U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
|X| Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended JUNE 30, 2003
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File No. 0-30584
BLUE MOON GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 16-1636770
- ------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S.Employer Identification No.)
Incorporation or Organization)
4890 GARLAND BRANCH RD., DOVER, FL 33527
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(Address of Principal Executive Offices)
(813) 707-1535
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(Issuers Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Common Stock, $.0001 par value per share, 4,239,823 shares were issued
and 4,014,823 were outstanding at August 8, 2003
Transitional Small Business Disclosure Format (check one)
Yes [ ] No [X]
BLUE MOON GROUP, INC.
INDEX TO FORM 10-QSB
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet as of June 30, 2003 4
Statements of Operations 5
for the six months and three months ended June 30, 2003 and
June 30, 2002
Statements of Cash Flows 6
for the six months and three months ended June 30, 2003 and
June 30, 2002
Statements of Stockholders Equity 7
for the six months ended June 30, 2003 and June 30, 2002
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Controls and Procedures 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submissions of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
2
FORWARD LOOKING STATEMENTS
When used in this report, the words "may, will, expect, anticipate,
continue, estimate project or intend" and similar expressions identify
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E Securities Exchange Act of 1934 regarding events,
conditions and financial trends that may effect our future plan of operation,
business strategy, operating results and financial position. Current
stockholders and prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included
within the forward-looking statements as a result of various factors. Such
factors are described under the headings "Business-Certain Considerations,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the financial Statements and their associated notes.
Important factors that may cause actual results to differ from
projections include, for example:
o the success or failure of management's efforts to implement their
business strategy;
o our ability to protect our intellectual property rights;
o our ability to compete with major established companies;
o our ability to attract and retain qualified employees; and
o other risks which may be described in future filings with the SEC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
BLUE MOON GROUP, INC.
BALANCE SHEET
JUNE 30, 2003
(UNAUDITED)
June 30,
ASSETS 2003
------------
Current Assets
Accounts receivable - trade $ 28,000
Loans receivable - trade 409,624
Prepaid expenses 430,437
Marketable securities 7,800
Inventories 34,533
------------
Current Assets 910,394
Property and equipment, net 229,300
Intellectual assets, net 31,500
Goodwill 10,000
Music library (Notes 2 and 4) 6,105,005
Publishing & Copyrights 128,334
------------
Total Assets $ 7,414,533
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 316,214
Accrued payroll and expenses 201,344
Judgements payable 92,166
Notes payable 494,928
------------
Current Liabilities 1,104,652
------------
Total Liabilities 1,104,652
Stockholders' Equity
Preferred stock, .001 par value;
5,000,000 shares authorized, 0 issued and outstanding --
Common stock, .001 par value;
50,000,000 shares authorized, 4,059,823
and 3,834,823 issued and outstanding,
respectively (Note 7) 3,835
Additional paid-in capital 14,759,572
Retained earnings (8,453,526)
------------
Total Stockholders' Equity 6,309,881
------------
Total Liabilities and Stockholders' Equity $ 7,414,533
============
The accompanying notes are an integral part of these financial statements.
