrated business entity that conducts all of its actual business
activities through its two wholly owned subsidiaries: Belsen Getty, LLC ("Belsen
Getty") and Fringe Benefit Analysts, LLC ("Fringe"). Unless otherwise
specifically described in this offering, the reference to Prime shall
collectively mean both Prime and its two operating subsidiaries.
The principal business activity of Prime has been, and will continue to be, for
the foreseeable future, providing insurance and related insurance products
principally in the health, life, dental and disability areas, as well as
implementing and managing various employee related benefit programs and plans,
such as 401(k) retirement accounts. The insurance activities of Prime are
primarily conducted through Fringe. Belsen Getty supplies collateral services
related primarily to pension and investment management programs, as well as
financial advisory services, retirement planning and general business
consulting.
Management intends to attempt to grow the company primarily through the
acquisition of other insurance providers into the Fringe Benefit entity and the
recruitment and training of new agents and their books of business.
Concurrently, Belsen Getty is attempting to expand its financial and business
consulting and pension planning services principally by creating a more
extensive investment advisory role and aggressive marketing.
The company commenced an initial public offering of its shares on April 16, 2003
when its registration became effective. Prime raised $750,000 in this offering.
It intends to employ these funds primarily for acquisitions to grow its core
insurance services and products as generally discussed above. A more detailed
description of the use of proceeds is contained in the prospectus for the public
offering. Any person wishing to obtain a copy of that prospectus material,
including the use of proceeds, may obtain a copy at the Securities and Exchange
Commission ("SEC") online website at www.sec.gov\edgar. Alternatively, a copy of
the prospectus will be made available to any shareholder, or other interested
party, upon request to the company at its principal address at 1245 East
Brickyard Road, Suite 590, Salt Lake City, UT 84106.
8
The company's long term growth and potential to realize profits is substantially
dependent upon the ability of management of the company to successfully employ
the expected proceeds of the public offering in a manner which will generate
additional revenues and potential net income to Prime. No assurance or warranty
of the success of Prime can be made or implied at this time. Prime can make no
warranty it will be able to place the offering being sold as a self-
underwriting. Under current SEC regulations, the use and disposition of the
proceeds of the offering, if any, will be reported subsequently in the periodic
filings of Prime under a specifically designated section on Use and Employment
of Offering Proceeds. This section is not included in this 10-QSB because no
shares have been sold as of the date of this report.
As may be noted from the foregoing financial statements, the company experienced
a net loss of $143,275 in the first quarter of 2002. In the first quarter of
2003 the company realized a net profit of $ 126,459primarily due to increased
insurance revenues and, to a lesser extent, increases in revenues for the
financial advisory and consulting services of Belsen Getty. Each person
reviewing this report should understand that the company has not had historical
profits and that the first quarter of 2003 evidences the first profit realized
by the company since inception. The failure of the company to have historical
profits should be considered as a potential risk factor to any person acquiring
securities of the company in that it does not have a proven or sustained profit
history.
At present, the outstanding current liabilities of the company are presently $
373,550 as of March 31, 2003. The company has retained earnings from its
inception as a corporate entity to March 31, 2003 of $ 118,759.
Products and Markets
As generally described above, the revenue sources to Prime are primarily divided
into two categories. The first being the sale of a broad line of insurance
products and services through Fringe with a primary emphasis on group health,
disability and life policies. The insurance activities of Prime are primarily
offered within twelve western states. Prime acts as a general agent through
Fringe for various companies in supplying the insurance policies and services.
However, four companies account, collectively, for almost all of the policies
provided. These four principal suppliers of policies to Prime are Altius
Insurance, (previously Pacific Health Care); United Health Care; Intermountain
Health Care and Regence Blue Cross. Commissions for the placement of these
products range from approximately 2-20%. Fringe currently has, as of March 31,
2003, approximately 823 employers who are receiving ongoing insurance coverage
and related services from Fringe. Fringe also has what it believes to be a
unique program related to its insurance activities in which it provides at
little or no cost to the client the administration for various insurance
programs such as COBRA, ss.125((e) and State continuation plans and other
insurance related consulting and management services. Fringe believes it has
been successful in growing its business through supplying these services to the
insurance policy client. The company believes it has been successful in
maintaining a profit while providing these services without additional costs by
obtaining discounts from its insurance providers on insurance products in
partial consideration for providing these ongoing management services. This
program is generally called the "Advantage Program".
9
Belsen Getty supplies investment advisory and pension management services to
various clients of Prime. Some, but not all, of these clients are referred by
Fringe incident to completion of insurance funded products sold to various
individuals and entities which then require pension fund management. The
compensation for these valuable services is derived on a fee basis. The fees
range from 38 basis points to 125 basis points per year depending upon the size
of the portfolio or program managed. There are no commissions paid on investment
products and the assets are held by third party custodians, such as various
brokerage firms. It is anticipated that the Belsen Getty portion of the business
will grow concurrently with the growth of the Fringe business, but for the
foreseeable future will generate revenues substantially less than the Fringe
component of the business. At present, Belsen Getty has approximately 426
clients as of March 31, 2003.
