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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1997
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 No. 2-75313
PROCARE AMERICA, INC.
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(FORMERLY KNOWN AS ROYAL EQUITY EXCHANGE, INC.)
(Exact name of registrant as specified in its charter)
NEVADA 84-0871427
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(State or Other Jurisdiction (I.R.S. Employer)
Incorporation or Organization) Identification No.)
12995 SO. CLEVELAND AVENUE, SUITE 109, FT MYERS, FL 33907
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (941) 418.0021
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT;
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS COMMON STOCK $0.001 PAR VALUE
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 [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrants knowledge, in a definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates
as of June 30, 1997 was approximately $265,829.00
There were 5,692,913 shares of the Registrants common stock outstanding
as of June 30, 1997.
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INCORPORATION BY REFERENCE
Specified portions of the registrant's Form 8-K filed May 8, 1997 are
incorporated by reference in Part III hereof.
FORWARD LOOKING STATEMENTS OR INFORMATION
Certain statements, other than statements of historical fact, included
in this Annual Report, including, without limitation, the statements under
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are, or may be deemed to be, forward-looking statements
that involve significant risks and uncertainties, and accordingly, there is no
assurance that these expectations will be correct. These expectations are based
upon many assumptions that the registrant believes to be reasonable, but such
assumptions ultimately may prove to be materially inaccurate or incomplete, in
whole or in part and, therefore, undue reliance should not be placed on them.
Several factors which could cause actual results to differ materially from those
discussed in such forward-looking statements include, but are not limited to:
pricing policies of competitors, the ability to attract and retain employees in
key positions and uncertainties and changes in general economic conditions. All
subsequent forward-looking statements attributable to the registrant or persons
acting on its behalf are expressly qualified in their entirety.
PART I
ITEM 1. BUSINESS
As of November 11, 1991, the date of a Form 8-K, Current Report, filed
by Royal Equity Exchange, Inc. (the "Company") (now known as ProCare America,
Inc.) with the Securities and Exchange Commission, the Company was engaged in
the travel industry as described in Exhibit A to Form 15C2-11 attached to that
Form 8-K. In June 1996 the Company entered into a merger transaction whereby all
of the shares of ProCare America, Inc. were acquired by the Company in exchange
for 4,056,484 shares of the Company (at the time of the Form 8K filing, based
upon the best information available to management at that date, it was reported
that all of the shares of ProCare America, Inc. were acquired by the Company in
exchange for 3,888,984 shares of the Company. As reflected herein, this number
has been adjusted to 4,056,484 shares of the Company following an audit of the
Company which was based on figures provided by the preceding auditor).
Approximately 1,300,000 of these shares were issued to Owen L. Stephens who
became Chairman of the Board of Directors, President and Chief Executive Officer
of the Company. Subsequently, Mr. Stephens resigned these positions as discussed
below. Following the merger in June 1996, the Company's only line of business
became that of a provider of certain medical services, primarily that of
medicinal infusion by intravenous medical equipment. The medical services
provided by the Company are performed at the Company's site, in a doctor's
office or in the residence of the patient. According to representations made by
Owen L. Stephens, former Chairman of the Board of Directors, President and Chief
Executive Officer of the Company, and Maryann Stephens, former Director of the
Company, the Company held all requisite licenses from federal and state
governmental authorities to perform these services in the state of Florida and
the Company was an approved provider for Blue Cross-Blue Shield, Aetna, PCA,
Medicaid and Part B of Medicare. To the best information and knowledge of the
Company's present board of directors and officers, these representations
regarding the governmental licenses were correct as of the date when the new
management assumed operating responsibility. The present board of directors and
officers, in the process of taking steps necessary to determine and protect the
validity of these licenses, discovered in December 1997 that the licenses had
been terminated for lack of notification compliance by previous management.
ENVIRONMENTAL MATTERS
The Company, when operational, is subject to various federal, state and
local regulations concerning the environment and hazardous waste disposal.
Efforts to maintain compliance with such regulations have not required
expenditures material to the Company's overall operating performance or
financial condition.
EMPLOYEES
Prior to the new management assuming control of the Company, the
Company had a number of employees. At the time of the new management assuming
control of the Company there were no employees. The new management has been
unable to determine the number and status of the former employees from records
available to them. As of June 30, 1997, the Company had no wage or salaried
employees.
