U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
|X| Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2001
|_| TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission File Number 0-30178
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VIEW SYSTEMS, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 59-2928366
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
925 West Kenyon Avenue,
Englewood, Colorado 80110
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(Address of Principal Executive Offices)
(303) 783-9153
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(Issuer's Telephone Number, Including Area Code)
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes No ___
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes X No ___
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 12,322,620 shares of common stock as
of March 31, 2001.
Transitional Small Business Disclosure Format (check one):
Yes ___ No x
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Table of Contents
PART I. Financial Information
Item I. Financial Statements
Consolidated Balance Sheet.....................................................1
Consolidated Statement of Operations...........................................2
Consolidated Statement of Stockholder's Equity.................................3
Consolidated Statement of Cash Flows...........................................4
Notes to Consolidated Financial Statements.....................................5
Item II. Management Discussion and Analysis...................................7
PART II. Other Information
Item I. Legal Proceedings....................................................10
Item II. Changes In Securities...............................................10
Item III. Defaults Upon Senior Securities....................................10
Item IV. Submission of Matters To A Vote of Security Holders.................10
Item V. Other Information....................................................11
Item VI. Exhibits And Reports On Form 8-K....................................11
ITEM 1. FINANCIAL STATEMENTS
VIEW SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
March 31, December 31,
2001 2000
----------- ------------
(Unaudited)
CURRENT ASSETS:
Cash $ 49,503 $ 265,245
Accounts receivable (net) 357,091 155,017
Inventory 123,195 95,339
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Total current assets 529,789 515,601
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PROPERTY AND EQUIPMENT:
Equipment 386,286 382,609
Leasehold improvements 20,261 20,261
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406,547 402,870
Less accumulated depreciation 91,005 79,814
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Net value of property and equipment 315,542 323,056
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OTHER ASSETS:
Goodwill 866,099 894,383
Investments 28,000 28,000
Due from affiliated entity 105,552 105,552
Due from stockholders - 20,000
Deposits 780 832
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Total other assets 1,000,431 1,048,767
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TOTAL ASSETS $1,845,762 $1,887,424
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 450,292 $ 401,247
Note payable - bank 27,083 42,083
Notes payable 110,000 110,000
Accrued interest payable 24,750 22,000
Other accrued liabilities 1,477 31,951
Due to stockholder 11,847 2,090
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Total current liabilities 625,449 609,371
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STOCKHOLDERS' EQUITY:
Common stock - par value $0.001
50,000,000 shares authorized,
12,041,031 shares issued and outstanding 12,041 -
11,481,031 shares issued and outstanding - 11,481
Additional paid-in capital 7,588,942 7,364,502
Accumulated deficit ( 6,380,670) ( 6,097,930)
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Total stockholders' equity 1,220,313 1,278,053
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,845,762 $1,887,424
========== ==========
See Accompanying Notes
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VIEW SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
March 31, March 31,
2001 2000
-------------- --------------
(Unaudited) (Unaudited)
REVENUE:
Sales of security systems $ 341,709 $ 17,900
Sales of assembled electronic components 9,512 92,512
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Total sales 351,221 110,412
Cost of goods sold 143,910 60,395
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GROSS PROFIT ON SALES 207,311 50,017
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OPERATING EXPENSES:
Advertising and promotion 577 10,418
Amortization 28,284 27,281
Depreciation 11,191 12,890
Dues and subscriptions 720 820
Insurance 7,503 2,633
Interest 5,756 6,190
Investor relations 33,084 33,865
Miscellaneous expense 7,380 1,699
Office expenses 26,277 36,216
Professional fees 114,331 96,378
Rent 40,006 27,985
Repairs and maintenance 3,441 4,493
Research and development - 63,765
Salaries and benefits 173,706 131,040
Sales promotions 17,119 26,513
Taxes - other 6,930 4,205
Travel 8,559 16,905
Utilities 5,187 2,985
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Total operating expenses 490,051 506,281
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NET LOSS FOR THE THREE MONTHS $( 282,740) $( 456,264)
=========== ==========
LOSS PER SHARE:
Basic $( 0.02) $( 0.06)
=========== ==========
Diluted $( 0.02) $( 0.06)
