SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
For the Quarter Ended November 30, 1998
Commission File Number 01-19001
MILLER DIVERSIFIED CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Nevada 84-1070932
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(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization Number)
Mailing Address:
P. O. Box 937
La Salle, Colorado 80645
23360 Weld County Road 35
La Salle, Colorado 80645
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(Address of Principal Executive Office)
(970) 284-5556
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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
----- -----
Number of shares of Common Stock, par value $.0001, outstanding on December 12,
1998, 6,364,640.
Transitional Small Business Disclosure Format: YES NO X
--- ---
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
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November 30, August 31,
1998 1998
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ASSETS
Current Assets:
Cash $ 66,298 $ 63,656
Trade accounts receivable 848,547 823,576
Accounts receivable - related parties 291,865 203,137
Notes receivable - customer financing 176,174 --
Inventories 714,532 1,321,467
Prepaid expenses 18,006 13,542
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Total Current Assets 2,115,422 2,425,378
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Property and Equipment:
Feedlot facility under capital lease -
related party 1,497,840 1,497,840
Equipment 77,453 77,453
Equipment under capital leases -
related party 30,649 30,649
Leasehold improvements 131,043 131,043
-----------------------------------
1,736,985 1,736,985
Less: Accumulated depreciation
and amortization 602,466 581,331
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Total Property and Equipment 1,134,519 1,155,654
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Other Assets:
Securities available for sale 9,050 10,347
Other investments 273,389 186,366
Notes receivable - related party 300,000 300,000
Deferred income taxes 233,142 233,142
Deposits and other 16,500 30,885
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Total Other Assets 832,081 760,740
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TOTAL ASSETS $ 4,082,022 $ 4,341,772
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Continued on next page
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MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS - Continued
November 30, August 31,
1998 1998
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LIABILITIES
Current Liabilities:
Bank overdraft $ 22,877 $ --
Notes payable 460,418 1,001,327
Trade accounts payable 611,063 440,848
Income taxes payable 36,814 --
Accrued expenses 29,209 32,046
Customer advance feed contracts 14,907 14,907
Current portion of capital lease obligations -
related party 27,094 27,094
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Total Current Liabilities 1,202,382 1,516,222
Capital Lease Obligations - related party 977,934 984,432
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Total Liabilities 2,180,316 2,500,654
Commitments
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STOCKHOLDERS' EQUITY
Preferred Stock -- --
Common Stock, par value $.0001 per share;
25,000,000 shares authorized; 6,364,640
shares issued and outstanding 636 636
Additional Paid-in Capital 1,351,693 1,351,693
Unrealized Gain (Loss) on Securities
available for sale (11,049) (9,753)
Retained Earnings 560,426 498,542
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Total Stockholders' Equity 1,901,706 1,841,118
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,082,022 $ 4,341,772
=======================================================================================
See Accompanying Notes to Unaudited Consolidated Financial Statements.
-3-
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended November 30 1998 1997
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Revenue:
Feed and related sales $ 1,702,717 $ 2,097,379
Fed cattle sales 1,151,238 --
Feedlot services 257,055 355,447
Other 18,051 7,436
Interest income 8,491 2,269
Interest income - related party 4,500 8,250
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Total Revenue 3,142,052 2,470,781
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Costs and Expenses:
Cost of:
Feed and related sales 1,467,614 1,905,115
Fed cattle sales 1,090,341 --
Feedlot services 272,704 282,607
Selling, general, and administrative 171,265 187,004
Interest 13,672 164
Interest on capital leases - related party 27,758 28,630
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Total Costs and Expenses 3,043,354 2,403,520
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Income Before Income Taxes 98,698 67,261
Income Tax 36,814 24,096
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NET INCOME $ 61,884 $ 43,165
=====================================================================================
INCOME PER COMMON SHARE $ .01 $ .01
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Weighted Average Number of Common
Shares Outstanding 6,364,640 6,364,640
=====================================================================================
See Accompanying Notes to Unaudited Consolidated Financial Statements.