2
ITEM 2. PROPERTIES
In May 1997 the Company entered into a three-year lease agreement for
office space at 12995 South Cleveland Avenue, Suite 109, Ft. Myers, Florida,
33907, which serves as the Company's principal operational and executive office.
As consideration for the leasehold improvements and in lieu of cash for the
first years rent the Company granted 75,000 shares of stock to Dr. Harry Lowell,
the lessor.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings pending or to the knowledge of the
Company threatened, that, if determined adversely to the Company would have a
material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company submitted no matters for security holder voting during the
fiscal year ending June 30, 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock (symbol: REEX) was listed on the
Over-the-Counter (OTC) Bulletin Board. In March of 2000 the Company was
de-listed for non-compliance with SEC filing requirements. The shares are now
listed on the "pink sheets" as published by the National Quotation Bureau.
The Company's common stock is not listed on any national stock exchange
or on NASDAQ. The OTC Bulletin Board is a regulated quotation service that
displays real-time quotes, last-sale prices and volume information for
non-listed (over-the-counter) equity securities. The OTC Bulletin Board is a
reporting system for participating market makers, not an issuer listing service,
and should not be confused with the NASDAQ Stock Market. Participating market
makers in the bulletin board system enter quotes and trade reports on a closed
computer network and the information is made publicly available through numerous
websites and other locations. The OTC Bulletin Board is distinct from the "pink
sheets" published by the National Quotation Bureau which also report on
transactions in non-listed equity securities.
Stockholders of record at June 30, 1997 numbered approximately 806. The Company
has not paid cash dividends on its Common Stock in the past and currently plans
to retain earnings, if any, for business development and expansion.
QUARTERLY STOCK PRICES
FIRST SECOND THIRD FOURTH
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Closing Stock Price end of each quarter........ $1.75 $1.06 $0.25 $0.13
ITEM 6. SELECTED FINANCIAL DATA
The following table depicts selected consolidated financial data for
the two-year period ended June 30, 1997 as derived from the consolidated
financial statements of the Company. This table should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's audited consolidated financial statements and
notes thereto appearing elsewhere herein.
AS OF
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CONSOLIDATED BALANCE SHEET DATA 6/30/97 6/30/96
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Working capital deficit......................... $ (272,352) $(328,681)
Total assets.................................... 27,640 115,001
Long-term debt, including current portion....... 178,820 93,802
Stockholders' equity (deficit).................. (260,784) (285,892)
3
YEAR ENDED
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CONSOLIDATED STATEMENT OF OPERATIONS DATA 6/30/97 6/30/96
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Net patient services revenue ................... $ 11,891 $ 41,435
Operating Expenses:
Bad debt expense .......................... 33,963 0
Medical Supplies .......................... 13,685 19,153
General & administrative .................. 236,896 355,797
Consulting fees paid to directors
and stockholders ........................ 42,730 0
Interest expense .......................... 14,964 18,087
Loss on disposal/abandonment of
Fixed assets ............................ 43,445 0
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$ 385,683 $ 393,037
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Net Loss $ (373,792) $ (351,602)
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Net loss per common share ...................... $ (.08) $ (.09)
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Weighted average number of
Common shares outstanding ................... 4,735,400 4,112,452
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
HISTORICAL EVENTS
Reverse Split of Common Stock; Surrender of Control Shares; Merger
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On December 29, 1995, the Company declared a 40 for 1 reverse split of
the Company's outstanding common stock whereby 1,449,779 shares of common stock
were issued in exchange for 57,991,165 shares of common stock outstanding.
Before and after the exchange, the Company had 500,000,000 authorized shares of
common stock (NOTE: other documents of the Company reflect that this stock split
occurred on March 15, 1996). Subsequent to this stock split, the then control
shareholder of the Company, Robert Slominski, surrendered 900,000 shares of the
Company, leaving 549,779 shares of the Company outstanding.
In June 1996 the Company entered into a merger transaction whereby all
of the shares of ProCare America, Inc. were acquired by the Company in exchange
for 3,888,984 shares of the Company (NOTE: other documents of the Company
provided by the previous audit firm reflect the merger as occurring February 7,
1996 with the number of shares in the transaction being 4,056,484).
Approximately 1,300,000 of these shares were issued to Owen L. Stephens who
became Chairman of the Board of Directors, President and Chief Executive Officer
of the Company. Subsequently, Mr. Stephens resigned these positions as discussed
below.
As of May 8, 1997, the Company had issued and outstanding 5,692,913
shares of common stock.
