Correspondence
Birch Branch, Inc.
March 13, 2007
Ms. Amanda Jaffe
U.S. Securities & Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549
RE: Birch Branch, Inc.
Dear Ms. Jaffe:
As we discussed on the telephone, I have sent to you via general correspondence
on Edgar, the amended September 30, 2006 10QSB for Birch Branch, Inc. This file
shows our proposed changes that address the comments in your letter of February
28, 2007. I have noted our changes in this letter as below:
1. Part I, Item 3 "CONTROLS AND PROCEDURES" - this disclosure was
unintentionally omitted from the earlier filing so the following has been
added:
The Company's management, including the president, chief financial officer and
vice president, has evaluated the effectiveness of the Company's disclosure
controls and procedures (as defined by Rules 13a-15 (e) of the Securities
Exchange Act of 1934) as of September 30, 2006. Their evaluation concluded
that(i) the disclosure controls and procedures are effective as of September 30,
2006 and provide reasonable assurance that material information relating to the
Company is made known to management including the president, chief financial
officer and vice president and;(ii) the financial statements, and other
financial information included in this Quarterly Report on Form 10-QSB, fairly
present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this
Quarterly Report on Form 10-QSB.
2. Exhibits - the certifications have been revised to conform exactly to the
presentation set forth in Item 601(b)(31) of Regulation SB. All statements
continue to be true however I have left the original signature dates unless
you need these to reflect today's date.
Amanda, please call me to discuss these changes at your earliest convenience. I
will be submitting separate transmittals for each reporting period.
Best Regards,
/s/ Bob Lazzeri
- ---------------
Bob Lazzeri
2560 W. Main Street, Suite 200 Littleton, CO 88120 ph 303-794-9450
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
Commission File Number: 000-50936
Birch Branch, Inc.
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-1124170
- ----------------------------- ---------------------------------
(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2525 Fifteenth Street, Ste 3H, Denver, CO 80211
----------------------------------------------------------
(Address of principal executive offices including zip code)
(303) 480-5037
--------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 September 30, 2006, the Registrant had 1,287,393 shares of common stock,
no par value per share, outstanding.
Transitional Small Business Disclosure Format (check one): Yes___ No X
INDEX
-----
Page
Number
------
Part I. Financial Information
Item I. Financial Statements
Balance Sheet as of September 30, 2006
(unaudited) and June 30, 2006 2
Statements of Operations, Three Months
Ended September 30, 2006 and 2005 (unaudited) 3
Statements of Cash Flows, Three Months
Ended September 30, 2006 and 2005 (unaudited) 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 7
Part II. Other Information 8
BIRCH BRANCH, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
September 30, June 30,
2006 2006
(Unaudited) (See Note 1)
------------- -------------
Current Assets
Cash $ 2,980 $ 2,980
------------- -------------
Total Current Assets 2,980 2,980
Real estate, land 55,595 55,595
Real estate, building, net of accumulated
depreciation of $10,214 and $7,660 at
September 30, 2006 and June 30, 2006 388,124 390,678
Furnishings, net of accumulated depreciation
of $1,724 and $1,262 at September 30, 2006
and June 30, 2006 7,885 7,839
------------- -------------
Total Assets $ 454,584 $ 457,091
============= =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable, related party 38,172 34,069
Accrued expenses 7,992 2,944
------------- -------------
Total Current Liabilities 46,164 37,013
Mortgage note payable, related party 430,000 430,000
Accrued interest payable, related party 34,227 25,557
------------- -------------
Total Liabilities 510,391 492,570
Stockholders' (Deficit):
Preferred Stock, no par value,
50,000,000 shares authorized,
none issued and outstanding -- --
Common Stock, no par value,
500,000,000 shares authorized
1,287,393 shares issued and
outstanding 65,613 65,613
Accumulated (deficit) (5,173) (5,173)
Accumulated (deficit) during development stage (116,247) (95,919)
------------- -------------
Total Stockholders' (Deficit) (55,807) (35,479)
------------- -------------
Total Liabilities and Stockholders' (Deficit) $ 454,584 $ 457,091
============= =============
The accompanying notes are an integral part of the financial statements.
