U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1)
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2002
---------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File No. 0-18686
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PAK MAIL CENTERS OF AMERICA, INC.
---------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Colorado 84-0934575
------------------------------ -----------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7173 S. Havana St., Englewood, Colorado 80112
-------------------------------------- --------
(Address of principal executive offices) (zip code)
Issuer's telephone number: 303-957-1000
Former name, former address and former fiscal year, if changed since
last report: N/A
As of August 31, 2002, there were outstanding 3,877,737 shares of the
issuer's Common Stock, par value $.001 per share.
Transitional Small Business Disclosure Format
Yes [ ] No [X]
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY
Consolidated Balance Sheets
August November
31, 2002 30, 2001
(Unaudited) Audited
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 59,569 $ 17,201
Restricted cash 90,759 138,406
Accounts receivable, net of allowance
of $72,052 (2002) and $69,677 (2001) 535,991 544,192
Inventories 53,532 30,225
Notes receivable, current, net of allowance of $16,383 (2002) and $31,115 (2001) 115,523 115,523
Prepaid expenses and other current assets 25,167 55,588
Deferred income tax benefit - current -- 132,734
----------- -----------
Total current assets 880,541 1,033,869
----------- -----------
Property and equipment, at cost, net of accumulated depreciation 58,389 85,413
----------- -----------
Other assets:
Notes receivable, net of current portion 71,932 184,447
Deposits and other 111,334 112,868
Deferred franchise costs, net of accumulated amortization of
$135,603 (2002) and $135,603 (2001) 50,310 16,770
Capitalized software costs, net of amortization and impairment
$571,956 (2002) and $130,373 (2001) -- 571,956
----------- -----------
Total other assets 233,576 886,041
----------- -----------
$ 1,172,506 $ 2,005,323
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities
Trade accounts payable $ 84,708 $ 203,042
Other accrued expenses 332,035 348,617
Deferred Rent 59,415 64,776
Due to advertising fund 90,759 138,406
Preferred dividends payable 232,750 133,000
Current portion of capital lease obligation 10,520 10,520
Current portion of post employment benefits 45,369 --
----------- -----------
Total current liabilities 855,556 898,361
----------- -----------
Long term liabilities
Deferred revenue 535,302 626,205
Note payable related party 400,000 400,000
Capital lease obligation 2,360 11,088
Post employment benefits 226,869 --
----------- -----------
Total long-term liabilities 1,164,531 1,037,293
----------- -----------
Stockholders' equity:
Series "C" redeemable preferred stock, $1,000 par value; 6% cumulative
2,500 shares authorized; 2,216.668 shares issued and outstanding
(liquidation preference $2,349,668) 2,216,668 2,216,668
Common stock, $.001 par value; 200,000,000 shares authorized;
3,877,737 shares issued and outstanding as of 08/31/02 and
3,877,737 shares issued and outstanding as of 11/30/01 3,877 3,877
Additional paidin capital 5,113,992 5,113,992
Accumulated deficit (8,182,118) (7,264,868)
----------- -----------
Total stockholders' equity (847,581) 69,669
----------- -----------
$ 1,172,506 $ 2,005,323
=========== ===========
See notes to consolidated financial statements
F-1
PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY
Consolidated Statement of Operations
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- ---------------------------
August 31, August 31,
2002 2001 2002 2001
-------------------------- ---------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- ---------
Revenue
Royalties from franchisees $ 610,400 $ 629,585 $ 2,074,542 $ 2,161,208
Franchise fees 258,132 165,676 701,448 559,865
Sales of products and services 231,579 197,967 489,816 403,008
Software licence fees -- 19,409 -- 121,169
Other operating revenue 44,619 23,334 83,807 74,316
