SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2001
OR
[ ] TRANSITION REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from________to________
Commission file number 0-16341
ADVA International Inc.
(Name of small business issuer in its charter)
Delaware 16-1284228
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
454 South Anderson Road
Rock Hill, South Carolina 29730
803.327.6790
(Address and phone number of principal executive offices and place of business)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
section q2, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes X No __
APPLICABLE TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common stock as of February 28,
2002 is 13,185,194.
ADVA INTERNATIONAL INC. AND SUBSIDERARY
FORM 10 -QSB
INDEX
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheet as of September 30, 2001
and March 31, 2001.....................................................3
Consolidated Statements of Operations for the Three
Months Ended September 30, 2001 and 2000, the
six months ended September 30, 2001 and 2000,
and the cumulative period April 2, 1998
(inception) through September 30, 2001.................................5
Consolidated Statements of Changes in Stockholders'
Equity (Deficiency) for the cumulative period
April 2, 1998, (inception) through September 30, 2001..................6
Consolidated Statements of Cash Flows for the Six
Months Ended September 30, 2001 and 2000 and the
cumulative period April 2, 1998 (inception) through
September 30, 2001.....................................................7
Notes to Consolidated Financial Statements..................................8
Item 2. Plan of Operation.....................................................11
PART II. OTHER INFORMATION
Item 2. Changes in Securities.................................................12
Item 6. Exhibits and Reports on Form 8-K......................................12
SIGNATURES....................................................................12
Forward Looking Statements
When used in this Form 10-QSB, the words "may", "might", "will", "should",
"could", "expect(s)", "plan(s)", "intend(s)", "anticipate(s)", "believe(s)",
"estimate(s)", "predict(s)", "potential", or "continue(s)" or the negative of
such terms and other comparable terminology are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties, including but not limited to economic conditions, changes in laws
or regulations, our history of operating losses, limited access to capital,
demand for our products and services, dilution from issuance of additional
shares, newly developing technologies, loss of permits, conflicts of interests
in related party transactions, regulatory matters, the occurrence of events not
covered by insurance, a substantial increase in interest rates, protection of
technology, lack of industrial standards, raw material commodity pricing, the
ability to receive bid awards, the inability to implement our growth strategy,
the inability to maintain key employees, the effects of competition and our
ability to obtain additional financing. Such factors, which are discussed in
"The Plan Of Operation" and the notes to condensed consolidated financial
statements, could effect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with undue reliance on any such forward-looking
statements, which speak only as of the date made. Although we believe the
expectations reflected in the forward-looking statements are reasonable, we
cannot and do not guarantee future results, levels of activity, performance or
achievements. See "Plan of Operation".
Item 1. Financial information
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ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated Balance Sheet
Sept. 30, March 31,
2001 2001
------------- -------------
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 123,180 $ 961,483
Accounts receivable, other 46 -
Prepaid expenses 39,417 56,500
- -------------------------------------------------------------------------------
Total current assets 162,643 1,017,983
----------- -----------
Furniture and equipment, net of
accumulated depreciation 23,814 -
of $1,863
Software 271,937 200,000
Deferred financing costs, net of
accumulated amortization 604,542 696,345
of $312,958 and $221,155
Deposit 2,979 2,979
- -------------------------------------------------------------------------------
Total assets $ 1,065,915 $ 1,914,328
- -------------------------------------------------------------------------------
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated Balance Sheet
Sept. 30, March 31,
2001 2001
-------------- --------------
(Unaudited)
Liabilities and Stockholders' (Deficiency)
Current liabilities
Current maturities of long term debt $ 1,500,000 -
Accrued transaction and creditor payables - $ 300,000