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VIEW SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD JANUARY 1, 2000 TO MARCH 31, 2001
Additional Total
Common Paid-In Accumulated Stockholders'
Stock Capital Deficit Equity
----- ------- ----------- -------------
Balances at January 1, 2000 $ 7,167 $ 5,334,342 $( 3,893,648) $ 1,447,861
Sale of common stock 857 509,918 - 510,775
Stock options exercised 85 845 - 930
Net loss for the three months
ended March 31, 2000 - - ( 456,264) ( 456,264)
-------- ------------ ------------- ------------
Balances at March 31, 2000 (Unaudited) 8,109 5,845,105 ( 4,349,912) 1,503,302
Sale of common stock 1,986 938,179 - 940,165
Stock options exercised 3 49 - 52
Issuance of common stock
(employee and other compensation) 1,383 581,169 - 582,552
Net loss for the period of April 1, 2000
to December 31, 2000 - - ( 1,748,018) ( 1,748,018)
-------- ------------ ------------- ------------
Balances at December 31, 2000 11,481 7,364,502 ( 6,097,930) 1,278,053
Sale of common stock 500 199,500 - 200,000
Issuance of common stock
for services 60 24,940 - 25,000
Net loss for the three months
ended March 31, 2001 - - ( 282,740) ( 282,740)
-------- ------------ ------------ ------------
Balances at March 31, 2001 (Unaudited) $ 12,041 $ 7,588,942 $( 6,380,670) $ 1,220,313
====== ========== ============ =============
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VIEW SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
March 31, March 31,
2001 2000
-------------- ---------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $( 282,740) $( 456,264)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 39,475 40,171
Stock issued for services 25,000 -
Changes in operating assets and liabilities:
Accounts receivable ( 202,074) 6,165
Inventory ( 27,856) ( 5,449)
Deposit 52 -
Accounts payable 49,045 ( 48,047)
Accrued interest 2,750 2,750
Other accrued liabilities ( 30,474) 15,904
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Net cash used in operating activities ( 426,822) ( 444,770)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ( 3,677) ( 22,743)
Funds advanced to affiliated entities - 10,278
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Net cash used in investing activities ( 3,677) ( 12,465)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Funds advanced from (to) shareholders 29,757 ( 20,000)
Repayment of note payable - bank ( 15,000) ( 1,616)
Proceeds from sales of stock 200,000 511,705
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Net cash provided by financing activities 214,757 490,089
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NET DECREASE /(INCREASE) IN CASH ( 215,742) 32,854
CASH AT BEGINNING OF PERIOD 265,245 89,150
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CASH AT END OF PERIOD $ 49,503 $ 122,004
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VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
-------------------
View Systems, Inc. (the "Company") designs and develops computer
software and hardware used in conjunction with surveillance capabilities. The
technology utilizes the compression and decompression of digital inputs.
Operations, from formation to June 30, 1999, have been devoted primarily to
raising capital, developing the technology, promotion, and administrative
function. As of July 1, 1999 the Company was no longer considered to be in the
development stage.
Basis of Consolidation
----------------------
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, Real View Systems, Inc. ("Real
View"), Xyros Systems, Inc. ("Xyros") and Eastern Tech Manufacturing, Inc.
("ETMC"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
Use of Estimates
----------------
Management uses estimates and assumptions in preparing financial
statements in accordance with accounting principles generally accepted in the
United States. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could differ from the
estimates that were used.
Revenue Recognition
-------------------
The Company and its subsidiaries recognize revenue and the related
cost of goods sold upon shipment of the product.
Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined by the last-in-first-out method (LIFO).
Property and Equipment
----------------------
Property and equipment is recorded at cost and depreciated over their
estimated useful lives, using the straight-line and accelerated depreciation
methods. Upon sale or retirement, the cost and related accumulated depreciation
are eliminated from the respective accounts, and the resulting gain or loss is
included in the results of operations. The useful lives of property and
equipment for purposes or computing depreciation are as follows:
Equipment 5-7 years
Software tools 3 years
Repairs and maintenance charges which do not increase the useful lives
of assets are charged to operations as incurred. Depreciation expense for the
years ended March 31, 2001 and 2000 amounted to $11,191 and $12,890
respectively.
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VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
Imairment of Long-Lived Assets
------------------------------
Long-lived assets and identifiable intangibles (including goodwill) to
be held and used are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount should be addressed. Impairment
is measured by comparing the carrying value to the estimated undiscounted future
cash flows expected to result from use of the assets and their eventual
disposition.