Resignation of Board Members and Election of New Board Members and Officers;
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Resignation of Bookkeeper
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Certain of the shareholders of the Company were not satisfied with the
performance of the Company and sought a change in the Company's board of
directors and management. Responding to pressures from these Company
shareholders, Owen L. Stephens, by letter dated January 29, 1997, tendered his
resignation as a director of the Company, Chairman of the Board, President and
Chief Executive Officer of the Company and all positions with subsidiaries of
the Company; by letter dated January 29, 1997, Maryann Stephens tendered her
resignation as an officer and director of the Company and all positions with
subsidiaries of the Company; and, by letter dated January 30, 1997, Donna Kay
tendered her resignation as a director of the Company and all positions with
subsidiaries of the Company. At a special meeting of the board of directors held
on February 11, 1997, the sole remaining director, William Strahan, accepted the
foregoing resignations. The foregoing former directors, Mr. Stephens, Mrs.
Stephens and Mrs. Kay, have not expressed to the Company, and have not furnished
the Company with a letter describing, any disagreement they may have had with
the Company's operations, policies or practices.
4
At the February 11, 1997 board meeting, the sole remaining director,
William Strahan, elected Donald Strong to fill the board vacancy created by the
resignation of Owen Stephens, James Karabasz to fill the board vacancy created
by the resignation of Maryann Stephens and Fred Hodgdon to fill the board
vacancy created by the resignation of Donna Kay. Following their election, the
newly constituted board of directors elected Mr. Strahan as Chairman of the
Board, Donald Strong as President and Secretary and James Karabasz as Treasurer.
By letter dated February 14, 1997, Richard E. Shield, P.A. a certified
public accountant, stated that he thought because of non-payment of his fees it
was prudent to terminate his present engagement with the Company in light of the
changes in the Company's organization and management. Mr. Shield prepared the
Company's payroll tax returns and W-2's and, according to Mr. Shield's letter,
provided other consultation and accounting services to the Company. In his
letter to the Company, Mr. Shield indicated his willingness on being brought
current on his fee payments to be re-engaged by the Company. Mr. Shield was not
engaged as the Company's principal accountant to audit the Company's financial
statement. The Company's principal accountant was Stirtz, Bernards & Company.
Effective February 4, 1998 the Company entered into a letter of engagement with
Wentzel, Berry & Alvarez P. A. (now known as Wentzel, Berry, Wentzel & Phillips,
P. A.) as the principal audit firm. This action was ratified by the shareholders
on September 16, 1998.
Failure to File Periodic Reports and Provide Audited Financials; Absence of
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Current Information
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Based upon information recently learned by the Company's new directors
and officers, it appears that the prior management of the Company did not file
the periodic reports as required under the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder since November 13, 1991, when
the Company filed the Form 8-K, Current Report, discussed above.
The newly constituted board of directors believes that prior management
did not provide the new board with full and current information on the
operations and financial condition of the Company. The board of directors has
acted to seek and obtain updated and complete information on the Company. In the
spring of 1997 representatives of the Company discussed the situation with its
then principal accounting firm, Stirtz, Bernards & Company.
Retention of Management Organization
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At its meeting of February 19, 1997, the board authorized the retention
of a medical management service to manage the day to day affairs of the Company,
under the supervision of the board of directors, pursuant to the terms of an
engagement letter which sets forth the duties to be performed. The long-term
goals to be accomplished by the medical management service were to organize the
books and records of the Company, assist the Company in its fund-raising
efforts, retain competent personnel to provide medical services to patients of
the Company, advise the Company on recommended actions to return the Company to
a fully operational status and explore possible acquirors for the Company should
this be in the best interest of the shareholders. These goals were progressive
and their accomplishment was dependent upon the Company obtaining an adequate
source and level of funding in the immediate future.
The principals of this management entity were Brent Peterson, who
previously served for a short period of time as an officer and director of one
of the Company's subsidiaries, and Paul Schryver. While the principals of the
management entity were experienced businessmen, they had not previously provided
management services to a medical provider.
For services rendered in the past and to be rendered in the future, the
principals of the management entity were to be compensated at the rate of $100
per hour plus approved out of pocket expenses and the board granted to each of
the two principals of the management entity warrants, as of February 24, 1997,
for 400,000 shares of common stock of the Company (for a total of 800,000
shares) as follows: 150,000 shares could be purchased within one year at $0.25
per share, 150,000 shares could be purchased from months 12 to 24 at $0.50 per
share and 100,000 shares could be purchased from months 24 to 36 at $0.75 per
share.
