UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 0-2380
SPORTS ARENAS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1944249
(State of Incorporation) (I.R.S. Employer I.D. No.)
5230 Carroll Canyon Road, Suite 310, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 587-1060
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 _
The number of shares outstanding of the issuer's only class of common stock
($.01 par value) as of October 31, 1996 was 27,250,000 shares.
SPORTS ARENAS, INC.
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
INDEX
Part I - Financial Information:
Item 1.- Consolidated Condensed Financial Statements:
Balance Sheets as of September 30, 1996 and June 30, 1996 1-2
Statements of Operations for the Three Months Ended September 30, 3
1996 and 1995
Statements of Cash Flows for the Three Months Ended September 30, 4
1996 and 1995
Notes to Financial Statements 5-7
Item 2.- Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-10
Part II - Other Information 11
Signature 12
SPORTS ARENAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
September 30, June 30,
1996 1996
---- ----
(Unaudited)
Current assets:
Cash and equivalents .......................... $ 1,542,158 $ 1,093,465
Sales proceeds held in escrow ................. 1,066,939 --
Current portion of notes receivable ........... 25,000 25,000
Current portion of notes receivable-affiliate . 100,000 100,000
Construction contract receivables ............. 644,284 623,877
Other receivables ............................. 28,110 134,843
Prepaid expenses .............................. 208,629 148,225
Property and equipment sold on August 7, 1996 . 2,745,978 --
----------- -----------
Total current assets ........................ 3,615,120 4,905,986
----------- -----------
Receivables due after one year:
Note receivable ............................... 720,449 731,993
Less deferred gain .......................... (716,025) (716,025)
Affiliate ..................................... 590,140 552,567
Other ......................................... 73,662 81,696
----------- -----------
668,226 650,231
Less current portion ........................ (125,000) (125,000)
----------- -----------
543,226 525,231
----------- -----------
Property and equipment, at cost:
Land .......................................... 678,000 678,000
Buildings ..................................... 2,461,327 2,461,327
Equipment and leasehold and tenant improvements 1,249,873 1,234,170
----------- -----------
4,389,200 4,373,497
Less accumulated depreciation and amortization (1,252,273) (1,175,332)
----------- -----------
Net property and equipment .................. 3,136,927 3,198,165
----------- -----------
Other assets:
Undeveloped land, at cost ..................... 4,737,353 4,737,353
Capitalized carrying costs on leased land ..... 85,095 85,569
Goodwill, net ................................. 470,875 538,144
Deferred loan costs, net ...................... 82,678 97,161
Investments ................................... 2,204,095 2,232,119
Other ......................................... 103,075 125,353
----------- -----------
7,683,171 7,815,699
----------- -----------
$ 14,978,444 $ 16,445,081
============ ============
SPORTS ARENAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
September 30, June 30,
1996 1996
---- ----
(Unaudited)
Current liabilities:
Long-term debt subject to extinguishment ........ $ -- $ 1,808,282
Assessment district obligation - in default ..... 2,111,398 2,061,090
Long-term debt due within one year .............. 912,000 1,061,000
Long-term debt due within one- related party .... 100,000 100,000
Accounts payable ................................ 922,781 908,530
Accrued payroll and related expenses ............ 221,320 308,619
Accrued property taxes .......................... 382,914 385,591
Accrued interest ................................ 36,543 33,794
Accrued frequent bowler program expense ......... 231,955 250,506
League bowler prize funds ....................... 55,490 --
Other accrued liabilities ....................... 161,612 297,361
------------ ------------
Total current liabilities ..................... 5,136,013 7,214,773
------------ ------------
Long-term debt, excluding current portion .......... 4,058,326 4,167,515
------------ ------------
Long-term debt, related party ...................... 219,744 219,744
------------ ------------
Distributions received in excess of basis in
investment ....................................... 9,862,384 9,828,360
------------ ------------
Tenant security deposits 26,523 25,894
------------ ------------
Minority interests in consolidated subsidiaries .... 2,212,677 2,212,677
------------ ------------
Commitments and contingencies
Shareholders' equity (deficiency):
Common stock, $.01 par value, 50,000,000 shares
authorized, 27,250,000 shares issued and
outstanding ................................... 272,500 272,500
Additional paid-in capital ...................... 1,730,049 1,730,049
Accumulated deficit ............................. (6,716,525) (7,448,409)
------------ ------------
(4,713,976) (5,445,860)
Less note receivable from shareholder ........... (1,823,247) (1,778,022)
------------ ------------
Total shareholders' equity (deficiency) ....... (6,537,223) (7,223,882)
------------ ------------
$ 14,978,444 $ 16,445,081
============ ============
See accompanying notes to consolidated condensed financial statements.
