SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended November 30, 2003
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________
Commission File Number: 0-19945
NoFire Technologies, Inc.
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(Name of small business issuer in its charter)
Delaware 22-3218682
--------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21 Industrial Avenue, Upper Saddle River, New Jersey 07458
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (201) 818-1616
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 X NO
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Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by the Court.
YES X NO
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State the number of shares of each of the issuer's classes of common equity
outstanding at the latest practicable date: 20,939,019 shares of Common
Stock as of January 16,2004.
Transitional Small Business Disclosure Format (check one):
YES NO X
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Page 1
NOFIRE TECHNOLOGIES, INC.
FORM 10-QSB
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Balance Sheets as of November 30, 2003(unaudited)
and August 31, 2003 3
Statements of Operations for the Three Months
ended November 30,2003 and 2002 and
the period July 13, 1987 (date of inception)
through November 30, 2003 (unaudited) 5
Statements of Cash Flows for the
Three Months ended November 30, 2003 and 2002
and the period July 13, 1987 (date of inception)
through November 30, 2003 (unaudited). 6
Notes to Unaudited Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Controls and Procedures 11
Part II - OTHER INFORMATION
Item 1. Legal 11
Item 6. Exhibits and Reports on Form 8-K
Signatures 12
Certification of Financial Information 13
Sarbanes-Oxley Act Section 906 Certification Exhibit 1
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEETS
November 30, August 31,
2003 2003
----------- ----------
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $27,425 $ 197,161
Accounts receivable - trade 36,325 59,353
Inventories 96,567 54,067
Prepaid expenses and other current assets 46,820 46,747
Receivable for sale of tax loss
carry forward 43,290 -
--------- ----------
Total Current Assets 250,427 357,328
--------- ----------
EQUIPMENT, less accumulated depreciation 5,914 6,495
--------- ----------
OTHER ASSETS:
Patents, less accumulated amortization of
$1,524,665 at November 30, 2003 and
$1,523,013 at August 31, 2003 8,366 10,018
Security deposits 24,879 19,379
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33,245 29,397
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$ 289,586 $ 393,220
========== ==========
See accompanying notes to financial statements
Page 3
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEETS
November 30, August 31,
2003 2003
----------- ----------
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES:
Settled liabilities $1,168,718 $1,168,718
Accounts payable and accrued expenses 724,276 830,287
Loans and advances payable to
stockholders 9,970 16,470
Deferred salaries 1,376,401 1,362,743
Loans payable 204,652 204,652
Convertible Debentures 8% 430,000 200,000
---------- ---------
Total Current Liabilities 3,914,017 3,782,870
---------- ---------
LOAN PAYABLE 88,811 88,811
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock $.20 par value:
Authorized - 50,000,000 shares
Issued and outstanding -20,939,019
shares at November 30, 2003 and
August 31, 2003 4,187,804 4,187,804
Capital in excess of par value 4,138,757 4,000,757
Deficit accumulated in the development
stage (12,039,803) (11,667,022)
---------- ----------
Total Stockholders' Equity (Deficiency) (3,713,242 (3,478,461)
---------- ----------
$ 289,586 $ 393,220
========== ==========
See accompanying notes to financial statements
Page 4
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
July 13, 1987
(Date of
For the Three Months Inception)
Ended November 30, through
2003 2002 November 30, 2003
---------- ------ ----------
(UNAUDITED) (UNAUDITED)
NET SALES $ 73,443 $ 101,593 $ 1,803,427
---------- ---------- ----------
COSTS AND EXPENSES:
Cost of sales 30,683 52,636 941,114
Write-down of excess inventory - - 55,000
General and administrative 299,266 238,617 15,328,549
---------- ---------- ----------
329,949 291,253 16,324,663
---------- --------- ----------
LOSS FROM OPERATIONS (256,506) (189,660) (14,521,236)
---------- ---------- ----------
OTHER EXPENSES:
Interest expense 159,640 37,088 1,913,921
Interest income ( 75) (75) (24,515)
Reorganization items - - 365,426
Litigation settlement - - 198,996
---------- ---------- ----------
159,565 37,013 2,453,828
---------- ---------- ----------
LOSS BEFORE DISCONTINUED OPERATION
AND EXTRAORDINARY ITEM (416,071) (226,673) (16,975,064)
DISCONTINUED OPERATIONS - - (1,435,392)
---------- ---------- ----------
LOSS BEFORE EXTRAORDINARY ITEM (416,071) (226,673) (18,410,456)
EXTRAORDINARY ITEM - Gain on
debt discharge - - 507,952
---------- ---------- ----------
LOSS BEFORE INCOME TAXES (416,071) (226,673) (17,902,504)
DEFERRED INCOME TAX BENEFIT 43,290 179,719 636,574
---------- ---------- ----------
NET LOSS $ (372,781) $ (46,954) $(17,265,930)