Income Taxes
------------
Deferred income taxes are recorded under the asset and liability
method whereby deferred tax assets and liabilities are recognized for the future
tax consequences, measured by enacted tax rates, attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss carryforwards. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period the rate change becomes effective. Valuation
allowances are recorded for deferred tax assets when it is more likely than not
that such deferred tax assets will not be realized.
Research and Development
------------------------
Research and development costs are expensed as incurred. Equipment and
facilities acquired for research and development activities that have
alternative future uses are capitalized and charged to expense over the
estimated useful lives.
Advertising
-----------
Advertising costs are charged to operations as incurred.
Monetary Transactions
---------------------
Nonmonetary transactions are accounted for in accordance with
Accounting Principles Board Opinion No. 29 Accounting for Nonmonetary
Transactions which requires the transfer or distribution of a nonmonetary asset
or liability to be based, generally, on the fair value of the asset or liability
that is received or surrendered, whichever is more clearly evident.
Financial Instruments
---------------------
For most financial instruments, including cash, accounts receivable,
accounts payable and accruals, management believes that the carrying amount
approximates fair value, as the majority of these instruments are short-term in
nature.
Net Loss Per Common Share
-------------------------
Basic net loss per common share ("Basic EPS") is computed by dividing
net loss available to common stockholders by the weighted average number of
common shares outstanding. Diluted net loss per common share ("Diluted EPS") is
computed by dividing net loss available to common stockholders by the weighted
average number of common shares and dilutive potential common share equivalents
then outstanding. Potential common shares consist of shares issuable upon the
exercise of stock options and warrants. The calculation of the net loss per
share available to common stockholders for the years ended March 31, 2001 does
not include potential shares of common stock equivalents, as their impact would
be antidilutive.
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VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
Segment Reporting
-----------------
The company has determined that it does not have any separately
reportable operating segments as of March 31, 2001.
2. FINANCIAL CONDITION
Since its inception, the Company has incurred significant losses and
as of March 31, 2001 had an accumulated deficit of $6.4 million. The Company
believes that it will incur operating losses for the foreseeable future. There
can be no assurance that the Company will be able to generate sufficient
revenues to achieve or sustain profitability in the future. However, the Company
believes that its current cash and cash equivalents, along with sales revenue
and anticipated equity infusions, will be sufficient to sustain operations
through March 31, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read and reviewed in conjunction
with Management's Discussion and Analysis of Financial Condition and Results of
Operations set forth in the Company's Annual Report on Form 10-QSB for the year
ended December 31, 2000. In addition to historical information, this Form 10-QSB
contains forward -looking statements that involve risks and uncertainties, such
as statements of the Company's plans and expectations. The Company's actual
results could differ materially from management's expectations.
Since start-up of operations in September 1998, we have devoted most
of our resources to the development, sale and marketing of digital video
surveillance and security products. We have generated limited revenues from our
security products to date, but are rapidly expanding our sales and distribution
network. At the same time we are working on delivering new products to market
and enhancing and upgrading our product line. Until we more fully develop our
product line and our sales and distribution network, we expect our operating
losses to continue. We have provided contract manufacturing services since May,
1999, when we acquired ETMC. ETMC had provided such services for more than 15
years and had an established customer base. We have continued the contract
manufacturing business line, while increasing ETMC's manufacturing capacity to
permit production of our products.
Three Months Ended March 31, 2001 Compared With the Three Ended Months Ended
March 31, 2000
Revenue
For the three months ended March 31, 2001, revenues from sales of our
products increased $323,809 or 1,809% to $341,709 from $17,900 in the same
period last year, and revenues from sales of our services decreased $83,000 or
90% to $9,512 from $92,512 in the same period last year. Of the $351,221 in
total revenue during the three month period ended March 31, 2001, $341,709 or
97% was derived from sales of systems and $9,512 or 3% from sales of contract
manufacturing services. The ratio of security systems sales to contract
manufacturing is increasing.
Gross Profit
Gross profit on sales for the three months ended March 31, 2001,
increased $157,294 or 314% to $207,311 compared with $50,017 in same period last
year. Gross profit margin for the three
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months ended March 31, 2001, was 59% compared with 45% in the same period last
year. Because of low net sales we achieved in the period last year ended March
31, 2000, we do not believe gross profit margin comparisons are meaningful at
this stage of our operations.
