UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
1-10963
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(Commission File Number)
Rx Medical Services Corp.
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(Exact name of registrant as specified in its charter)
Nevada 87-0436782
---------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
888 East Las Olas Blvd., Suite 210, Fort Lauderdale, Florida 33301
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(Address of principal executive offices and zip code)
(954) 462-1711
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ( X ) No ( )
The number of shares outstanding of the registrant's common stock, par value
$.002 per share, at June 30, 2002, was 23,145,034 shares.
RX MEDICAL SERVICES CORP.
FORM 10-Q
Six Months Ended June 30, 2002
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
PART II. OTHER INFORMATION 16
Item 1. Legal Proceedings 16
Item 2. Changes In Securities and Use Of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6 (a) Exhibits 16
Item 6 (b) Reports on Form 8-K 16
SIGNATURES 17
ITEM 1. FINANCIAL STATEMENTS.
RX MEDICAL SERVICES CORP.
Consolidated Statements of Operations
(Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Hospitals and medical clinics $ 2,676 $ 2,916 $ 5,253 $ 5,460
------- ------- ------- -------
Costs and expenses:
Compensation and benefits 1,971 1,791 3,796 3,599
Supplies 312 308 607 601
Fees for services 317 317 668 600
Bad debts 405 247 674 487
Depreciation and amortization 50 49 97 88
Occupancy 143 125 278 268
Occupancy-related party 241 241 481 481
Equipment rental and maintenance 93 56 190 121
Equipment rental-related party 46 46 92 92
Other 347 187 595 368
------- ------- ------- -------
3,925 3,367 7,478 6,705
------- ------- ------- -------
Operating loss (1,249) (451) (2,225) (1,245)
Other income (expense):
Interest (13) (9) (54) (19)
Interest - related party (4,146) (3,008) (8,029) (5,947)
Gain on sale of intangible asset -- -- 300 --
Gain on retirement/settlement of liabilities 1,365 500 1,365 500
Other income 84 19 106 41
------- ------- ------- -------
(2,710) (2,498) (6,312) (5,425)
------- ------- ------- -------
Net loss $(3,959) $(2,949) $(8,537) $(6,670)
======= ======= ======= =======
Basic and diluted net loss per common share $ (0.17) $ (0.13) $ (0.37) $ (0.29)
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements
3
RX MEDICAL SERVICES CORP.
Consolidated Balance Sheets
(Dollars in thousands)
June 30, December 31,
2002 2001
----------- ------------
(Unaudited)
Assets:
Current assets:
Cash $ 729 $ 421
Accounts receivable (less allowance for doubtful accounts of
$887 and $759 at 2002 and 2001, respectively) 1,946 1,989
Inventories 333 296
Other 253 233
-------- --------
Total current assets 3,261 2,939
-------- --------
Property and equipment, at cost
Equipment 1,200 1,056
Furniture, fixtures and improvements 104 105
-------- --------
1,304 1,161
Less: accumulated depreciation and amortization (811) (731)
-------- --------
493 430
Other assets 10 11
-------- --------
Total assets $ 3,764 $ 3,380
======== ========
The accompanying notes are an integral part of these financial statements
4
RX MEDICAL SERVICES CORP.
Consolidated Balance Sheets (continued)
(Dollars in thousands)
June 30, December 31,
2002 2001
----------- ------------
(Unaudited)
Liabilities and shareholders' deficit:
Current liabilities:
Notes payable $ 16 $ 16
Notes payable - related party 99,645 89,224
Accounts payable 1,492 3,205
Accrued liabilities 1,746 1,489
Accrued liabilities - related party 247 227
Accrued compensation, benefits and related taxes 765 699
Current portion of long-term debt - related party 142 133
Current portion of capital lease obligations 37 43
Current portion of capital lease obligations-related party -- 16
---------- ----------
Total current liabilities 104,090 95,052
---------- ----------
Long-term liabilities:
Long-term debt - related party 39 113
Obligations under capital leases 78 91
---------- ----------
Total long-term liabilities 117 204
---------- ----------
Total liabilities 104,207 95,256
---------- ----------
Commitments and contingencies -- --
Shareholders' deficit:
Convertible preferred stock, $.001 par value, authorized shares 1,500,000,
issued and outstanding 800,000 shares at 2002 and
2001; aggregate liquidation preference of $1,100 and $1,070 at
2002 and 2001, respectively 1 1
Common stock, $.002 par value, authorized 25,000,000 shares,
issued and outstanding 23,145,034 shares at 2002 and 2001 46 46
Additional paid-in capital 44,989 45,019
Accumulated deficit (145,479) (136,942)
---------- ----------
Total shareholders' deficit (100,443) (91,876)
---------- ----------
Total liabilities and shareholders' deficit $ 3,764 $ 3,380
========== ==========
The accompanying notes are an integral part of these financial statements
5
RX MEDICAL SERVICES CORP.