2
BIRCH BRANCH, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Period
From July 1,
2002 (date of
commencement
of development
Three Months Ended stage) through
September 30, September 30, September 30,
2006 2005 2006
------------- ------------- --------------
Revenues $ -- $ -- $ --
------------- ------------- --------------
Expenses
Accounting and auditing 4,850 875 20,960
Depreciation 3,016 -- 11,938
Legal fees -- 1,494 26,313
Real estate taxes 697 335 8,033
Stock transfer fees 1,721 -- 5,573
Other 1,373 575 6,588
------------- ------------- --------------
11,657 3,279 79,405
------------- ------------- --------------
Net Operating (Loss) (11,657) (3,279) (79,405)
Other (Expense):
Interest expense (8,671) (2,615) (36,842)
------------- ------------- --------------
Net (Loss) $ (20,328) (5,894) (116,247)
------------- ------------- --------------
Per Share $ (.02) $ (.01) $ (.09)
============= ============= ==============
Weighted Average Number of Shares
Outstanding 1,287,393 1,287,393 1,287,393
============= ============= ==============
The accompanying notes are an integral part of the financial statements.
3
BIRCH BRANCH, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Period
From July 1,
2002 (date of
commencement
of development
Three Months Ended stage) through
September 30, September 30, September 30,
2006 2005 2006
------------- ------------- --------------
Cash Flows from Operating Activities:
Net (loss) $ (20,328) $ (5,894) $ (116,247)
Adjustment to reconcile net
(loss) to net cash provided
by operating activities:
Depreciation 3,016 -- 11,938
Increase (decrease) in accounts payable
and accrued expenses 13,209 (13,079) 28,516
------------- ------------- --------------
Net Cash (Used in) Operating Activities (4,103) (18,973) (75,793)
------------- ------------- --------------
Cash Flows from Investing Activities -- -- --
------------- ------------- --------------
Cash Flows from Financing Activities
Additional paid-in capital -- -- 2,424
Advances from related party 4,103 18,973 73,369
------------- ------------- --------------
Net Cash Provided by Investing Activities 4,103 18,973 75,793
------------- ------------- --------------
Increase (Decrease) in Cash -- -- --
Cash, Beginning of Period 2,980 2,980 2,980
------------- ------------- --------------
Cash, End of Period $ 2,980 $ 2,980 $ 2,980
============= ============= ==============
Interest Paid $ -- $ -- $ --
============= ============= ==============
Income Taxes Paid $ -- $ -- $ --
============= ============= ==============
Schedule of non-cash financing and
investing activities:
Construction in progress financed
by advances payable from related
party including accrued interest $ -- $ 12,680 $ 398,517
============= ============== =============
The accompanying notes are an integral part of the financial statements.
4
BIRCH BRANCH, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2006 (Unaudited)
(1) Unaudited Financial Statements
The balance sheet as of September 30, 2006, the statements of operations for the
three month periods ended September 30, 2006 and 2005 and the statements of cash
flows for the three month periods ended September 30, 2006 and 2005, have been
prepared by Birch Branch, Inc. (Company) without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures, normally included in the financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America, have been condensed or omitted as allowed by such rules and
regulations, and the Company believes that the disclosures are adequate to make
the information presented not misleading. The results of operations for the
three months ending September 30, 2006 are not necessarily indicative of results
expected for the full year ending June 30, 2007. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position at September 30, 2006 and for all periods presented, have
been made.
It is suggested that these statements be read in conjunction with the June 30,
2006 audited financial statements and the accompanying notes included in the
Company's Report on Form 10-KSB, filed with the Securities and Exchange
Commission.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplates continuation of the Company as a going concern. However, the
Company has no operating income to date, has working capital and stockholders'
deficits, and has recurring losses from operations. These matters raise
substantial doubt about the Company's ability to continue as a going concern. In
view of these matters, realization of certain of the assets in the accompanying
balance sheet is dependent upon the Company's ability to meet its financing
requirements, raise additional capital, and the success of its future
operations. The Company has been economically dependant on its President to fund
operations. In order to meet its liquidity needs during the next fiscal year,
the Company anticipates receiving additional financing from its President. There
is no assurance that the Company's President will fund the necessary operating
capital, or that revenues will commence sufficient to assure the eventual
profitability of the Company. Management believes that this plan provides an
opportunity for the Company to continue as a going concern.