========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 20,939,019 20,627,530
========== ==========
BASIC AND DILUTED EARNINGS LOSS
PER COMMON SHARE $ (0.02) $ (0.00)
========== ==========
See accompanying notes to financial statements
Page 5
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
July 13, 1987
(Date of
For the Three Months Inception)
Ended November 30, through
2003 2002 November 30, 2003
--------- --------- ----------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (372,781) (46,954) $(17,265,930)
Adjustments to reconcile net loss to
net cash flows from operating activities:
Depreciation and amortization 2,233 2,234 1,846,114
Extraordinary gain on debt discharge - - (507,952)
Amortization of interest expense for
settled liabilities - - 634,522
Amortization of interest expense for
discount on convertible debentures 138,000 - 298,000
Amortization of interest expense for
discount on note payable - - 38,781
Revaluation of assets and liabilities
to fair value - - 482,934
Litigation settlement - - 198,996
Common stock issued in exchange for
services - (44,000) 141,780
Repricing of warrants -
Write-down of excess inventory - - 55,000
Warrants issued for consulting services - - 25,000
Changes in operating assets and liabilities
(net of effects from reverse purchase
acquisition)
Accounts receivable - trade 23,028 23,668 (36,325)
Inventories (42,500) 16,800 (151,567)
Prepaid expenses (73) 11,526 (46,820)
Receivable for sale of state
tax loss carryforward (43,290) (179,719) ( 43,290)
Accounts payable and accrued expenses(106,011) 60,012 3,561,459
Security deposits (5,500) - (24,879)
Deferred salaries 13,658 82,537 1,376,701
Obligation from discontinued
operations - - 51,118
---------- --------- ----------
Net cash flows from operating activities (393,236) (73,896) (9,230,711)
---------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment - - (40,712)
Increase in patent costs - - (164,320)
Acquisition accounted for as a
reverse purchase - - (517,893)
----------- --------- ----------
Net cash flows from investing activities - - (722,925)
----------- --------- ----------
See accompanying notes to financial statements
Page 6
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
July 13,1987
(Date of
For the Three Months Inception)
Ended November 30, through
2003 2002 November 30, 2003
--------- --------- ----------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt - - 1,506,113
Principal payments on notes payable - - (75,000)
Principal payment on settled liabilities - - (2,884,416)
Proceeds from issuance of common stock,
net of related expenses - - 8,724,943
Payments on advances from stockholders (6,500) - (67,250)
Loans and advances from stockholders - - 79,053
Interest accrued on loans from
stockholders - - (8,053)
Proceeds from issuance of convertible
debentures 230,000 - 2,366,002
Proceeds from short-term loans - 75,000 293,463
---------- ---------- ---------
Net cash flows from financing activities 223,500 75,000 9,981,061
---------- ---------- ---------
NET CHANGE IN CASH (169,736) 1,104 27,425
CASH AT BEGINNING OF PERIOD 197,161 483 -
---------- ---------- ----------
CASH AT END OF PERIOD $ 27,425 $ 1,587 $ 27,425
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 1,154 $ - $ 81,407
========== ========== ==========
Income taxes paid (received) - - (593,284)
========== ========== ==========
Common stock issued in exchange
for settlement of debt $ - $ - $2,439,816
========== ========== ==========
Common stock issued in exchange
for subscriptions receivable $ - $ - $ 95,000
========== ========== ==========
Common stock issued in exchange for
services $ - $ - $ 131,700
========== ========== ==========
See accompanying notes to financial statements
Page 7
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
November 30, 2003
NOTE 1 - Basis of Presentation:
The balance sheet at the end of the preceding fiscal year has been derived
from the audited balance sheet contained in the Company's Form 10-KSB for the
year ended August 31, 2003 (the "10-KSB") and is presented for comparative
purposes. All other financial statements are unaudited. In the opinion of
management, all adjustments which include only normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows for all periods presented have been made. The results of
operations for interim periods are not necessarily indicative of the operating
results for the full year.
Footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
of America have been omitted in accordance with the published rules and
regulations of the Securities and Exchange Commission. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the 10-KSB for the most recent fiscal year.
Loss per Share - Loss per share is based on the weighted average number of
shares outstanding during the periods. The effect of warrants outstanding
is not included since it would be anti-dilutive.
NOTE 2 - Reorganization:
The Company owned 89% of the outstanding common stock of both No Fire Ceramic
Products, Inc. and No Fire Engineering, Inc. together with an option to
acquire the remaining 11% of such stock. Both of those subsidiaries were
dissolved during the fiscal year ended August 31, 1997.
