SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X]Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended March
31, 2003.
[ Transition report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition
period from to .
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Commission file number: 0-31417
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BOTTOMLINE HOME LOAN, INC.
--------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0356064
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
- -----------------------------------------------------------------------------
200 South Los Robles Avenue, Suite 230, Pasadena California 91101
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(Address of principal executive office) (Zip Code)
(626) 432-1500
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(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 XX No
The number of outstanding shares of the issuer's common stock, $0.001 par value
(the only class of voting stock), as of May 9, 2003 was 15,539,000.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS.....................................................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION................................................4
PART II
ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES..................................................................6
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.........................................................................6
SIGNATURES........................................................................................................7
INDEX TO EXHIBITS................................................................................................11
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
2
PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Bottomline Home Loan, Inc., a
Nevada corporation, unless otherwise indicated. Unaudited, condensed interim
financial statements including a balance sheet for the Company as of the quarter
ended March 31, 2003, and statements of operations, and statements of cash flows
for the interim period up to the date of such balance sheet and the comparable
period of the preceding year are attached hereto as Pages F-1 through F-10 and
are incorporated herein by this reference.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
F-1
INDEX TO FINANCIAL STATEMENTS
Unaudited Balance Sheet as of March 31, 2003....................................................................F-3
Unaudited Statement of Operations for the three months and nine months ended
March 31, 2003 and 2002.........................................................................................F-4
Unaudited Statement of Cash Flows for the nine months ended
March 31, 2003 and 2002.........................................................................................F-5
Notes to Condensed Financial Statements...................................................................F-6 to 10
F-1
BOTTOMLINE HOME LOAN, INC.
Unaudited Consolidated Balance Sheet
March 31, 2003
[GRAPHIC OMITTED]
See accompanying notes to consolidated financial statements.
F-3
BOTTOMLINE HOME LOAN, INC.
Unaudited Consolidated Statement of Cash Flows
Nine Months Ended March 31,
` Three Months Ended Nine Months Ended
March 31, March 31,
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2003 2002 2003 2002
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Revenues:
Equity builder finder's fee $ $ 29,472$ 7,020$ 162,275
Origination fee revenue 281,451 346,972 910,445 755,021
Income from sale of loans and servicing rights 451,153 512,737 1,344,758 1,115,728
----------------------------------------------------------
Total revenues 732,604 889,181 2,262,223 2,033,024
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Operating expenses:
Salaries and direct loan costs 552,862 636,358 1,593,707 1,413,185
Interest 15,194 28,378 43,137 83,826
Selling, general and administrative 132,609 184,867 418,005 441,992
----------------------------------------------------------
Total operating expenses 700,665 849,603 2,054,849 1,939,003
----------------------------------------------------------
Income from operations 31,939 39,578 207,374 94,021
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Other income (expense):
Interest income - - - 3,094
Other income (expense) - - (11,588) -
Realized and unrealized gains (losses)
on securities - - - (7,290)
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Total other income (expense) - - (11,588) (4,196)
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Net income before minority interest
and taxes 31,939 39,578 195,786 89,825
Income tax (expense) benefit - - - -
Minority share of income (6,517) (9,895) (39,157) (26,966)
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Net income $ 25,422 $ 29,683$ 156,629 $ 62,859
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Net income per common share
- basic and diluted $ 0.0$ 0$00 0.0$ 0.00
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Weighted average shares outstanding
- basic and diluted 15,539,000 16,039,000 15,621,000 16,039,000
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2003 2002
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Cash flows from operating activities:
Net income $ 156,629 $ 62,859
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 8,100 8,229
Realized and unrealized loss on trading securities - 7,290
Minority interest in net income 39,157 26,966
Decrease (increase) in:
Receivable from sale of loans (1,394,814) 747,898
Equity builder finder's fee receivable 155,903 (179,180)
Prepaid and other assets 12,500 (500)
Increase (decrease) in:
Accounts payable and accrued liabilities 64,704 29,725
Warehouse line of credit 1,344,756 (796,649)
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Net cash provided by (used in) operating activities 386,935 (93,362)
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Cash flows from investing activities:
Decrease in other investments - 12,500
Proceeds from sale of marketable securities - 56,788
Purchase of property and equipment (2,970) (3,833)
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Net cash (used in) provided by investing activities (2,970) 65,455
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Cash flows from financing activities:
Purchase of subsidiary stock (70,000) -
Increase in related party payable - 8,154
Net decrease in note payable (181,783) -
Proceeds from long-term debt - 277,764
Payments of long-term debt (11,529) (10,187)
Issuance of subsidiary stock for cash - 20,000
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Net cash (used in) provided by financing activities (263,312) 295,731
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Net increase in cash and cash equivalents 120,653 267,824
Cash and cash equivalents at beginning of period 274,028 41,672
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Cash and cash equivalents at end of period $ 394,681 $ 309,496
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During the nine months ended March 31, 2003, the Company:
Bought back Company stock using marketable securities totaling $12,500.
