United States
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 December 31, 2001.
[ ] Transition Report to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the Transition Period from _____________ to ___________.
000-28371
(Commission File Numbers)
ENDOVASC LTD., INC.
(Exact name of registrant as specified in its charter)
NEVADA 76-0512500
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
15001 Walden Road, Suite 108
Montgomery, Texas 77356
(Address of principal executive offices) (Zip Code)
(936) 448-2222
(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 [ ]
As of February 13, 2002, 80,669,267 shares of Common Stock, par value $.001
per share, of Endovasc Ltd., Inc. were outstanding.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
Balance Sheet as of December 31, 2001 and
June 30, 2001 F-2
Statement of Operations for the three months
and six months ended December 31, 2001 and
2000, and for the period from inception,
June 10, 1996, to December 31, 2001 F-3
Statement of Stockholders' Deficit for
the six months ended December 31, 2001,
and for the period from inception,
June 10, 1996, to December 31, 2001 F-4
Statement of Cash Flows for the six months
ended December 31, 2001 and 2000, and for
the period from inception, June 10, 1996,
to December 31, 2001 F-6
Notes to Financial Statements F-7
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
BALANCE SHEET
DECEMBER 31, 2001 AND JUNE 30, 2001
__________
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, JUNE 30,
2001 2001
ASSETS (UNAUDITED) (NOTE)
------ -------------- --------------
Current assets:
Cash and cash equivalents $ 1 $ 117
Other current assets 24 47
-------------- --------------
Total current assets 25 164
Property and equipment, net 193 214
Other assets, net 136 144
-------------- --------------
Total assets $ 354 $ 522
============== ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------
Current liabilities:
Current maturities of long-term debt $ 119 $ 43
Current portion of obligations under capital leases 38 35
Note payable to stockholder 124 99
Accounts payable 667 296
Accrued liabilities 113 532
-------------- --------------
Total current liabilities 1,061 1,005
Long-term debt, net of current maturities 21 28
Long-term obligations under capital leases 56 74
Convertible debentures 253 - _
-------------- --------------
Total liabilities 1,391 1,107
-------------- --------------
Commitment and contingencies
Stockholders' deficit:
Common stock, $.001 par value, 100,000,000 shares
authorized, 82,875,267 and 40,253,331 shares issued
and 80,669,267 and 38,168,331 shares outstanding at
December 31, 2001 and June 30, 2001, respectively 83 40
Preferred stock, $.001 par value, 20,000,000 shares
authorized, 9,002 and 15,760 shares of Series A 8%
cumulative convertible preferred stock issued and
outstanding at December 31, 2001 and June 30, 2001,
respectively, stated value $100 per share - -
Additional paid-in capital 8,976 8,121
Unissued common stock 560 -
Losses accumulated during the development stage (10,634) (8,729)
Treasury stock (22) (17)
-------------- --------------
Total stockholders' deficit (1,037) (585)
-------------- --------------
Total liabilities and stockholders' deficit $ 354 $ 522
============== ==============
Note: The balance sheet at June 30, 2001 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying notes are an integral
part of these financial statements.
F-2
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000 AND
FOR THE PERIOD FROM INCEPTION, JUNE 10, 1996, TO DECEMBER 31, 2001
__________
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- -------------------------- INCEPTION
DECEMBER DECEMBER DECEMBER DECEMBER TO DECEMBER
31, 2001 31, 2000 31, 2001 31, 2000 31, 2001
------------ ------------ ------------ ------------ -------------
Income:
Sales $ - $ 75 $ - $ 75 $ 104
Interest income - - 1 - 28
Other income - _ - _ 246 - _ 255
------------ ------------ ------------ ------------ -------------
Total income - 75 247 75 387
Costs and expenses:
Operating, general and
administrative expenses 280 319 664 556 4,991
Research and development
costs 478 336 739 655 4,263
Interest expense 16 31 193 61 541
Settlement with former
employee - _ - _ - _ - _ 408
------------ ------------ ------------ ------------ -------------
Total costs and expenses 774 686 1,596 1,272 10,203
------------ ------------ ------------ ------------ -------------
Net loss (774) (611) (1,349) (1,197) (9,816)
Extraordinary loss on extin-
guishment of convertible
debentures - _ - _ - _ - _ 127
------------ ------------ ------------ ------------ -------------
Net loss $ (774) $ (611) $ (1,349) $ (1,197) $ (9,943)
============ ============ ============ ============ =============
Weighted average shares
outstanding 70,603,319 14,023,721 54,119,351 14,023,721
============ ============ ============ ============
Basic and diluted net loss
per common share $ (0.01) $ (0.04) $ (0.02) $ (0.09)
============ ============ ============ ============
The accompanying notes are an integral
part of these financial statements.
