U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001
Commission file no. 000-31521
Mariculture Systems, Inc.
--------------------------------------------
(Name of small business issuer in its charter)
Florida 65-0677315
- - ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 968
Lake Stevens, Washington 98258
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (425) 397-0409
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
None None
- - ----------------------------- ------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
-----------------------------------
(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
Indicate by 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 X No
--- ---
As of March 31, 2001, there were 10,605,614 shares of voting stock of the
registrant issued and outstanding.
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
PAGE
CONDENSED FINANCIAL STATEMENTS
Balance sheet F-1
Statement of operations F-2
Statement of stock holders' deficit F-3
Statement of cash flows F-4
Notes to financial statements F-5
MariCulture Systems, Inc.
(A development stage company)
BALANCE SHEETS
ASSETS
December 31, March 31,
2000 2001
unaudited
--------------- -------------
CURRENT ASSETS
Cash $ 7,232 $ 3,514
Receivable 570 570
--------------- -------------
Total current assets 7,802 4,084
TEST FACILITY EQUIPMENT, at salvage value 55,429 55,429
--------------- -------------
Total assets 63,231 $ 59,513
=============== =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Notes payable - related party $ 97,296 $ 102,296
Notes payable - other 10,000 10,000
Accounts payable - trade 252,316 273,835
Accounts payable - related party 23,695 30,604
Payables to stockholders 17,500 17,500
Accrued liabilities 34,267 27,745
Accrued interest 63,809 68,103
--------------- -------------
Total current liabilities 498,883 530,083
-------------- -------------
COMMITMENTS - -
STOCKHOLDERS' DEFICIT
Preferred stock, par value $.001; 1,000,000 shares
authorized; no shares issued or outstanding - -
Common stock, par value $.001; 20,000,000 shares authorized 10,314 10,355
Additional paid-in capital 746,450 788,676
Deferred compensation - (1,500)
Accumulated development stage deficit (1,192,416) (1,268,101)
-------------- -------------
Total stockholders' deficit (435,652) (470,570)
-------------- -------------
Total liabilities and stockholders' deficit $ 63,231 $ 59,513
============== =============
The accompanying notes are an integral part of these statements.
F-1
MariCulture Systems, Inc.
(A development stage company)
STATEMENTS OF OPERATIONS
Cumulative results
of operations
Quarter ended March 31, since inception
2000 2001 (August 25, 1994)
OPERATING EXPENSES
General and administrative $ 67,945 $ 71,433 $ 570,813
Research and development - - 629,289
------------ ------------ ----------------
Total operating expenses 67,945 71,433 1,200,102
NET LOSS FROM OPERATIONS (67,945) (71,433) (1,200,102)
INTEREST INCOME - - 7,200
OTHER INCOME - 42 42
INTEREST EXPENSE (2,932) (4,294) (78,173)
------------ ------------ ----------------
NET LOSS $ (70,877) $ (75,685) $ (1,271,033)
============ ============ ================
LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.007) $ (0.007) $ (0.146)
============ ============ ================
The accompanying notes are an integral part of these statements.
F-2
MariCulture Systems, Inc.
