UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 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 Number: 0-27520
SDC International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-2583767
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2065 Montgomery Street, Fort Worth, Texas 76107
(Address of principal executive offices) (Zip Code)
(817) 738-9881
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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 a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Common stock, par value $.001 per share: 2,331,384 shares outstanding as of
May 31, 1997.
SDC INTERNATIONAL, INC.
INDEX
PART 1 - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
Balance Sheets May 31, 1997 (Unaudited)
and August 31, 1996 1
Statements of Operations (Unaudited)
for the three months ended May 31, 1997
and 1996 2
Statements of Operations (Unaudited)
for the nine months ended May 31, 1997
and 1996 3
Statement of Stockholders' Equity (Unaudited)
for the nine months ended May 31, 1997 4
Statements of Cash Flows (Unaudited)
for the nine months ended May 31, 1997
and 1996 5
Notes to Financial Statements 6 - 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 12
PART II - OTHER INFORMATION 13
SDC INTERNATIONAL, INC.
BALANCE SHEETS
(Unaudited)
May 31, August 31,
1997 1996
ASSETS
Current assets:
Cash $ 292,142 $ -
Cash - restricted 83,194 80,932
Accounts receivable 130,094 -
Inventory 31,310 31,310
Prepaid expenses 6,584 6,584
Notes receivables - stockholder and
related parties - 62,985
Total current assets 543,324 181,811
Machinery and equipment, net 3,972,551 4,204,581
Exclusive agency rights, net 134,053 166,237
Customer list, net 168,750 253,125
Other assets 8,600 29,464
Total assets $ 4,827,278 $ 4,835,218
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ - $ 3,711
Accounts payable - related party 440,269 -
Accrued expenses 49,703 79,467
Note payable - short term 35,000 -
Due to stockholder 48,050 111,302
Total current liabilities 573,022 194,480
Commitments and contingencies (Note 4) - -
Stockholders' equity:
Common stock $.001 par value, authorized
10,000,000 shares,issued and
outstanding 2,331,384 and 2,198,265
shares, respectively 2,331 2,198
Additional paid-in capital 6,033,857 5,845,016
Accumulated deficit (1,781,932) (1,206,476)
Total stockholders' equity 4,254,256 4,640,738
Total liabilities and stockholders' equity $ 4,827,278 $ 4,835,218
See accompanying notes to financial statements.
SDC INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MAY 31,
(UNAUDITED)
1997 1996
Sales $ - 33,367
Cost of goods sold - 28,350
Gross profit - 5,017
Expenses:
Selling, general and administrative 118,943 77,619
Depreciation and amortization 117,152 114,390
Management fees 18,000 18,000
Total expenses 254,095 210,009
Loss from operations before other income
and provision for income taxes (254,095) (204,992)
Other income (expense):
Interest income 1,358 1,160
Interest expense (11,824) -
Loss before provision for income taxes (264,561) (203,832)
Provision for income taxes - -
Net loss $ (264,561) $ (203,832)
Primary loss per share:
Loss from operations before other income
and provision for income taxes $ (.12) $ (.10)
Provision for income taxes $ - $ -
Net loss $ (.12) $ (.10)
Weighted average number of shares outstanding 2,289,011 2,145,427
See accompanying notes to financial statements
SDC INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31,
(UNAUDITED)
1997 1996
Sales $ 1,335,579 $ 45,456
Cost of goods sold 1,279,548 33,075
Gross profit 56,031 12,381
Expenses:
Selling, general and administrative 216,698 279,749
Depreciation and amortization 351,455 307,545
Management fees 54,000 54,000
Total expenses 622,153 641,294
Loss from operations before other income
and provision for income taxes (566,122) (625,093)
Other income (expense):
Interest income 2,866 3,820
Interest expense (12,200) -
Loss before provision for income taxes (575,456) (625,093)
Provision for income taxes - -
Net loss $ (575,456) $ (625,093)
Primary loss per share:
Loss from operations before other income
and provision for income taxes $ (.26) $ (.31)
Provision for income taxes $ - $ -
Net loss $ (.26) $ (.31)
Weighted average number of shares outstanding 2,231,847 2,019,609
See accompanying notes to financial statements
SDC INTERNATIONAL, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MAY 31, 1997
(UNAUDITED)
Additional Total
Common Stock paid-in Accumulated Stockholders'
Shares Amount capital Deficit Equity
Balances at September 1, 1996 2,198,265 $ 2,198 $ 5,845,016 $ (1,206,476) $ 4,640,738
Sale of common stock, net of
expense of $ 16,705 133,119 133 188,841 - 188,974
Net loss for the nine months
ended May 31, 1997 - - - (575,456) (575,456)
Balances at May 31, 1997 2,331,384 $ 2,331 $ 6,033,857 $ (1,781,932) $ 4,254,256
See accompanying notes to financial statements.