SPORTS ARENAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
---- ----
Revenues:
Bowling ......................................... $ 990,498 $ 1,743,800
Rental .......................................... 124,411 124,019
Construction .................................... 666,705 528,704
Other ........................................... 40,862 30,233
Other-related party ............................. 27,766 27,040
----------- -----------
1,850,242 2,453,796
----------- -----------
Costs and expenses:
Bowling ......................................... 806,746 1,218,599
Rental .......................................... 54,696 54,927
Construction .................................... 573,049 461,391
Development ..................................... 29,610 46,379
Selling, general and administrative ............. 521,176 745,386
Depreciation and amortization ................... 179,324 261,353
----------- -----------
2,164,601 2,788,032
----------- -----------
Loss from operations ............................... (314,359) (334,236)
----------- -----------
Other income (charges):
Investment income:
Related party ................................. 56,257 55,894
Other ......................................... 13,623 17,568
Interest expense and amortization of finance
costs ......................................... (117,362) (220,800)
Interest expense related to development
activities .................................... (68,620) (54,695)
Recognize deferred gain ......................... -- 5,650
Gain from sale of bowling centers ............... 1,099,514 --
Equity in income of investees ................... 62,831 40,775
----------- -----------
1,046,243 (155,608)
----------- -----------
Net income (loss) .................................. $ 731,884 $ (489,844)
=========== ===========
Per common share (based on weighted average
shares outstanding):
Net income (loss) ............................. $ .03 $(.02)
===== =====
See accompanying notes to consolidated condensed financial statements.
SPORTS ARENAS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
---- ----
Cash flows from operating activities:
Net income (loss) ................................. $ 731,884 $ ( 489,844)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Amortization of deferred financing costs ........ 8,130 9,842
Depreciation and amortization ................... 179,324 261,353
Undistributed income of investees ............... (62,831) (40,775)
Gain on sale of bowling centers ................. (1,099,514) --
Interest accrued on assessment district
obligation ................................... 50,308 52,211
Interest accrued on receivable from shareholder . (45,225) (43,929)
Recognize deferred gain ......................... -- ( 5,650)
----------- -----------
(237,924) (256,792)
Changes in assets and liabilities:
(Increase) decrease in receivables and prepaid
expenses ..................................... 40,520 (91,433)
Increase (decrease) in accounts payable and
accrued expenses ............................. (171,786) 233,786
Other ........................................... 20,110 (1,537)
----------- -----------
Net cash provided (used) by operating
activities .................................. (349,080) (298,722)
----------- -----------
Cash flows from investing activities:
(Increase) decrease in notes receivable ........... (17,995) 12,042
Capital expenditures .............................. (15,703) (3,036)
Distributions from investees ...................... 111,524 105,000
Proceeds from sale of bowling centers ............. 985,246 --
Acquire additional interest in Redbird Properties . -- (5,264)
----------- -----------
Net cash provided (used) by investing activities 1,063,072 108,760
----------- -----------
Cash flows from financing activities:
Scheduled principal payments ...................... (265,299) (168,215)
Proceeds from line of credit ...................... -- 210,000
Payments on line of credit ........................ -- (15,000)
----------- -----------
Net cash used by financing activities ......... (265,299) 26,785
----------- -----------
Net increase (decrease) in cash and equivalents ...... 448,693 19,569
Cash and equivalents, beginning of period ............ 1,093,465 120,027
----------- -----------
Cash and equivalents, end of period .................. $ 1,542,158 $ 139,596
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental Schedule of Non-Cash Investing and Financing Activities:
The sale of three bowling centers on August 7, 1996 resulted in the following
increase (decreases) to the following assets and liabilities: sale proceeds
held in escrow- $1,066,939 (received October 15, 1996); property and
equipment- ($6,741,237); accumulated depreciation- ($4,013,747); deferred loan
costs-($6,353); prepaid expenses ($20,000); and notes payable- ($1,801,172).
The Company acquired an additional 29 percent interest in Redbird Properties,
effective July, 1, 1995, in exchange for a $446,000 note payable. As a result
of the acquisition, Redbird Properties became a consolidated subsidiary. The
acquisition and consolidation, in addition to eliminating the Company's
investment of $134,975, resulted in an increase in the following assets and
liabilities: property and equipment- $1,537,984; accumulated depreciation-
$331,500; note payable- $713,538; note payable, related party- $446,000. See
accompanying notes to consolidated condensed financial statements.