Consolidated Statements of Cash Flows
(Dollars in thousands)
Six Months Ended June 30,
-------------------------------
2002 2001
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (8,537) $ (6,670)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 97 88
Provision for bad debts 674 487
Gain on retirement/settlement of liabilities (1,365) (697)
Changes in operating assets and liabilities:
Increase in accounts receivable (631) (530)
Increase in inventories (37) (25)
Increase in other assets (20) (212)
Decrease in accounts payable and accrued liabilities (56) (622)
Increase (decrease) in accrued liabilities - related party 21 (101)
---------- ----------
Net cash used in operating activities (9,854) (8,282)
---------- ----------
Cash flows from investing activities:
Acquisition of property and equipment (160) (154)
---------- ----------
Net cash used in investing activities (160) (154)
---------- ----------
Cash flows from financing activities:
Proceeds from notes payable and long-term debt - related party 10,421 8,736
Payments on notes payable, long-term debt and obligations under
capital leases (19) (27)
Payments on notes payable, long-term debt and obligations under
capital leases - related party (80) (86)
---------- ----------
Net cash provided by financing activities 10,322 8,623
---------- ----------
Net increase in cash 308 187
Cash - beginning of period 421 81
---------- ----------
Cash - end of period $ 729 $ 268
========== ==========
(Continued)
The accompanying notes are an integral part of these financial statements
6
RX MEDICAL SERVICES CORP.
Consolidated Statements of Cash Flows (Continued)
(Dollars in thousands)
Six Months Ended June 30,
-------------------------------
2002 2001
------------ -----------
(Unaudited) (Unaudited)
The following is supplementary information relating to the consolidated
statement of cash flows:
Noncash investing and financing activities:
Equipment purchased under capital leases $ -- $ 105
==== =====
For the six months ended June 30, 2002 and 2001, interest paid, which includes
interest on obligations under capitalized leases, was $2,834 and $1,921,
respectively. No income taxes were paid during these periods.
The accompanying notes are an integral part of these financial statements
7
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements, which are for
interim periods, do not include all disclosures provided in the audited annual
consolidated financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto, together with management's discussion and
analysis of financial condition and results of operations, contained in the
Annual Report on Form 10-K for the year ended December 31, 2001 of Rx Medical
Services Corp. (the "Company"), as filed with the Securities and Exchange
Commission. The December 31, 2001 balance sheet was derived from audited
consolidated financial statements, but does not include all disclosures required
by accounting principles generally accepted in the United States of America. The
results of operations for the interim periods are not necessarily indicative of
the results to be expected for the full year. In the opinion of management, the
accompanying unaudited consolidated financial statements contain all adjustments
(which are of a normal recurring nature) necessary for a fair presentation of
the financial position and results of operations.
The Company has experienced significant losses in each of the past three years,
had a working capital deficit of $100.8 million at June 30, 2002 and is in
default with respect to certain indebtedness. However, the accompanying
financial statements have been prepared on the basis that the Company will
continue as a going concern because management believes it has an attainable
plan to overcome these matters and provide sufficient capital to operate for the
coming year. The Company's ability to continue as a going concern is dependent
on the continued funding of its operations from its primary financing source,
National Century Financial Enterprises, Inc. and its affiliates (the "Financing
Source") or an alternative source, without which funding the Company's ability
to continue as a going concern would be adversely impacted.
While the Company has not yet reached operational profitability, it is
attempting to improve operational profitability, as well as, cash flow. The
Company's primary focus though is on the reorganization of the hospital
ownership and management business.
As mentioned above, the Company intends to continue reorganizing the hospital
ownership and management line of business. This line of business has and
currently is incurring significant operating losses due to a reduction in
patient services eligible for reimbursement and reimbursement rates from third
party payors, such as Medicare and Medicaid. The Company anticipates entering
into an agreement to sell or to close the hospital it currently operates. There
can be no assurance that suitable candidates can be found or that a sale can be
negotiated on terms acceptable or economically feasible to the Company. If the
Company can not find a suitable candidate to acquire its hospital, the Company
may have to or could be forced to close the remaining hospital it operates.