4
BLUE MOON GROUP, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
For the six months For the three months
ended June 30, ended June 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenue
Sales $ -- $ -- $ -- $ --
Forgiveness of debt 108,379 108,379
Cost of Sales -- -- -- --
----------- ----------- ----------- -----------
Gross profit 108,379 -- 108,379 --
Operating expenses
Administrative expenses 2,038,705 24,117 1,130,632 15,247
Salaries and payroll taxes 66,990 47,500 35,740 23,750
Professional and outside services 91,470 204,005 75,985 5,000
Amortization and depreciation 20,170 9,620 10,085 4,810
----------- ----------- ----------- -----------
Total Operating Expense 2,217,335 285,242 1,252,442 48,807
----------- ----------- ----------- -----------
Loss from operations (2,108,956) (285,242) (1,144,063) (48,807)
----------- ----------- ----------- -----------
Other expenses
Interest expense 26,747 24,060 13,010 13,856
Loss on disposal of property and equipment 108,166 -- 108,166 --
----------- ----------- ----------- -----------
Loss before income taxes (2,243,869) (309,302) (1,265,239) (62,663)
----------- ----------- ----------- -----------
Provision (benefit) of income taxes -- -- -- --
----------- ----------- ----------- -----------
Net loss $(2,243,869) $ (309,302) $(1,265,239) $ (62,663)
=========== =========== =========== ===========
Net loss per common share (Note 8) $ (0.63) $ (0.45) $ (0.33) $ (0.09)
=========== =========== =========== ===========
Weighted average shares outstanding 3,587,899 685,804 3,817,856 685,804
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
5
BLUE MOON GROUP, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
For the six months For the three months
ended June 30, ended June 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Cash Flows From Operating Activities
Net income (loss) $(2,243,869) $ (309,302) $(1,265,239) $ (62,663)
Adjustments to reconcile net loss to net
cash used by operating activities
Amortization and depreciation 20,170 9,620 10,085 4,810
Issuance of stock for services (196,308) 151,505 (196,308) --
----------- ----------- ----------- -----------
Changes in cash flows used by operating activities (2,420,007) (148,177) (1,451,462) (57,853)
Changes in operating assets and liabilities (net
of effects from acquisition of business):
Loans receivable - trade (226,000) -- (181,500) --
Prepaid expenses 868,250 -- 514,063 --
Accounts payable 77,712 (1,795) 15,315 --
Royalties payable -- -- -- (5,208)
Accrued expenses (17,305) (42,906) (62,295) 37,182
----------- ----------- ----------- -----------
Net cash flow used by operating activities (1,717,350) (192,878) (1,165,879) (25,879)
----------- ----------- ----------- -----------
Cash flows from investing activities
Acquisition of property, plant and equipment (483) (31,000) (483) --
----------- ----------- ----------- -----------
Net cash used by investing activities (483) (31,000) (483) --
----------- ----------- ----------- -----------
Cash flows from financing activities
Proceeds from issuance of debt 99,238 45,488 25,500 25,879
Stock sold for capital or assets 1,618,596 -- 1,140,862 --
Common stock issued for repayment of debt -- 178,390 -- --
----------- ----------- ----------- -----------
Net cash provided by financing activities 1,717,834 223,878 1,166,362 25,879
----------- ----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents -- -- -- --
Cash at beginning of period -- -- -- --
----------- ----------- ----------- -----------
Cash at end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
6
BLUE MOON GROUP, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)
Common Stock
------------------------- Paid in Accumulated
Shares Amount Capital Deficit Total
--------- ----------- ----------- ----------- -----------
Balance at December 31, 2001 629,955 $ 630 $10,733,542 $(2,150,080) $ 8,584,092
Issuance of Stock 98,143 $ 98 329,797 -- 329,895
Net Loss -- -- -- (309,302) (309,302)
--------- ----------- ----------- ----------- -----------
Balance at June 30, 2002 728,098 $ 728 $11,063,339 $(2,459,382) $ 8,604,685
========= =========== =========== =========== ===========
Balance at December 31, 2002 1,906,316 $ 1,906 $13,332,179 $(6,209,657) $ 7,124,428
Issuance of Stock 1,928,507 1,929 1,427,393 -- 1,429,322
Net Loss -- -- -- (2,243,869) (2,243,869)
--------- ----------- ----------- ----------- -----------
Balance at June 30, 2003 3,834,823 $ 3,835 $14,759,572 $(8,453,526) $ 6,309,881
========= =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
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BLUE MOON GROUP, INC.
Notes to Financial Statements
for the six months ended June 30, 2003 and 2002
Note 1 - Organization
In October 2002, the Company reincorporated in the State of Delaware and changed
its name to Blue Moon Group, Inc. The predecessor, Open Door Records, Inc.
("Open Door") was incorporated in the State of Rhode Island on November 20,
1997. In June 1999 Open Door merged with Genesis Media Group, Inc., a New Jersey
corporation. The surviving entity of this merger was renamed Open Door Online,
Inc., a New Jersey corporation. In October 2002, the Company acquired Nebulous
Records, Inc., a Florida corporation formed in February 2002.