SPORTS ARENAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1. The information furnished reflects all adjustments which management
believes are necessary to a fair statement of the Company's financial
position, results of operations and changes in cash flow for the interim
periods.
2. Due to the seasonal fluctuations of the bowling operations, the financial
results for the interim periods ended September 30, 1996 and 1995, are not
necessarily indicative of operations for the entire year.
3. Investments:
(a) Investments consist of the following:
September 30, June 30,
1996 1996
----------- -----------
Accounted for on the equity method:
Investment in UCV, L.P. ............. $(9,862,384) $(9,828,360)
Vail Ranch Limited Partnership ...... 2,154,063 2,182,087
----------- -----------
(7,708,321) (7,646,273)
Less Investment in UCV, L.P. classified
as liability- Distributions received
in excess of basis in investment .. 9,862,384 9,828,360
----------- -----------
2,154,063 2,182,087
Accounted for on the cost basis:
All Seasons Inns, La Paz ............ 50,032 50,032
----------- -----------
$ 2,204,095 $ 2,232,119
=========== ===========
The following is a summary of the equity in income (loss) of the
investments accounted for by the equity method:
1996 1995
---- ----
UCV, L.P. ........................... $ 62,831 $ 40,775
Vail Ranch Limited Partnership ...... -- --
-------- --------
$ 62,831 $ 40,775
======== ========
During the three months ended September 30, 1996, the Company received cash
distributions of $83,500 from UCV, L.P. and $28,024 from Vail Ranch Limited
Partners ($105,000 from UCV, L.P. in 1995).
(b) Investment in UCV, L.P.
The operating results of this investment are included in the
accompanying consolidated statements of operations based upon the
partnership's fiscal year (March 31). Summarized information from UCV,
L.P.'s unaudited statements of income for the three-month periods ended
June 30, 1996 and 1995 are as follows:
1996 1995
---- ----
Revenues ............................... $ 1,067,000 $ 1,007,000
Operating and general and
administrative costs ................. 368,000 356,000
Depreciation ........................... 49,000 48,000
Interest expense ....................... 524,000 522,000
Net income ............................. 125,000 81,000
SPORTS ARENAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1994
(Unaudited)
4. Contingencies:
(a)Old Vail Partners (OVP), a consolidated subsidiary and 50 percent owned
by the Company, owns approximately 40 acres of undeveloped land that are
located within a special assessment district of the County of Riverside,
California (the County) which was created to fund and develop roadways,
sewers, and other required infrastructure improvements in the area
necessary for the owners to develop their properties. Property within the
assessment district is collateral for an allocated portion of the bonded
debt that were issued by the assessment district to fund the
improvements. The annual payments due related to the bonded debt are
approximately $156,000 for the 40 acres. The payments continue through
the year 2014 and include interest at approximately 7-3/4 percent. OVP is
delinquent in the payment of property taxes and assessments for the last
four years. As of September 30, 1996, the County had obtained judgments
for the defaults under the assessment district obligations, however, the
County has not yet commenced foreclosure proceedings on these judgments.
The amount due to cure the judgments at September 30, 1996 was
approximately $711,000 ($688,000 at June 30, 1996). The principal balance
of the allocated portion of the bonds ($1,513,730), and delinquent
interest and penalties ($597,668 and $547,360 at September 30, 1996 and
June 30, 1996, respectively) are classified as "Assessment district
obligation- in default" in the consolidated balance sheet. In addition,
accrued property taxes in the balance sheet includes $340,169 ($337,016
at June 30, 1996) of delinquent property taxes and late fees related to
the 40 acre parcel.
In November 1993, the City of Temecula adopted a general development plan
that designates the 40 acres of property owned by OVP as suitable for
"professional office" use, which is contrary to its zoning as
"commercial" use. As part of the adoption of its general development
plan, the City of Temecula adopted a provision that, until the zoning is
changed on properties affected by the general plan, the general plan
shall prevail when a use designated by the general plan conflicts with
the existing zoning on the property. The result is that the City of
Temecula has effectively down-zoned the 40 acre parcel from a
"commercial" to "professional office" use. The parcel is subject to
Assessment District liens which were allocated in 1989 based on a higher
"commercial" use. Since the Assessment District liens are not subject to
reapportionment as a result of re-zoning, a "professional office" use is
not economically feasible due to the disproportionately high allocation
of Assessment District costs. OVP has filed suit against the City of
Temecula claiming that the City's adoption of a general plan as a means
of effectively re-zoning the property is invalid. Additionally, OVP is
claiming that, if the effective re-zoning is valid, the action is a
taking and damaging of OVP's property without payment of just
compensation. OVP is seeking to have the effective re-zoning invalidated
and an unspecified amount of damages. The outcome of this litigation is
uncertain. If the City of Temecula is successful in its attempt to
down-zone the property, the value of the property may be significantly
impaired.