-4-
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended November 30, 1998 1997
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Cash Flows from Operating Activities:
Cash received from customers $ 3,108,590 $ 2,264,604
Cash paid to suppliers and employees (2,099,900) (2,484,196)
Interest received 8,491 10,519
Interest paid (45,981) (28,795)
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Net Cash Provided (Utilized) by
Operating Activities 971,200 (237,868)
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Cash Flows from Investing Activities:
Acquisition of property and equipment -- (1,933)
Acquisition of other investments (87,023) --
Loans to unrelated customers (176,174) --
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Net Cash Utilized by Investing Activities (263,197) (1,933)
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Cash Flows from Financing Activities:
Proceeds from notes payable 1,405,633 380,000
Principal payments on::
Short-term notes payable (1,946,542) (380,000)
Capital lease obligations - related party (6,498) (7,155)
Net decrease in short-term feeder
cattle financing (180,830) (33,853)
Increase in cash overdraft 22,877 --
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Net Cash Utilized by Financing Activities (705,360) (41,008)
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Net Increase (Decrease) in Cash 2,643 (280,809)
Cash, Beginning of Year 63,656 359,278
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Cash, End of Year $ 66,299 $ 78,469
===========================================================================================
Continued on next page.
-5-
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS -Continued
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Three Months Ended November 30, 1998 1997
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Reconciliation of Net Income (Loss) to Net
Cash Provided by Operating Activities:
Net income $61,884 $ 43,165
Adjustments:
Depreciation and amortization 21,135 21,087
Changes in assets and liabilities net of
short-term feeder cattle financing:
(Increase) decrease in:
Trade accounts receivable (24,971) (146,436)
Trade accounts receivable - related party -- (49,222)
Accounts receivable - related party (88,728) (111,132)
Inventories 787,765 (168,512)
Prepaid expenses (4,463) (6,608)
Deposits and other 14,385 --
Increase (decrease) in:
Trade accounts payable and accrued
expenses 167,379 155,694
Accrued income taxes payable 36,814 24,096
- -----------------------------------------------------------------------------------------
Net Cash Provided (Utilized) by
Operating Activities $ 971,200 $ (237,868)
=========================================================================================
See Accompanying Notes to Unaudited Consolidated Financial Statements.
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MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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Securities Available for Sale
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Amortized Estimated Gross - Unrealized
Cost Market Value Gains Losses
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August 31, 1998
Equity Securities $ 20,100 $ 10,347 $-- $ 9,753
November 30, 1998
Equity Securities $ 20,100 $ 9,050 $-- $ 11,050
In the Consolidated Statements of Cash Flow, the phrase "Short-term cattle
financing" includes changes in feeder cattle inventory held for sale to
customers, accounts receivable for feeder cattle sold to customers, accounts
payable for feeder cattle held for sale to customers, and accounts payable to
customers for slaughter cattle sold. The transactions from which these amounts
are derived do not have a material reflection of the operations of the Company,
and are thus only summarized.
The consolidated balance sheets as of November 30, 1998 and August 31, 1998, the
consolidated statements of earnings for the three months ended November 30, 1998
and 1997 and consolidated statements of cash flows for the three months ended
November 30, 1998 and 1997 have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted as allowed by the rules and regulations of the
Securities and Exchange Commission.
In preparation of the above-described financial statements, all adjustments of a
normal and recurring nature have been made. The Company believes that the
accompanying unaudited financial statements contain all adjustments necessary to
present fairly the results of operations and cash flows for the periods
presented. Further, management believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the annual financial statements
and the notes thereto. The operations for the three month period ended November
30, 1998 are not necessarily indicative of the results to be expected for the
year.
