UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 2003
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from n/a to n/a
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000-32749
Commission file number
KIWI NETWORK SOLUTIONS INC. (FORMERLY KOALA INTERNATIONAL WIRELESS INC.)
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(Exact name of small business issuer as specified in its charter)
Nevada #76-0616468
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(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
2929 E. Commercial Blvd. Suite 610
Fort Lauderdale, FL 33308
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(Address of principal executive offices)
(954)771-5500
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(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 past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
1) Yes [X] No [ ] 2) Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date: As of August 16, 2004, the Issuer had
76,469,486 shares of common stock, par value $0.001, and no shares of preferred
stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format (Check one): Yes No [X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Consolidated Balance Sheets 4
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8
Plan of Operations 8
Liquidity and Capital Resources 8
Special Note Regarding Forward Looking Statements 8
ITEM 3. CONTROLS AND PROCEDURES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 9
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 5. OTHER INFORMATION 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
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The accompanying consolidated balance sheets of KIWI Network Solutions Inc.
(formerly Koala International Wireless Inc.) (a development stage company) at
December 31, 2003 and September 30, 2003, and the related consolidated
statements of operations and the consolidated statements of cash flows for the
three months ended December 31, 2003 and December 31, 2002 and for the period
August 25, 2000 (inception) to December 31, 2003, have been prepared by KIWI
Network Solutions Inc. 's management and they do not include all information and
notes to the consolidated financial statements necessary for a complete
presentation of the consolidated financial position, results of operations and
cash flows in conformity with accounting principles generally accepted in the
United States of America. In the opinion of management, all adjustments
considered necessary for a fair presentation of the consolidated results of
operations and consolidated financial position have been included and all such
adjustments are of a normal recurring nature.
Consolidated operating results for the quarter ended December 31, 2003 are not
necessarily indicative of the results that can be expected for the year ending
September 30, 2004.
KIWI Network Solutions Inc.
(formerly Koala International Wireless Inc.)
(a Development Stage Company)
Consolidated BALANCE SHEETS
As at December 31, 2003 and September 30, 2003 (Unaudited)
U.S. Dollars
December 31 September 30
2003 2003
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ASSETS
Current
Cash $ 48 60
Fixed assets, net of accumulated depreciation $21,309
(September 30, 2003 $20,351) 18,199 19,157
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Total Assets $18,247 $19,217
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LIABILITIES
Current
Accounts payable and accrued liabilities 63,817 82,623
Loan payable to a director 23,000 -
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86,817 82,623
STOCKHOLDERS' EQUITY
Common Stock
Authorized
500,000,000 shares of common stock with a par value of $0.001 each
100,000,000 shares of preferred stock with a par value of $0.001 each
Issued and outstanding
63,219,486 shares of common stock 63,219 51,419
(51,419,486 at September 30, 2003)
Additional paid in capital 7,845,485 6,339,254
Subscription receivable - 7,100
Other comprehensive income 4,851 4,851
Deficit accumulated during development stage of operations (7,982,125) (6,451,830)
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Total Stockholders' Equity (Deficit) (68,570) (63,406)
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Total Liabilities and Stockholders' Equity $18,247 $19,217
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The accompanying notes are an integral part of these consolidated financial statements.
KIWI Network Solutions Inc.
(formerly Koala International Wireless Inc.)
(a Development Stage Company)
Consolidated STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 2003 and 2002 and
the Period August 25, 2000 (Inception) to December 31, 2003 (Unaudited)
U.S. Dollars
August 25, 2000
(Inception) to
Three Months Three Months December 31
2003 2002 2003
------------ ------------ ---------------
Revenue $ - $ - $ -
Expenses
Website - - 74,999
Professional fees 11,016 5,659 226,841
Depreciation 958 1,940 21,309
Rent, office and administration 15,288 30,899 203,502
Consulting 420,000 15,000 4,402,550
Stock based compensation 960,000 - 1,174,660
Directors compensation - - 950,000
Marketing - - 193,410
Product development - - 400,496
Financing and due diligence - - 73,450
Write-off merger goodwill - - 38,013
Salaries - - 145,719
Investor relations - - 27,112
Travel and business development - - 50,564
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1,407,262 53,498 7,982,125
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Net income (loss) for period $(1,407,262) (53,498) $(7,982,125)
Net income (loss) per share $ (0.03) $ (0.00)
Weighted average number of shares outstanding 52,223,110 12,739,867
The accompanying notes are an integral part of these consolidated financial statements.
KIWI Network Solutions Inc.
(formerly Koala International Wireless Inc.)