Had a change in minority interest of $31,722 du to the buy-back of subsidiary
common stock.
See accompanying notes to consolidated financial statements.
F-4
BOTTOMLINE HOME LOAN, INC.
Notes to Unaudited Consolidated Financial Statements
March 31, 2003 and 2002
1. Summary of Nature of Business
Significant The Company incorporated under the laws of the State of Nevada
Accounting on February 15, 1996 as CyberEnergy, Inc. The name of the
Policies Company was changed to Bottomline Home Loan, Inc. on May 4,
2001. The Company was a developmental stage company until
June 27, 2001, when it acquired 76% of the outstanding common
stock of Bottomline Mortgage, Inc. The transaction was
accounted for as a reverse acquisition using the purchase
method of accounting. The Company assists individuals,
brokers, and others in obtaining long-term trust deed (mortgage)
financing. The Company processes loan applications, effects
loan underwriting and receives purchase commitments from
investor groups for mortgage backed loans prior to funding the
loans, primarily at its corporate office in Pasadena, California.
Loan applications are also solicited and received at our location
in Clearwater, Florida. The Company is a loan correspondent, as
defined by the U.S. Department of Housing and Urban
Development (HUD), and is therefore required to conform to
certain net worth, liquid assets and other conditions and
requirements and to follow certain specific regulations issued
from time to time by HUD.
Principles of Consolidation
The accompanying consolidated balance sheet includes
the accounts of Bottomline Home Loan, Inc. (formerly
known as Cyberenergy, Inc.) and its 80%-owned
subsidiary, Bottomline Mortgage, Inc. Minority
interest represents minority shareholders'
proportionate share of the equity in Bottomline
Mortgage, Inc. All significant intercompany balances
and transactions are eliminated.
Estimates
The preparation of financial statements in conformity
with accounting principles generally accepted in the
United States of America requires management to make
estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results
could differ from those estimates.
F-5
BOTTOMLINE HOME LOAN, INC.
Notes to Unaudited Consolidated Financial Statements
Continued
1. Summary of Concentration of Credit Risk
Significant The Company's primary business is originating conventional
Accounting mortgage loans and mortgage loans based on FHA/HUD Title II
Policies regulations. As an approved FHA/HUD Title II loan Continued
correspondent, the Company's mortgages are insured by FHA.
Title II regulations limit the size of individual
loans to specific dollar amounts, and contain
guidelines regarding borrower credit-worthiness.
Company management believes the credit risk associated
with specific borrowers and geographic concentrations
is not significant.
The Company maintains cash in bank deposit accounts,
which at times may exceed federally insured limits.
The Company has not experienced any losses in such
accounts and believes it is not exposed to any
significant credit risk on cash and cash equivalents.
Financial instruments, which potentially subject the
Company to concentration of credit risk include
receivables from investors and customers. In the
normal course of business, the Company provides credit
terms to investors and customers. Accordingly, the
Company performs ongoing credit evaluations of
investors and customers.
Earnings Per Share
The computation of basic earnings per common share is
based on the weighted average number of shares
outstanding during each period.
The computation of diluted earnings per common share
is based on the weighted average number of shares
outstanding during the period plus the common stock
equivalents which would arise from the exercise of
stock options and warrants outstanding using the
treasury stock method and the average market price per
share during the period. Common stock equivalents are
not included in the diluted per share calculation when
their effect is antidilutive. As of March 31, 2003 and
2002, the Company had no stock options or warrants
outstanding.
F-6
BOTTOMLINE HOME LOAN, INC.
Notes to Unaudited Consolidated Financial Statements
Continued
1. Summary of Recognition of Mortgage Fee Income
Significant Mortgage fee income consists of service and release premiums,
Accounting origination fees, processing fees and certain other income related to
Policies mortgages. For mortgages sold, mortgage fee income and related
Continued expenses are recognized at the time the loan meets the sales criteria
for financial assets which are; (1) the transferred
assets have been isolated from the Company and its
creditors, (2) the transferee (investor) has the right
to pledge or exchange the mortgage, and (3) the
Company does not maintain effective control over the
transferred mortgage loan. The Company does not carry
any mortgage loans for investment purposes. A firm
commitment is obtained from the investor on a
loan-by-loan basis before closing a loan. Immediately
after closing, the loan documents are sent to the
investor endorsed in blank, thus meaning title and
effective control have transferred to the investor. At
such time, revenue, calculated as the amount due from
the investor in excess of the loan funded by the
Company, is recorded.