5
Authorization to Borrow Funds with Convertible Features
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The management service retained by the Company to manage the Company's
day to day operations has advised the board that significant funds would be
required by the Company to return it to full operational status. Specifically,
the management service has estimated that, until accounts receivable begin to
flow into the Company, the Company's short term cash needs are approximately
$90,000 and, to bring the Company to fully operational status, approximately
$500,000 in cash would be required. After consideration of this recommendation,
the board determined, at its meeting held on February 11, 1997, that the Company
should seek to borrow $750,000 in short term loans thereby providing a cushion
of approximately $160,000 beyond the amount recommended by the management
service, assuming funds can be raised. Accordingly, at this meeting, the board
authorized the Company to borrow up to $750,000 from investors for a term of one
year at an interest rate of 10 % per annum. At the option of the investor, the
loans may be converted into common stock of the Company at the conversion rate
of $0.50 per share, exercisable prior to the loan maturity date. Further, each
loan carries warrants entitling the lender to purchase, within one year after
the loan is advanced, a number of shares of common stock equal to the original
principal amount of the loan at a warrant price of $0.75 per share and, from
months 12 to 24, a number of shares of common stock equal to the original
principal amount of the loan at a warrant price of $1.00 per share. The proceeds
of these loans will be used to pay accounts payable that are now due and any
remaining loan proceeds will be used to fund the Company's operations. There can
be no assurance that the Company's efforts to raise funds will be successful or,
if successful, that the Company will return to a fully operational status or
that these activities will be successful or profitable.
RESULTS OF OPERATIONS
Operating Income
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For the year ended June 30, 1997 the net patient services revenue
totaled $11,891. This net revenue figure represents revenues generated and
booked prior to new management assuming control and operation of the Company on
February 11, 1997. There has been no operating revenue generated for the period
of February 11, 1997 to June 30, 1997.
Current Operations
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The medical management service retained by the Company has set about
determining the assets and liabilities of the Company, organizing the books and
records, assisting in fund-raising and development of a reorganizational plan to
return the Company to operational status as a licensed medical services
provider. The medical management service has advised the Board of Directors that
a minimum of $600,000 in cash will be required to adequately address the past
obligations and provide working capital for initiating medical services
operations. Approximately $100,000 would be allocated to past obligations and
$500,000 will be necessary to implement the medical services operation. The
Board of Directors has approved the issuance $750,000 in short term loans (see
Authorization to Borrow Funds with Convertible Feature above). As of June 30,
1997 the Company has raised $50,000 in the form of loans from private investors
subject to the terms and conditions described above. These funds have been used
to pay accounts payable deemed to be a priority by the Board of Directors. These
funds were raised in February and March 1997 and no other funds have been raised
or been available to the Company as of June 30, 1997.
Accounts Payable and Receivable: Assets of the Company
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In December 1996, the Company substantially reduced operations. As of
February 2, 1997, based on the best information made available by prior
management, present management believes that the Company's accounts payable
totaled $112,002.20 of which $43,662.61 was due immediately. Additionally, the
Company had outstanding bank notes of $85,833 of which $20,207.58 was due
immediately. Prior management also claims to be due approximately $99,000 in
back pay or loans to the Company. Based on the best information made available
by prior management to present management, it would appear that, as of that same
date, the Company had due to it $52,803.78 in accounts receivable; however, the
collection of all or even a substantial portion of these accounts receivable is
highly doubtful. In fact there was a write-off of $33,963 during fiscal 1997. As
of that same date, the Company had no cash available to it for the payment of
its account's payable. As of June 30, 1997 total accruals and notes payable
totaled $288,424.
6
Overview and Outlook for 1998
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During the last four months of the company's fiscal year, management
has focused on organizing the books and records of the Company, determining what
obligations are outstanding and structuring a financing program to allow the
Company to return to medical service operations. This result of this effort
would be platform to rebuild the Company. In Fiscal 1998 the focus will be to
fund the Company to full operational status. As part of this plan management
intends to carefully evaluate its medical services model and target those areas
that provide the most efficiencies and profit performance. Management expects to
continuously monitor and review all operations to improve financial returns.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The following consolidated financial statements of the Company and its
Independent Accountants' Opinion are set forth in Part IV, Item 14, of this
Report:
(i) Consolidated Balance Sheets-as of June 30, 1997 and June 1996.