Under a Chapter 11 proceeding, the Bankruptcy Court confirmed a Plan of
Reorganization for the Company which became effective on August 11, 1995.
Claims of creditors, to the extent allowed under the Plan, were required to be
paid over a four-year period.
NOTE 3 - Management's Actions to Overcome Operating and Liquidity
Problems:
The Company's financial statements have been presented on the going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company's viability as a
going concern is dependent upon its ability to achieve profitable operations
through increased sales and/or obtaining additional financing. Without
achieving these, there is substantial doubt about the Company's ability to
continue as a going concern.
The Company has a liability for settled claims payable to creditors in
connection with its reorganization under the Plan. Without the achievement
of profitable operations or additional financing, funds for repayment would
not be available.
Page 8
NOFIRE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
November 30, 2003
Management believes that successful passing of stringent tests, obtaining
various civil and government approvals, and actions it has undertaken to
revise the Company's operating and marketing structure should provide it
with the opportunity to generate revenues needed to realize profitable
operations and to attract the necessary financing and/or capital for the
payment of outstanding obligations.
NOTE 4 - CONVERTIBLE DEBENTURES:
Between September and November 2003, the Company issued to six
accredited investors, $230,000 of convertible debentures which mature
between May and October 2004 bearing interest at 8%. The debentures,
entitle the holders, to convert the debt into common stock at a rate of
one share for each $0.30 principal amount plus any outstanding accrued
interest. In conjunction with this transaction, the Company issued
warrants to the six investors, to purchase a total of 1,165,000 shares
of the Company's common stock for $0.30-$0.32, expiring in five years.
The warrants vested immediately.
The value, attributed to the warrants issued along with the debenture
transactions above, totaling $138,000, has been charged to interest expense.
During the quarter ended November 30, 2003 warrants for the purchase of
1,330,250 shares of the Company's common stock expired unexercised.
Note 5- STOCK-BASED COMPENSATION
The Company follows the intrinsic value method of Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and
related interpretations in accounting for its employee stock options because,
in the opinion of management, Financial Accounting Standards Board Statement
No. 123, Accounting for Stock-Based Compensation" (FAS 123) requires use of
option valuation models that were not developed for use in valuing employee
stock options. FAS 123 permits a company to elect to follow the intrinsic
value method of APB 25 rather than the alternative fair value accounting
provided under FAS 123, but requires pro forma net income (loss) and earnings
(loss) per share disclosures as well as various other disclosures. The
Company has adopted the disclosure provisions required under Financial
Accounting standards Board Statement No. 148, "Accounting for Stock-Based
Compensation Transition and Disclosure " (FAS 148).
There were no awards of stock-based compensation granted or outstanding
during the 3 months ended November 30,2003 and 2002.
NOTE 6- SUBSEQUENT EVENTS
In December of 2003 the Company issued five-year warrants to purchase a
total of 165,000 shares of the Company's common stock to three employees and
two individual at an exercise price of $0.30 per share. The warrants
vested immediately.
In December 2003, warrants for the purchase of 1,458,000 shares of the
Company's common stock expired unexercised.
Page 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company continued its product development and application testing, and now
has numerous certifications for specific applications. Since August 1995, the
Company has applied for eight patents, five of which have been issued. The
other three are pending. Additionally, one patent has been purchased by the
Company. The Company has been increasing its marketing efforts
principally by retaining the services of specialized distribution firms. The
Company's management believes that marketing efforts to date have brought the
Company closer to achieving greater sales for applications in many diverse
industries including: military, maritime, wood products, structural steel and
nuclear power plants. Significant tests have been passed and approvals
received to qualify the Company's products in naval and other military and
governmental applications. Aggressive marketing efforts are underway to
obtain orders in these applications. Obstacles encountered in obtaining
orders for most applications are the continuing tests and approvals required,
competition against well established and better capitalized companies, cost,
the slow process of specifying new products in highly regulated industrial
applications, and the decisions not to use any fire retardant product.
In general, the Company's products perform their intended uses well and are
in a form that is safe and easy to use. The Company's most pressing need
continues to be cash infusion as discussed below in the section on Liquidity
and Capital Resources. The Company is limiting its research and development
efforts in order to concentrate on sales of existing products. While new
market opportunities frequently arise, the Company has opted to concentrate
on targeting sales of present products rather than developing new products.
Efforts to establish additional U.S. distributors are being accelerated.
Additional efforts are also being directed to increase international sales
by establishing distributor relationships in strategic locations throughout
the industrialized world.
The number of manufacturing and quality control employees will increase with
increased production. The salaried administrative and marketing staff will be
evaluated and may be increased to support sales and marketing initiatives.
Additional support for direct sales is expected to be provided by independent
commission agents or employees compensated principally by commission.