(b) The Company is involved in other various routine litigation and disputes
incident to its business. In the management's opinion, based in part on
the advice of legal counsel, none of these matters will have a material
adverse affect on the Company's financial position.
SPORTS ARENAS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996 AND 1994
(Unaudited)
5. Significant Events:
(a) The Company's revolving line of credit limit was renewed and increased to
from $300,000 to $500,000. The line of credit expires in September 1997.
(b) On August 7, 1996 the Company sold the Village, Marietta and American
Bowling Centers (all located in Georgia) and related real estate for
$3,950,000 cash, which resulted in a gain of $1,099,514. At September 30,
1996, $1,066,939 of the proceeds were still held in escrow. These funds
were received on October 15, 1996. The property and equipment and the
long-term debt extinguished from the sale proceeds were presented as
current assets and liabilities at June 30, 1996, respectively. The
following are the results of operations of these bowling centers included
in the Company's statements of operations for the three months ended
September 30, 1996 and 1995: 1996 1995 Revenues $ 331,961 $ 815,298 Bowl
costs 260,183 548,743 Selling, general and administrative: Direct 93,572
211,825 Allocated 20,100 50,300 Depreciation 18,598 55,871 Interest
expense 7,401 45,674 Loss ( 67,893) ( 97,115)
ITEM2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Liquidity and Capital Resources
The working capital deficit at September 30, 1996 was $1,520,893 versus
$2,308,787 at June 30, 1996. Excluding the balance of the
assessment-district-obligation-in-default included in current liabilities, the
Company's working capital of $590,505 as of September 30, 1996 is a $838,202
increase from the $247,697 working capital deficit as of June 30, 1996. The
increase in working capital is primarily attributable to the proceeds from the
sale of three bowling centers on August 7, 1996 which was partially offset by
the $503,223 of negative cash flow from operations after debt service for the
three months ended September 30, 1996. Other than an extra $115,000 payment in
July 1996 on a note payable, this negative cash flow from operations is
comparable to the same period in 1995 and is reflective of the seasonality of
the bowling industry.
On August 7, 1996, the Company sold its three bowling centers in Georgia for
$3,950,000 cash. Including the $1,066,939 of sales proceeds held in escrow
(which was received on October 15, 1996), the cash proceeds from the sale were
$2,052,000 after deducting selling expenses and extinguishing related long-term
debt.
As described in Note 4 of the Notes to Consolidated Condensed Financial
Statements, Old Vail Partners is delinquent in the payment of special assessment
district obligations and property taxes on 40 acres of undeveloped land. The
County of Riverside has obtained judgments for the default in assessment
district payments. The amount due to cure the judgment as of September 30, 1996
is $711,000. Other than a notice of levy received in November 1995 on a 33 acre
portion of the 40 acres of land, the County has not yet commenced foreclosure
proceedings on the judgments. If the County of Riverside takes the property to
public sale and the judgments are not satisfied prior to the sale, Old Vail
Partners could lose title to the property and the property would not be subject
to redemption. Also as described in Note 4 of the Notes to Consolidated
Condensed Financial Statements, Old Vail Partners is contesting an attempt by
the City of Temeculah to effectively down-zone the property. As a results of the
judgments and the attempts to down-zone the property, the recoverability of the
carrying value of this property is uncertain.
Management estimates a cash flow deficit in the range or $200,000 to $250,000
for the remaining three quarters in the year ending June 30, 1997 from operating
activities after adding estimated distributions from UCV ($445,000) and
deducting capital expenditures and scheduled principal payments on long-term
debt. The Company believes its cash at September 30, 1996 and the Company's line
of credit will be sufficient to fund the expected cash flow deficit. This
analysis does not include consideration of the following due to their
uncertainty: any distributions the Company may receive from its investment in
Vail Ranch Limited Partners; or, any payments made on delinquent or current
property taxes and assessments on undeveloped land.