Liquidity and Sources of Capital
As previously noted, the parent entity, Prime Resource, Inc. had its initial
public offering become effective April 16, 2003. It is believed and anticipated
that proceeds from this offering will be sufficient to implement the general
growth plan of the company, as generally described above, and which includes
primarily acquisition of other insurance companies or insurance lines of
business, as well as the recruitment and training of insurance agents with
existing books of business and clients. No warranty or assurance of the success
of this proposed plan of operation or of the sale of the offering can be made.
Since the end of 2002, recruiting efforts have attracted 12 new agents to Fringe
Benefits. Prime is presently in a position where it believes that its general
revenues can sustain other business operations, including salaries, rent,
utilities and other overhead costs, without the employment of offering proceeds
for those general purposes.
The company has no present plans for any additional offering of its securities
or other capital formation activities for the foreseeable future.
Further, the company does not significantly rely on lines of credit or other
bank loans for its present operations and has total outstanding debt
obligations, as of March 31, 2003, of approximately $ 122,382.
Controls and Procedures
(a) Prime maintains controls and procedure designed to ensure that information
required to be disclosed in the reports that the Company files or submits
under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures performed within 90 days of the
filing date of this report, the chief executive officer and the principal
financial officer of the Company concluded that the Company's disclosure
controls and procedures were adequate for its present activities.
10
(b) Changes in internal controls. The Company made no significant changes in
its internal controls since completing its public offering. The company is
presently seeking a listing of its stock on the National Association of
Securities Dealers ("NASD") sponsored Electronic Bulletin Board, but does
not view such listing as requiring a change in its accounting or auditing
practices at the present time.
(c) Should the company subsequently seek a listing on an exchange or any
established NASD listing, such as the NASDAQ small cap markets, it is aware
that other accounting/auditing standards, such as the establishment of an
independent audit committee, would be required.
(d) The company is aware of the general standards and requirements of the
recent Sarbanes-Oxley Act of 2002 and has implemented procedures and rules
to comply so far as applicable, such as a prohibition on company loans to
management and affiliates.
Part II - Other Information
Item 5. Other Matters
(1) Public Offering. As generally noted above, Prime commenced its
initial public offering for up to $750,000 on April 16, 2003 which is now
complete. Prime will report the use of proceeds as employed in subsequent
periodic filings with the SEC and any significant expenditure of proceeds would
constitute the basis for an 8-K filing as a special report item.
THESE ITEMS ARE REPORTED AS A MATERIAL SUBSEQUENT EVENT TO THE ACCOUNTING PERIOD
FOR THIS REPORT ENDING MARCH 31, 2003 AND THE PROCEEDS OF SUCH OFFERING ARE,
THEREFORE, NOT INCLUDED WITHIN THE FINANCIAL STATEMENTS OF THIS REPORT.
(2) Trading. The company presently does not have any active trading
market and, as of the date of this report, is engaged in attempting to
complete, through a Salt Lake City brokerage firm, a filing for NASD listing
on the Electronic Bulletin Board. The Electronic Bulletin Board is
essentially an informal trading mechanism managed by the National Association
of Securities Dealers, but does not constitute a regular NASDAQ exchange or
listing, but is essentially an electronic intra-dealer quotation system
for small public companies not meeting the requirements for regular NASDAQ
listing. The company cannot presently give any warranty or assurance that it
will be successful in completing such listing, but is presently actively engaged
through a designated broker/dealer in attempting to obtain this listing and
will, subsequently, report the completion of any listing requirements as an 8-K
filing.
11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification under Section 906 of the Sarbanes Oxley Act of 2002 (18
U.S.C. SECTION 1350)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the reporting period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 8, 2003 By: /s/ Terry M. Deru
----------------------------------
Mr. Terry M. Deru President, Director
Date: August 8, 2003 By: /s/ Andrew W. Limpert
-----------------------------------
Mr. Andrew W. Limpert Director, Treasurer/CFO
12
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Prime Resource, Inc. (the "Company")
on Form 10- QSB for the period ending March 31, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), we, Mr.
Terry Deru, President and Chief Executive Officer and Mr. Andrew Limpert, Chief
Financial Officer, certify to the best of our knowledge, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The report fully complies with the requirements of section 13 (a)
or 15 (d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
Date: August 8, 2003 /s/ Terry M. Deru
----------------------------------
Mr. Terry M. Deru President,
Director
Date: August 8, 2003 /s/ Andrew W. Limpert
----------------------------------
Mr. Andrew W. Limpert CFO, Director
13
Attachment A
CERTIFICATION
I, Terry M. Deru, President and Director of Prime Resource, Inc certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Prime Resource,
Inc;
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of 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: August 8, 2003 /s/Terry M. Deru
----------------------------------
Mr. Terry M. Deru President
14
Attachment A
CERTIFICATION
I, Andrew W. Limpert, Chief Financial Officer and Director of Prime Resource,
Inc certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Prime Resource,
Inc.;
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of 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: August 8, 2003 /s/ Andrew W. Limpert
----------------------------------
Mr. Andrew W. Limpert Chief Financial Officer, Director
15