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Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
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Results of Operations
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A summary of the net earnings for the three months of the fiscal year ended
November 30, 1998, compared to the same period the year before is as follows:
Three Months Ended November 30, 1998 1997 Increase
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First Quarter $ 61,884 $ 43,165 $ 18,719
The most significant factor that affects operating results is the average
head numbers of cattle per day ("average head days") in the Company's feedlot
because feed is sold and feedlot services are rendered to the cattle owners.
Sales of feed and feedlot services account for 95% or more of the Company's
historically consistent revenues. As noted below, fed cattle sales, which
account for 36.6% if the total revenues for the period ended November 30, 1998,
are sporadic and have not been a major factor in prior period sales. Excluding
fed cattle sales, feed and related sales and feedlot services account for 98.4%
of total revenue for the period ended November 30, 1998. The average head days
for the periods being compared were as follows:
Three Months Ended November 30, 1998 1997 Decrease
---------------------------------------------------------------------------
First Quarter 14,114 15,721 1,607
The 1,607 or 10.2% decrease in average head days age head numbers for the
three months ended November 30, 1998 compared to the previous year, impacted
several areas as described below.
Another factor that affected earnings for the three months ended November
30, 1998 and 1997, and that did or will impact average head numbers and earnings
later in the fiscal year, is the Company's "fall calf program". As a service to
customers, the Company purchases for them calves weaned in the fall and places
them with local farmer-feeders who feed and care for the calves until the
following February through April when the cattle are transferred to the
Company's feedlot. These fall calf programs are undertaken on essentially a
break-even basis; that is, the amounts paid to the farmer-feeders are about the
same as the amounts charged to the customers. The Company offers this service to
improve replacements in February through April when cattle placements are
usually low. The revenues are recorded as sales of feedlot services and the
costs as the cost of feedlot services. Therefore, a high volume in the fall calf
program can reduce the gross profit percentage on sales of feedlot services. For
the period ended November 30, 1998, the Company an average of 1,944 head in its
fall calf program as compared to an average of 1,224 head the previous year.
This resulted in a increase in the sales and costs of the fall calf program for
the three months ended November 30, 1998 over the same period the previous year
of about $20,500 and had a significant impact of the increase in the gross
profit percentage from sales of feedlot services as noted below.
-8-
Other key factors that affect earnings are the gross profit percentages on
feed and related sales, and on feedlot services. The following is a brief
summary of gross profit and gross profit percentages on feed and related sales:
Increase
Three Months Ended November 30, 1998 1997 (Decrease)
--------------------------------------------------------------------------
Feed and related sales $1,702,717 $2,097,379 $(394,662)
Cost of feed and
related sales $1,497,614 $1,905,115 $(407,501)
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Gross profit $ 205,103 $ 192,264 $ 12,839
Gross profit percentage 12.1% 9.2% 2.9%
A variety of feed ingredients are combined in varying percentages and sold
as various rations. The ingredients are separately marked up so the gross profit
percentage on feed sales is affected by three variables:
(1) the type and quantity of individual rations sold
(2) management's discretionary pricing decisions
(3) feed ingredients sold under customer advance feed contracts which are
not subject to management's discretionary pricing decisions
The $12,839 increase in gross profit from feed and related sales for the
period ended November 30, 1998 from the same period the previous year is a
result of changes in the three variables described above. For the period ended
November 30, 1998, more rations were sold which contained a higher percentage of
ingredients that contribute higher gross margins to the gross profit due to
their lower cost and/or markup. Also effecting the gross profit and gross profit
percentage from feed and related sales is the discontinuance of the
policy/procedure that transferred revenues from feed sales to feedlot services
that had been in effect during a portion of the previous fiscal year. This
policy/practice was discontinued because it created a situation where historical
comparisons were difficult to analyze. Not included in the feed and related
sales and costs of sales amounts for the period ended November 30, 1998 are
sales of approximately $113,700 and cost of sale of approximately $104,700 for
feed and related sales to cattle the Company is retaining ownership of and
feeding to slaughter. This compares to similar sales of approximately $69,900
and cost of sales of approximately $64,500 for the period ended November 30,
1997. Sales for cattle fed to slaughter are recorded when the cattle are sold
and are recorded as Fed cattle sales as described below.
