Securities and Exchange Commission
Washington, D.C., 20549
FORM 10-QSB
(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE FISCAL QUARTER ENDED DECEMBER 31, 2001
Commission file Number 0-28416
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
==============================================================================
ValCom, Inc.
(Name of small business issuer specified in its charter)
==============================================================================
Delaware 58-1700840
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
26030 Avenue Hall - Studio #5, Valencia, California 91355
-----------------------------------------------------
(Address of Principal executive offices) (Zip code)
(661) 257-8000
--------------
Issuer's telephone number
==============================================================================
Securities registered pursuant to 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock and Preferred Stock
Common Stock $0.001 Par Value - Preferred Stock $0.001 Par Value
---------------------------------------------------------------
(Title of Class)
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 [ ]
As of December 31, 2001 the Registrant had 9,757,649 shares of its $0.001
par value Common Stock Outstanding.
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January 30, 2002
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Table Of Contents
ValCom, Inc.
FORM 10-QSB
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets as of
September 30, 2001 and
and December 31, 2001
Consolidated Statements of Operations 5
for the three months ended
December 31, 2000 and 2001
Consolidated Statement of Changes 6
in Shareholders' Equity for the three
months ended December 31, 2001
Consolidated Statements of Cash Flows 6
for the three months ended December 31,
2000 and 2001
Notes to Consolidated Financial State- 8
ments
Item 2. Management's Discussion and Analysis 12
of Financial Condition and Results
of Operations Condition
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote 15
of Security Holders
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 16
-2-
PART I. FINANCIAL INFORMATION
Financial Statements
VALCOM, INC. AND SUBSIDIARY
-----------------------------
CONSOLIDATED BALANCE SHEETS
-----------------------------
December 31, September 30,
2001 2001
------ -----
(Unaudited) (Audited)
Cash $ 59,840 $ 420,857
Accounts receivable, net 212,022 156,179
Other receivables 74,000 74,000
Prepaid development costs 180,555 190,699
Note receivable, related party 1,300,000 1,415,000
------------ -------------
Total Current Assets 1,826,417 2,256,735
------------ -------------
Fixed Assets - net $11,921,885 $11,959,941
Prepaid loan fees 211,791 232,171
Deposits 30,291 31,750
Notes receivable, long-term 100,000 100,000
------------ -------------
Total Assets $ 14,090,384 $ 14,580,597
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Account payable $ 509,896 $ 540,983
Accrued interest 20,384 20,384
Accrued other 202,923 107,824
Credit line payable 150,837 150,837
Notes payable - current portion 213,067 133,405
Production advances, net -0- 765,656
----------- ------------
Total Current Liabilities 1,097,107 1,719,089
Notes Payable 6,530,401 6,636,734
------------ -----------
Total Liabilities $ 7,627,508 $ 8,355,823
Commitments and contingencies (Note 5)
See accompanying notes to consolidated financial statements
-3-
Stockholders' equity:
Preferred stock, par value
$0.001; 10,000,000 shares
authorized: 1,538,000 shares issued and
outstanding at December 31, 2001
and 2000, respectively: 1,538 1,538
common stock, par value $.001;
100,000,000 shares
authorized; 9,757,649 and 8,909,401
shares issued and outstanding at
December 31, 2001 and 2000
respectively: 9,758 8,909
Additional Paid in capital 9,700,735 9,512,699
Accumulated deficit ( 3,249,155) (3,298,372)
------------- --------------
6,462,876 6,224,774
------------- --------------
$ 14,090,384 $ 14,580,597
============= ==============
See accompanying notes to consolidated financial statements
-4-
VALCOM, INC. AND SUBSIDIARY
-------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
-------------------------------------
December 31,
-------------
2001 2000
----- ------
(unaudited) (unaudited)
<s> <c> <c>
Revenue
Rental $ 886,472 $ 134,500
Production 2,819,239 37,500
Other -0- 28,791
------------ --------------
3,705,711 200,791
Cost and Expenses: ------------ --------------
Production and development 2,540,890 73,599
Selling and promotion 18,085 85,870
Depreciation 52,412 168,778
Administrative and
general 875,570 564,189
------------- --------------
Total 3,486,957 892,436
------------- --------------
Operating income 218,754 ( 691,645)
Interest Expense (169,537) ( 338,582)
-------------- --------------
Net Income (loss) $ 49,217 $ (1,030,227)