Operating Expenses
Operating expenses for the three months ended March 31, 2001,
decreased to $490,051, compared with $506,281 for the comparable period in 2000.
The decrease is principally due to decreased expenditures in R & D and increases
in salaries and professional fees.
As a result of the foregoing, net loss was $(282,740) for the three
months ended March 31, 2001, compared to a net loss of $(456,264) for the three
months ended March 31, 2000.
Costs and Expenses
Costs of Products and Services Sold. The cost of products and services
sold, was $143,910 for the three months ended March 31, 2001, and represented
41% of revenue for the period, compared to $60,395 for the three months ended
March 31, 2000 which represents 55% of revenues for that period. Because of our
low sales volume in the same period last year, we do not consider the costs of
goods sold in the same period last year to be a good measure of our true costs
of goods sold. As our product sales increase and account for a larger percentage
of our overall sales, we expect that our costs of goods and services sold will
decline and stabilize as a percentage of total revenue. We anticipate that our
profit margins on sales of security systems will exceed our profit margins on
sales of services. We are continually working on engineering changes in our
security products that we expect will lower component costs for these products.
We do not determine our inventory on a quarterly basis, instead we do it on an
annual basis. Therefore, our cost of goods sold calculations are based on
estimates of inventory used in products sold.
Research and Development Expense. We spent $0 on research and
development for the three months ended March 31, 2001, as compared with $63,765
in the same period last year. Our R&D expenditures in the three months ended
March 31, 2001, represented 0% of gross profit margin for this period. We are
working on introducing additional products to the market in 2001. We expect
continued heavy expenditures in this area, evidencing our commitment to develop
industry leading video management and identification products.
Salaries and Benefits. We spent $173,706 on salaries and benefits for
the three months ended March 31, 2001, as compared with $131,040 in the same
period last year. We have increased expenditure on salaries and fees for sales
and marketing personnel, including consultants, and we incurred $17,119 on sales
and promotional expenses for the three month period ended March 31, 2001, as
compared with $26,513 in the same period a year ago.
Net Operating Loss. We incurred approximately $(282,740) of net
operating loss carry forwards for the three-month period ended March 31, 2001,
which may be used to offset taxable income and income taxes in future years.
LIQUIDITY AND CAPITAL RESOURCES
Since the start-up of our operations in 1998, we have funded our cash
requirements primarily through equity transactions. We received $6,987,259 since
inception through the issuance of our common stock. We are not currently
generating cash from our operations in sufficient amounts to finance our
business and will continue to need to raise capital from other sources. We used
the proceeds from these sales of equity to fund operating activities, including,
product development, sales and marketing, and to invest in the acquisition of
technology, assets and business. As of March 31, 2001, we had total assets of $
1,845,762, a decrease of approximately $42,000 over last year's $1,887,424 at
December 31, 2000. Total liabilities were $625,449, at March 31, 2001, resulting
in stockholders' equity of $1,220,313, a decrease of $57,740 from the December
31, 2000 balance of $1,278.053.
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During the three months ended March 31, 2001, our cash decreased from
$265,245 at December 31, 2000, to $49,503 at March 31, 2001. Net cash used in
operating activities was $426,822 for the three months ended March 31, 2001,
including decreases in accounts receivable of $202,074, increases in inventory
of $27,856, and increases in accounts payable of $49,045.
Net cash generated from financing activities during the three months
ended March 31, 2001 was $214,757, consisting of proceeds received from sales of
stock of $200,000, plus 29,757 advanced from stockholders, less payments on
$15,000 made on a promissory note to Columbia Bank with an outstanding principal
balance of $27,083 at March 31, 2001.
As a result of the foregoing, at March 31, 2001 we had negative
working capital of $95,660, including $357,091 in net trade accounts receivable
and $123,195 in inventory. We have provided and may continue to provide payment
term extensions to certain of our customers from time to time. As of March 31,
2001 we have not granted material payment term extensions.
Our inventory balance at March 31, 2001, was estimated to be $123,195.