----------- ----------- ----------- -----------
Total Revenue 1,144,730 1,035,971 3,349,613 3,319,566
----------- ----------- ----------- -----------
Operating expenses
Selling, general, and administrative 430,040 468,844 1,323,330 1,537,439
Cost of sales of products and services 253,924 186,626 508,549 438,993
Royalties paid to area franchises 270,351 260,028 927,409 964,300
Commissions on franchise sales 98,850 57,018 299,795 210,301
Advertising 10,275 25,949 76,328 117,608
Depreciation & amortization 12,714 21,756 47,607 118,584
Impairment of capitalized software 571,956 -- 571,956 --
Post employment expenses 272,238 -- 272,238 --
----------- ----------- ----------- -----------
Total Operating Expenses 1,920,348 1,020,221 4,027,212 3,387,225
----------- ----------- ----------- -----------
Operating income (loss (775,618) 15,750 (677,599) (67,659)
Other income & expense
Interest income 2,259 3,942 9,859 10,427
Interest expense 5,163 10,590 17,026 36,270
----------- ----------- ----------- -----------
Net (loss) income before income tax expense (778,522) 9,102 (684,766) (93,502)
Deferred income tax expense 132,734 -- 132,734 --
Net (loss) income before preferred stock dividend (911,256) 9,102 (817,500) (93,502)
----------- ----------- ----------- -----------
Preferred stock dividend 33,250 33,250 99,750 99,750
Net loss (income) available to Stockholders (944,506) $ (24,148) (917,250) (193,252)
=========== =========== =========== ===========
Basic and diluted net (loss) income
per share of common share $ (0.244) $ (0.006) $ (0.237) $ (0.050)
=========== =========== =========== ===========
3,877,737 3,877,737 3,877,737 3,877,737
=========== =========== =========== ===========
See notes to consolidated financial statements.
F-2
PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY
Consolidated Statement of Cash Flows
NINE MONTHS ENDED
August 31, August 31,
2002 2001
--------- ---------
(Unaudited) (Unaudited)
Cash flows from operating activities
Net Loss $(917,250) $(193,252)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 47,607 38,170
Amortization of trademarks 17,666
Amortization PSS software development -- 48,984
Amortization of deferred franchise costs 13,764
Bad debt 94,500
Change in provision for loss on accounts receivable 2,375 46,030
Change in provision for loss on notes receivable (14,732) 28,638
Impairment on capitalized software 571,956 --
Postemployment expenses 272,238
Deferred income tax expense 132,734
Changes in assets and liabilities
Accounts receivable (65,928) (47,153)
Inventories (23,307) 13,532
Prepaids expenses 30,421 (44,190)
Trade accounts payable (118,334) (124,280)
Accrued expenses and deferred rent (21,943) 188,364
Due to Ad Fund (47,647) 62,941
Deferred franchise costs (33,540) --
Deferred revenue (38,903) 184,799
--------- ---------
Net cash (used in)/provided by operating activities (129,753) 234,013
--------- ---------
Cash flows from investing activities
Capital expenditures (5,747) (9,416)
Deferred franchise expenditures (12,980)
Capitalized software costs (194,098)
Collections on notes receivable 52,501 73,021
Deposits & other (13,302) 42,392
--------- ---------
Net cash provided by/(used in) investing activities 33,452 (101,081)
--------- ---------
Cash flows from financing activities
Payments on notes payable and capital lease obligations (8,728) (7,775)
Preferred stock dividends accrued 99,750 99,750
Preferred stock dividends paid -- (133,000)
Restricted Cash 47,647 (74,070)
--------- ---------
Net cash provided by/(used in) financing activities 138,669 (115,095)
--------- ---------
Net increase in cash and cash equivalents 42,368 17,837
========= =========
Cash and cash equivalents, beginning of year 17,201 11,129
Cash and cash equivalents, end of period $ 59,569 $ 28,966
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 17,027 $ 39,311
Supplemental disclosure of noncash activity:
During the nine monts ended August 31, 200 (Unaudited) the company cancelled a
note receivable and the associated deferred revenue totaling $52,000
See notes to consolidated financial statements.
F-3
PAK MAIL CENTERS OF AMERICA, INC.