(3) Related party transactions
The Company's President advanced funds plus accrued interest to the Company for
the construction in progress and operating expenses. The construction was
completed in September 2005, and the Company's President and the Company
converted $381,134 of the advances and $48,866 of the accrued interest to a
mortgage note payable totaling $430,000, collateralized by the land and building
owned by the Company. An additional $38,172 in advances is uncollateralized,
bears no interest and has no maturity date.
The mortgage loan bears simple interest at 8% per annum with the total note and
accrued interest due September 30, 2010. The Annual Percentage Rate (APR) is
approximately 6.85%. Construction note interest of $48,866 was capitalized
during the construction period. Immaterial real estate taxes on this property,
subject to the construction in progress, were expensed as incurred.
5
There were 1,325,000 shares of common stock outstanding at July 1, 2002. To
facilitate the one for one distribution, 37,607 shares were cancelled for no
consideration.
The Company uses the offices of its President for its minimal office facility
needs for no consideration. No provision for these costs has been provided since
it has been determined that they are immaterial.
(4) Agreement and Plan of Reorganization
On September 26, 2006, the Company entered into an Agreement and Plan of
Reorganization with Fluid Audio Networks, Inc. ("FAN") under which, following a
3.75 forward stock split of the outstanding stock of the Company, the Company
will issue 30,808,584 shares of its common stock to acquire all of the
outstanding common stock of FAN. Additionally, the Company will divest itself of
its nominal net real estate assets by conveying these assets to its President in
exchange for the assumption of all the parent company debt and cancellation of
50,000 (post split) shares of its common stock held by its President and
transferred to it. The Company's President will convey for cancellation an
additional 50,000 shares (post split) of the Company's common stock in exchange
for a payment of $500,000.
The Agreement is subject to certain significant contingencies which must be
completed by November 30, 2006 in order for the transaction to be closed.
6
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical facts are
forward-looking statements such as statements relating to future operating
results, existing and expected competition, financing and refinancing sources
and availability and plans for future development or expansion activities and
capital expenditures. Such forward-looking statements involve a number of risks
and uncertainties that may significantly affect our liquidity and results in the
future and, accordingly, actual results may differ materially from those
expressed in any forward-looking statements. Such risks and uncertainties
include, but are not limited to, those related to effects of competition,
leverage and debt service financing and refinancing efforts, general economic
conditions, changes in laws and regulations, and risks related to merger and
acquisition activities. The following discussion and analysis should be read in
conjunction with the financial statements and notes thereto appearing elsewhere
in this report.
Overview
The Company was organized on September 28, 1989 under the laws of the state of
Colorado. Until November 12, 2002, the Company was a wholly owned subsidiary of
Pride Holdings, Inc. Pride Holdings is a wholly-owned subsidiary of Pride, Inc.
(PRIDE). Pride, Inc. was a wholly-owned subsidiary of Prime Rate Income &
Dividend Enterprises, Inc. (PIDV). On November 12, 2002, the directors of PIDV
approved, subject to the effectiveness of a registration with the Securities and
Exchange Commission, the spin-off of PRIDE to the PIDV shareholders of record on
November 26, 2002 on a pro rata basis, exclusive of shares issued to U.S.
Medical Systems, Inc. (USMS) shareholders effective November 12, 2002. PIDV
entered into a share exchange agreement with USMS whereby USMS became a
wholly-owned subsidiary of PIDV. This business combination completed in
November, 2002, was accounted for as a reverse acquisition of PIDV since the
former controlling shareholders of USMS controlled PIDV after the transaction.
Since USMS's business is not related to the real estate and mortgage investment
business of PRIDE, the PIDV directors decided it was in the best interest of
PIDV and PRIDE and PIDV's shareholders to spin-off PRIDE. The conditions of the
business combination agreement with USMS stipulate that PRIDE would be spun-off
to PIDV shareholders. The shares of PRIDE are being held by Michael L.
Schumacher, President, for the benefit of PIDV shareholders, in escrow with
instructions to distribute the PRIDE shares once the PRIDE Form 10-SB is
effective with the Securities and Exchange Commission. Management of PRIDE
intends to continue operations of PRIDE in the same manner as prior to the
spin-off and does not anticipate any additional corporate transactions which
might impact the continuing interest of the shareholders.