SDC INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MAY 31,
(UNAUDITED)
1997 1996
Cash flows from operating activities:
Net loss $ (575,456) $ (625,093)
Adjustments to reconcile net loss to net
cash used for operating activities:
Amortization and depreciation 351,455 307,545
Decrease (increase) in:
Accounts receivable (130,094) 537,280
Inventory - (39,409)
Restricted cash (2,262) -
Other assets 17,998 -
Prepaid expenses - 6,400
Increase (decrease)
in: Accounts payable (3,711) -
Accounts payable - related party 440,269 (372,175)
Accrued expenses (29,764) (8,858)
Net cash (used for) provided by
operating activities 68,435 (194,310)
Cash flows from investing activities:
Acquisition of exclusive agency rights - (150,000)
Proceeds from collection of notes
receivable - related parties 62,985 14,608
Acquisition of customer list - (150,000)
Purchase of machinery and equipment - (1,946)
Other assets acquired - (4,401)
Net cash provided (used for) by
investing activities 62,985 (291,739)
Cash flows from financing activities:
Proceeds from issuance of note payable 35,000 -
Proceeds from stockholder 32,500 -
Proceeds from sale of common stock 205,679 681,750
Cost associated with private placement
memorandum and sale of common stock (16,705) (175,046)
Repayment of loans from stockholder (95,752) (36,196)
Net cash provided by financing
activities 160,722 470,508
Net increase (decrease) in cash 292,142 (15,541)
Cash at beginning of period - 49,677
Cash at end of period $ 292,142 $ 34,136
Supplemental disclosures:
Interest paid $ 12,200 $ -
Income taxes paid $ - $ -
Supplemental disclosure of non-cash
investing activities:
Issuance of 150,000 shares of common stock
for acquisition of customer list $ - $ 187,500
See accompanying notes to financial statements.
SDC INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -GENERAL
SDC International, Inc. ("the Company") was incorporated in the state of
Delaware on June 30, 1994 for the purpose of developing and marketing an
exclusive license acquired from Skoda Diesel a.s. ("Skoda") to sell a broad
range of Skoda's products which are primarily comprised of piston combustion
diesel engines whose applications include locomotive and stationary engines
for the generation and co-generation of electric power.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management the interim financial statements include all adjustments necessary
in order to make the financial statements not misleading. The results of
operations for the three and nine months ended are not necessarily indicative
of the results to be expected for the full year. For further information,
refer to the Company's audited financial statements and footnotes thereto at
August 31, 1996, included in the Company's Form 10-KSB, filed with the
Securities and Exchange Commission.
NOTE 2 - EXCLUSIVE AGENCY RIGHTS, NET
On April 21, 1994, one of the founding shareholders executed an exclusive
agency representation letter agreement as agent of the Company with Skoda
pursuant to which the Company was appointed as Skoda's exclusive sales agent
in North, South and Central America with the exception of the country of
Peru. In connection with this agreement, the Company is obligated to furnish
Skoda with all inquiries from potential purchasers and may not execute any
contracts or other agreements on Skoda's behalf without its written consent.
Skoda must provide the Company with all information and materials normally
associated with the sales effort, including catalogues, product literature and
descriptions, price lists and the technical expertise and consultation of its
staff, if necessary.
In order for the Company to maintain its exclusivity, it must generate annual
gross sales within the territory of at least $15,000,000 at the close of the
fifth year (April, 1999) after the execution of the agreement. As
consideration for the purchase of these exclusive agency rights, the Company
has issued 51,650 shares of it's common stock to Skoda. Such stock has been
assigned a value of 50% of the private offering per share price of $2.50.
Accordingly, the Company has valued such exclusive agency rights at $64,563
(51,650 x $1.25) which will be amortized on a monthly basis over five (5)
years. For the three months ended May 31, 1997 and 1996, the Company has
recorded amortization expense of $3,228 and $3,228, respectively.
In October 1995 the Company purchased the exclusive rights to market and sell
Skoda Diesel products into the countries of China and South Korea The Company
paid Skoda a one-time fee of $50,000 for the acquisition of such exclusive
rights in South Korea and a one-time fee of $100,000 for the acquisition of
such exclusive rights in China.