Note 2 - Summary of Significant Accounting Policies
The summary of significant accounting policies of Blue Moon Group, Inc. is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management.
Management is responsible for their integrity. The accounting policies conform
to generally accepted accounting principles and have been consistently applied
in the preparation of the financial statements. The results of operations for
the interim periods shown in this report are not necessarily indicative of
results to be expected for the fiscal year ending December 31, 2003
Line of Business
- ----------------
Blue Moon Group, Inc. is an entity designed to provide traditional sales of
recorded music from artists who have contracted the Company to provide
distribution. The Company will also generate revenue from promotions, artist
recording sessions and the sales of other prerecorded music.
Revenue Recognition
- -------------------
Revenue is recognized when product is shipped with an offset for possible
returns. Additional revenue is recorded when recording or promotional contracts
are billed upon completion of the services.
Equipment and Depreciation
- ---------------------------
Depreciation has been provided on a straight-line basis for financial accounting
purposes using the straight-line method over the shorter of the asset's
estimated life or the lease term. The estimated useful lives of the assets are
as follows:
Record and production equipment 5-7 Years
Website development 5-7 Years
Leasehold improvements 3-10 Years
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BLUE MOON GROUP, Inc.
Notes to Financial Statements
for the six months ended June 30, 2003 and 2002
Note 2 - Summary of Significant Accounting Policies (continued)
Impairment
- ----------
The Company has adopted SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" which requires
that long-lived assets to be held and used be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.
In June 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets. This statement establishes accounting and reporting standards
for goodwill and intangibles for years commencing after December 15, 2001.
Whether already acquired or subsequently acquired after the effective date,
companies are required to identify intangibles with finite lives and those with
indefinite lives. Those intangibles with finite lives are to be amortized over
the estimated useful lives of the assets while those with indefinite lives are
not to be amortized. Each intangible or goodwill asset should be analyzed at
least annually for impairment where the carrying value is in excess of the fair
value of the intangibles and in excess of the implied fair value in the case of
goodwill assets. The asset's carrying value is to be reduced by a charge to
income if the fair value is lower than the carrying value. The Company has not
determined the effect of this new standard.
Master Music Library
- --------------------
The master music library consists of original and digitized masters of well
known artists. The Company has the right to produce, sell, distribute or
otherwise profit from its utilization of this library subject to industry
standard royalty fees to be paid to artists as copies of the product are sold or
distributed. The Company will amortize the library on a unit sold basis in
accordance with SFAS 50 that relates the capitalized costs to estimated net
revenue to be realized. When anticipated sales appear to be insufficient to
fully recover the basis, a provision against current operations will be made for
anticipated losses. To date the Company has not utilized the library nor
expensed any of the carrying value.
Comprehensive Net Loss
- ----------------------
There is no difference between the Company's net loss as reported for any of the
periods reported herein and the Company's comprehensive loss, as defined by the
Statement of Financial Accounting Standards No. 130.
Note 3 - Property and Equipment
Depreciation and amortization for the six months and three months ended June 30,
2003 and 2002 were $20,170 and $9,620 and $10,085 and $4,810, respectively.
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BLUE MOON GROUP, Inc.
Notes to Financial Statements
for the six months ended June 30, 2003and 2002
Note 3 - Property and Equipment (continued)
Property plant and equipment consist of the following:
June 30,
2003 2002
--------- ---------
Production equipment $ 216,000 $ 124,305
Office equipment, furniture and fixtures 37,276 10,376
--------- ---------
253,276 134,681
Less accumulated depreciation (23,976) (92,266)
--------- ---------
$ 229,300 $ 42,415
========= =========
Note 4 - Stock Transactions - Related Party
During 2002 and 2003, Mr. Muzio has been a lender of funds to BLUE MOON GROUP,
Inc. As of December 31, 2002 and June 30, 2003, the outstanding balances due him
are $48,007 and $172,354, including interest expense of $1,877 and $3,099
respectively. The interest rate is of 7% per annum.
Note 5 - Common Stock
The outstanding stock of the Company, as adjusted, was 4,059,823 shares and
728,098 shares at June 30, 2003 and 2002, respectively.