============== ==============
Basic net income
(loss) per share......... $ 0.01 $ (.04)
============== ==============
Weighted number of shares 9,135,419 13,770,878
============== ==============
See accompanying notes to consolidated financial statements
-5-
VALCOM, INC. AND SUBSIDIARY
-----------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOW
------------------------------------
December 31,
------------
2001 2000
---- ----
(Unaudited) (Unaudited)
Operating Activities:
Net income (Loss) 49,217 ($1,030,227)
Not Requiring Cash:
Depreciation and amortization 72,792 168,778
Stock issued for services 56,088 278,000
Other 132,797 -0-
------------- ------------
310,894 (583,449)
------------- ------------
Changes in:
Receivables (55,843) (38,946)
Other assets -0- 22,000
Production costs 10,144 64,235
Accounts payable and other accrued exp 64,012 69,232
Production deposits (765,656) -0-
Credit line payable -0- 110,000
Due to stockholder -0- 25,508
------------ -----------
(747,343) 252,029
------------ -----------
Cash Provided (used) by Operations (436,449) (331,420)
Investing Activities:
Acquisition of fixed assets ( 14,356) (125,035)
Deposits 1,459 40,500
Acquisition of VEI -0- 80,738
Notes receivable payments 115,000 -0-
------------- ------------
Cash Used by Investing
Activities 102,103 (3,797)
------------- ------------
Financing Activities:
Principal payments
on notes payable ( 26,671) 195,436
Issuance of stock -0- 125,000
------------- ------------
Cash Provided (Used) by
Financial Activities ( 26,671) 320,463
------------- ------------
See accompanying notes to consolidated financial statements
-6-
Increase (Decrease) in Cash and
Cash Equivalents (361,017) (14,754)
Cash and cash equivalents,
beginning of period 420,857 22,541
------------ ------------
Cash and cash equivalents,
end of period $ 59,840 $ 7,787
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 169,537 $ 338,582
============ ============
Income taxes paid $ 0 $ 0
============ ============
VALCOM, INC. AND SUBSIDIARY
---------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
-----------------------------------------------
QUARTER ENDED DECEMBER 31, 2001 AND 2000
---------------------------------------
Additional
Common Preferred Paid-in Accumulated
------- ---------- Capital Deficit
Shares Amount Shares Amount ---------- -----------
------- ------- ------ -------
Balance
October
31, 2001 8,909,401 $8,909 1,538,000 $ 1,538 $9,512,699 ($3,298,372)
Shares issued
for services 320,500 321 55,767 ( 56,088)
Shares issued
for debt
retirement 527,748 528 132,269 (5,403)
Net income
for the
period 110,708
----------- ------- --------- ---------- ---------- ------------
Balance
December
31,2001 9,757,649 $ 9,758 1,538,000 $ 1,538 $9,700,735 (3,249,155)
========== ======= =========== ======= ========== ===========
See accompanying notes to consolidated financial statements
-7-
VALCOM, INC. AND SUBSIDIARY
----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 2001 AND 2000
-----------------------------------------------------
NOTE 1 Summary of Significant Accounting Policies
- -------------------------------------------------
Following is a summary of the significant accounting policies followed
in the preparation of these financial statements, which policies are in
accordance with generally accepted accounting principles:
Organization
- ------------
ValCom, Inc. (the "Company"), formerly SBI Communication, Inc.
was originally organized in the State of Utah on September 23, 1983,
under the corporate name of Alpine Survival Products, Inc. Its name was
subsequently changed to Supermin, Inc. on November 20, 1985. On September 29,
1986, Satellite Bingo, Inc. became the surviving corporate entity in a
statutory merger with Supermin, Inc. In connection with the above merger,
the former shareholders of Satellite Bingo, Inc. acquired control of the
merged entity and changed the corporate name to Satellite Bingo, Inc. Through
shareholder approval dated March 10, 1988, the name was changed to
SBI Communications, Inc. On January 1, 1993, the Company executed a
plan of merger that effectively changed the Company's state of domicile from
Utah to Delaware.
In October 2000, the Company was issued 7,570,997 shares by SBI for
100% of the shares outstanding in Valencia Entertainment International
LLC ("VEI"), a California limited liability company. This acquisition has
been accounted for as a reverse acquisition merger with VEI becoming the
surviving entity. The corporate name was changed to ValCom, Inc.
Principles of Consolidation/Presentation
- ---------------------------
The consolidated financial statements include the accounts of the Company
and one wholly-owned subsidiary Half Day Video, Inc.
These financial statements include all activities as if the acquisition
occurred on January 1, 2001.