8
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company is looking to expand its presence, through joint ventures and/or
acquisitions, into new markets in related health care businesses with perceived
growth potential. The Company anticipates limiting its joint ventures and/or
acquisitions to those that meet certain criteria and are expected to generate
positive cash flow.
NOTE 2 - GAIN ON SETTLEMENT OF LIABILITY
In July 1998, an action was commenced against the Company in the Superior Court
of California, County of Contra Costa, under the title North Bay MRI Associates
v. Rx Medical Services Corp. (Case No. C 98-02610). The complaint stated many
issues though the primary issue was that Rx Medical Services Corp. guaranteed
the performance of a lease agreement entered into by a partnership of which a
subsidiary of the Company was a general partner. This subsidiary was included in
voluntary bankruptcy petition of Manatee Medical Laboratories, Inc. filed on
April 4, 1996. The Company chose not to defend against this action and on
October 20, 1998, a judgment by default was entered against the Company in the
amount of $1,432,900. The Company established a liability account, which was
included in accounts payable, for the full amount of the judgment. In February
2002, the Company settled this action with the plaintiffs for $80,000 in cash
and the transference from the Company's Chief Executive Officer of 210,000
shares of the Company's Common Stock. The Company recognized a gain on
settlement of liability, in the second quarter of 2002, of approximately $1.4
million.
NOTE 3 - NOTES PAYABLE - RELATED PARTY
Notes payable - related party includes notes payable due to the Financing Source
that are collateralized by accounts receivable and equipment. The collateral
also includes all the issued and outstanding common stock of Consolidated Health
Corporation of Mississippi, Inc. The Company has defaulted on the required
payments due under these notes payable, which aggregate $99.6 million at June
30, 2002.
NOTE 4 - PREFERRED STOCK
Pursuant to an agreement, dated June 27, 2002, between the Company and
Healthcare Capital, LLC ("HCC"), the sole shareholder of the Company's Series G
Preferred Stock, the Company has amended the preferences, rights and limitations
of the Company's Series G Preferred Stock effective April 2, 2002 (the
"Amendment Date"). The amendments to this series of Preferred Stock are as
follows:
a) As of the Amendment Date this series of Preferred Stock shall
cease to accrue dividends,
b) HCC, anytime after July 1, 2002 and until June 30, 2004, can
convert any or all remaining unconverted shares,
9
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
c) A change in control of the Company will result in the
automatic conversion of all remaining unconverted shares of
the Company's Series G Preferred Stock on the date the change
in control occurs,
d) The automatic conversion date of July 1, 2002 has been changed
to July 1, 2004.
Also pursuant to this agreement the Company and HCC have agreed:
a) That as of the Amendment Date the Company owes HCC 19,857,142
shares of the Company's Common Stock for dividends which have
been accrued for but not paid pursuant to the preferences,
rights and limitations of the Company's Series G Preferred
Stock and
b) to reduce the number of shares of the Company's Common Stock
owed to HCC for dividends which have been accrued for but not
paid pursuant to the preferences, rights and limitations of
the Company's Series G Preferred Stock to a certain number of
shares of the Company's Common Stock to be agreed upon prior
to the amended automatic conversion date of July 1, 2004 or to
any conversion event that shall take place prior to July 1,
2004.
NOTE 5 - EARNINGS PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings Per Share,"
requires public companies to present basic earnings (net loss) per share and, if
applicable, diluted earnings (net loss) per share for all periods that
statements of operations are presented.
The Company has only presented basic net loss per share since (a) the potential
common shares of the Company would be anti-dilutive and (b) the Company has
reflected net losses from continuing operations for all periods presented and
thus the diluted net loss per share would be the same as basic net loss per
share.