In connection with the sale of mortgage loans, the
Company also sells the servicing rights to such loans.
The Company recognizes revenue from the sale of such
servicing rights when an agreement with the purchaser
of such servicing rights exists, ownership to such
servicing rights has been transferred to the
purchaser, the selling price of such servicing rights
is fixed or determinable, and collectibility is
reasonable assured. The Company's contracts with
investors or servicers that purchase these rights
require certain warrants and representations by the
Company which guarantee the mortgages will be serviced
for a minimum of three to twelve months after they are
purchased. Should for any reason the loan be paid off
or prepaid during the first year, the servicer may
request the return of all or a pro-rated portion of
the service release premium paid to the Company. The
Company's accounting policy is to provide a reserve
for the amount of fees that are estimated to be
refunded to the servicers, however to date such
estimates are minor. During the nine months ended
March 31, 2003 and the years ended June 30, 2002 and
2001, the Company did not refund any service release
premiums to a servicer.
F-7
BOTTOMLINE HOME LOAN, INC.
Notes to Unaudited Consolidated Financial Statements
Continued
1. Summary of Recognition of Mortgage Fee Income - Continued
Significant Commitment fees received, are non-refundable fees that arise from
Accounting agreements with borrowers that obligate the Company to make a loan
Policies or satisfy an obligation under a specified condition, are
initially Continued deferred and recognized as revenue as loans are
delivered to investors, or when it is evident that the
commitment will not be utilized.
Loan origination fees received and direct costs of
originating loans are deferred and recognized as
income or expense when the loans are sold to
investors.
Mortgage loans are primarily funded by lending
institutions under warehouse line of credit
agreements.
Recognition of Equity Builder Finder's Fee
Equity builder finder's fees represents fees charged
to customers to initiate the Equity Builder Program
(the program). The program allows the customer to make
bi-weekly payments by automatic transfer, which
results in a quicker loan payoff. Equity builders
finder's fees are recognized upon the Company
receiving confirmation from the servicing agent that
the loan payments will be processed in accordance with
the program. The unpaid balance from the program due
from customers at March 31, 2003 was $197,837, which
is shown under the caption equity builder finder's fee
receivable on the balance sheet.
F-8
1. Summary of Income Taxes
Significant Deferred taxes are computed using the asset and liability method.
Accounting Under the asset and liability method, deferred tax assets and liabilities
Policies are recognized for future tax consequences attributable to differences
Continued between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are
expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that
includes the enactment date.
2. Unaudited The unaudited financial statements include the accounts of the
Financial Company and include all adjustments (consisting of normal recurring
Statements items), which are, in the opinion of management, necessary to present
fairly the financial position as of March 31, 2003 and
the results of operations for the three and nine
months ended March 31, 2203 and 2002 and cash flows
for the nine months ended March 31, 2003 and 2002. The
results of operations for the three and nine months
ended March 31, 2003 are not necessarily indicative of
the results to be expected for the entire year.
3. Basis of The accompanying unaudited consolidated financial statements have
Presentation been prepared by management in accordance with the instructions in
Form 10-QSB and, therefore, do not include all
information and footnotes required by accounting
principles generally accepted in the United States of
America and should, therefore, be read in conjunction
with the Company's Form 10-KSB, filed with the
Securities and Exchange Commission. These statements
do include all normal recurring adjustments, which the
Company believes necessary for a fair presentation of
the statements. The interim operations results are not
necessarily indicative of the results for the entire
year.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN O
OPERATIONS
General
Bottomline Home Loan, Inc. was formed under Nevada law on February 15, 1996. On
June 26, 2001, Bottomline Home Loan, Inc. signed an agreement to acquire a 76%
interest in Bottomline Mortgage, Inc. in exchange for 10,000,000 of the common shares of
the Company or a 62% interest of the issued and outstanding shares of its common stock.
Bottomline Mortgage, Inc. then became an operating subsidiary of the Company effective
as of July 1, 2001.
Our executive office is located at 200 South Los Robles Avenue, Suite
230, Pasadena, California 91101, and our telephone number is (800)
520-5626. Our registered statutory office in Nevada is located at 711 S.