-8-
ValCom, Inc. and Subsidiary
------------
Notes to Consolidated Financial Statements
--------------------------------------------
December 31, 2001 and 2000
------------------------------------------------
Note 1 Summary of Significant Accounting Policies (cont'd)
- ----------------------------------------------------------
The Company changed its fiscal year to September 30 from December 31 to better
reflect its operating cycle.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could materially differ from those estimates.
Commitments, Risk And Contingencies
- ------------------------------------
Financial instruments that potentially subject the Company to concentrations of
risk, consist of trade receivables principally arising from monthly leases
from television producers. Management believes all receivables to be fully
collectible. In addition, the Company has a standby letter of credit for
$30,000 related to a lease of the facility.
Cash Equivalents
- ----------------
The Company maintains cash and cash equivalents (short-term highly liquid
investments with original maturity less than three months) with various
financial institutions. From time to time, cash balances may exceed
Federal Deposit Insurance Corporation insurance limits.
Fair Value of Financial Instruments
- -----------------------------------
The carrying value of cash, receivables and accounts payable approximates
fair value due to the short maturity of these instruments. The carrying
value of short and long-term debt approximates fair value based on
discounting the projected cash flows using market rates available for
similar instruments. None of the financial instruments are held for
trading purposes. As of December 31, 2001 accounts receivable has been
reported net of a $10,000 allowance for bad debts.
-9-
ValCom, Inc. and Subsidiary
--------------
Notes to Consolidated Financial Statements
--------------------------------------------
December 31, 2001 and 2000
-------------------------------------------------
Note 1 Summary of Significant Accounting Policies (cont'd)
- ----------------------------------------------------------
Depreciation
- ------------
For financial and reporting purposes, the Company follows the policy
of providing depreciation and amortization on the straight-line and accelerated
declining balance methods over the estimated useful lives of the assets,
which are as follows:
Building 39 years
Building Improvements 39 years
Office Furniture and Equipment 5 years
Production Equipment 5 years
Amortization of Prepaid Loan Costs
- ----------------------------------
For financial reporting purposes, costs are amortized on the straight-line
method over the term of the related loan.
Income Taxes
- ------------
The Company provides for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, which requires the use of the asset
and liability method and recognizes deferred income taxes for the
consequences of "temporary differences" by applying enacted statutory tax
rate applicable to future years differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities.
Related Party Transactions
- --------------------------
From time to time, a shareholder of the Company advances money to the Company
for operations. All amounts owed to the shareholder are non-interest bearing.
In addition to advances, the Company accrued salaries payable to the
shareholder. All amounts owed to the shareholder are payable on demand
upon disposition of property held for sale to related party. The Company's
financial statements reflect 1.2 million secured note receivable with
interest due at 5%.
-10-
ValCom, Inc. and Subsidiary
-------------
Notes to Consolidated Financial Statements
--------------------------------------------
December 31, 2001 and 2000
-------------------------------------------------
Note 1 Summary of Significant Account Policies (cont'd)
- -------------------------------------------------------
Stock-Based Compensation
- ------------------------
As provided for in SFAS #123, the Company elected to apply APBO #25 and
related interpretations whereby the fair value of stock given is determined
at the grant date.
Impairment of Long-Lived Assets
- -------------------------------
Long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of such assets may not
be recoverable. Determination of recover ability is based on an estimate
of undisclosed future cash flows resulting from the use of the asset and its
eventual disposition. Measurement of an impairment loss for long-lived assets
is based on the fair value of the asset. Long-lived assets to be disposed of
are reported at the lower of carrying amount or fair value less costs to sell.
Revenue Recognition
- -------------------
Revenues from licensing of television programming is recorded when the material
is available for telecasting by the licensee and when certain other
conditions are met. Rental revenue is recognized monthly pursuant to written
contracts.
Note 2 Property and Equipment
- -----------------------------
Property and equipment consists of the following at:
December 31,
-------------
2001 2000
----- ------
<s> <c> <c>
Land $7,392,292 $7,392,292
Building 4,028,785 4,028,785
Building Improvements 1,154,406 1,240,070
Production Equipment 713,839 -0-
Leasehold Improvements 51,218 -0-
Autos and Trucks 87,836 -0-
Office Furniture and 73,243 39,500
equipment ------------ -----------
13,501,621 12,700,647
Less: Accumulated
depreciation (1,597,734) ( 1,019,266)
------------ -------------
Net Book Value $ 11,921,885 $11,681,381
============ =============
-11-
NOTE 3 Net Loss Per Share
- -------------------------
The Company's net loss per share was calculated using weighted average shares
outstanding of 9,135,419 and 13,770,878 for the quarters ended December 31,
2001 and 2000 respectively. Although convertible preferred stock and
convertible debt are a common stock equivalent, with a conversion rate of 5
shares of common stock for each share of preferred stock conversion has not
been included in the calculation of earnings per share as it would be
antidilutive.