(a Development Stage Company)
Consolidated STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 2003 and 2002 and
the Period August 25, 2000 (Inception) to December 31, 2003 (Unaudited)
U.S. Dollars
August 25, 2000
(Inception) to
Three Months Three Months December 31
2003 2002 2003
------------ ------------ ---------------
Operating Activities
Net income (loss) $(1,407,262) $(53,498) $(7,982,125)
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Adjustments to reconcile net income (loss) to net
cash used by operating activities
Depreciation 958 1,940 21,309
Salaries paid by share issuance 960,000 - 962,500
Consulting paid by share issuance 420,000 - 2,898,120
Directors paid by share issuance 0 - 950,000
Other expenses paid by share issuance - - 1,864,456
Changes in operating assets and liabilities (11,708) 37,119 1,116,740
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Net cash provided by (used by) operating activities (38,012) (14,439) (123,000)
Investing Activities
Fixed assets - - (39,508)
Financing Activities
Director Loan 23,000 0 23,000
Common stock issued for:
Cash 15,000 14,550 185,556
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38,000 14,550 208,556
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Inflow (outflow) of cash (12) 111 48
Cash, beginning of period 60 - -
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Cash, end of period $ 48 $ 111 $ 48
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Supplemental information
Interest paid $ 0 $ 0 $ 0
Shares issued to settle debts $ 0 $ 0 $ 926,555
Corporate income taxes paid $ 0 $ 0 $ 0
The accompanying notes are an integral part of these consolidated financial statements.
KIWI Network Solutions Inc.
(formerly Koala International Wireless Inc.)
(a Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended December 31, 2003
1. ORGANIZATION AND BASIS OF PRESENTATION
Urbanesq.com Inc. ("Urbanesq") was incorporated August 25, 2000 under the laws
of the Province of Ontario, Canada.
Effective October 18, 2001, Urbanesq completed a merger with Koala International
Wireless Inc. ("Koala", "the Company"), a public company incorporated in the
State of Nevada on August 18, 1999. This merger constituted a reverse takeover
of Urbanesq by Koala resulting in the period of operations being reported from
the commencement of operations of Urbanesq.
These financial statements reflect the acquisition applying reverse takeover
accounting whereby the legal parent (Koala) is considered to have been acquired
by the legal subsidiary (Urbanesq). Capital stock represents the authorized and
issued capital of the legal parent and the dollar amount is that of the legal
subsidiary, the ongoing operating company. The consolidated statements of
operations and deficit and cash flows represent the results of operations for
Urbanesq for the period from October 18, 2001 to December 31, 2003.
The Company changed its name to KIWI Network Solutions Inc. ("the Company")on
December 23, 2003.
All significant inter-company balances and transactions have been eliminated.
The Company's business plan is to continue development of the KEEWEE
communications device, for which the Company intends to subcontract the
production. The base product and the handheld communicator (PDA) have been
redefined. The Company intends to contract out the building of the prototype,
certification of the prototype and development of the manufacturing of the
prototype.
2. DEVELOPMENT STAGE COMPANY
Koala acquired a license to market and distribute a product in Maine, New
Hampshire and Vermont. This license was cancelled. On February 14, 2000, as a
replacement for this license, the Company was granted additional rights to
market and distribute vitamins, minerals, nutritional supplements and other
health and fitness products in Great Britain. The grantor of the license
offered these products for sale from various suppliers on their website. The
original license was granted to the Company by a partnership for consideration
of 2,000,000 common shares value at $2,000. These shares were paid evenly to
the ten partners. The replacement license was granted by the same partnership.
The general manager of that partnership was, at the time, the spouse of a former
director and officer of the Company. The value of $2,000 and other costs of
acquiring the license have been charged to operations. Subsequently, the
license was abandoned.
In a development stage company, management devotes most of its activities to
preparing the business for operations. Planned principal activities have not
yet begun. The ability of the Company to emerge from the development stage with
respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain profitable
operations. There is no guarantee that the Company will be able to raise any
equity financing or sell any of its products at a profit. There is, therefore,
doubt regarding the Company's ability to continue as a going concern.
3. BASIS OF ACCOUNTING PRESENTATION
These unaudited financial statements have been prepared by management on a going
concern basis in accordance with accounting principles generally accepted in the
United States of America for interim financial information, are condensed and do
not include all disclosures required for annual financial statements. This
presumes funds will be available to finance on-going development, operations and
capital expenditures and the realization of assets and the payment of
liabilities in the normal course of operations for the foreseeable future.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the Company's
audited financial statements filed as part of the Company's Form 10-SB and Form
10K-SB for the year ended September 30, 2003.