F-3
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2001
__________
(IN THOUSANDS, EXCEPT SHARE DATA)
LOSSES
ACCUMULATED
COMMON STOCK PREFERRED STOCK ADDITIONAL UNISSUED DURING THE
------------------- ------------------- PAID-IN COMMON TREASURY DEVELOPMENT
AMOUNT SHARES AMOUNT SHARES CAPITAL STOCK STOCK STAGE TOTAL
------- ---------- --------- -------- ------------ --------- ---------- ------------- -------
Balance at June 30, 2001 $ 40 40,253,331 $ - 15,760 $ 8,121 $ - $ (17) $ (8,729) $ (585)
Stock issued for services 4 3,735,000 - - 152 - - - 156
Stock issued for employee
compensation - 50,367 - - 5 - - - 5
Stock issued in settlement
of lawsuit 8 8,000,000 - - 400 - - - 408
Purchase of treasury stock - - - - - 560 (565) - (5)
Issuance of treasury stock
for conversion of preferred
stock to common stock - - - (240) - - 182 (182) -
Issuance of treasury stock
for conversion of
debentures - - - - - - 378 (324) 54
Dividends declared on
preferred stock - - - - - - - (50) (50)
Conversion of preferred
stock to common stock 25 24,711,478 - (6,518) (25) - - - -
The accompanying notes are an integral
part of these financial statements.
F-4
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2001
__________
(IN THOUSANDS, EXCEPT SHARE DATA)
LOSSES
ACCUMULATED
COMMON STOCK PREFERRED STOCK ADDITIONAL UNISSUED DURING THE
------------------- ----------------- PAID-IN COMMON TREASURY DEVELOPMENT
AMOUNT SHARES AMOUNT SHARES CAPITAL STOCK STOCK STAGE TOTAL
------- ---------- --------- ------ ----------- --------- ---------- ------------- --------
Conversion of debentures
to common stock 4 3,764,104 - - 90 - - - 94
Stock issued as payment of
interest on debentures - 120,877 - - 3 - - - 3
Stock issued as payment of
dividends on preferred
stock 2 2,240,110 - - 59 - - - 61
Effect of the beneficial
conversion feature of the
convertible debentures - - - - 171 - - - 171
Net loss - - - - - - - (1,349) (1,349)
------- ---------- --------- ------ ----------- --------- ---------- ------------- --------
Balance at December 31,
2001 $ 83 82,875,267 $ - _ 9,002 $ 8,976 $ 560 $ (22) $ (10,634) $(1,037)
======= ========== ========= ====== =========== ========= ========== ============= ========
The accompanying notes are an integral
part of these financial statements.
F-5
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000, AND
FOR THE PERIOD FROM INCEPTION, JUNE 10, 1996, TO DECEMBER 31, 2001
(IN THOUSANDS)
SIX MONTHS ENDED
------------------------------ INCEPTION TO
DECEMBER 31, DECEMBER 31,
2001 2000 2001
-------------- -------------- --------------
Cash flows used in operating activities:
Net loss $ (1,349) $ (1,197) $ (9,943)
Adjustments to reconcile net loss to net
cash used in operating activities 747 184 4,738
-------------- -------------- --------------
Net cash used in operating activities (602) (1,013) (5,205)
-------------- -------------- --------------
Cash flows used in investing activities:
Capital expenditures (6) (66) (148)
Proceeds received from repayment of loan to
stockholder - - 72
-------------- -------------- --------------
Net cash used in investing activities (6) (66) (76)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds from sale of equity securities - - 337
Proceeds from sale of common stock - 25 212
Proceeds from sale of convertible debentures 400 - 1,437
Net proceeds from issuance of preferred stock - 570 2,263
Issuance of notes payable 113 - 218
Repayment of notes payable (26) (5) (90)
Payments of obligations under capital leases (15) (5) (38)
Proceeds from advances from stockholders 25 - 969
Repayments of notes to stockholder - - (5)
Purchase of treasury stock (5) - (22)
-------------- -------------- --------------
Net cash provided by financing activities 492 585 5,282
-------------- -------------- --------------
Net increase (decrease) in cash and cash
equivalents (116) (494) 1
Cash and cash equivalents at beginning of period 117 926 -
-------------- -------------- --------------
Cash and cash equivalents at end of period $ 1 $ 432 $ 1
============== ============== ==============
Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 16 $ - $ 114
============== ============== ==============
Cash paid for income taxes $ - $ - $ -
============== ============== ==============
The accompanying notes are an integral
part of these financial statements.