Fed cattle sales for the period ended November 30, 1998 were $1,151,238
while the cost of sales for the same period was $1,090,341 which resulted in a
gross profit of $60,897 or 5.3% There were no similar sales for the period ended
November 30, 1997. The Company, in an effort to maintain high numbers in the
feedlot, lessen the effect of major customers and benefit from what is currently
perceived as a good future for the cattle market, has implemented a policy of
retaining ownership in and feeding to slaughter, cattle in the Company's
feedlot, a major change from previous years when cattle were fed to slaughter on
an inconsistent basis.
-9-
The following is a brief summary of the gross profit and gross profit
percentages on sales of feedlot services:
Three Months Ended November 30, 1998 1997 Decrease
----------------------------------------------------------------------------
Sales of feedlot services $ 257,055 $ 355,477 $ 98,422
Cost of feedlot services $ 272,704 $ 282,607 $ 9,903
----------------------------------------------------------------------------
Gross profit (Loss) $(15,649) $ 72,840 $ 88,489
Gross profit percentage (6.9%) 20.5% 27.4%
Sales of feedlot services consist primarily of yardage (pen rent) charged
to the owners of the cattle on feed and grain processing charged for the
processing of certain feed ingredients before they can be fed to the cattle.
Yardage charges for the period ended November 30, 1998 decreased $65,944 or
33.7% from the same period the prior year partially due to the decrease in
average head numbers and partially due to procedural changes as noted above.
Grain processing charges decreased $52,931 or 38.1% for the period ended
November 30, 1998 due to the mix of ingredients as described above and the
decrease in average head numbers.
As previously noted, the sales and cost of sales for the fall calf program
are also included in the sales and cost of sales of feedlot services. If the
fall calf program sales and costs are excluded, the gross profit percentage for
the period ended November 30, 1998 is -7.3% compared to 21.8% for the same
period the previous year.
The cost of feedlot services consists largely of feedlot operating
expenses. The total cost of feedlot services decreased $9,903 for the period
ended November 30, 1998 compared to the same period the prior year. If the fall
calf program costs are excluded, the feedlot operating expenses decreased
$30,386 for the period ended November 30, 1998 compared to the same period the
prior year. This decrease is due to the decreases in variable costs, such as
labor and equipment related costs, that are at least partially affected by the
reduction in average head numbers described above.
Other revenues increased $10,615 for the period ended November 30, 1998 as
compared to the same period the prior year. This increase is the result of
increases and decreases in various secondary revenue producing activities. The
most significant of these in as increase of approximately $6,400 in sales
commissions earned by Miller Feeders, Inc.
-10-
Interest income increased $6,222 or 274.2% for the period ended November
30, 1998 over the same period the prior year due to the Company's "carrying" or
financing greater amounts of customer feeding charges.
Selling, general, and administrative expenses decreased $15,739 for the
period ended November 30, 1998 over the same period the prior year. The most
significant decrease was for customer death loss adjustments ,which were
approximately $700 for the period ended November 30, 1998 compared to
approximately $11,800 the same period the previous year, a decrease of $11,200
These adjustments, although not required, are made to customers for the purpose
of creating goodwill and/or when management determines that death losses
incurred by a customer were extraordinary in nature. The balance of the decrease
in selling, general, and administrative expenses are various increases and
decreases in several accounts.
Interest expense increased $13,507 for the period ended November 30, 1998
over the same period the prior year. This is the result of increased borrowings
that were necessary to fund the increase in the Company's "carrying" or
financing greater amounts of customer feeding charges as described above. For
the period ended November 30, 1997, the Company had additional funds available
for the sale of certain assets, which reduced its need for borrowed funds. These
funds were subsequently utilized by operations and the acquisition of long-term
investments.