(A development stage company)
STATEMENT OF STOCKHOLDERS' DEFICIT
Since inception through March 31, 2001
Accumulated
Common stock Additional development
-------------------------- paid-in Deferred stage
Shares Amount Capital Compensation Deficit Total
------------- ------------ ----------- ------------- ------------- ----------
Sale of common stock in 1995 1,640,000 $ 1,640 $ 431,321 $ - $ - $ 432,961
Issuance of common stock to founders in 1995 8,213,080 8,212 (8,212) - - -
Sale of common stock in 1996 130,000 130 32,370 - - 32,500
Issuance of common stock to founders in 1996 1,200,000 1,200 (1,200) - - -
Issuance of common stock for services in 1996 10,766 11 3,074 - - 3,085
Share exchange agreement of MSIW in August 1996 (10,075,354) (10,075) 10,075 - - -
Share exchange agreement of MSIW in August 1996 8,800,000 8,800 (8,800) - - -
Sale of common stock in 1997 186,978 187 145,741 - - 145,928
Issuance of common stock for services in 1997 126,747 127 68,933 - - 69,060
Issuance of common stock for services in 1998 20,600 21 20,579 - - 20,600
Sale of common stock in 1999 32,000 32 31,968 - - 32,000
Net loss since inception through December 31,1999 - - - - (1,017,187)(1,017,187)
------------- ------------ ------------ ----------- ------------ -----------
Balance at December 31, 1999 10,284,817 10,285 725,849 - (1,017,187) (281,053)
Issuance of 17,400 common stock shares for
services on January 20, 2000 17,400 17 8,683 - - 8,700
Issuance of 11,930 common stock shares for
services on February 29, 2000 11,930 12 11,918 - - 11,930
Issuance of shares into escrow on March 21, 2000 250,000 - - - - -
Net loss for the year ended December 31, 2000 - - - - (175,229) (175,229)
------------- ----------- ------------ ----------- ------------ -----------
Balance at December 31, 2000 10,564,147 $ 10,314 $ 746,450 - $ (1,192,416)$ (435,652)
Issuance of 32,467 common stock shares for
services on January 2, 2001 32,467 32 32,935 (1,500) - 31,467
Issuance of 300 common stock shares for services
on February 8, 2001 300 - 300 - - 300
Sale of 2,000 common stock shares on March 19,
2001 2,000 2 1,998 - - 2,000
Sale of 7,000 common stock shares on March 27,
2001 7,000 7 6,993 - - 7,000
Net loss for the quarter ended March 31, 2001 - - - - (75,685) (75,685)
------------- ------------ ------------ ----------- ------------ -----------
Balance at March 31, 2001 10,605,914 $ 10,355 $ 788,676 $ (1,500) $ (1,268,101)$ (470,570)
============= ============= ============ =========== ============ ===========
The accompanying notes are an integral part of these statements.
F-3
MariCulture Systems, Inc.
(A development stage company)
STATEMENTS OF CASH FLOWS
Cumulative results
of operations
For three months ended March, 31 since inception
2000 2001 (August 25, 1994)
---------------- ---------------- ----------------
Increase (Decrease) in Cash
Cash flows from operating activities
Net loss $ (70,877) $ (75,685) $ (1,268,101)
Adjustments to reconcile net loss to net cash used in
operating activities:
Issuance of common stock for services 20,630 31,767 145,142
Depreciation and write down of test facility - - 441,892
Changes in assets and liabilities
Accounts receivable - - (570)
Payables to shareholders - - (8,700)
Accounts payable and accrued liabilities 49,245 26,199 396,269
---------------- ---------------- ---------------
Net cash used in operating activities (1,002) (17,719) (294,068)
Cash flows from investing activities
Purchase of test facility components - - (497,321)
---------------- ---------------- ---------------
Net cash used in investing activities - - (497,321)
Cash flows from financing activities
Proceeds from notes payable (486) 5,001 116,314
Proceeds from sale of common stock - 9,000 652,389
Proceeds from unissued shares - - 26,200
---------------- ---------------- ---------------
Net cash provided by financing activities (486) 14,001 794,903
---------------- ---------------- ---------------
Net increase in cash (3,718) 3,514
(1,488)
Cash at beginning of period 2,373 7,232 -
---------------- ---------------- ---------------
Cash at end of period $ 885 $ 3,514 $ 3,514
================ ================ ===============
Noncash disclosures:
Issuance of common stock or unearned services $ - $ 1,500 $ 1,500
================ ================ ===============
The accompanying notes are an integral part of these statements.
F-4
NOTE 1. FINANCIAL STATEMENTS
The unaudited condensed financial statements of MariCulture Systems (the
Company) have been prepared by the Company 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 accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the entire fiscal year ending December 31, 2001. The
accompanying unaudited condensed financial statements and related notes should
be read in conjunction with audited financial statements filed on April 13,
2001 and Form 10KSB.
NOTE 2. NET (LOSS) EARNINGS PER SHARE
Basic (loss) earnings per share are based on the weighted average number of
shares outstanding during each quarter. The weighted average shares for
computing the Company's basic (loss) earning per share were 10,597,023 and
10,357,840 for the three months ended March 31, 2001 and 2000, respectively, and
8,691,026 from inception through March 31, 2001. As of March 31, 2001 and 2000,
the Company had 25,000 and 0, of common stock equivalent shares.
Because of the net loss for the three months ended March 31, 2001 and 2000, and
from inception through March 31, 2001, common stock equivalent shares were not
included in the calculation of diluted earnings per share as their inclusion
would be anti-dilutive.