Notes to Consolidated Financial Statements
Note 1 ORGANIZATION AND BUSINESS
-------------------------
Pak Mail Centers of America, Inc. was incorporated in Colorado in 1984
and is engaged in the business of marketing and franchising Pak Mail
service centers and retail stores which specialize in custom packaging
and crating of items to be mailed or shipped. For the period from June
1, 2002 through August 31, 2002, the Company awarded 9 individual
franchises. For the period from December 1, 2001 through August 31,
2002, the Company awarded 24 individual franchises. The Company had
336 domestic and 47 international individual stores operating, and 27
domestic and 8 international area franchises in existence. 19 of the
domestic franchise agreements, which have been issued, are for stores
not yet operating.
The consolidated financial statements include the accounts of Pak Mail
Centers of America, Inc. and its wholly owned subsidiary, Pak Mail
Crating and Freight Service, Inc. (together, the "Company"). All
significant inter-company transactions and balances have been
eliminated in consolidation.
Note 2 BASIS OF PRESENTATION
---------------------
The Company has prepared the accompanying consolidated financial
statements. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of
America have been condensed or omitted. In the opinion of the
Company's management, the interim financial statements include all
adjustments necessary in order to make the interim financial
statements not misleading.
The results of operations for the nine months ended August 31, 2002
are not necessarily indicative of the results to be expected for the
full year.
F-4
Item 2. Management's Discussion and Analysis or Plan of Operation
---------------------------------------------------------
The following information should be read in conjunction with the
un-audited consolidated financial statements included herein. See Item
1.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Nine months ended August 31, 2002
---------------------------------
The company used $129,753 in operations; provided $33,452 from
investing activities and generated $138,669 in financing activities
during the nine months ended August 31, 2002. The cash generated was
used primarily to pay down accounts payable.
Per mutual agreement, the company and the area developer for
Oklahoma/Louisiana cancelled the existing agreement with no penalties
or obligations to either party. This resulted in the cancellation of a
note receivable and associated deferred revenue in the amount of
$52,000.
RESULTS OF OPERATIONS
---------------------
Three months ended August 31, 2002, compared to three months ended
------------------------------------------------------------------
August 31, 2001
---------------
Revenues
--------
Total revenues increased $108,759 (up 10.50% from $1,039,971 to
$1,144,730). The increase is primarily attributable to increases in
Sales of equipment, supplies and services (up 16.98% from $197,967 to
$231,579), Franchise fees (up 55,81% from $165,676 to $258,132), PSS
license & maintenance fees (down 100% from $19,409 to $0), and Other
income (up 91.22% from $23,334 to $44,619.
Sales of equipment, supplies and services increased $33,612 due to the
increase in individual franchise sales. As more franchises are sold,
more associated equipment is sold.
Franchise fees increased $92,456 due to an ndividual franchise fee
increase of $72,770 due to the increase in the number of sales over
the comparable period, a result of favorable referrals from the
franchisee community. And an area franchise fees increased $19,686 due
to the transfer of the area agreements covering the states of
Washington and Oregon. These fees are deferred and realized over the
life of the contract. The contract was terminated with approximately 1
1/2 years remaining and $30,330 in revenue still deferred which was
recognized. The company received no revenue from the transfer.
PSS license and maintenance fees decreased $19,409 due to Pak Mail's
exit from the software business. Pak Mail had been developing a point
of sale software program called PSS over the past five years. The
decrease in PSS license & maintenance fees is a result of Pak Mail's
decision to discontinue developing the PSS point of sales software
program. In May 2001 the Company determined that it had no more funds
to commit to finishing the development of the software. Accordingly,
an agreement was reached with ReSource Software, Inc. to use its off
the shelf packing and shipping program.
Other income increased $21,285 due to an increase in number of store
transfers over the same period of last year.
2
Costs and Expenses
------------------
Total expenses increased $900,127 (up 88.23%) from $1,020,221 to
$1,920,348. The decrease is due to a decrease in selling, general and
administrative (down 8.28% from $468,844 to $430,040); Cost of sales
of equipment, supplies and services (up 36.06% from $186,626 to
$253,924), commissions on franchise sales (up 73.37% from $57,018 to
$98,850), and advertising (down 60.40% from $25,949 to $10,275).
Impairment of capitalized software (up from $0 to $571,956) and post
employment expenses (up from $0 to $272,238).