Accrued professional fees 270,490 147,267
Accrued interest 99,558 49,400
Accounts payable and accrued expenses, other 62,244 27,742
Due to officer 36,324 33,515
- -----------------------------------------------------------------------------------------
Total current liabilities 1,969,619 557,924
Long-term debt - 1,500,000
- -----------------------------------------------------------------------------------------
Total liabilities 1,969,619 2,057,924
----------- ------------
Commitments (Note 3, 4)
Stockholders' (deficiency)
Class A preferred stock, no par value - -
Authorized 4,000 shares, none issued
Class B preferred stock, no par value - -
Authorized 6,000 shares, none issued
Common stock, $.001 par value
Authorized 20,000,000 shares
Issued and outstanding 13,185,194 shares 13,185 13,185
Additional paid-in capital 1,937,815 1,937,815
(Deficit) accumulated during the development stage (2,854,264) (2,094,596)
Total stockholders' (deficiency) (903,264) (143,596)
- ------------------------------------------------------------- --------------------- -------------------- --------------------
- ------------------------------------------------------------- --------------------- -------------------- --------------------
Total liabilities and stockholders' (deficiency) $ 1,065,915 $1,914,328
- ------------------------------------------------------------- --------------------- -------------------- --------------------
- -------------------------------------------------------------
See accompanying notes to consolidated financial statements
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated Statement of Operations
Cumulative
Period
April 2,
1998
Six Months Ended (Inception)
Three Months Sept 30, through
Ended 2001 Sept.30,
Sept. 30, 2000 2001
2001 2000
- --------------------------------------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales, license fees $ - $ - $ - $ $ 8,484
-
Operating expenses
Salary and employee related 64,723 27,537 115,334 55,062 463,064
General and administrative 221,858 65,699 481,682 82,123 1,017,839
Expenses related to merger 5,000 73,203 25,336 181,763 990,278
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Total operating expenses 291,581 166,441 622,352 318,948 2,471,181
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- ----------------
(Loss) from operations (291,581) (166.411) (622,352) (318,948) (2,462,697)
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Other income (expense)
Miscellaneous income - - - - 1,305
Interest (expense), Officer (1,558) - (2,808) - (11,029)
Interest (expense), debt (70,818) (57,276) (141,961) (108,905) (413,925)
Interest income 1,905 5,101 7,453 8,751 32,082
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Total other (expense) (70,471) (52,175) (137,316) (100,154) (391,567)
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Net (loss) $(362,052) $(218,616) $(759,668) $(419,102) $(2,854,264)
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Basic and diluted loss per share $(0.03) $(0.02) $(0.06) $(0.04) $(0.24)
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
Weighted average shares outstanding 13,185,194 12,468,750 13,185,194 11,959,622 11,726,517
- -------------------------------------------- --------------- ---------------- --------------- --------------- ----------------
- ------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
(Deficit)
Total
Accumulated
Stock
Additional During the Stock
Holders'
Preferred Stock Common
Stock Paid-In Development Subscription Equity
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
Balance, April 2, 1998 (inception) - $ - - $ $ - $ - $ $
- - -
Common stock issued, May 14, - - 1,000 300,990 -
1998 10 (1,000) 300,000
- - - - (287,851)
Net (loss) - - (287,851)
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
- ---------------------------------------------------- --------------- --------------- -------------- ---------------
Balance, March 31, 1999 - - 1,000 10 300,990 (287,851) (1,000) 12,149
Original issue discount arising from options - - - - - - 900,000
granted in connection with debt, Jan. 14, 1998 900,000
2000
Net (loss) - - - - - (339,034) - (339,034)
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
Balance, March 31, 2000 - - 1,000 10 1,200,990 (626,885) (1,000) 573,115
Common stock issued, May 17, 2000 - - 13 - 300,000 - - 300,000
Stock options exercised, May 17, 2000 - - 176 2 449,998 - - 450,000
Recapitalization, March 2, 2001 - - 13,184,005 13,173 (13,173) - - -
Receipt of stock subscription, March 2, 2001 - - - - - - 1,000 1,000
Net (loss) - - - - (1,467,711) (1,467,711)
-
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
Balance, March 31, 2001 - - 13,185,194 13,185 1,937,815 (2,094,596) - (143,596)
Net (loss) (unaudited) - - (759,668) (759,668)