ValCom, Inc. and Subsidiary
--------------
Notes to Consolidated Financial Statements
---------------------------------------------
December 31, 2001 and 2000
-------------------------------------------------
NOTE 4 LEGAL
- ------------
LITIGATION
On September 14, 2001, an action was filed against Valencia Entertainment
International, Inc. and ValCom, Inc. This matter arises from an underlying
action wherein plaintiffs obtained judgements against Ricky Rocket Enterprises,
Inc. and AJ Time Travelers, Inc. in the amounts of $3,000,000 and $1,200,000,
respectively. In this matter, Plaintiffs' first of two causes of action
alleges that The Company, and other defendants, are alter-egos of Ricky
Rocket Enterprises, Inc. and Time Travelers, Inc. and, therefore, plaintiffs
are entitled to enforce the aforementioned judgments against The Company.
Further, a second cause of action concerning malicious prosecution also alleges
alter-ego liability. Unspecified compensatory and punitive damages are sought
under this cause of action.
Valencia Entertainment was a distributor for AJ Time Travelers, Inc. and
management believes it should not be a party to this action and did not
become the distributor for Time Travelers, Inc. until four
years after the alleged wrong doing occurred. The Company believes the
allegations are without merit and intends to vigorously defend itself. In
addition the Company is indemnified by a related party if any loss relative
to this matter is sustained.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
------------
Plan of Operation:
ValCom, Inc. operations at present are comprised of three divisions; 1)
Studio Rental, 2) Studio Equipment Rental, and 3) Film and Television
Production.
-12-
Studio Rental
- --------------
The Company owns six improved acres with six sound stages and two
additional leased stages in Valencia California doing business
as Valencia Entertainment International. Seven of the eight stages are
leased under annual contracts to two major production companies.
Rental income for the seven stages should remain constant at approximately
$2,000,000 annually with cost of living increases. Rental income for
the eighth stage increased in August 2001 to $95,000 per month.
Studio Equipment Rental
- -----------------------
In March 2001 the Company acquired with stock, Half Day Video, Inc. a
company which supplies personnel, cameras and other production
equipment to various production companies on a short term basis. As a result of
additional equipment purchases and increased activity, from both internal
and external services, it is anticpated that Half Day Video revenue should
increase significantly from prior periods.
Film Production
- ---------------
In March 2001, the Company entered into an agreement with Woody Fraser
Productions to produce various television productions on its behalf.
Under the terms of the agreement, the Company will fund up to $500,000 of
annual production development costs. In return, the Company will retain
after costs of production, 75% of the net savings derived from all production.
In January 2002, the Company signed contracts with a Cable Television Network
to produce the second season of a television series consisting of 13 episodes.
Revenue under this contract during 2002 will be approximately $2,500,000.
In addition to retaining 75% of any possible net savings from the productions,
the Company's Half Day Video unit will handle a majority of the production
rental needs. Additionally, the Company signed a contract with a different
Cable Television Network to produce six (6) epiodes of a television series
at a contracted amount of approximately $500,000. After costs of
production, the Company will retain 100% of any savings plus a portion of the
executive producer fees. Additional productions are in the development
process. Revenues will be recognized when individual programs are available.
Results of Operation
--------------------
December 31, 2001 and 2000 Comparison
As of December 31, 2001 the Company had working capital of
$729,310. As of December 31, 2000 working capital was $537,646. The
change was due primarily to a decrease in Cash.
Total assets were $14,090,384 at December 31, 2001 a decrease of $490,195
from December 31, 2000 total assets of $14,580,579. The decrease in total
assets was due to a decrease in Cash and Notes Receivable. Total
liabilities were $8,355,823 at December 2001 and $7,627,508 at December 2000
this decrease was due primarily to the use of production advances.
The merger with Valencia Entertianment International took place on
October 17, 2000. The amounts reflected on the Statement of Operations and
Statement of Cash Flow reflect an acquisition date of October 1, 2000. The
acquisition of Half Day Video, Inc. and the joint venture with Woody Fraser
-13-
Productions both occurred in 2001 and are not included in the year 2000
amounts.
For the quarter ended December 31, 2001 the Company had revenue of
$3,705,711, operating expenses of $3,486,957 and a net income of $49,217.
Income before depreciation and interest for the quarter was $271,166.