Note 6 - Earnings per Common Share
Earnings per share of common stock have been computed based on the weighted
average number of shares outstanding. The weighted average number of shares used
to compute the earnings per share at June 30, 2003 and 2002 was 3,587,899 and
685,804, respectively.
10
BLUE MOON GROUP, Inc.
Notes to Financial Statements
for the six months ended June 30, 2003 and 2002
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the three month's ended June 30, 2003 and June 30, 2002
SALES
No sales were recorded for the quarter ending at June 30, 2003. No
sales were reported in the quarterly period ended June 30, 2002.
COST OF SALES
Cost of Sales are normally primarily represented by costs for
recordings, promotions and CD fulfillment operations and royalties. No cost of
sales had been recorded for the quarters ended June 30, 2003 and 2002.
SALES AND MARKETING EXPENSE
Sales and marketing expense consists primarily of direct marketing
expenses, promotional activities, salaries and costs related to website
maintenance and development. We anticipate that overall sales and marketing
costs will increase significantly in the future; however, sales and marketing
expense as a percentage of net revenue may fluctuate depending on the timing of
new marketing programs and addition of sales and marketing personnel.
Expenses of $ 0 were incurred for the quarter ended June 30, 2003 and
2002. The lack of expenses is directly relational to the lack of available cash
for promotional expenses.
GENERAL AND ADMINISTRATIVE
General and administrative expense consists primarily of legal and
other administrative costs, fees for outside consultants, and other overhead.
General and administrative expenses were $1,130,632 for the quarter ended June
30, 2003, an increase of $1,115,385 from $15,247 for the quarter ended June 30,
2002. The increase is attributable to consulting fees of $1,133,980 and legal
fees that increased $59,485. The consulting fees were paid for new contracts to
produce music videos and for a music advisory board and additional activities in
the production of musical recordings.
DEPRECIATION EXPENSE
Depreciation and amortization expenses rose to $10,085 from $4,810 in
the quarters ended June 30, 2003 and June 30, 2002, respectively. The increase
is attributed to the addition of equipment from the Nebulous Records purchase
and is lessened by the sale of the Open Door Records equipment that occurred in
the fourth quarter of 2002.
11
INTEREST EXPENSE
Net interest expense for the quarter ended June 30, 2003 was $13,010.
Comparable interest costs for the corresponding quarter ended 2002 was $13,856.
This increase was caused by the increase in outstanding short-term debt that
occurred in fiscal 2003.
RESULTS OF OPERATIONS
For the six month's ended June 30, 2003 and June 30, 2002
SALES
No sales were recorded for the six months ending at June 30, 2003. No
sales were reported in the quarterly period ended June 30, 2002.
COST OF SALES
Cost of Sales are normally primarily represented by costs for
recordings, promotions and CD fulfillment operations and royalties. No cost of
sales had been recorded for the six months ended June 30, 2003 and 2002.
SALES AND MARKETING EXPENSE
Sales and marketing expense consists primarily of direct marketing
expenses, promotional activities, salaries and costs related to website
maintenance and development. We anticipate that overall sales and marketing
costs will increase significantly in the future; however, sales and marketing
expense as a percentage of net revenue may fluctuate depending on the timing of
new marketing programs and addition of sales and marketing personnel.
Expenses of $ 0 were incurred for the six months ended June 30, 2003
and 2002. The lack of expenses is directly relational to the lack of available
cash for promotional expenses.
GENERAL AND ADMINISTRATIVE
General and administrative expense consists primarily of salaries,
legal and other administrative costs, fees for outside consultants and other
overhead. General and administrative expenses were $2,038,705 for the six months
ended June 30, 2003, an increase of $2,014,588 from $24,117 for the quarter
ended June 30, 2002. The increase is attributable to consulting that rose by
$1,971,622 and legal fees that increased $67,970. The consulting fees were paid
for new contracts to produce music videos and for a music advisory board plus
the production costs for newly recorded music.