F-6
ENDOVASC LTD., INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
__________
1. INTERIM FINANCIAL STATEMENTS
------------------------------
The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles and the rules
of the U.S. Securities and Exchange Commission, and should be read in
conjunction with the audited financial statements and notes thereto for the
year ended June 30, 2001. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of financial position and the results of operations for the
interim periods presented have been included. Operating results for the
interim periods are not necessarily indicative of the results that may be
expected for the respective full year.
A summary of the Company's significant accounting policies and other
information necessary to understand the interim financial statements is
presented in the Company's audited financial statements for the years ended
June 30, 2001 and 2000. Accordingly the Company's audited financial
statements should be read in connection with these financial statements.
2. INCOME TAXES
-------------
The difference between the 34% federal statutory income tax rate and
amounts shown in the accompanying interim financial statement is primarily
attributable to an increase in the valuation allowance applied against the
tax benefit from utilization of net operating loss carryforwards.
3. CONVERTIBLE DEBENTURES
-----------------------
During the six months ended December 31, 2001, the Company issued $400,000
in convertible debentures. The debentures bear interest at 8% per year
payable quarterly in arrears. The debentures mature in September 2003 and
are convertible, at the option of the holder, to shares of the Company's
common stock at a conversion price per share equal to the lower of (i) 85%
of the average of the three lowest closing prices for the common stock for
the thirty days prior to the closing date of the debentures; or (ii) 70% of
the average of the three lowest closing prices for the common stock for the
thirty days prior to the conversion date. Accordingly, the actual weighted
average interest rate on these debentures, including the effect of the cost
of the beneficial conversion feature, is approximately 23%.
Continued
F-7
ENDOVASC LTD., INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS
__________
4. PREFERRED STOCK
----------------
The Company's articles of incorporation authorize the issuance of up to
20,000,000 shares of preferred stock with characteristics determined by the
Company's board of directors. Effective May 5, 2000, the board of directors
authorized the issuance and sale of up to 55,000 shares of Series A 8%
convertible preferred stock.
On May 9, 2000, the Company issued 15,000 shares of $0.001 par value and
$100 per share stated and liquidation value Series A 8% non-voting
convertible preferred stock for $1,500,000. The actual proceeds received by
the Company were $1,040,300, which are net of related offering costs. The
Series A convertible preferred stock can be converted to common stock at
any time at the option of the holder. The conversion rate is the stated
value per share plus any accrued and unpaid dividends divided by 85% of the
average of the three lowest closing bid prices of the Company's common
stock for the thirty trading days immediately preceding May 9, 2000, or 70%
of the average of the three lowest closing bid prices for the thirty days
immediately preceding the conversion of the respective preferred stock.
During the six months ended December 31, 2001, 6,518 shares of preferred
stock were converted to 24,711,478 shares of common stock. In addition,
1,000,000 shares of treasury stock were issued for the conversion of 240
shares of preferred stock.
In addition, the Series A preferred stockholders are obligated to purchase
an additional 30,000 shares of Series A 8% convertible preferred stock
("Put Stock") at the option of the Company subject to the Company being in
compliance with various covenants. The Company is currently not in
compliance with these covenants but the stockholders maintain a right to
waive any violations. The purchase price of the additional shares is $100
per share, which is its stated and liquidation value. During November 2000,
the Company issued an additional 7,500 shares of this Series A preferred
stock for proceeds to the Company of $569,757, which is net of related
offering costs.
If the conversion price is lower than the initial price on the date of
issue, the Company has the right to redeem the shares of Series A 8%
convertible preferred stock at 130% of its stated value per share.
5. RESEARCH AGREEMENT
-------------------
Effective July 1, 2001, the Company entered into an External Research
Agreement with another company (the "Sponsor") whereby the Sponsor has
agreed to assist in the funding of the Company's research and development
related to its Nicotine Receptor Agonist. The Sponsor has agreed to fund a
maximum of $511,829, of which $240,680 was recorded as other income in the
accompanying statement of operations for the six months ended December 31,
2001.