F-5
Item 2. Management's Discussion and Analysis of Results of Operations.
General
In November 2000, the Company entered into a consulting agreement with
Websters' Inc. The consulting agreement provides that the Company is to engage
Websters' Inc. as a registered professional engineering firm for the purposes of
performing the comprehensive development and production of a functional water
driven, integrated commercial flow-through effluent handling device to capture,
separate and consolidate the water borne waste originating from a SARGO fish
farming system. This device is to improve upon and replace existing energy
intensive technology currently being used in the SARGO System. Websters' Inc. is
to provide technical support to the integration and installation of the
resulting device into the current design of SARGO commercial fish rearing
vessels. Websters' Inc agreed to provide approximately two hundred fifty (250)
hours of service to the Company, and to accept restricted common stock of the
Company in Lieu of cash payment at a rate of one hundred (100) share for every
one (1) hour of services, or a pro-rata amount thereof, or, upon the approval of
the Company's Board of Directors, in a cash amount of one hundred fifty dollars
($150) per hour of service. Websters' Inc. received an initial deposit in
advance against the consulting agreement of one thousand (1,000) shares of
restricted common stock of the Company in January 2001. Payments for services in
shares will be presented as a certificate of the restricted common stock on a
quarterly basis upon approval of the Company's Board of Directors. The agreement
also provides that the Company agrees to exchange for cash, at the same rate of
value as at original issue, any designated part or the total of all stock issued
to Websters' Inc. as a fee from the consulting agreement. The exchange for cash
will only be in the event that the stock tendered to Websters' Inc. is unable to
be sold in a brokered transaction after a period of one (1) year from the date
of issue of the certificate. The agreement expires December 1, 2002. The
offering was conducted pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the "Act"), Rule 506 of Regulation D promulgated thereunder ("Rule
506") and Section 460-44A-506 of the Washington Code.
The facts relied upon to make the Washington Exemption applicable include
the following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than fifteen (15) days after the first sale; and (iii) the
Company executed a Form U-2 consent to service of process, and (iv) the Company
paid an appropriate filing fee of $300.00 to the Washington State Treasurer.
In January 2001, the Company issued 100 shares of the Company's common
stock each to David Meilahn, Don Jonas and Robert Janeczko for services rendered
to the Company in the third fiscal quarter of year 2000. For such offering, the
Company relied upon Section 4(2) of the Act, Rule 506, Section 4[5/4]S of the
Illinois Code and Section 460-44A-506 of the Washington Code.
The facts relied upon to make the Illinois Exemption applicable include the
following: (i) The offer, sale or issuance was to a person who was or was
reasonably believed to be a director, executive officer, or general partner of
the issuer of the securities being offered or sold .
8
The facts relied upon to make the Washington Exemption applicable include
the following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than fifteen (15) days after the first sale; and (iii) the
Company executed a Form U-2 consent to service of process, and (iv) the Company
paid an appropriate filing fee of $300.00 to the Washington State Treasurer.
In January 2001, the Company issued 31,167 shares to Richard Luce as
compensation in lieu of salary for services rendered to the Company through year
2000. For such offering, the Company relied upon Section 4(2), Rule 506, and
Section 460-44A-506 of the Washington Code.
The facts relied upon to make the Washington Exemption applicable include
the following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than fifteen (15) days after the first sale; and (iii) the
Company executed a Form U-2 consent to service of process, and (iv) the Company
paid an appropriate filing fee of $300.00 to the Washington State Treasurer.
In February 2001, the Company hired Cary Grant as a consultant to the
Company. As payment for such services, the Company committed to provide Mr.
Grant with 25,000 shares of its unrestricted common stock. To date, no shares
have been issued in connection with this agreement.
In February 2001, the Company executed a promissory note in favor of Elaine
Meilahn in the amount of five thousand dollars ($5,000) at an interest rate of
twelve percent (12%) per annum. The Note was in exchange for monies lent by Ms.
Meilahn to the Company for working capital. The Note is payable on demand. For
such offering, the Company relied on Section 4(2) of the Act, Rule 506 and
Section 460-44A of the Washington Code.