In the opinion of the Company's management, these financial statements reflect
all adjustments necessary to present fairly the Company's financial position at
December 31, 2003 and the results of its operations for the three months then
ended. The results of operations for the three months ended December 31, 2003
are not necessarily indicative of the results to be expected for the entire
fiscal year.
The Company has minimal capital resources presently available to meet
obligations which normally can be expected to be incurred by similar companies
and has accumulated deficit of $7,982,125. The Company is in the process of
negotiating a private placement to provide funds for the completion of the
development of the KEEWEE device. Once funding is acquired, and the device is
completed, the Company expects to generate revenues from the sale of the
device.
These factors raise substantial doubt about the Company's ability to continue as
a going concern and is dependent on its ability to obtain and maintain an
appropriate level of financing on a timely basis and to achieve sufficient cash
flows to cover obligations and expenses. The outcome of these matters cannot be
predicted. These financial statements do not give effect to any adjustments to
the amounts and classification of assets and liabilities which might be
necessary should the company be unable to continue as a going concern.
4. COMMON STOCK
Pursuant to a voluntary share exchange agreement dated October 17, 2001 and
effective October 18, 2001, the Company issued 6,500,000 shares of common stock
to acquire 100% of the outstanding share capital of Urbanesq.com, Inc., a
private Ontario, Canada company. Certain shareholders of the Company in turn
surrendered 7,500,000 shares of the Company's common stock to the Company,
resulting in 12,500,000 shares of common stock of the Company issued and
outstanding as of October 18, 2001. On completion of the acquisition,
Urbanesq.com, Inc. became a wholly-owned subsidiary of the Company. Urbanesq was
incorporated August 25, 2000, which became the effective date of inception of
Koala after the reverse takeover of Urbanesq.
During the quarter ended December 31, 2003, the Company issued 34,000,000 shares
of common stock to the President of the Company for services rendered, valued at
$3,400,000. Subsequently, on January 29, 2004, the Company cancelled the share
issuance, and did not record the transaction at December 31, 2003. During the
quarter ended December 31, 2003 the Company issued 3,000,000 shares (valued at
$300,000)in trust for the acquisitions of Dylan Morris Software Inc, IPBand, and
Digiplates Software Inc., 300,000 shares on the exercise of options for proceeds
of $15,000 to the Company, and 8,000,000 shares (valued at $960,000) for
consultants pursuant to the Company's S-8. The Company issued a further
3,500,000 shares (valued at $420,000) for consulting services. The Company
subsequently cancelled the 3,000,000 shares (valued at $300,000) issued and
therefore did not record the transaction at December 31, 2003.
Subsequent to December 31, 2003, the Company cancelled 2,000,000 shares valued
at $200,000 for services rendered. Because these shares were issued prior to
September 30, 2003, they will be recorded in the Company's financial statements
during the period in which they were cancelled.
Item 2. Management's Discussion and Analysis or Plan of Operation.
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The following discussion should be read in conjunction with the accompanying
unaudited interim consolidated financial statements.
Plan of Operations.
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The Company has not generated any revenues from operations since inception.
With the exception of the following, the Company has abandoned its previous
intended acquisitions and business strategies. In the Company's judgment, these
former projects did not fit in with the Company's new direction or were not
commercially feasible.
The Company has acquired specific assets and technologies from NoWire Telecom,
Inc., a wireless messaging company, incorporated in Cairo, Egypt. The assets
acquired include virtual carrier agreements with more than 125 international
telephone and data carriers to enable the delivery of premium data and Short
Messaging content and services to their customers, for the issuance of common
shares. Initially, the Company intended to acquire NoWire, but it was mutually
agreed to abandon that form of acquisition in favor of the Company buying only
certain assets of NoWire.
We are developing an International Mobile Virtual Network Operator (IMVNO)
platform to allow the delivery of voice, data and Short Messaging over multiple
networks. Concurrent with the IMVNO development, We are pursuing the development
of applicable devices to serve the network subscribers. The IMVNO strategy will
enable subscribers to access the Internet, play and store MP3, utilize existing
applications including calendaring, contact management systems, email and Short
Messaging and additional functionality, some not currently available in the
marketplace.
The Company's intended business following its acquisition of Urbanesq was
to produce and market a product called the Hipster and the subscription
services associated with that product. The Company has ceased to pursue this
business and instead now intends to launch a Windows based communication device
and associated services. The new device is being designed to access
information from the Internet, provide email service and other communication
functionality such as text messaging. The plan is to deliver multiple services,
some on a subscription basis, in a manner similar to the way a consumer
currently pays for a cellular telephone. The first market for the device and
services will be Europe followed by other GSM/GPRS markets. The base product and
the handheld communicator, the KEEWEE, a Personal Digital Assistant (PDA), have
been redefined. A contract to develop the newly defined device should be
finalized by the second quarter of 2004. The contract will include building the
prototype, certification of the prototype and development of the manufacturing
of the prototype.