Selling, general and administrative decreased $38,804 due to the
reduction in personnel from 18 to 13, a reduction in the phone bill
and a reduction in legal expenses.
Cost of sales of equipment, supplies and services increased $67,298
due to an increase in the number of individual franchises sold.
Commissions on franchise sales increased $41,832 due to the increase
in individual franchises sold.
Advertising decreased $15,674 as unproductive advertising was
eliminated.
Impairment of capitalized software costs increased $571,956 due to the
inability to utilize the marketing and custom packaging modules from
PSS in the ReSource point of sale software. The ReSource program did
not have a marketing or custom packaging module. Those two pieces from
PSS were to be incorporated into the ReSource Software point of sale
program. The Company expected the ReSource Software point of sale
program including the two pieces from PSS to be released in August or
September of 2002 at which point Pak Mail would share in the revenue
from the enhanced package. Pak Mail had been developing a point of
sale software program called PSS over the past five years. In May 2001
the Company determined that it had no more funds to commit to
finishing the development of the software. An agreement was struck
with ReSource Software, Inc. to use its off the shelf packing and
shipping program. The amount impaired is the remaining balance of
capitalized software costs on the financial statements.
Post employment expenses increased $272,238 due to recognition of the
remaining liability associated with John Kelly's severance package,
the former CEO. Included in the liability are salary, benefits,
payroll taxes, health club membership and car allowance. The contract
terminates February 29th, 2004.
Deferred income tax expense increased $132,734 due to the company's
decision to write off the balance of the deferred income tax asset
based upon the lack utilization of net operating losses.
Nine months ended August 31, 2002 compared to the Nine months ended
-------------------------------------------------------------------
August 31, 2001
---------------
Revenue
-------
Total revenues decreased 0.91% or $30,097 from $3,319,566 to
$3,349,613. The increase is attributable primarily to; Royalties (down
4.01% from $2,161,208 to $2,074,542), sales of equipment supplies and
services increased (up 25.29% from $403,008 to $489,816), franchise
fees of $559,865 to $701,448 franchise fees increased (up 25,29% from
$405,790 to $568,200), and PSS license & maintenance fees decreased
(down 100.00% from $121,169 to $0).
Royalties decreased $86,666 due to a decrease in average store volume,
which is a lingering effect of the September 11th terrorist attack and
a decrease in the number of stores operating.
Sales of equipment supplies and services increased $86,808 due to the
increase in individual franchise sales.
Franchise fees increased $141,583 due to an individual franchise fee
increased of $162,410 due to the increase in number of store
franchises sold and recognized. And an area franchise fees decrease of
3
$20,827 due to fewer area sales contracts being amortized in 2002 and
one additional Area franchise being sold during the first quarter of
the 2001. Per our accounting method, the net area fee is amortized
over the life of the contract, usually 5 years. However, the revenue
associated with the commission paid on the contract is recognized in
the month sold. Therefore in the first year, revenue associated with
the commission and 20% of the contract is recognized. Area Fee revenue
was higher in the first quarter of 2001 due to the recording of the
commission in the same quarter.
PSS license & maintenance fees decreased $121,169 due to Pak Mail's
exit from the software business. Pak Mail had been developing a point
of sale software program called PSS over the past five years. The
decrease in PSS license & maintenance fees is a result of Pak Mail's
decision to discontinue developing the PSS point of sales software
program. In May 2001 the Company determined that it had no more funds
to commit to finishing the development of the software. Accordingly,
an agreement was reached with ReSource Software, Inc. to use its off
the shelf packing and shipping program.
Costs and Expenses
------------------
Costs and expenses decreased 6.53% or $223,451 from $3,423,495 to
$3,200,045. Selling, general and administrative expenses decreased
(down 13.93% from $1,537,439 to $1,323,330), cost of sales of
equipment, supplies and services increased (up 15.84% from $438,993 to
$508,549), commissions on franchise sales increased (up 42.56% from
$210,301 to $299,795) royalties paid to area franchisees decreased
(down 3.83% from $964,300 to $927,409) advertising decreased (down
35.10% from $117,608 to $76,328), Amortization of software decreased
(down 81.55% from $80,414 to $14,837) and Interest expense decreased
(down 53.05% from $36,270 to $17,026).