COMPARISON THREE MONTHS ENDED NOVEMBER 30, 2003 AND NOVEMBER 30, 2002
Sales of $73,443 for the three months ended November 30, 2003 represented an
decrease of 28% from the $101,593 for the comparable three-month period of the
prior year. Cost of goods sold during the same periods decreased 42% from
$52,636 to $30,683 resulting in a gross profit of $42,760 compared to $48,957
in the prior year. Selling, general and administrative expenses for the three
months ended November 30, 2003 was $299,266, representing an increase of
$60,649 or 25% from the $238,617 of the similar period of the prior year.
The most significant changes were increases of $26,000 in professional fees
and $44,000 in the repricing of warrants and decreases of $32,000 in officer's
salaries.
Page 10
During the quarters ended November 30, 2003 and 2002 the Company realized
approximately $43,000 and $180,000, respectively, through the sale of a
portion of its New Jersey Net Operating Loss Carry Forward under a program
sponsored by that state.
LIQUIDITY AND CAPITAL RESOURCES
At November 30, 2003 the Company had cash balances of $ 27,425. In order to
fund continuing operations during the three months ended on that date,
the Company issued to six accredited investors $230,000 worth of
convertible debentures which mature between September and November 2004
bearing interest at 8%. The debentures entitles the holders,
to convert the debt into common stock at a rate of one share for each
$0.30 principal amount plus any outstanding accrued interest.
The Company has deferred payment of $1,168,718 of the installments of the
Chapter 11 liability to unsecured creditors that were due in September 1996,
1997, 1998 and 1999. Of that deferred amount, $790,686 is due to officers and
directors of the Company. In order to pay those liabilities and meet working
capital needs until significant sales levels are achieved, the Company will
continue to explore alternative sources of funding including exercise of
warrants, bank and other borrowings, issuance of convertible debentures,
issuance of common stock to settle debt, and the sale of equity securities in
a public or private offering. There is no assurance that the Company will be
successful in securing requisite financing.
Item 3. Controls and Procedures
Within the 90-day period prior to the date of this report, our Chief Executive
Officer and Chief Financial Officer performed an evaluation of our disclosure
controls and procedures, which have been designed to permit us to effectively
identify and timely disclose important information. They concluded that the
controls and procedures were effective. Since the date of the evaluation, we
have made no significant changes in our internal controls or in other factors
that could significantly affect our internal controls.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 1- Sarbanes-Oxley Act Section 906 Certification
No reports on Form 8-K were filed during the quarter ended November 30, 2003.
Page 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: January 16,2004 NoFire Technologies, Inc.
By: /s/ Samuel Gottfreid
Sam Gottfreid
Chief Executive Officer
By: /s/ Sam Oolie
Sam Oolie
Chairman of the Board,
Chief Financial Officer
Page 12
I, Sam Oolie, certify that:
1. I have reviewed this annual report on Form 10-KSB of
NoFire Technologies, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and
other financial information included in this annual
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 annual 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 annual 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 annual report (the
"Evaluation Date"); and
c) presented in this annual 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 board of directors (or persons performing the
equivalent functions):
Page 13
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 auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I
indicated in this quarterly report that there were no
significant changes in internal controls or in other
factors that could significantly affect internal control
subsequent to the date of our most recent evaluation,
including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Date: January 16, 2004 /s/Sam Oolie
-------------
- --------------
Sam Oolie,
Chief Financial Officer
Page 14
I, Samuel Gottfried certify that:
1. I have reviewed this annual report on Form 10-KSB of
NoFire Technologies, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and
other financial information included in this annual
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 annual 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 annual 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 annual report (the
"Evaluation Date"); and
c) presented in this annual 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 board of directors (or persons performing the
equivalent functions):
Page 15
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this
annual report whether 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: January 16,2004 /s/ SamuelGottfreid
---------------------
Samuel Gottfreid
--------------------
Chief Executive Officer
Page 16
CERTIFICATION
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of section 1350, chapter 63 of title 18, United States Code), each of the
undersigned officers of NoFire Technologies, Inc., a Delaware corporation (the
company), does hereby certify, to the best of such officer's knowledge and
belief, that:
The Quarterly Report on Form 10-QSB for the Quarter ended November 30,
2003 of the Company fully complies with the requirements of section 13
(a) or 15 (d) of the Securities Exchange Act of 1934: and
The information contained in the Form 10-QSB fairly presents in all
material respects, the financial condition and results of operations of
the Company.
Dated: January 16, 2004 /s/ Samuel Gottfreid
-------------------
Chief Executive Officer
Dated: January 16, 2004 /s/ Sam Oolie
-----------------------
Chief Financial Officer
EXHIBIT 1