10
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following tables reflects the computation of the net loss per common share:
Three Months Ended June 30,
-------------------------------------------------------
2002 2001
----------------------- -----------------------
Per-Share Per-Share
Amount Amount Amount Amount
------- --------- ------- ---------
Loss from continuing operations $(3,959) $ (0.17) $(2,949) $ (0.13)
Dividends on preferred stock -- -- (30) (0.00)
------- ------- ------- -------
Loss available to common
shareholders' (3,959) (0.17) (2,979) (0.13)
Other Items -- -- -- --
------- ------- ------- -------
Net loss $(3,959) $ (0.17) $(2,979) $ (0.13)
======= ======= ======= =======
Weighted average common
shares outstanding 23,145 23,146
======= =======
Six Months Ended June 30,
-------------------------------------------------------
2002 2001
----------------------- -----------------------
Per-Share Per-Share
Amount Amount Amount Amount
------- --------- ------- ---------
Loss from continuing operations $(8,537) $ (0.37) $(6,670) $ (0.29)
Dividends on preferred stock (30) (0.00) (60) (0.00)
------- ------- ------- -------
Loss available to common
shareholders' (8,567) (0.37) (6,730) (0.29)
Other items -- -- -- --
------- ------- ------- -------
Net loss $(8,567) $ (0.37) $(6,730) $ (0.29)
======= ======= ======= =======
Weighted average common
shares outstanding 23,145 23,146
======= =======
The Company has issued potential common share securities that could potentially
dilute basic earnings per share in the future. These potentially dilutive
securities, as of June 30, 2002, are as follows:
a) stock options for 163,627 shares of the Company's Common
Stock,
b) the Company's Series G Preferred Stock that could convert,
based on the market value of the Company Common Stock on June
30, 2002, into approximately 26,666,667 shares of the
Company's Common Stock,
c) dividends in arrears on the Company's Series G Preferred Stock
convertible into 19,857,142 shares of the Company's Common
Stock.
11
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
These securities were not included in the computations of net loss per common
share presented in the financial statements because they were anti-dilutive.
At June 30, 2002, the Company does not have enough authorized shares of Common
Stock to either convert the Company's Series G Preferred Stock and/or pay the
dividends in arrears on the Company's Series G Preferred Stock.
NOTE 6 - BUSINESS SEGMENTS
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information," requires disclosure of net profit or
loss, certain specific revenue and expense items and certain asset items by
reportable segments and how reportable segments are determined. The statement
defines a reportable segment as a component of an entity about which separate
financial information is produced internally, that is evaluated by the chief
operating decision-maker to assess performance and allocate resources.
As of June 30, 2002, the Company effectively discontinued the distribution of
biological products line of business and thus the Company's only remaining
operating segment is the operation of hospitals and medical clinics.
The following table presents information on the Company's applicable business
segments for the six months ended June 30, 2002 and 2001 (in thousands):
Hospitals and
Medical Biological
Clinics Products Corporate Total
------------- ---------- ---------- ---------
2002
Revenues $ 5,253 $ -- $ -- $ 5,253
Operating profit (loss) $ (1,764) $ (50) $ (411) $ (2,225)
Capital expenditures
(including capital leases) $ 159 $ -- $ 1 $ 160
Depreciation and
amortization expense $ 95 $ -- $ 2 $ 97
Identifiable assets at
end of period $ 3,634 $ -- $ 130 $ 3,764
2001
Revenues $ 5,460 $ -- $ -- $ 5,460
Operating profit (loss) $ (796) $ (77) $ (372) $ (1,245)
Capital expenditures
(including capital leases) $ 259 $ -- $ -- $ 259
Depreciation and
amortization expense $ 84 $ 1 $ 3 $ 88
Identifiable assets at
end of period $ 3,162 $ 2 $ 249 $ 3,413
12
RX MEDICAL SERVICES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 - SUBSEQUENT EVENTS
On August 9, 2002, options to acquire 12,502 shares of the Company's Common
Stock expired unexercised.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Three Months:
Revenues from hospitals and medical clinics for the three months ended June 30,
2002 were $2.6 million compared to $2.9 million for the three months ended June
30, 2001. The decrease in revenues from hospitals and medical clinics is
primarily the result of a decrease in patient services provided at and an
increase in contractual adjustments realized at the Dickenson County Medical
Center ("DCMC") which resulted in a decrease of revenues of approximately $0.3
million.
Costs and expenses increased 17% to $3.9 million for the three months ended June
30, 2002 from $3.3 million for the three months ended June 30, 2001. Of these
2002 expenses, hospital management operations accounted for $3.7 million and the
corporate expenses of the Company were $0.2 million. The increase in costs and
expenses is primarily the result of an increase in compensation and benefits, an
increase in the provision for doubtful accounts and an increase in other
operating expenses incurred in providing patient services at DCMC.