Continued
F-8
ENDOVASC LTD., INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE FINANCIAL STATEMENTS
6. NON-CASH INVESTING AND FINANCING ACTIVITIES
-----------------------------------------------
SIX MONTHS ENDED
---------------------------- INCEPTION TO
DECEMBER 31, DECEMBER 31,
2001 2000 2001
------------- ------------- -------------
Non-cash investing and financing
activities:
Common stock or warrants issued for
services and license and patent
rights $ 161 $ 157 $ 3,259
============= ============= =============
Common stock issued for equity
securities $ - $ - $ 302
============= ============= =============
Common stock issued for settlement of
lawsuit $ 408 $ - $ 601
============= ============= =============
Common stock issued upon conversion of
debentures $ 148 $ 30 $ 1,437
============= ============= =============
Reduction of notes payable and accrued
liabilities through exercise of stock
options or issuance of common stock $ 235 $ 275 $ 1,203
============= ============= =============
Issuance of note payable for the purchase
of equipment $ - $ 56 $ 124
============= ============= =============
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------- -----------------------------------------------------------------------
OF OPERATIONS
- --------------
The statements contained in this Form 10-Q that are not historical are
forward-looking statements, including statements regarding the Company's
expectations, intentions, beliefs or strategies regarding the future.
Forward-looking statements include the Company's statements regarding liquidity,
anticipated cash needs and availability and anticipated expense levels. All
forward-looking statements included in this Report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statement. It is important to note
that the Company's actual results could differ materially from those in such
forward-looking statements. Additionally, the following discussion and analysis
should be read in conjunction with the Financial Statements and notes thereto
appearing in our annual report filed in Form 10-KSB for the period ending June
30, 2001.
OVERVIEW
- --------
The Company is in the research and development stage and has had limited
operating revenues since its inception on June 10, 1996. From June 10, 1996
through December 31, 2001, the Company had an accumulated deficit of
$10,634,303.
Our research and development efforts are focused on our core product -
Liprostin(TM). We are conducting clinical trial testing of Liprostin(TM) to
obtain the approval of the U.S. Food and Drug Administration (FDA) for sale of
Liprostin(TM) in the United States. Phase I clinical trials to test the
product's safety and tolerance levels using a small group of healthy subjects,
as well as providing information about the product's effectiveness and dosage
levels was successfully completed in January 2001. With this success, the
Company has decided to proceed to Phase III clinical trials, as had been
suggested by the FDA in late 1999. An IND and protocol for a Phase III
randomized, multicenter study of Liprostin(TM) in conjunction with percutaneous
transluminal angioplasty in patients with critical limb ischemia was filed with
the FDA in August 2001. Also, the Company filed an Orphan Drug Application with
the FDA in July 2001. Orphan Drug is a designation by the FDA to indicate a
therapy developed to treat a rare disease (one which afflicts a U.S. population
of less than 200,000 people). Because there are few financial incentives for
drug companies to develop therapies for diseases that afflict so few people, the
U.S. government offers additional incentives to drug companies that develop
these drugs, which include: 1) eligibility for an FDA grant of up to $300,000
per year for a maximum of 3 years; 2) a tax credit equal to 50% of the qualified
clinical testing expenses for the taxable year in which the clinical study(s)
are conducted; and most importantly, 3) a 7 year exclusivity to market the drug
as adjunct treatment for the rare disease. We expect to complete Phase III
clinical trials by late 2004.
In addition, we are conducting feasibility studies with prospective
strategic partners to find practical collaborative products that incorporate
Liprostin with other technologies. We intend to develop new uses for our core
product Liprostin, including applications to hip or bone prostheses, cancer
treatment, inflammatory disease, liver disease and wound healing.
We have successfully completed preclinical trials in rabbits for our
Nicotine Receptor Agonist at Stanford University, and have initiated animal
studies in dogs and pigs at Columbia University to continue safety and efficacy
studies of this technology. We are currently developing this technology for use
in treatment of peripheral occlusive arterial disease, in addition to other
applications.
We successfully completed a feasibility study of our stent coating
technology using our patented Prostaglandin E1 with a major medical device
manufacturer in early 2001. We have continued that work with other medical
device companies, as well.
RESULTS OF OPERATIONS
- -----------------------
THREE MONTH PERIOD ENDED DECEMBER 31, 2001 AND 2000
- -----------------------------------------------------------
During the three months ended December 31, 2001, the Company had no revenue
compared with $75,000 of revenues for the three months ended December 31, 2000.