The newly acquired agency rights from China and Korea are being amortized on a
monthly basis over (5) five years. For the three months ended May 31, 1997
and 1996, the Company recorded $7,500 and $7,500, respectively, of
amortization expense.
NOTE 3 - NOTES PAYABLE
Pursuant to a promissory note dated April 23, 1997, the Company borrowed
$35,000 . The note bears interest at the prime rate and is payable ninety days
from date of issuance.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
a) Lease agreement
The Company leases its administrative office pursuant to signed lease
agreement commencing July 1, 1995 and expiring on June 30, 1997. Such lease
requires monthly payments of $3,500. Effective December 1996, the Company
terminated this lease. Prior to July 1, 1995 the Company maintained its
administrative office on a month to month basis, free of charge at the office
of Worth. Worth is an entity which the President of the Company is also a 50%
shareholder. Effective January 1, 1997, the Company entered into a new lease
for a one year term. Such lease requires monthly payments of $3,000.
Included in general and administrative expenses is rent expense which amounted
to $9,318 and $10,500 for the three months ended May 31, 1997 and 1996,
respectively.
b) Management agreement
On December 15, 1995 the Company and Worth entered into a management agreement
with an individual for a period of three years. Pursuant to such agreement,
the individual shall devote such time, attention and efforts to management
services as may be reasonably required by the Company and Worth. The Company
and Worth will pay such individual an amount equal to twenty-five percent
(25%) of the gross profit from sales made by the Company. Such payments are
payable monthly after the collection of receivables from said sales. For the
three months ended May 31, 1997 and 1996, no payments were made or are due to
such individual.
c) Significant customers and vendors
i) For the three months ended May 31, 1997, the Company had no sales.
Sales made during the three months ended May 31, 1996 totalled
$33,367. For the nine months ended May 31, 1997 and 1996, the
Company made sales to two companies totalling $1,335,579 and
$45,456, respectively.
ii) For the three and nine months ended May 31, 1997 and 1996, the
Company purchased 100% of its cost of goods sold from Skoda and
Double Seal Ring Company, two of its founding shareholders.
NOTE 4 - COMMITMENTS AND CONTINGENCIES (Cont'd)
d) Concentration of credit risk
Due to its current limited sales, the Company has a high concentration of
credit risk until such transactions are completed. The Company is actively
seeking sales outside of the United States. If such sales occur, the revenue
and subsequent collections will be subject to the fluctuations such sales
generate, both from currency and political changes. The Company's machinery
and equipment is located in the Czech Republic. The Company's primary source
of inventory is currently Skoda and as such, it is subject to Skoda's risks of
business and its continued financial health, as well as the risks associated
with foreign businesses, both from currency and political changes.
e) Finder's fee agreement
On May 20, 1996, the Company entered into a finder's fee agreement with
Prime Charter, Ltd ("Prime") for a period of ten years, renewable for
additional five year periods. Pursuant to such agreement, any sales to
entities introduced to the Company by Prime shall result in a finder's fee to
Prime of two percent (2%) of the gross sales price or ten percent (10%) of the
adjusted gross profit resulting from the sales. Such payments are due 45 days
after each quarter-annual calendar period.
f) Dependence on Skoda
The Company's operations are dependent on Skoda since Skoda is
responsible for the manufacturing of all of the Company's products. The
Company faces risks of the inability to obtain products in the event of
production problems of Skoda due to labor problems, governmental regulations,
working capital deficiencies, political unrest and other problems which may
result in the inability of Skoda to fulfill orders of the Company.
NOTE 5 - RELATED PARTY TRANSACTION
a) Accounts payable
At May 31, 1997, the Company had accounts payable totalling $433,744
and $6,525, which were due to Skoda and Double Seal Ring Company,
respectively, two of its founding shareholders.
b) Notes receivables - Stockholder and related parties
From February 1995 to August 1995, the Company made loans at various
terms. As of August 31, 1996 the balance amounted to $62,985, inclusive of
accrued interest, from a shareholder and to entities which such shareholder
is also an officer. Said shareholder is not an officer or director of the
Company. These amounts were repaid during October 1996.
c) Accrued expenses
Included in accrued expenses at May 31, 1997 and August 31, 1996 is
$3,122 and $35,354, respectively of management services which are owed to an
affiliate of the Company's President and Secretary.