Carson Street, Suite 1, Carson City, Nevada 89701. We use the terms
"Company" and "we" in this report to refer to Bottomline Home Loan, Inc.
and its 80%-owned subsidiary, Bottomline Mortgage, Inc., unless the
context indicates otherwise.
Bottomline Mortgage, Inc. (Bottomline) was founded in 1989. Bottomline
has focused on growing its origination volume through the construction
of a retail origination network as a result of internal growth and
through operation of an Internet mortgage web site,
www.bottomlinemortgage.com.
The Company's operations are conducted primarily through its subsidiary
Bottomline Mortgage, Inc. Bottomline is an independent retail mortgage
banking company engaged in the business of originating and selling
residential mortgage loans. Bottomline offers a broad array of
residential mortgage products targeted at high-credit-quality borrowers
over the Internet, as well as through 14 commission-compensated loan
originators.
Bottomline operates from a principal office in Pasadena, California and
a call center in Clearwater, Florida. This call center was relocated
from San Marcos, Texas in September of 2002 to service the 18 states in
which it is currently approved to originate mortgages. Bottomline
operates primarily as a mortgage banker, funding and selling its loan
products to various buyers. In the year 2002, Bottomline Mortgage, Inc.
originated approximately $68.8 million in loans, of which 93% were first
mortgages and 7% were second mortgages made to owners seeking to
refinance property they already owned.
Our revenues increased during the past nine months due to the hiring of
6 new commission compensated loan originators in our Florida call
center, along with the continued interest rate cuts during 2002.
The operations of the Company are more fully set forth in the 10-KSB
filed on September 30, 2002 .
4
The number of actual mortgages funded during the nine month period ended
March 31, 2003 was up 41.6%, from 291 loans for the nine months ended
March 31, 2002 to 412 during the same nine-month period in 2003.
Although the volume of mortgages funded increased by 41.6%, our revenue
from origination fees and the sale of loans and servicing rights only
increased by 20.5%. The actual revenue did not increase at a similar
rate as the volume due to a reduction in costs charged per loan and a
decrease in the average loan amount funded. The decrease in the average
loan amount funded is mainly due to the increase in volume of loans in
Florida. In 2002 the majority of the loans funded were in California
where the average price of homes is greater than Florida.
Results Of Operations
The Company's results of operations for the periods described below are
not necessarily indicative of results of operations for future periods,
which depend upon numerous factors including the Company's ability in
the future to enter new markets and introduce additional new products
into its markets.
Three months ending March 31, 2003 and 2002
Revenues for the three months ended March 31, 2003 decreased 17.6% to
$732,604 as compared to revenue of $889,181 for the three months ended
March 31, 2002. The decrease in revenues for the three months ended
March 31, 2003 as compared to 2002 was due mainly to two factors. First,
we focused our sales and marketing efforts on new mortgage loans rather
than the equity builder program and as a result, had no revenues from
the equity builder program during the quarter ended March 31, 2003 as
compared to approximately $29,000 during the same period in 2002.
Because of the current status of interest rates, we have focused our
efforts and resources on originating new loans and refinancing existing
loans rather than the equity builder program. We will continue to use
our personnel and resources in such a way to maximize our efficiency and
profitability, therefore the equity builder finder's fees may continue
to be a minor portion of our revenue while rates remain at such
historical low levels. The second factor causing a decline in our
revenues during the quarter ended March 31, 2003 as compared to 2002 was
a decrease in the average dollar amount of loans funded. During the
March 31, 2002 quarter, the substantial majority of our loans funded
were from the Southern California area whereas in 2003 we had a
substantial number of loans funded as a result of our Florida office
location. Generally, the cost of homes in Florida is less than the cost
of homes in Southern California, thus resulting in a decrease in the
average dollar amount of loans funded.
General, and administrative expenses were $132,609 for the three months
ended March 31, 2003 and $184,867 for the comparable period in 2002, a
decrease of $52,258 or approximately 28%. The decrease was primarily a
result of the decrease in marketing and administrative expenses
associated with our equity builder program.
5
Net income for the quarters ended March 31, 2003 and 2002 was $25,422
and $29,683, respectively; a decrease of 14%. As a percentage of
revenue, net income for the three months ended March 31, 2003, as
compared to the same period in 2002 increased approximately 0.1% from
3.4% in 2002 to 3.5% in 2003.