Selling general and administrative decreased $214,109 due to the
reduction in personnel from 18 to 13, a reduction in the phone bill
and a reduction in legal expenses.
Cost of sales of equipment supplies and services increased $69,556 due
to the increase in individual franchise sales.
Commission on franchise sales increased $89,494 due to the increase in
individual franchise sales.
Royalties paid to area franchisees decreased $36,891 due the
associated decrease in royalty revenue.
Advertising decreased $41,280 as unproductive advertising was
eliminated.
Depreciation of software decreased $65,577 as the in house point of
sale software PSS, is no longer being amortized.
Interest expense decreased $19,244 due to improved cash flow from
increased sales, cost reductions and the resulting reduction in
interest paid particularly on trade accounts.
Impairment of capitalized software costs increased $571,956 due to the
inability to utilize the marketing and custom packaging modules from
PSS in the ReSource point of sale software. The ReSource program did
not have a marketing or custom packaging module. Those two pieces from
PSS were to be incorporated into the ReSource Software point of sale
program. The Company expected the ReSource Software point of sale
program including the two pieces from PSS to be released in August or
September of 2002 at which point Pak Mail would share in the revenue
from the enhanced package. Pak Mail had been developing a point of
sale software program called PSS over the past five years. In May 2001
the Company determined that it had no more funds to commit to
finishing the development of the software. An agreement was struck
with ReSource Software, Inc. to use its off the shelf packing and
shipping program. The amount impaired is the remaining balance of
capitalized software costs on the financial statements.
4
Post employment expenses increased $272,238 due to recognition of the
remaining liability associated with John Kelly's severance package,
the former CEO. Included in the liability are salary, benefits,
payroll taxes, health club membership and car allowance. The contract
terminates February 29th, 2004.
Deferred income tax expense increased $132,734 due to the company's
decision to write off the balance of the deferred income tax asset
based upon the lack utilization of net operating losses.
5
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.
(a) Exhibits
3.1(a) Articles of Incorporation, incorporated by reference to Exhibit
(3)(a) of the Company's Annual Report on Form 10-KSB for the fiscal
year ended November 30, 1995.
3.1(b) Articles of Amendment to the Articles of Incorporation filed
with the Colorado Secretary of State on January 26,1998 incorporated
by reference to Exhibit (3)(b) of the Company's Annual report on Form
10KSB for the fiscal year ended November 30, 1997.
3.1(c) Articles of Amendment to the Articles of Incorporation filed
with the Colorado Secretary of State on July 13, 1998, incorporated by
reference to Exhibit 3(a) of the Company's Quarterly Report on Form
10-QSB for the quarter ended May 31, 1998.
3.2 Bylaws incorporated by reference to Exhibit 3(b) of the Company's
Quarterly Report on Form 10-QSB for the quarter ended May 31, 1998.
99.1 Chief Executive Officer Certification per Sarbanes-Oxley Section
906
99.2 Accounting Supervisor Certification per Sarbanes-Oxley Section
906
99.3 Chief Executive officer Certification per Sarbanes-Oxley Section
302*
99.4 Accounting Supervisor Certification per Sarbanes-Oxley Section
302*
(b) Reports on Form 8-K
None.
- -------------
* Previously filed
6
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.
PAK MAIL CENTERS OF AMERICA, INC.
(Registrant)
Date: January 8, 2003
By: /s/ P. Evan Lasky
--------------------------------
P. Evan Lasky
Chief Executive Officer
7
CERTIFICATIONS
I, P. Evan Lasky, certify that:
1. I have reviewed this quarterly report of Pak Mail Centers of America, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based upon my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 8, 2003
By: /s/ P. Evan Lasky
------------------------------
P. Evan Lasky
Chief Executive Officer
I, P. Evan Lasky, certify that:
1. I have reviewed this quarterly report of Pak Mail Centers of America, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based upon my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 8, 2003
By: /s/ P. Evan Lasky
--------------------------------
P. Evan Lasky
Accounting Supervisor