DEPRECIATION EXPENSE
Depreciation and amortization expenses rose to $20,170 from $9,620 in
the six months ended June 30, 2003 and June 30, 2002, respectively. The increase
is attributed to the addition of equipment from the Nebulous Records purchase
and is lessened by the sale of the Open Door Records equipment that occurred in
the fourth quarter of 2002.
12
INTEREST EXPENSE
Net interest expense for the quarter ended June 30, 2003 was $26,747.
Comparable interest costs for the corresponding six months ended 2002 was
$24,060. This increase was caused by the increase in outstanding short-term debt
that occurred in fiscal 2003
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2003 we had $0 cash. Sufficient cash to finance
operations for the short term is required. Historically we have financed our
operations with short-term convertible debt or through the issuance of equity in
the form of our common stock. During the current quarter and the six month
period ended June 30, 2003, we issued net new debt for cash of approximately
$25,500 and $99,238 respectively. Significant increases in capital will be
required to fund our aggressive business plan and support the manufacturing and
distribution requirements of our current artist distribution contracts. While
there is no assurance that we will be successful in raising the required capital
all indications through our current financing negotiations suggest that we will
receive substantial capital.
ACCOUNTS RECEIVABLE
As of June 30, 2003 we had no receivables from sales.
RECOUPABLE ARTIST ADVANCES
Our distribution agreements with artists require us to pay certain
costs up front for the artist. These costs, depending on the contract, may
include promotion, production, manufacturing, advertising, travel, etc. All of
these advances are to be received from the sales of the artist recordings before
any payment to the artist is made. In some instances the artist is to receive
50% of the net wholesale price we receive, in others only 25% goes to the
artist. We have no reason to believe that these recoupable costs will not be
received. In the event that the artist's music does not sell successfully to
recoup these costs within six months of the release of the recording we will
take a charge to earnings for these costs. This account contains four artists at
this time. At no time will the Company advance costs that exceed the amount
recoupable from the pre-orders plus $20,000. This method is in compliance with
FASB 50 paragraph 10 relating advances against future royalties.
OPERATIONS
BLUE MOON GROUP, Inc. has completed a total restructuring of its
operations and has changed its product and business mix.
FUTURE PLAN OF OPERATION
BLUE MOON GROUP, INC. has embarked on a search to find various
entertainment companies whose acquisition would be synergistic with current
operations. The signing of artists to recording and distribution contracts is a
key focus for the immediate revenue generating capacity of the Company. Six new
artists have begun recording for releases in the third quarter of 2003 and the
first quarter of 2004.
13
The company has been successful in settling old debts and certain
lawsuits. All outstanding legal issues between prior officers who had filed suit
two years ago have been settled. With the suits settled, new high quality
advisory personnel and the upcoming releases of products the company stands
poised to implement its business plan and provide its shareholders the
opportunity for a return on their investments.
ITEM 3. DISCLOSURE CONTROLS AND PROCEDURES
We have carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer (the
"CEO") and our Principal Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the "Act")) as of the end of the fiscal quarter covered by this report. Based
upon that evaluation, our CEO and Principal Financial Officer concluded that our
disclosure controls and procedures are effective in providing reasonable
assurance that (a) the information required to be disclosed by us in the reports
that we file or submit under the Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and (b) such information is accumulated and
communicated to our management, including our CEO and Principal Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
There has been no changes in our internal control over financial
reporting during the fiscal quarter covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved from time to time in litigation incidental to
its business. Management believes that the outcome of current litigation will
not have a material adverse effect upon the operations or financial condition of
the Company and will not disrupt the normal operations of the Company.
ITEM 2. CHANGES IN SECURITIES
During the quarter ended June 30, 2003 Blue Moon Group, Inc. issued a
net 70,800 restricted common shares for the purchase of services rendered. These
shares were issued with reliance on an exemption from registration requirements
provided in Section 4(2) of the Securities Act of 1933.
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
Exhibit 31.1 Certificate of Chief Executive Officer and
Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certificate of Chief Executive Officer and
Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BLUE MOON GROUP, INC.
---------------------
(Registrant)
/s/ Michael Muzio
Dated: August 19, 2003 -----------------
Michael Muzio
President
15