Nine months ending March 31, 2003 and 2002
Revenues for the nine months ended March 31, 2003 increased 11.3% to
$2,262,223 as compared to revenue of $2,033,024 for the nine months
ended March 31, 2002 due to growth in the number of loans written during
the period. This growth in loans originated was partially offset by a
decrease in equity builder finder's fees and a decrease in the average
dollar amount of loans funded as noted above. Because of the current
status of interest rates, we have focused our efforts and resources on
originating new loans and refinancing existing loans rather than the
equity builder program. We will continue to use our personnel and
resources in such a way to maximize our efficiency and profitability,
therefore the equity builder finder's fees may continue to be a minor
portion of our revenue while rates remain at such historical low levels.
General, and administrative expenses were $418,005 for the nine months
ended on March 31, 2003 and $441,992 for the comparable period in 2002,
a decrease of $23,987. The decrease was primarily a result of the
decrease in marketing and administrative expenses associated with our
equity builder program.
Net income for the nine months ended March 31, 2003 and 2002 was
$156,629 and $62,859, respectively. As a percentage of revenue, net
income for the nine months ended March 31, 2003, as compared to the same
period in 2002 increased approximately 3.8% from 3.1% in 2002 to 6.9% in
2003. This increase in net income as a percentage of revenues over the
comparable period can be attributed to the increase in loan activity,
the reduction of interest expense due to more favorable rates on our
warehouse line of credit, and the reduction of general and
administrative expenses.
Liquidity and Capital Resources
Total stockholders' equity in the Company was $363,870 as of March 31,
2003, compared to a stockholder's equity of $268,850 as of March 31,
2002 and $258,019 at year end of June 30, 2002.
The Company's net working capital was $420,260 as of March 31, 2003
compared to a net working capital of $301,844 at year ended June 30,
2002.
The Company had an ending cash balance of $394,681 at March 31, 2003, as
compared to $309,496 at March 31, 2002. Cash flows used in operations
was $(93,362) for the nine months ended March 31, 2002 as compared to
cash flows provided by operations of $386,935 for the comparable period
in 2003.
6
Critical Accounting Policies and Estimates
The following is a discussion of our critical accounting policies and
estimates that management believes are material to an understanding of
our results of operations and which involve the exercise of judgment or
estimates by management.
Revenue Recognition. Mortgage fee income consists of service and
release premiums, origination fees, processing fees and certain other
income related to mortgages. For mortgages sold, mortgage fee income and
related expenses are recognized at the time the loan meets the sales
criteria for financial assets which are; (1) the transferred assets have
been isolated from Bottomline and its creditors, (2) the transferee
(investor) has the right to pledge or exchange the mortgage, and (3)
Bottomline does not maintain effective control over the transferred
mortgage loan. Bottomline does not carry any mortgage loans for
investment purposes. A firm commitment is obtained from the investor on
a loan-by- loan basis before closing a loan, therefore each loan is sold
virtually at the same time it is closed, removing all exposure to
interest rate changes. Such loans are sold at premiums or discounts
depending on the ultimate yield required by the investor. All premiums
or discounts are paid by the investor at the time the loan is sold.
Immediately after closing, the loan documents are sent to the investor
endorsed in blank, thus allowing the holder of the loan to sell or
transfer the loan at their discretion. This means title and effective
control have transferred to the investor. At such time, revenue,
calculated as the amount due from the investor in excess of the loan
funded by Bottomline, is recorded. Payment of most receivables from the
sale of loans is received within one week of closing. Because title of
the loan has been transferred, Bottomline is not exposed to market risk
during this time period. Bottomline may be required to repurchase the
loans from investors if specific original documents specified by the
investor are not delivered, if there was fraud in the origination of the
loan, or if the borrower becomes delinquent during the first several
months after the loan is sold. Bottomline's accounting policy is to
reserve for the estimated loan repurchases. During the nine month ended
March 31, 2003 and fiscal years ended June 30, 2002 and 2001, Bottomline
recorded loan repurchase expense of approximately $0, $31,000 and
$47,000 respectively.
In connection with the sale of mortgage loans, Bottomline also sells
the servicing rights to such loans. Bottomline recognizes revenue from
the sale of such servicing rights when an agreement with the purchaser
of such servicing rights exists, ownership to such servicing rights has
been transferred to the purchaser, the selling price of such servicing
rights is fixed or determinable, and collectability is reasonably
assured. Bottomline's contracts with investors or servicers that
purchase these rights require certain warrants and representations by
Bottomline which guarantee the mortgages will be serviced for a minimum
of three to twelve months after they are purchase. Should for any reason
the loan be paid off or prepaid during the first year, the servicer may
request the return of all or a pro-rata portion of the service release
premium paid to Bottomline. Bottomline's accounting policy is to provide
a reserve for the amount of fees that are estimated to be refunded to
the servicers, however to date such estimates are minor. During the nine
months ended March 31, 2003 and fiscal years ended June 20, 2002 and
2001, Bottomline
7
did not refund any service release premiums to a servicer.