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
Balance, September 30, 2001 (Unaudited) - $ - 13,185,194 $13,185 $1,937,815 $(2,854,264) - $(903,264)
- ---------------------------------------------------- --------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
Shares Amount Shares
Amount Capital Stage
Receivable Deficiency)
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated Statement of Cash Flows
Cumulative
Period
April 2,
1998
(Inception)
Six Months Ended through
Sept. 30, Sept . 30,
2001 2000 2001
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
(Unaudited)
Cash Flows from operating activities
Net (loss) $ $ (419,102) $
Adjustments to reconcile net (loss) to net cash (used in) (759,668) (2,854,264)
Operating activities
Amortization of deferred finance costs 91,539
Depreciation 91,802 - 312,957
Changes in assets and liabilities 1,863 1,863
Accounts receivable -
Prepaid expenses (46) (29,000) (46)
Deposits 17,083 - (39,417)
Accrued transaction and creditor payables (2,979) - (2,979)
Accounts payable and accrued expenses (299,440) (168,138) 560
207,886 432,295
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Net cash (used in) operating expenses (743,499) (524,701) (2,149,031)
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Cash flows from investing activities
Software and related costs (71,936) - (271,936)
Purchase of furniture and equipment (25,677) - (25,677)
Repayment of (loan to) officer 2,809 (7,379) 36,324
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Net cash (used in) investing activities (94,804) (7,379) (261,289)
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Cash flows from financial activities
Proceeds from long-term debt, net of finance fees - 390,000 1,482,500
Proceeds from stock issuance and subscription - 750,000 1,051,000
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Net cash provided by financing activities - 1,140,000 2,533,500
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Net (decrease) increase in cash and cash equivalents (838,303) 607,920 123,180
Cash and cash equivalents at the beginning of the period 961,483 183,492 -
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Cash and cash equivalents at the end of period 123,180 791,412 123,180
- -------------------------------------------------------------------- ------------------ ------------------ ------------------
Non cash activity
During the year ended March 31, 2000, the Company incurred $900,000 in non-cash deferred finance charges from
options for common stock issued with debt. The amount was credited to additional paid-in capital.
- -----------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Notes to Consolidated Balance Sheets
1. Basis of The consolidated Financial statements are unaudited and include the accounts of ADVA
Presentation International Inc. ("ADVA") and its wholly owned subsidiary Global Information Group USA,
Inc. ("GIG"). All significant inter-company accounts and transactions have been eliminated
in consolidation.
In the opinion of management, all adjustments (consisting of normal recurring accruals) have
been made which are necessary to present fairly the financial position of the company as of
September 30, 2001, and the results of its operations for the three and six months ended
September 30, 2001 and 2000. The results of operations experienced for the six months period
ended September 30, 2001 are not necessarily indicative of the results to be experienced for
the fiscal year ended March 31, 2002.
The statements and related notes have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and regulations. The
accompanying notes should therefore be read in conjunction with the Company's March 31, 2001
annual financial statements.
From April 2, 1998 (inception) to March 31, 2000, the Company maintained operations in the
2 Business Netherlands and in April 2000 moved all operations to the United States. The Company is in
Operations the development stage and planned principal operations have not yet commenced.
The Company develops and markets 3D graphics applications software running on the Linux and
UNIX operating systems. The Company's present software product is believed to be the only
complete 3D solid modeling, animation and rendering system currently available on the Linux
OS. The Company's software has been designed for use by digital media professionals in the
production of film and video special effects, animation, computer-aided design and
scientific visualization, Internet web site and print graphics, game development and virtual
television. Since acquiring the software and the underlying source code in February 2000,
the Company has been enhancing the software, performing market research and developing
marketing plans for sales of the software to users in the 3D graphics applications market.