(ii) Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity (Deficit) for the year's ended June 30,
1997 and June 30, 1996.
(iii) Notes to the Consolidated Financial Statements; and
Unqualified Opinion of Independent Accountants dated May 12,
2000.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
Effective February 4, 1998 the Company terminated its relationship with
Stirtz, Bernards & Company and entered into a letter of engagement with Wentzel,
Berry & Alvarez P. A.(now known as Wentzel, Berry, Wentzel & Phillips P. A.) as
its principal audit firm. There have been no disagreements between management
and the previous and current accounting firms as regards any accounting issues
or financial disclosure matters.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing in the Company's Form 8-K filed May 8, 1997
is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
At this time there no Executive Compensation. However the board has
authorized the retention of a medical management service to manage the
day-to-day affairs of the Company and the information appearing in the Company's
Form 8-K filed May 8, 1997 under the caption "Retention of Management
Organization" is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Total (2)
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Courtney Hansen................ 250,000 4.39%
Frans Hansen................... 50,000 0.88%
Gerald Hansen.................. 19,000 0.33%
Jordyn Hansen.................. 250,000 4.39%
David Perrigo.................. 70,000 1.23%
Penny (Perrigo) Stoltz......... 70,000 1.23%
Robert Perrigo................. 70,000 1.23%
William Perrigo Jr............. 70,000 1.23%
William Perrigo Sr............. 480,000 8.43%
Richard Prescott............... 524,925 9.22%
Mary Joy Stead................. 412,350 7.24%
Owen & Maryann Stephens........ 1,300,000 22.84%
All beneficial owners
As a group................ 3,566,275 62.64%
7
(1) Except as other wise indicated, the persons named in the table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them. The information shown above is based upon
information furnished to the company by the named persons. Information
relating to beneficial ownership of shares is based upon "beneficial
ownership" concepts set forth in the rules promulgated by the
Securities Exchange Act of 1934, as amended. Under such rules a person
is deemed to be a "beneficial owner" of a security if that person has
or shares "voting power" which includes the power to vote or to direct
the voting of such security, or "investment power", which includes the
power to dispose or to direct the disposition of such security. A
person is also deemed to be a beneficial owner of any security of which
that person has the right to acquire beneficial ownership within 60
days. Under the rules, more than one person may be determined to be a
beneficial owner of the same securities.
(2) In calculating the percentage ownership for a given individual or
group, the number of shares of the company's common stock outstanding
includes unissued shares subject to options, warrants, rights or
conversion privileges exercisable within 60 days by such individual or
group, but unissued shares are not deemed outstanding in calculating
the percentage ownership for other persons or groups.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing in the Company's Form 8-K filed May 8, 1997
under the caption "Granting of Options" is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a) (1) Financial Statements.
CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of ProCare America,
Inc. (formerly known as Royal Equity Exchange, Inc. and subsidiaries
and Report of Independent Accountants are attached as pages F1 through
F23 to this report:
(i) Independent Auditors' Report dated May 12, 2000.
(ii) Consolidated Balance Sheets for the years ended June
30, 1997 and June 30, 1996 and the period from
September 22, 1993 (inception) to June 30, 1997;
(iii) Consolidated Statements of Operations for the years
ended June 30, 1997, and June 30, 1996 and the period
from September 22, 1993 (inception) to June 30, 1997;
(iv) Consolidated Statements of Stockholders Equity
(Deficit) for the years ended June 30, 1997, and June
30, 1996 and the period from September 22, 1993
(inception) to June 30, 1997;
(v) Consolidated Statements of Cash Flows for the years
ended June 30, 1997, and June 30, 1996 and the period
from September 22, 1993 (inception) to June 30, 1997;
(vi) Notes to the Consolidated Financial Statements.
(b) Reports on Form 8-K:
Form 8-K current report filed May 8, 1997.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ProCare America, Inc.
(formerly known as Royal Equity Exchange, Inc.)
(Registrant)
By /s/Donald Strong
--------------------------------------
President, Secretary, Director
Date: June 30, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
By: /s/ William Strahan Chairman of the Board June 30, 1997
-------------------------------- Director
William Strahan
By: /s/ Donald Strong President/Secretary June 30, 1997
-------------------------------- Director
Donald Strong
By: /s/ James Karabasz Treasurer/Director June 30, 1997
--------------------------------
James Karabasz
By: /s/ Fred Hodgdon Director June 30, 1997
--------------------------------
Fred Hodgdon
9