The revenue during the three months ended December 31, 2000 was a result of a
feasibility study agreement, relating to the Company's stent-coating technology,
with Advanced Cardiovascular Systems, Inc., a California corporation and
subsidiary of Guidant Corporation.
During the three months ended December 31, 2001 and 2000, administrative
and operating expenses were $280,000 and $319,000, respectively. The decrease
in costs and operating expenses is primarily due to a reduction in promotion and
general consulting expenses during the three months ended December 31, 2001.
Research and development costs totaled $478,000 during the three months
ended December 31, 2001, compared to $336,000 during the three months ended
December 31, 2000. This increase of $142,000 was related to the increased cost
of materials, labor and travel connected to the animal study at Columbia
University with NRA, the Phase II clinical studies preparation with
Liprostin(TM) and the ongoing, in-house projects for medicinally coated vascular
stents and a biodegradable resorbable stent.
Interest expense decreased from $31,000 during the three months ended
December 31, 2000 to $16,000 during the three months ended December 31, 2001.
This decrease is a result of a lower average debt balance and lower interest
rates.
SIX MONTH PERIOD ENDED DECEMBER 31, 2001 AND 2000
- ---------------------------------------------------------
During the six months ended December 31, 2001, the Company had total
revenues of $247,000 compared with $75,000 of revenues for the six months ended
December 31, 2000. The increase relates to revenue received from an external
research agreement with another company entered into in July 2001 whereby the
Company received assistance from this company in funding its research and
development costs related to its Nicotine Receptor Agonist.
During the six months ended December 31, 2001 and 2000, administrative and
operating expenses were $664,000 and $556,000, respectively. The increase in
costs and operating expenses is primarily due to an increase in facilities cost,
personnel and overhead as rent and other costs increased. Financing costs and
legal fees associated with securing the convertible debentures were also
expensed during the six months ended December 31, 2001.
Research and development costs totaled $739,000 during the six months ended
December 31, 2001, compared to $655,000 during the six months ended December 31,
2000. This increase of $84,000 was related to the increased cost of materials,
labor and travel related to the animal study at Columbia University with NRA,
the Phase II clinical studies preparation with Liprostin(TM) and the ongoing,
in-house projects for medicinally coated vascular stents and a biodegradable
resorbable stent.
Interest expense increased from $61,000 during the six months ended
December 31, 2000 to $193,000 during the six months ended December 31, 2001.
This increase is a result of the cost of the beneficial conversion feature
related to the convertible debentures recorded during the six months ended
December 31, 2001 of $171,000, offset by lower interest rates during the period.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
The Company had a working capital deficit at December 31, 2001 of
$1,036,000, compared to a deficit of $350,000 at December 31, 2000. This
increase in the working capital deficit is primarily related to the increase in
accounts payable and decrease in cash resulting from no revenue during the three
months ended December 31, 2001 and less proceeds from issuance of preferred
stock.
The Company requires significant additional funds to enable it to proceed
with its Phase II/III Liprostin(TM) clinical trials, as well as research and
development of its licensed product Nicotine Receptor Agonist. In May 2000, the
Company completed a $4.5 million financing commitment related to the private
placement and sale of its convertible preferred stock in three (3) $1.5 million
tranches.
Pursuant to the commitment, the Company received $1,040,300 on May 10,
2000, $569,757 on November 2000, and $653,488 on April 12, 2001 which is net of
related offering costs. There can be no assurance that the Company will take
down the remaining tranches.
During the six months ended December 31, 2001 the Company issued $400,000
of convertible debentures, of which it received $333,000, net of related
offering costs. The debentures bear interest at 8%, which is due quarterly in
arrears, with the principal due September 2003.
The Company continues to actively pursue additional financing,
collaborations with firms, and other arrangements aimed at increasing its
capital resources. Failure to acquire such funds may adversely impact the
scheduled marked introduction of Liprostin(TM) and possibly adversely affect the
Company's operations. In order to continue as a going concern, the Company must
raise additional funds and ultimately achieve profit from its operation.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- -------------------------------------
(a) Exhibits -- None.
(b) Reports on Form 8-K -- None.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.
ENDOVASC LTD., INC.
Date: February 12, 2002 By: /s/ David P. Summers
------------------------ --------------------------------
David P. Summers
Chief Executive Officer
Date: February 12, 2002 By: /s/ M. Dwight Cantrell
------------------------ --------------------------------
M. Dwight Cantrell
Chief Financial Officer