The Company's success will depend in part on its ability to obtain patents and product
license rights, maintain trade secrets, and operate without infringing on the proprietary
rights of others, both in the United States and other countries. There can be no assurance
that patents issued to or licensed by the Company will not be challenged, invalidated, or
circumvented, or that the rights granted thereunder will provide proprietary protection or
competitive advantages to the Company.
The Company has no significant operating history and, from April 2, 1998 (inception) to
September 30, 2001, has generated a net loss of $2,854,264. This loss has been financed by
proceeds from equity and debt issuances.
New debt and equity issuances are expected to provide near term working capital until
earnings from operations can support the Company. There can be no assurance that management
will be successful in its efforts to attract such capital.
An interest payment to investors due in August 2001 was not made. Negotiations to revise the
terms of this loan and future interest payments have been undertaken and are currently
ongoing. As a result, the Company is in default under its loan agreements, and has
classified this debt as a current liability.
3. Employment In January 2000, GIG entered into an employment agreement with the Chief Executive Officer
and that provides for payments of $110,000 per year along with certain other benefits in
Consulting exchange for defined services to be performed by the employee. The agreement is not for a
Agreements specific term and may be terminated by either party at any time.
On April 23, 2001, the Board of Directors granted an Incentive Stock Option (see Note 5) to
the President of GIG who is also a Director of both ADVA and GIG to purchase 100,000 shares
of ADVA common stock in connection with an employment agreement with GIG. ADVA's Board of
Directors approved the option on April 23, 2001. The incentive stock option will vest
annually in four equal increments commencing April 23, 2001. The exercise price, $1.75 per
share, was set at the closing price of the common stock on the grant date.
On May 1, 2001, GIG entered into an employment agreement with the President of GIG for a
minimum of one year, providing payments of $125,000 per year along with certain other
benefits.
On May 1, 2001, the Company entered into a one-year contractual agreement with a consultant
to act as Chief Financial Advisor to the Company. The agreement provides for payment of
$4,300 monthly, and is cancelable on thirty days notice by the consultant or the Company.
The Company also granted an Incentive Stock Option (see note 5) to acquire 25,000 shares of
common stock at $1.25 per share which vests in equal quarterly increments beginning August
1, 2001. This agreement was ratified by the ADVA Board of Directors on August 17, 2001
On September 1, 2001 the Company entered into an agreement with a consultant to become
Director of Software Development for GIG at an annual salary of $85,000. On December 1,
2001, the employee terminated his employment with the Company but he continues to work for
GIG as a consultant.
ADVA INTERNATIONAL AND SUBSIDIARY
(A Development Stage Enterprise)
Notes to Consolidated Balance Sheets
4. ADVA On August 17, 2001, the Board of Directors in consideration for advisory and consultant
Outside Director services rendered to Global Information Group USA Inc., granted a Director a Non-Qualified
Options Stock Option for 10,000 shares at an option price of $1.25 per share.
Outside Directors of ADVA, in lieu of other compensation, received stock option grants for
Board Meeting attendance as follows:
Ronald G Moyer 1,500
Ruud A.M. Pruijm 750
Philip L. van Wijngaarden 750
C. Roger Jones 750
Michael Tolson *2,000
* Options granted as newly elected board member.
The Company, at its August 17, 2001 Board of Directors meeting "authorized the 2001 Stock
5. ADVA Option Plan and further authorized to set aside 1,400,000 shares of the common stock of the
Stock Option Plan Company for sale and issuance to the executives and key employees of the Company and its
subsidiaries and affiliates in accordance with the terms of the Plan".
Options granted under the plan are Incentive Stock Options or Non-Qualified Stock Options
and are granted at a price equal to the fair market value of the Company's common stock at
the date of grant. In addition, no Incentive Stock Option may be granted to an employee
owning directly or indirectly stock having more than 10% of the total combined voting power
of all classes of stock of the Company unless the exercise price is set at not less than
110% of the fair market value of the shares subject to such Incentive Stock Option on the
date of the grant and such Incentive Stock Option expires not later than five years from the
date of grant.