Simultaneous with the spin-off of Pride, Inc., the directors of Pride and Pride
Holdings, Inc. determined that Birch Branch should also be distributed in the
same manner to the same qualified PIDV shareholders. Birch Branch is the owner
of five residential lots comprising a total of eight acres in Nebraska. Since
Birch Branch desired to develop this property and needed additional capital to
fund this development, it was determined that it was in the best interest of
Pride's shareholders to spin-off Birch Branch to the same PIDV qualified
shareholders.
Birch Branch owns real estate in Nebraska. At November 12, 2002, Birch Branch
had tentative plans to build a replica of a historic artist's studio (Studio) on
one of the Nebraska lots, but had not commenced construction at that time. The
tentative plans called for using the Studio as a private museum and as a bed and
breakfast type rental facility. Construction began on the Studio in 2003 and is
complete as of September 30, 2005. Since there are five lots included in this
property, the remaining four lots are being held as investments for potential
future development or sale.
Results of Operations
The Company generated no revenues during the quarter ended September 30, 2006,
and management does not anticipate any revenues until May 2007, due to the
seasonal nature of the business.
The Company has minimal capital.
At September 30, 2006, the Company had no material commitments for capital
expenditures related to furnishing the Studio.
ITEM 3. CONTROLS AND PROCEDURES
The Company's management, including the president, chief financial officer and
vice president, has evaluated the effectiveness of the Company's disclosure
controls and procedures (as defined by Rules 13a-15 (e) of the Securities
Exchange Act of 1934) as of September 30, 2006. Their evaluation concluded
that(i) the disclosure controls and procedures are effective as of September 30,
2006 and provide reasonable assurance that material information relating to the
Company is made known to management including the president, chief financial
officer and vice president and;(ii) the financial statements, and other
financial information included in this Quarterly Report on Form 10-QSB, fairly
present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this
Quarterly Report on Form 10-QSB.
7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
31.1 Certification of Chief Executive Officer Filed herewith
and Chief Financial Officer pursuant electronically
to Section 302 of the Sarbanes-Oxley
Act of 2002
31.2 Certification of Vice-President pursuant Filed herewith
to Section 302 of the Sarbanes-Oxley electronically
Act of 2002
32.1 Certification of Chief Executive Officer Filed herewith
and Chief Financial Officer pursuant electronically
to 18 U.S.C. Section 1350
32.2 Certification of Vice-President pursuant Filed herewith
to 18 U.S.C. Section 1350 electronically
(b) Reports on Form 8-K.
None
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this quarterly report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Birch Branch, Inc.
/s/ Michael Schumacher
- -----------------------------------------------------------------
Michael Schumacher, President, Treasurer, Chief Executive Officer
Chief Financial Officer and Director
Date: November 13, 2006
/s/ George A. Powell
- -----------------------------------------------------------------
George A. Powell, Vice-President, Secretary and Director
Date: November 13, 2006
9
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Schumacher, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Birch Branch, Inc.
(2) Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small business
issuer's fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect,
the small business issuer's internal control over financial reporting;
and
(5) The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: November 13, 2006
/s/ Michael Schumacher
- ----------------------------------------------
Michael Schumacher
President, Treasurer, Chief Executive Officer,
Chief Financial Officer and Director
10
EXHIBIT 31.2
CERTIFICATION OF VICE-PRESIDENT
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, George A. Powell, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Birch Branch, Inc.
(2) Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small business
issuer's fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect,
the small business issuer's internal control over financial reporting;
and
(5) The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: November 13, 2006
/s/ George A. Powell
- --------------------------------------
George A. Powell
Vice-President, Secretary and Director
11
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
BIRCH BRANCH, INC.
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Birch Branch, Inc. (the "Company") on
Form 10-QSB for the period ended September 30, 2006, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Michael
Schumacher, Chief Executive Officer and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d), as applicable, of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Michael Schumacher
- -----------------------------------------------
Michael Schumacher
President, Treasurer, Chief Executive Officer,
Chief Financial Officer and Director
November 13, 2006
12
EXHIBIT 32.2
CERTIFICATION OF VICE-PRESIDENT
BIRCH BRANCH, INC.
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Birch Branch, Inc. (the "Company") on
Form 10-QSB for the period ended September 30, 2006, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, George
Powell, Vice-President of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d), as applicable, of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ George A. Powell
- ---------------------------------------
George A. Powell
Vice-President, Secretary and Director
November 13, 2006
13