Commitment fees received, are non-refundable fees that arise from
agreements with borrowers that obligate Bottomline to make a loan or
satisfy an obligation under a specified condition, are initially
deferred and recognized as revenue as loans are delivered to investors,
or when it is evident that the commitment will not be utilized.
Loan origination fees received and direct costs of originating loans
are deferred and recognized as income or expense when the loans are sold
to investors.
Equity builder revenue represents finders' fees charged to customers to
initiate the Equity Builder Program (the program). The program allows
the customer to make bi- weekly payments by automatic transfer, which
results in a quicker loan payoff. Equity builder revenue is recognized
upon Bottomline receiving confirmation from the servicing agent that the
loan payments will be processed in accordance with the program. The
unpaid balance from the program due from customers at March 31, 2003 and
June 30, 2002 and 2001 was $197,837, $353,740 and $0, respectively,
which is shown under the caption "Equity builder finder's fee
receivable" on the balance sheet.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedure
Under the supervision and with the participation of the Company's CEO & CFO, the
Company evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-14(c) and 15d-14(c)
under the Exchange Act) as of a date (the "Evaluation Date") within 90 days
prior to the filing date of this report. Based upon that evaluation, the CEO &
CFO concluded that, as of the Evaluation Date, the Company's disclosure controls
and procedures are effective in timely alerting him to the material information
relating to the Company (or its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings.
Changes in internal controls.
There were no significant changes made in the Company's internal controls during
the period covered by this report or, to the Company's knowledge, in other
factors that could significantly affect these controls subsequent to the date of
the CEO & CFO's evaluation.
/s/ Buster Williams
Buster Williams, Jr.
CEO & CFO
May 14, 2003
8
PART II
ITEM 1 LEGAL PROCEEDINGS
NONE
ITEM 2 RECENT SALES OF UNREGISTERED SECURITIES
There have been no sales of unregistered securities since the filing of the
Company's 10-KSB as filed on September 30, 2002.
Item 5. Other Information
In December 2002, Bottomline Mortgage, Inc. paid $58,000 to acquire shares of Bottomline
Mortgage, Inc. from Buster Williams, Jr. plus an additional $12,000 during the period from
January 1, 2003 thru March 31, 2003. The shares were acquired in connection with the
settlement of the legal matter as reported in the filing of the Company's 10-KSB on September
30, 2002 under legal proceedings. Buster Williams, Jr. paid $70,000 for such shares and
therefore did not record any profit on the sale of such shares to Bottomline Mortgage, Inc..
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits on page 12 of this Form 10-QSB, and are
incorporated herein by this reference.
(b) Reports on Form 8-K. No reports on Form 8-K
-------------------
were filed during the quarter.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, hereunto duly
authorized, this 9th day of May, 2003.
BOTTOMLINE HOME LOAN, INC.
/s/ Buster Williams
Buster Williams. Jr.
CEO, CFO and Director
9
CERTIFICATIONS
I, Buster Williams Jr., certify that:
1. I have reviewed this quarterly Report on Form 10-QSB of Bottomline Home Loan, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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 functions):
(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
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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: May 14, 2003 /s/ Buster Williams Jr.
CEO & CFO
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. DESCRIPTION
3(i) * Articles of Incorporation of the
Company (incorporated herein by reference from Exhibit
No. 3(i) of the Company's Form 10-SB as filed with the Securities and Exchange
Commission on August 30, 2000).
3(ii) * Bylaws of the Company, as amended
(incorporated herein by reference from Exhibit
3(ii) of the Company's Form 10-SB as filed with the
Securities and Exchange Commission on August 30,
2000).
99.1 13 Certification As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002
* Incorporated herein by reference from the referenced
filings previously made by the Company.
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EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bottomline Home Loan, Inc. (the
"Company") on Form 10- QSB for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Buster Williams Jr., CEO & CFO of the Company, certify, pursuant to 18 U.S.C.
ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of my knowledge and belief:
(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.
/s/ Buster Williams Jr., CEO & CFO
- --------------------
May 14, 2003
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