Income taxes are directly related to the net earnings before income taxes
and certain assumptions that are made with the estimations. For the period ended
November 30, 1998, income taxes increased $12,718 from the same period the prior
year while pretax income increased $31,437.
Liquidity and Capital Resources
- -------------------------------
For the three months ended November 30, 1998 operating activities provided
$971,200 more than were internally-required compared to a requirement of
$237,868 for the same period the previous year, an increase of $1,209,068. Cash
received from customers for the period increased $843,986 and cash paid to
suppliers and employees decreased $384,296, for a total cash increase of
$1,228,282. Interest received for the period decreased $2,028, while interest
paid increased $17,186 for a total cash decrease of $19,214.
For the three months ended November 30, 1998 the net cash that was utilized
by investing operations was $263,197 compared the same period the previous year
of $1,933, resulting in a net cash decrease of $261,264. For the period ended
November 30, 1998, the Company acquired other investments for $87,023; during
the same period the previous year the Company acquired property and equipment
for $1,933. During the period ended November 30, 1998, the Company initiated its
customer financing program with loans to customers for their cattle on feed in
the Company?s feedlot in the amount of $176,174.
The net cash utilized financing activities was $705,360 for the three
months ended November 30, 1998, a decrease in cash of $664,352 compared to the
cash utilization of $41,008 for the same period the prior year. The change in
net short-term payments over short-term borrowings resulted in a $540,909
increase in funds utilized for the three months ended November 30, 1998 compared
to the same period the previous year. Net short-term cattle financing for the
three months ended November 30, 1998 utilized $180,830 compared $33,853 the same
period the prior year, an increase in funds utilized of $146,977.
-11-
The Company's working capital (current assets minus current liabilities)
increased by $3,884 for the three months ended November 30, 1998 from $909,156
at August 31, 1998 to $913,040 at November 30, 1998.
Total Current Assets decreased $309,956 from $2,425,378 at August 31, 1998
to $2,115,422 at November 30, 1998. Total Current Liabilities decreased $313,840
from $1,516,222 at August 31, 1998 to $1,202,382 at November 30, 1998. Although
there are increases and decreases in all components, the two major change that
are not attributable to being a point in time variance are the increases in
inventories and notes receivable for customer financing, as described below.
During the period ended November 30, 1998, the Company initiated the first
loans to customers under its customer financing program in the amount of
$176,174. This revenue generating program is offered to customers as an
alternative to seeking funding from a financial institution and to out of state
customers who raise their own cattle and have operating loans at financial
institutions who are not comfortable with having their collateral in a feedlot
which is out of state. This program differs from the normal trade accounts
receivable in that the cost of the cattle is also financed, payments are made
for feeding costs to satisfy tax deduction requirements, and the Company has
formal notes signed and security agreements filed with the state. The Company
requires set initial equity and set maintenance equity levels to minimize any
potential loss to the Company. The Company has a separate revolving line of
credit for this program as described below.
Inventories decreased $606,935 primarily due to a decrease in the level of
Company owned cattle being fed to slaughter. At November 30, 1998, this
inventory totaled $252,556 compared to a $1,100,874 inventory at August 31,
1998, a decrease of $848,318. The inventory of feeder cattle held for resale
increased from no inventory at August 31, 1998 to $180,831 at November 30, 1998.
Other investments increased $87,023 from $186,366 at August 31, 1998 to
$273,389 at November 30, 1998. The most notable changes are for the period ended
November 30, 1998, are:
1. Increase of $13,126 in the Company's working investment in an
unrelated company which owns several natural gas wells.
-12-
2. Initial investment in an unrelated company that provides water and
dispensing equipment for offices in the Denver metro area of $70,000.
The Company has several revolving lines of credit from a local branch of a
credit services company. All of the lines of credit mature December 1, 1999 and
bear interest at approximately 1.0% over the prime rate (actual rate of 8.5% at
November 30, 1998). The Company's operating line of $300,000 had an outstanding
balance of $96 at November 30, 1998 which meant that the Company could generate
an additional $299,904 cash if needed under this line of credit. This line of
credit is secured by feed accounts receivable, feed inventories, and equipment.