No revenue was recorded for the three month period ended December 31, 2003 and
no revenue has been generated since inception.
Net loss for the three month period ended December 31, 2003 was $(1,407,262)
compared to a loss of $(53,498) for the three months ended December 31, 2002.
The expenditures reflected in the loss represent the Company's administrative
expenses, including maintenance of an office.
Liquidity and Capital Resources
- ----------------------------------
The Company has been able to pay its expenses and costs through the increase in
its accounts payable and by the issuance of common shares. As of December 31,
2003, the Company had a working capital deficiency of $68,570 (at September 30,
2003 $82,563). The Company needs to raise additional funds through the sale of
stock or borrowing just to maintain the corporate existence of the Company and
to maintain the quotation of the Company's common stock on the OTC Bulletin
Board. The Company may not be successful in its efforts to raise equity
financing and /or attain profitable operations. There is doubt regarding the
Company's ability to continue as a going concern.
Special Note Regarding Forward Looking Statements
- ------------------------------------------------------
Certain statements in this report and elsewhere (such as in other filings by the
company with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended to
identify these forward-looking statements. Actual results may materially differ
from any forward-looking statements. Factors that might cause or contribute to
such differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements, which may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Item 3. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on the
evaluation of the Company's disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of a
date within 90 days of the filing date of this Quarterly Report on Form 10-QSB,
our chief executive officer and chief financial officer have concluded that our
disclosure controls and procedures are designed to ensure that the information
we are required to disclose in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms and are operating in an effective manner.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their most recent evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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To the Company's knowledge, there are no lawsuits nor were any lawsuits
commenced against the Company during the quarter ended December 31, 2003, nor
did the Company commence any lawsuits during the same period.
Item 2. Changes in Securities and Use of Proceeds.
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Changes in Securities
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During the three months ended December 31, 2003 the Company issued 300,000
shares of common stock for cash of $15,000 pursuant to the exercising of stock
options and issued 45,500,000 shares of common stock for services provided to
the Company, as previously disclosed in the Company's 10-KSB for the year ended
2003. Subsequently, the Company cancelled 34,000,000 of those shares issued for
services and reversed the transaction from its December 31, 2003 quarterly
financial statements.
Use of Proceeds
- -----------------
Not applicable.
Item 3. Defaults Upon Senior Securities.
- ---------------------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- ----------------------------------------------------------------------
During the quarter, the Company increased its capitalization to 500,000,000
common shares and 100,000,000 preferred shares. As well, the Company changed its
name to KIWI Network Solutions Inc.
Item 5. Other Information.
- -----------------------------
None.
Item 6. Exhibits and Reports on form 8-K.
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Exhibits
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None
Reports on Form 8-K
- ----------------------
Form 8-K filed November 7, 2003
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
KIWI NETWORK SOLUTIONS INC.
By: /s/ Derek Pepler
------------------------
Derek Pepler, President
Director
Date: August 26, 2004
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 W.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Derek Pepler, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report on Form 10-QSB of KIWI Network Solutions Inc. for the three months
ended December 31, 2003 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that the information
contained in the Quarterly Report on Form 10-QSB fairly presents in all material
respects the financial condition and results of operations of KIWI
Network Solutions Inc.
By: /s/ Derek Pepler
------------------
Name: Derek Pepler
Title: Chief Executive Officer
Date: August 26, 2004
I, Derek Pepler, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report on Form 10-QSB of KIWI Network Solutions Inc. for the three months
ended December 31, 2003 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that the information
contained in the Quarterly Report on Form 10-QSB fairly presents in all material
respects the financial condition and results of operations of KIWI
Network Solutions Inc.
By: /s/ Derek Pepler
------------------
Name: Derek Pepler
Title: Chief Financial Officer
Date: August 26, 2004
302 CERTIFICATION
I, Derek Pepler, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of KIWI Network
Solutions 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 annual 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 registrant as
of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a - 14 and 15d - 14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls.
6. I have indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: August 26, 2004 /s/ Derek Pepler
-----------------
Derek Pepler, Chief Executive Officer
and Director
302 CERTIFICATION
I, Derek Pepler, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of KIWI Network
Solutions 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 quarterly 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 registrant as
of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a - 14 and 15d - 14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls.
6. I have indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: August 26, 2004 /s/ Derek Pepler
--------------------
Derek Pepler, Chief Financial
Officer and Director