Results of Operations
The following is a recap of the circumstances related to the significant
differences between the net income for the three month period ended September
30, 1996 and the net loss for the same period in 1995 (increases in loss are in
brackets):
Gain on sale of Georgia bowling centers on
August 7, 1996 ................................. 1,099,000
Reduction in operations related to:
Sale of Redbird Lanes in May 1996 ............. 51,000
Sale of Georgia bowling centers ............... 29,000
Other changes to bowling segment ................. 30,000
Changes in construction segment .................. 6,000
Reduction in allocation of corporate overhead
to bowling segment as result of dispositions ... ( 44,000)
Increase in equity in income of investees ........ 22,000
Other changes .................................... 29,000
---------
Net change for period ......................... 1,222,000
---------
BOWLING OPERATIONS:
On August 7, 1996, the Company sold its three bowling centers located in Georgia
for $3,950,000, which resulted in a $1,099,514 gain. In May 1996 the Company
also sold the Redbird Lanes real estate and ceased operations of the bowling
center. The Company has two bowling centers remaining that are located in San
Diego, California.
The following is a summary of the changes to the components of the loss from
operations of the bowling segment during the three month period ended September
30, 1996 compared to the same period in 1995 that related to the disposition of
the bowling centers in May and August 1996:
Georgia Redbird
Bowls Lanes Combined
----- ----- --------
Revenues ................ (483,000) (288,000) (771,000)
Bowl costs .............. (289,000) (193,000) (482,000)
Selling, general and
administrative expenses:
Direct ................ (118,000) (75,000) (193,000)
Allocated ............. (30,000) (14,000) (44,000)
Depreciation ............ (37,000) (25,000) (62,000)
Loss from operations .... 9,000 (19,000) (10,000)
Interest expense ........ (38,000) (32,000) (70,000)
Net loss ................ (29,000) (51,000) (80,000)
The following is a comparison of operations of the two remaining bowling
centers:
There was no meaningful change to the bowling revenues of the two bowling
centers in San Diego compared to the same period in the prior year. Although
revenues were flat for the summer season, management is forecasting a six
percent decrease in bowling revenues for the remainder of the year due to
declines at both San Diego bowling centers in the number of league bowlers at
the beginning of the league season.
Bowl costs of these two centers increased by $62,000 primarily related to the
timing of bowling pin purchases and lane resurfacing that either occurred in a
different period in the prior year or had been deferred.
Selling, general and administrative expense directly related to the bowling
segment decreased by $46,000 primarily due to a decrease in promotions expense.
The decrease in promotions expense primarily related to discontinuing the
awarding of points for the Company's frequent bowler program. Management has
concluded that the frequent bowler program was not achieving the goals of
increasing the frequency of bowling or the loyalty of our customers.
Interest expense decreased related to these two bowling centers by $17,000 due
to the reduction in the balances of notes payable.
RENTAL OPERATIONS:
There were no significant changes to the components of the rental segment in the
period ended September 30, 1996.
OTHER ACTIVITIES:
Construction costs as a percentage of construction revenues stayed relatively
consistent in the range of 86%-87% during the periods ended September 30, 1996
and 1995. Selling, general and administrative costs related to the construction
segment increased by $20,000 primarily due to increased incentive compensation
as a result of the increased profitability in the second quarter.
Development costs and expenses primarily consists of legal costs incurred to
contest the City of Temecula's attempts to down-zone the undeveloped land owned
by Old Vail Partners. Interest expense related to development activities
primarily relates to interest accrued on the past due and current assessment
district obligations of Old Vail Partners. Old Vail Partners became a
consolidated subsidiary on October 1, 1994.
Other than changes associated with the bowling and construction segments,
selling, general and administrative expense did not change significantly in
1996. However, as a result of the disposition of the four bowling centers in May
and August 1996, there will be an increase in the unallocated portion of
corporate overhead, even though there will not be an increase in the components
of corporate overhead.
The equity in income of investees increased by $22,000 in the three month period
due to improved occupancy of University City Village (UCV). This "seniors"
apartment project has been operating at 97 percent occupancy or better since
July 1995.
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
As of September 30, 1996, there were no changes in legal proceedings from those
set forth in Item 3 of the Form 10-K filed for the year ended June 30, 1996.
ITEM 2. Changes in Securities
NONE
ITEM 3. Defaults upon Senior Securities
N/A
ITEM 4. Submission of Matters to a Vote of Security Holder
NONE
ITEM 5. Other Information
NONE
ITEM 6. Exhibits & Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K: NONE
SIGNATURES
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.
SPORTS ARENAS, INC.
By: /s/ Harold S. Elkan
Harold S. Elkan, President and Director
Date: November 14, 1996
By: /s/ Steven R. Whitman
Steven R. Whitman, Treasurer,
Principal Accounting Officer and Director
Date: November 14, 1996