The facts relied upon to make the Washington Exemption applicable include
the following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than fifteen (15) days after the first sale; and (iii) the
Company executed a Form U-2 consent to service of process, and (iv) the Company
paid an appropriate filing fee of $300.00 to the Washington State Treasurer.
In February and March 2001, the Company sold a total of 9,000 shares of its
restricted common stock to three (3) investors for a total of $9,000. For such
offering, the Company relied upon Section 4(2) of the Act, Rule 506, Section
460-44A-506 of the Washington Code and Section 551.23(19) of the Wisconsin Code.
The facts relied upon to make the Washington Exemption applicable include
the following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than fifteen (15) days after the first sale; and (iii) the
Company executed a Form U-2 consent to service of process, and (iv) the Company
paid an appropriate filing fee of $300.00 to the Washington State Treasurer.
The facts relied upon to make the Wisconsin Exemption applicable include
the following: (i) no commission or other remuneration or consideration was paid
or given to any person, directly
9
or indirectly for soliciting or selling to any person in Wisconsin except to
broker-dealers and agents licensed in Wisconsin or exempt from licensure; (ii)
the Company filed a completed SEC Form D with the State of Wisconsin DFI
Securities; (iii) the Company paid a fee of $200; and (iv) the Company believed
that the investment was suitable for the purchasers and the purchasers, either
alone or with the purchasers' representatives, had such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of the prospective investment.
Discussion and Analysis
The Company, Mariculture Systems, Inc. is a Florida corporation which
conducts business from its headquarters in Lake Stevens, Washington. The Company
was incorporated in the State of Florida on July 8, 1996. On August 22, 1996,
the Company entered into a share exchange agreement whereby the Company issued
and exchanged 8,800,000 shares of its common stock for one hundred percent
(100%) of the issued and outstanding stock of Mariculture Systems, Inc., a
Washington corporation ("MSIW") (the "Share Exchange"). As a result of that
transaction, MSIW became a wholly owned subsidiary of the Company. The
Washington corporation was administratively dissolved on September 19, 1997.
The Company is principally involved in the aquaculture industry, including
developing, manufacturing, and marketing proprietary systems that allow
commercial fish farmers to increase productivity and profits while reducing
risks to their crop and limiting environmental impact. Current activities
include the search for potential customers of the Company's proprietary product.
The Company is in the development stage. It is acquiring the necessary
operating assets and it is beginning its proposed business. While the Company is
developing tools necessary to enter the acquaculture industry, there is no
assurance that any benefit will result from such activities. The Company will
receive limited operating revenues and will continue to incur expenses during
its development, possibly in excess of revenue.
The ability of the Company to continue as a going concern is dependent upon
increasing sales and obtaining additional capital and financing. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern. The Company is currently seeking
financing to allow it to begin its planned operations.
Results of Operations -For the Three Months Ending March 31, 2001 and March 31,
2000
Financial Condition, Capital Resources and Liquidity
For the 1st quarter ended March 31, 2000 and 2001 the Company recorded no
revenues. For the first quarter ended March 31, 2000 and 2001 the Company had
general and administrative expenses of $67,945 and $71,433. This increase of
$3,488 was due to trips to Canada by the Company management for prospective
sales opportunities.
10
For the 1st quarter ended March 31, 2000 and 2001, the Company had research
and development expenses of $0 and $0 respectively.
For the 1st quarter ended March 31, 2000 and 2001, the Company had total
operating expenses of $67,945 and $71,433.
Net Losses
For the 1st quarter ended March 31, 2000 and 2001, the Company reported a
net loss from operations of $70,877 and $75,685 respectively.
The ability of the Company to continue as a going concern is dependent upon
increasing sales and obtaining additional capital and financing. The Company is
currently seeking financing to allow it to begin its planned operations.
Employees
At December 31, 2000, the Company employed five (5) persons, two (2) full
time, two (2) part time and one (1) consultant. Only one (1) of the employees is
paid by the Company. None of these employees are represented by a labor union
for purposes of collective bargaining. The Company considers its relations with
its employees to be excellent. The Company plans to employ additional personnel
as needed upon product rollout to accommodate fulfillment needs.
Research and Development Plans
The Company believes that research and development is an important factor
in its future growth. The aquaculture industry is closely linked to
technological advances, which produce new ways of producing product for its use
by the public. Therefore, the Company must continually invest in the latest
technology to appeal to the public and to effectively compete with other
companies in the industry. No assurance can be made that the Company will have
sufficient funds to purchase technological advances as they become available.