Generally, the Incentive Stock Options and Non-Qualified Stock Options have terms of ten
years from the date of grant. On each anniversary date of grant, the options vest in
increments of 20%. The options become fully vested and exercisable four years from the date
of grant. Notwithstanding the preceding, the board of directors determines the terms of
options granted on a case -by-case basis.
See Note 3, 4 for options granted during the quarter ended September 30, 2001, and options
subsequently expected to be approved.
The 2001 ADVA Stock Option Plan was approved by a majority of shareholders at the annual
meeting on September 25, 2001.
The options granted to employees and Directors, as described in notes 3 and 4, were issued
prior to stockholder approval of the Stock Option Plan (the "Plan")at exercise prices
exceeding the market value of the common stock on September 26, 2001, the date the "Plan"
was approved by the stockholders. Since there was no increase in market value between the
dates issuance and the approval date, no compensation was recorded
On September 26, 2001, the slate of Directors proposed by management was approved by a
majority of the shareholders of ADVA International Inc. to include Anthony E. Mohr, George
L. Down, Ruud AM Pruijm, C. Roger Jones and Michael Tolson. Earlier the same day, Philip van
6. Director Wijngaarden resigned as Director of ADVA International citing a lack of adequate time needed
Changes to devote to his responsibilities as Director. The Board has not yet moved to fill the
vacancy left by his departure.
Item 2. Plan of Operations
- ------- ------------------
The following information should be read in conjunction with the consolidated financial statements and notes
thereto appearing elsewhere in this Form 10-QSB.
Our short-term objectives are to raise additional operating funds through a mixture of equity capital and or
loans. With anticipated additional funding, the Company expects to continue further software development on
Linux, Unix and other software platforms. We further anticipate executing multiple software license and joint
venture agreements in the 3D graphics technology space.
Our long- term objectives are to generate increasing revenues in four areas: the Linux end user market; the 3D
animation and production markets through software licensing and joint venture partnerships; the licensing of the
Company's technology to developers of Computer-Aided Design (CAD) tools and finally, sales of 3D tools to CAD end
users.
During the Quarter ended September 30, 2001, ADVA suffered a loss from operations of $291,581. We funded our
operating losses during this period through a combination of long-term debt and the private sale of shares of our
common stock.
During the year ended March 31, 2001, we generated operating losses of $1,253,445. We funded these operating
losses during this period through a combination of low interest long-term debt and the private sale of shares of
our common stock.
We do not have available creditor, bank financing or other external sources of funding. Due to historical
operating losses, our operations have not generated positive cash flow. In order to obtain capital we may need to
sell additional shares of common stock and/or borrow funds from private lenders, some of which may take the form
of a convertible loan. There is no assurance if we do receive a loan we will be able to pay this money back to
the lender prior to its due date, thus having to convert the loan to stock. The Company is actively seeking fresh
capital from a pool of accredited investors, some of which are existing investors.
Based upon an anticipated infusion of capital via loans, capital raised via the sale of stock plus anticipated
revenue from joint venture agreements with hardware and software manufacturers in the 3D, Animation and CAD
marketplaces, we believe we will have adequate funds to meet our projected cash needs through Fiscal Year 2002.
However, should we not receive the infusion of capital, and or not execute anticipated agreements with hardware
and software manufacturers, the Company will incur additional losses and may be forced to cease operations. No
assurances can be given at this time as to the availability of the new funding, the terms thereof, or the
execution of revenue generating agreements.
Going forward, we have reduced our total number of employees to two, now relying on outside vendors and
consultants for many of the Company's operations. Should new operating capital becomes available, the Company
anticipates the immediate re-hiring or contracting of certain former employees.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
No reports on 8-K have been filed during the quarter covered by this report.
Signatures
In accordance with the requirements of the Exchange Act, the issuer caused this report to be signed on its behalf
by the undersigned, thereunto duly signed.
/s/ Ernst R. Verdonck
-----------------------------------------------------
Ernst R. Verdonck
CEO and President
Date: 07/15/02