We do not take inventory on a quarterly basis, and we made inventory estimates
based on annual inventory determinations. With expected increased product sales,
we will need to make increased inventory expenditures. However, the terms of our
product sales requires a twenty five percent (25%) deposit on order. In
addition, we endeavor to keep inventory levels low. Therefore, we do not believe
that increased product sales, associated materials purchases and inventory
increases, will adversely affect liquidity.
We anticipate further expenditures for fiscal year 2001 of
approximately $100,000 for test equipment. We are also exploring the purchase of
the commercial space we are leasing in Columbia, Maryland, plus adjoining space,
consisting of approximately 10,000 square feet. If we can obtain favorable
terms, we would purchase the building through debt financing.
Under our outstanding employment and consulting agreements, we are
obligated to pay Mr. Than $96,000 per year, Mr. Lesniak $84,000 per year and Mr.
Bruggeman $85,000 in salary and fees during calendar year 2001. If we terminate
the employment of Mr. Than without cause or because of merger, acquisition or
change in control, we will be obligated to pay him approximately $350,000 in
severance payments over a three year period.
We believe that cash from operations and funds available will not be
sufficient to meet anticipated operating capital expenditure and debt service
requirements for the next twelve months and that we will be dependent on raising
additional capital through equity sales or debt financing. In this offering we
are registering 600,000 shares of common stock for resale that can be obtained
from the exercise of warrants held by Columbia Financial Group, LLC and Magnum
Financial Group, LLC. If Columbia Financial Group, LLC and Magnum Financial
Group, LLC exercise all of their warrants, we will receive $625,000 which we
will use for working capital.
We also have outstanding warrants with various investors with an
exercise price of $.40 per share which is less than its recent market price. If
the warrant holders exercise all of their warrants, at the exercise price of
$.40 per share, we will receive $800,000, which we will use for additional
working capital.
Plan Of Operation
The amount of capital that we need to raise will depend upon many
factors primarily including:
o the rate of sales growth and market acceptance of our product
lines;
o the amount and timing of necessary research and development
expenditures;
o the amount and timing of expenditures to sufficiently market and
promote our products ; and
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o the amount and timing of any accessory product introductions.
We intend to use the cash raised from the private sale of shares and
the exercise of warrants held by the Selling Stockholders to the following:
o bring our ViewStorage, WebView and CareView products to market;
o continue our product development efforts;
o expand our sales, marketing and promotional activities for the
SecureView line of products; and
o increase our engineering, production management, quality control,
and customer support staff.
We operate in a very competitive industry that requires continued
large amounts of capital to develop and promote our products. We believe that it
will be essential to continue to raise additional capital, both internally and
externally, to compete in this industry.
In addition to accessing the public and private equity markets, we
will pursue bank credit lines and equipment lease lines for certain capital
expenditures. We currently estimate we will need between $3 million and $4
million to fully develop all of our products and launch our expanded business
operations in accordance with our current business plan.
RISK FACTORS AND CAUTIONARY STATEMENTS
Statements within this 10-QSB which are not historical facts,
including statements about strategies and expectations for new and existing
products, technologies, and opportunities, are forward-looking statements that
involve risks and uncertainties. Our actual results may differ substantially
from such forward-looking statements. Forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from
those expressed in or implied by the statements, including, but not limited to,
risks detailed in our other securities filings, including our Annual Report on
Form 10-KSB for the year ended December 31, 2000, and our registration
statement, as amended, filed on Form SB-2.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not aware of any material pending legal proceeding against us
or our property.
ITEM 2. CHANGES IN SECURITIES
We are not aware of any material pending legal proceeding against us
or our property.
- 10 -
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There are no changes in securities other than such changes reported in
our SB-2/A filed on March 29, 2001, registration number 333-55394.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable
ITEM 5. OTHER INFORMATION
Inapplicable
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
(A) EXHIBITS:
--------
3.1 (1) Articles of Incorporation
3.2 (1) By-laws
11. (attached to report) Statement re: Computation of Per Share Earnings
- --------------------------------------------------------------------------------
(1) Incorporated By Reference From Issuer's Registration Statement on Form SB-2
Filed With The Securities & Exchange Commission On January 11, 2000
(B) REPORTS ON FORM 8-K
-------------------
We did not file any reports on Form 8-K during the quarter for which
this report is filed.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
View Systems, Inc.
Registrant
Date: May 15, 2001 /s/ GUNTHER THAN
----------------
GUNTHER THAN
PRESIDENT & CEO
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