Additionally, due to the rapid advance rate at which technology advances, the
Company's equipment and inventory may be outdated quickly, preventing or
impeding the Company from realizing its full potential profits.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), expansion
and growth of the Company's business and operations, and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future
11
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results or developments will conform with
the Company's expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company; changes in laws or regulation; and other factors, most of which are
beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending March 31, 2001, covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
12
Exhibit No. Description
- - ---------------------------------------------------------------------------------------------
3.(i).1 [1] Articles of Incorporation of Mariculture Systems, Inc. filed July 8, 1996.
3.(ii).1 [1] Bylaws of Mariculture Systems, Inc.
4.1 [1] Promissory Note in the amount of $18,000 bearing 10% interest in favor of
William Evans dated April 1996.
4.2 [1] Form of Private Placement Offering of 1,200,000 common shares at $0.01 per share.
4.3 [1] Promissory Note in the amount of $10,000 bearing 10% interest in favor of William
Evans dated January 1997.
4.4 [1] Promissory Note in the amount of $22,000 bearing 10% interest in favor of William
Evans dated April 1997.
4.5 [1] Form of Private Placement Offering of 985,000 common shares at $1.00 per share.
4.6 [1] Replaced by Exhibit 4.11.
4.7 [1] Promissory Note in the amount of $21,970 bearing 12% interest in favor of David
Meilahn dated March 2000.
4.8 [1] Promissory Note in the amount of $10,600 bearing 12% interest in favor of Elaine
Meilahn dated August 2000.
4.9 [2] Promissory Note in the amount of $5,000 bearing 12% interest in favor of
Elaine Meilahn dated December 1, 2000.
4.10 [4] Promissory Note in the amount of $5,000 bearing 12% interest in favor of
Elaine Meilahn dated February 8, 2001.
4.11 [4] Promissory Note in the amount of $12,400.97 bearing 12% interest in favor of Elaine
Meilahn dated April 3, 2001.
10.1 [1] Share Exchange Agreement dated August 1996.
10.2 [1] Agreement with Corporate Imaging dated July 1997.
10.3 [1] Agreement with Stephen Jaeb dated August 1997.
10.4 [1] Agreement with Reinforced Tank Products, Inc. dated April 1998.
10.5 [1] License Agreement with David Meilahn dated December 1998.
13
10.6 [1] Agreement with Sanford Tager dated September 1999.
10.7 [1] Employment Agreement with Rich Luce dated September 2000.
10.8 [2] Consulting Agreement with Websters' Inc. Dated December 1, 2000.
16.1 [3] Letter on change of certifying accountant pursuant to Regulation SK, Section
304(a)(3)2.
16.2 [3] Letter from Moss Adams LLP.
- - -----------------------
[1] Incorporated herein by reference to the Company's Registration Statement on
Form 10SB filed September 13, 2000.
[2] Incorporated herein by reference to the Company's first amended
Registration Statement on Form 10SB filed December 21, 2000.
[3] Incorporated herein by reference to the Company's Current Report on Form
8-K filed on February 26, 2001.
[4] Incorporated herein by reference to the Company's Annual Report on Form
10KSB for the period ended December 31, 2000 filed on April 13, 2001.
(* Filed herewith)
(b) A report on Form 8-K was filed on February 26, 2001 disclosing a
change in the Registrant's Certifying Accountant.
Item 2. Description of Exhibits
The documents required to be filed as Exhibits Number 2 and 6 and in
Part III of Form 1-A filed as part of this Registration Statement on Form 10-SB
are listed in Item 1 of this Part III above. No documents are required to be
filed as Exhibit Numbers 3 , 5 or 7 in Part III of Form 1-A and the reference to
such Exhibit Numbers is therefore omitted. The following additional exhibits are
filed hereto:
14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Mariculture Systems, Inc.
(Registrant)
Date: May 1, 2001 By: /s/ David Meilahn
--------------------------
David Meilahn
President, Secretary, Treasurer and Chairman
By: /s/ Richard Luce
--------------------------
Richard Luce
Vice President, Sales & Marketing
By: /s/ Robert Janeczko
--------------------------
Robert Janeczko
Director
By: /s/ Don Jonas
---------------------------
Don Jonas
Director
15