NOTE 5 - RELATED PARTY TRANSACTION (Cont'd)
d) Due to stockholder
Included in due to stockholder at May 31, 1997 and August 31, 1996 is
$0 and $18,252, respectively which represents the balance due an affiliate
for the purchase of its customer list and $48,050 and $93,050, respectively
due the Company's President and Secretary for funds advanced to the Company.
e) Management fees
For the three months ended May 31, 1997 and 1996, the Company recorded
$18,000 and $18,000 respectively for management fees and travel allowance to
Worth, a founding stockholder. The Company's President and Secretary is a 50%
shareholder of Worth.
NOTE 6 - SUBSEQUENT EVENTS
a) Letter's of intent
(i) The Company entered into a Letter of Intent dated August 23, 1996
with Krizik, a.s. ("Krizik"), a Company organized and registered in
the Slovak Republic, to form a subsidiary to market, finance and sell
Krizik's products (meters and related products). As of May 31,
1997, the Company is continuing its negotiations with Krizik.
(ii) The Company has entered in to a Letter of Intent dated December 3,
1996 with Golden Grove Business, Inc. ("GGB") to merge GGB, and its
operations as the authorized agent for Tantra, a.s. in Central and
South America, and the Caribbean, into the Company. As of May 31,
1997, the Company is continuing its negotiations with GGB.
ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT PLANS
Negotiations and discussions with Krizik, a.s., the Slovak manufacturer of
electric meters, continues. Logistics and value-added-tax matters inherent in
the Slovak republic have been worked out between SDC and Krizik. It is
proposed that SDC will establish a US subsidiary, Krizik, Inc., and that all
export orders of Krizik will go through this new company. This SDC subsidiary
will finance the inventory needed for these orders, estimated to be
$18,000,000 in revenue for SDC during 1997 and 1998 fiscal year. Draft
contracts will be prepared and exchanged during the next quarter.
Contracts providing for the acquisition by merger of GGB into SDC have been
executed by both parties. Generally, the agreements call for SDC's
acquisition of GGB, for the exchange of 48,000 shares of SDC common stock plus
a capital infusion by SDC of approximately $180,000 into the operations of
GGB, which would then be a SDC subsidiary. Additionally, the President of GGB
will become a member of the Board of Directors of SDC and will serve as SDC's
Executive Vice President. It is anticipated that the merger will close no
later than July 31, 1997.
SDC plans to establish a wholly-owned subsidiary, SDC PowerGen in Prague,
Czech Republic, during July 1997. The subsidiary will market and sell
electrical generating and co-generating equipment using the components
(engine, alternator, and electrical control system) of East European
manufacturers. By establishing this company, the SDC product range of such
equipment is expanded four-fold and the reliance on a single manufacturer,
Skoda, is minimized.
Due to the above described corporate developments, the Company plans to sell
up to 500,000 new shares of its common stock under SEC Rule 505, with the use
of proceeds from such sale to be for working capital, to close the GGB
acquisition, and to prepare for a secondary stock offering before the end of
this fiscal year. The Company is preparing a Five Year Strategic Growth Plan
and plans to have a secondary stock issuance to provide funding in order to
capitalize on these developments.
There can be no assurances that any of the matters discussed above will result
in positive results for the Company.
RESULTS OF OPERATIONS
Three months ended May 31, 1997 as compared to three months ended May 31, 1996
For the three month period ended May 31, 1997, the Company reported no
revenues. The Company has posted $80,000 of performance bonds for orders
received and expects release of said bonds during September 1997.
ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd)
RESULTS OF OPERATIONS (Cont'd)
Three months ended May 31, 1997 as compared to three months ended May 31, 1996
(Cont'd)
Operating expenses for the three month period ended May 31, 1997 were
approximately $254,095. Operating expenses in the quarter ended May 31, 1997,
without including amortization and depreciation, increased approximately 53%
compared to the same operating expenses during the quarter ending May 31,
1996. Management expects operating expenses (non-depreciation and
non-amortization), to remain at this approximate level for the near future.
Operating expense categories which exceeded $5,000, for the three month period
ending May 31, 1997 were; amortization & depreciation $117,152; office rent
$9,318; compensation & salary $18,000; travel & lodging $23,866; consulting
$18,293; legal $5,657; marketing $35,720; taxes $9,150; interest $11,824 and
telephone $5,425. Operating expense categories which exceeded $5,000 for the
three month period ending May 31, 1996 were: amortization & depreciation
$114,390: freight $5,537; office rent $14,818; compensation & salary $18,000;
travel & lodging $13,487; and telephone & facsimile $9,554.