Interest expense increased 38% to $4.1 million for the three months ended June
30, 2002 from $3.0 million for the three months ended June 30, 2001. This
increase is due to a higher level of borrowings from the Financing Source. (see
"Financial Condition, Liquidity, and Capital Resources" below). Interest expense
for the three months ended June 30, 2001 was reduced $0.3 million for the
reversal of accrued interest.
Six Months:
Revenues from hospitals and medical clinics for the six months ended June 30,
2002 were $5.2 million compared to $5.4 million for the six months ended June
30, 2001. The decrease in revenues from hospitals and medical clinics is
primarily the result of a decrease in patient services provided at DCMC which
resulted in a decrease of revenues of approximately $0.2 million.
Costs and expenses increased 12% to $7.4 million for the six months ended June
30, 2002 from $6.7 million for the six months ended June 30, 2001. Of these 2002
expenses, hospital management operations accounted for $7.0 million and the
corporate expenses of the Company were $0.4 million. The increase in costs and
expenses is primarily the result of an increase in compensation and benefits, an
increase in the provision for doubtful accounts and an increase in other
operating expenses incurred in providing patient services at DCMC.
Interest expense increased 35% to $8.0 million for the six months ended June 30,
2002 from $5.9 million for the six months ended June 30, 2001. This increase is
due to a higher level of borrowings from the Financing Source. (see "Financial
Condition, Liquidity, and Capital Resources" below). Interest expense for the
six months ended June 30, 2001 was reduced $0.3 million for the reversal of
accrued interest.
14
Financial Condition, Liquidity, and Capital Resources
During the six months ended June 30, 2002, the Company's working capital deficit
increased by approximately $8.7 million to $100.8 million. This increase in the
working capital deficit was primarily due to a $10.4 million increase in the
level of funding from the Financing Source, and a $1.3 million decrease in
accounts payable and accrued liabilities. Through June 30, 2002, the Company's
ability to continue as a going concern is dependent on the continued funding of
its operations by the Financing Source. Without this funding, the Company's
ability to operate its business would be adversely impacted. However, until the
Company's revenues increase so as to exceed the Company's operating expenses,
the Company will continue to utilize funding from the Financing Source, or other
alternative sources of funding, to the extent available. To the extent fundings
from the Financing Source are insufficient to pay the Company's operating
expenses, the Company will require alternative sources of funding. There can be
no assurance that any alternative sources of financing will be available to the
Company at such point in time, or if obtainable, on terms that are commercially
feasible.
The Company's current operations are presently being funded through financing
agreements with the Financing Source. Financing agreements exist between the
Financing Source, the Company and four of the Company's subsidiaries.
While the Company has not yet reached profitability operationally, it is
attempting to improve operational profitability, as well as, cash flow. The
Company intends to continue reorganizing the hospital operation and management
business. The Company is also looking to expand its presence, through joint
ventures and/or acquisitions, into new markets in related health care businesses
with perceived growth potential. There can be no assurance, however, that the
Company will achieve these strategic objectives.
Going Concern
The reports of the independent auditors of the Company on its 2001, 2000 and
1999 consolidated financial statements express substantial doubt about the
Company's ability to continue as a going concern. Factors contributing to this
substantial doubt include recurring operating losses, a working capital
deficiency and delinquencies and defaults on its accounts payable and other
outstanding liabilities.
As mentioned in the Financial Condition section, the Company is dependent on the
continued funding currently being received from the Financing Source to continue
operations. The discontinuance of such funding, and the unavailability of
financing to replace such funding, could result in the Company ceasing its
operations.
15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 2 - Gain On Settlement Of Liability in Item 1
Financial Statements of Part I Financial Information.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
See Note 4 - Preferred Stock in Item 1 Financial Statements of
Part I Financial Information.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
See Note 3 - Notes Payable - Related Party in Item 1 Financial
Statements of Part I Financial Information.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6 (A). EXHIBITS
See Exhibit 99.1 - Certification to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, filed herewith.
See Exhibit 99.2 - Certification to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, filed herewith.
ITEM 6 (B). REPORTS ON FORM 8-K
None
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Rx MEDICAL SERVICES CORP.
By: /s/ Michael L. Goldberg
--------------------------------
Michael L. Goldberg
Chief Executive Officer
Date: August 14, 2002
By: /s/ Dennis Dolnick
--------------------------------
Dennis Dolnick
Chief Financial Officer
Date: August 14, 2002