The Company's revolving line of credit for the purpose of owning and feeding
cattle to slaughter. of $850,000 had an outstanding balance at November 30, 1998
of $249,131 which meant that the Company could generate an additional $600,869
cash if needed and qualified for cattle being fed to slaughter under this line
of credit. The note is secured by specific cattle and cross collateralized with
the revolving line of credit note above. The Company's line of credit for the
purpose of financing qualified customers' cattle feeding programs. of
$2,000,000, with a current qualification that the total outstanding cannot
exceed $1,000,000, had an outstanding balance of $176,190 at November 30, 1998.
This meant that the Company could generate an additional $823,810 cash if needed
and qualified for cattle being financed for customers under this line of credit.
The note is secured by specific customers' cattle and cross collateralized with
the revolving lines of credit noted above. Miller Feeders, Inc. (MFI) has a
$300,000 revolving line of credit at the same local branch of a credit services
company for the procurement of feeder cattle for resale to customers. The line
of credit matures on December 1, 1999 and bears interest at approximately 1.0%
over the prime rate (actual rate of 8.5% at November 30, 1998). There was an
outstanding balance at November 30, 1998 of $35,000 which meant that MFI could
borrow up to $265,000 to purchase feeder cattle for resale to customers. The
line is secured by feeder cattle inventories and feeder cattle accounts
receivable and is cross collateralized with the Company's lines of credit noted
above.
The Company had no material commitments for capital expenditures at
November 30, 1998.
Management believes it has adequate financial resources to conduct
operations at present and reasonably anticipated levels.
Year 2000 Compliance
- --------------------
The Company is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The ?Year 2000? problem
is concerned with whether computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail. The Year 2000 problem is pervasive and complex as virtually
every company?s computer operations will be affected in some way. The Company?s
computer programs which process it?s operational and financial transactions,
were designed and developed without considering the impact of the upcoming
change in century. Nevertheless, as a result of the company?s on going analysis
of it?s computer programs and operations, it has reached the conclusion that
?Year 2000? programs will not seriously impact or have a material adverse effect
on the Company's expenses, business or its operations.
-13-
It is possible, however, that "Year 2000" problems incurred by the
customers or suppliers of the Company could have a negative impact on future
operations and financial performance of the Company, although the Company has
not been able to specifically identify any such problems among its suppliers.
The Company believes that it will not be dependent upon any single supplier for
its equipment, or cattle and feed inventories in the Year 2000, and therefore
has made the determination not to contact its primary suppliers to determine if
they are developing plans to address processing transactions which may impact
the Company in the year 2000. However, there can be no assurance that Year 2000
problems will not occur with respect to the Company's computer systems.
Furthermore, the Year 2000 problem may impact other entities with which the
Company transacts business and the Company cannot predict the effect on the
Company. The Company is developing a contingency plan to operate in the event
that any non-compliant customer or supplier systems that materially impact the
Company are not remedied by January 1, 2000. Due to the specialized nature of
some of the Company's computer programs and equipment, all potential problems
and their contingencies, may not be identified in a manner timely enough to take
preventative and/or corrective actions. Therefore, the Company concedes that the
Year 2000 issue could have a material adverse effect on the Company's business,
financial condition and results of operation.
-14-
PART II OTHER INFORMATION
Items 1 through 5 None.
Item 6 (b)- Exhibits and Reports on Form 8-K
None
-15-
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.
MILLER DIVERSIFIED CORPORATION
------------------------------
(Registrant)
Date: January 15, 1999 /s/ JAMES E MILLER
--------------------------------------
James E. Miller
President, Chief Executive Officer,
Chief Financial Officer
Date: January 15, 1999 /s/ STEPHEN R. STORY
---------------------------------------
Stephen R. Story
Secretary-Treasurer
-16-