Nine months ended May 31, 1997 as compared to nine months ended May 31, 1996
For the nine month period ended May 31, 1997, the Company reported revenues of
$1,335,579. The Company has posted $80,000 of performance bonds for orders
received. Discussions have been made and are continuing with sources for
export and sales financing which could help the Company develop its markets
and customers.
Costs of goods sold for the nine month period ended May 31, 1997 was
approximately 96% of sales. Management believes that costs of goods sold in
the future may be a lower percentage if the company is able to attain a more
stable and favorable product mix. Orders shipped during this period were in
conjunction with Skoda Diesel, resulting in costs of goods which are higher
than for sales without participation of Skoda Diesel.
Operating expenses for the nine month period ended May 31, 1997 were
approximately $622,153. Operating expenses in the nine months period ended
May 31, 1997, without including amortization and depreciation, decreased
approximately 23% compared to the same operating expenses during the prior
year's three quarters ending November 30, 1995, February 29, 1996 and May 31,
1996. Management expects operating expenses (non-depreciation and
non-amortization) to remain at this approximate level. Operating expense
categories which exceeded $20,000, for the nine month period ending May 31,
1997 were; amortization & depreciation $351,455; office rent $47,000;
compensation & salary $54,000 marketing $35,720 and travel & lodging $44,598.
Operating expenses which exceeded $20,000 for the nine month period ending May
31, 1996 were; amortization & depreciation $307,545; consulting $24,745; legal
& accounting $44,518; compensation & salary $54,000; office rent $37,566;
telephone & facsimile $21,632 and travel & lodging $54,345.
ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd)
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by the Company's operating activities for the nine month
period ended May 31, 1997 was approximately $68,435, whereas net cash used by
operating activities during the nine months ended May 31, 1996 was $194,310,
an increase in net cash provided of $262,745. The increase is primarily a
result of an increase in net accounts receivable and payable of $145,070 and a
decrease in net loss, net of depreciation, of $93,547. Net cash provided by
the Company's investing activities for the nine month period ended May 31,
1997 was approximately $62,985 as opposed to net cash used by investing
activities during the nine months ended May 31, 1996 of $291,739. Cash was
provided during the nine months ended May 31, 1997 by collection of a note
receivable from a related party while cash was used during the nine months
ended May 31, 1996 primarily for acquisition of agency rights and customer
lists totaling $300,000. Management is evaluating its current and projected
cash needs to determine if its current financial situation will be sufficient
to meet such needs. If the Company continues according to its present plans,
the Company will be required to obtain additional financing or equity
capital. There is no assurance that such financing or equity capital will be
available.
Negative cash flows from the company's operating activities are anticipated to
continue until the Company has established its distributors within its sales
territories, has received and shipped orders, and has collected payment for
such orders. The Company may encounter difficulties in financing the
purchases of inventory necessary to complete orders. The Company acknowledges
that there can be no assurance that it will be able to obtain capital or
financing until the time of such payment is received or that such capital or
financing will be available. In the event the Company is unable to provide
needed revenues to finance its ongoing operations or if the Company does not
receive additional capital, there could be a severe adverse impact on the
Company's future operations.
Net cash provided by financing activities for the nine months ended May 31,
1997 and 1996 was approximately $160,722 and $470,508, respectively. These
increases in net cash amounting to $160,722 and $470,508 were attributable to
proceeds on loans from unrelated parties of $35,000 and $0 and net proceeds
from sale of common stock amounting to $188,974 and $506,704, net of repayment
of loans from stockholders amounting to $63,252 and $36,196
The Company's products are sold in US dollars and the Company does not believe
currency exchange rates or current inflation rates will have a significant
effect on sales or profitability.
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
None
ITEM 2 - Changes in Securities:
None
ITEM 3 - Defaults Upon Senior Securities:
None
ITEM 4 - Submission of Matters to a Vote of Security Holders:
None
ITEM 5 - Other Information:
None
ITEM 6 - Exhibits and Reports on Form 8-K:
None
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SDC INTERNATIONAL, INC.
July 21, 1997 BY:/s/ Ronald A. Adams
Ronald A. Adams, President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/Ronald A. Adams July 21, 1997
Ronald A. Adams, Director and
President (Principal Executive
Officer and Principal Financial
Officer)
/s/Henry S. Green, Jr. July 21, 1997
Henry S. Green, Jr., Director