Production revenue increased $37,500 in 2000 to $2,819,239 in 2001. This
increase was due to the recognition of revenue on various television
productions, primarily $2,400,000 in revenue from the Ultimate Revenge
production. In accordance with generally accepted accounting principles
production revenue has not been recognized until the material was available
for telecasting by the licensee. Rental revenue for the quarter ended
December 31, 2001 was $886,472 an increase of $751,792 from December 31, 2000.
The decrease was due to the rental of a previously vacant stage of a
production company.
Production and development costs increased from $73,599 for the
quarter ended December 31, 2000 to $2,540,890 for the quarter ended December
31,2001. This increase was due to the revenue recognition discussed above and
the development costs incurred with Woody Fraser Productions.
Depreciation expense decreased due to the fully depreciated status of
certain assets.
General and administrative expenses increased from $564,189 for the
quarter ended December 31, 2000 to $875,570 for the quarter ended December
31, 2001. This increase of $311,381 was primarily due to the increase in rent
expense for an additional stage of $107,511 and increases in utilities and
related costs for newly rented stages amounting to $125,493.
Trends events of uncertainties :
- -------------------------------
The studios rented by the Company are on one year extensions of previous
long term leases. The options expire at various dates during 2002. If these
productions are canceled, it is unlikely lease options would be extended. An
uncertainty may exist regarding the Company's ability to rent the properties
at profitable amounts.
Capital Resources
- -----------------
Internal and external source of funding:
- ----------------------------------------
The Company projects positive cash flow from its studio division.
ValCom may issue stock for services as a means of maintaining working
capital. Additionally, the Company is currently seeking refinancing of its
Studio real estate sufficient to provide approximately $1,500,000 in working
capital.
ValCom has sufficient funds to operate for the next 12 months through its
refinancing, common stock issues and projected positive cash flow from its
operation of business.
Statement Re: Computation of Earnings Per Share
- ----------------------------------------------
See Notes To Consolidated Financial Statements included elsewhere in this
filing for a description of the Company's calculation of earnings per share.
-14-
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On September 14, 2001, plaintiffs Diane Russomanno and Knowledge
Booster, Inc. commenced an action in the Superior Court of the State of
California, County of Los Angeles Diane Russomanno and Knowledge Booster,
Inc. v. Valencia Entertainment International, ValCom, Inc., Vince Vellardita,
Tom Grimmett, Nalin Rathod, Aburizal Bakrie, Nirwan Bakrie, Linda Layton, Barak
Isaacs,and Does 1 through 20, Case No. BC257989 (Sup. Ct., L.A. Co., C.A.).
This matter arises from an underlying action wherein plaintiffs obtained
judgments against Ricky Rocket Enterprises, Inc. and AJ Time Travelers, Inc. in
the amounts of $3,000,000 and $1,200,000, respectively. In this matter,
Plaintiffs' first of two causes of action alleges that we, and other
defendants, are alter-egos of Ricky Rocket Enterprises, Inc. and AJ Time
Travelers, Inc. and, therefore, plaintiffs are entitled to enforce the
aforementioned judgments against us. Plaintiffs seek payment of the
judgments in the amount of $4,200,000 plus interest under this cause
of action.
Further, Plaintiffs second cause of action concerning malicious
prosecution also alleges alter-ego liability. Plaintiffs allege that Ricky
Rocket Enterprises, Inc. and AJ Time Travelers, Inc. filed a cross-complaint in
the underlying litigation without any probable cause and for an improper
motive or purpose. Plaintiffs similarly allege that we, and other defendants,
are alter-egos of Ricky Rocket Enterprises, Inc. and AJ Time Travelers, Inc.
are therefore liable for such malicious prosecution. Plaintiffs seek
unspecified compensatory and punitive damages under this cause of action.
We believe the allegations are without merit and intend to vigorously
defend ourselves.
ITEM 2. CHANGES IN SECURITIES
In October 2001 the company issued 243,000 shares of common stock for
consulting services. Also in December, the company issued 52,000 shares of
common stock to employees as bonuses and 25,000 shares for stage rental
services.
In December 2001, the Company issued 527,748 shares of common stock to
Laurus Fund for the retirement of a debt in the amount of $132,269 and
interest.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
CHANGE IN MANAGEMENT.
NONE
-15-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
EXHIBITS DESCRIPTION
11 Statement re: computation of per share
earnings
(B) REPORTS ON FORM 8-K:
No 8-K were filed
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ValCom, Inc.
Date: January 30, 2002 By: /s/Vince Vellardita
-------------------------------------
Vince Vellardita Chairman of the
Board and Chief Executive Officer
(principal executive officer)
-16-