SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2002
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-22783
URBANI HOLDINGS, INC
(Exact Name of Registrant as Specified in its Charter)
Colorado 95-3966853
--------------------------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
20-24 40th Avenue, Long Island City, New York, 11101
(Address of Principal Executive Office) (Zip Code)
(718) 392-5050
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of November 11, 2002 was 30,558,753 shares.
URBANI HOLDINGS, INC.
INDEX
Page
Number
PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements
Balance Sheet - September 30, 2002....................................... 1
Statements of Operations - For the three and nine Months
Ended September 30, 2002 and 2001........................................ 2
Statements of Cash Flows - For the three and nine Months
Ended September 30, 2002 and 2001....................................... 3
Notes to Financial Statements............................................4-5
Item 2. Management's Discussion and Analysis or Plan of Operation........6-7
Item 3. Controls and Procedures...........................................7
PART II - OTHER INFORMATION
Item 1 Legal Proceedings................................................ 8
Item 2 Changes in Securities and Use of Proceeds........................ 8
Item 3 Defaults Upon Senior Securities.................................. 8
Item 4 Submission of Matters to a Vote of Security Holders.............. 8
Item 5 Other Information................................................ 8
Item 6 Exhibits and Reports on Form 8-K................................. 8
SIGNATURES............................................................... 9
(i)
URBANI HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 877
Accounts receivable, less allowance of $125,000 1,225,987
Stock subscription receivable 300,378
Inventories 4,630,793
Due from stockholder 85,805
Prepaid expenses and other current assets 126,027
----------
TOTAL CURRENT ASSETS 6,369,867
PROPERTY AND EQUIPMENT 243,905
INTANGIBLE AND OTHER ASSETS 251,041
----------
$ 6,864,813
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable - bank $ 3,068,337
Accounts payable and accrued expenses 1,906,889
----------
TOTAL CURRENT LIABILITIES 4,975,226
----------
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.01; 10,000,000 shares
authorized, none issued and outstanding -
Common stock, $0.001 par value; 100,000,000 shares
authorized, 23,292,206 shares issued and outstanding 23,293
Additional paid-in capital 2,670,326
Retained earnings (804,032)
----------
TOTAL STOCKHOLDERS' EQUITY 1,889,587
----------
$ 6,864,813
==========
See notes to consolidated financial statements
-1-
URBANI HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2002 2001 2002 2001
--------- ---------- --------- ----------
NET SALES $ 2,500,493 $ 2,353,345 $ 8,800,290 $ 8,653,899
COST OF SALES 1,796,210 1,759,143 6,050,360 6,820,141
--------- ---------- --------- ----------
GROSS PROFIT 704,283 594,202 2,749,930 1,833,758
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 670,861 670,861 2,529,033 1,724,372
STOCK BASED COMPENSATION 817,323 - 817,323 -
--------- ---------- --------- ----------
1,488,184 670,861 3,346,356 1,724,372
--------- ---------- --------- ----------
INCOME (LOSS) FROM OPERATIONS (783,901) (76,659) (596,426) 109,386
INTEREST EXPENSE, net 86,975 107,210 207,606 107,210
--------- ---------- --------- ----------
INCOME BEFORE INCOME TAXES (870,876) (183,869) (804,032) 2,176
PROVISION FOR INCOME TAXES (30,000) (64,354)(a) - 762
--------- ---------- --------- ----------
NET INCOME (LOSS) $ (840,876) $ (119,515) $ (804,032) $ 1,414
========= ========== ========= ==========
NET INCOME PER SHARE -
Basic and diluted $ (0.05) $ (0.01) $ (0.05) $ 0.01
========= ========== ========= ==========
AVERAGE SHARES OUTSTANDING -
Basic and diluted 17,130,177 10,125,000 15,810,059 10,125,000
========== ========== ========== ==========
(a)Pro forma provision for income taxes at 35 percent assumed tax rates, are
presented for comparative purposes only. The Company was an "S" Corp. during
2001 and accordingly paid no federal and NY state income taxes.
See notes to consolidated financial statements
-2-
URBANI HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
----------------------
2002 2001
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (804,032) $ 1,414
Adjustments to reconcile net income (loss) to net
cash provided by (used in)operating activities:
Depreciation and amortization 113,280 113,343
Stock based compensation 817,323 -
Changes in assets and liabilities:
Accounts receivable 1,072,736 1,683,978
Inventories (545,419) (385,801)
Prepaid expenses and other assets 36,973 88,738
Accounts payable and accrued expenses (811,760) (1,061,860)
------------ ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (120,899) 439,812
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures - (101,994)
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment from (loan to) stockholder 202,543 (104,279)
Decrease in bank loans (331,663) (200,000)
Repayment of equipment notes payable (27,097) (9,036)
Proceeds from sale of common stock 27,500 -
------------ ----------
NET CASH USED IN FINANCING ACTIVITIES (128,717) (313,315)
------------ ----------
NET INCREASE (DECREASE) IN CASH (249,616) 24,503
CASH - beginning of period 250,493 17,786
------------ ----------
CASH - end of period $ 877 $ 42,289
============ ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period:
Interest $ 207,642 $ 108,254
============ ==========
Income taxes $ 3,245 $ 12,850
============ ==========
See notes to consolidated financial statements.
-3-
URBANI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. REVERSE ACQUISITION
On March 15, 2002, pursuant to the agreement dated August 7, 2001, by
and among Sattel Global Networks, Inc., Urbani Acquisition Corp., a
wholly-owned subsidiary of Sattel Global Networks, Inc., and Rosario's
Epicureo, Ltd. d/b/a Urbani Truffles & Caviar, U.S.A., Urbani
Acquisition Corp. merged into Rosario's Epicureo, Ltd. In connection
with the agreement, the shares of common stock of Rosario's Epicure,
Ltd. were converted into 10,125,000 shares of common stock of Sattel
Global Networks, Inc. In connection with the transaction, Sattel
Global Networks, Inc. changed its name to Urbani Holdings, Inc.
Upon the closing of the merger, Sattel Global Networks, Inc. had
15,150,000 shares of common stock outstanding, together with warrants
to purchase 2,400,000 shares of common stock at an exercise price of
$1.50 per share. If the gross proceeds from the exercise of the
warrants is less than $500,000 within 270 days of the closing the
stockholders of Rosario's Epicureo, Ltd. shall be issued additional
shares. Under this agreement, an additional 2,395,570 shares were
issued during the three month period ended September 30, 2002.
The number of shares of common stock referred to above and to the
related financial statements included herein give effect to a 1 for
12 reverse stock split effective January 25, 2002.
For accounting purposes the acquisition has been treated as a
recapitalization of Rosario's Epicureo, Ltd. with such entity as the
acquirer (reverse acquisition). The historical financial statements
prior to March 15, 2002 are those of Rosario's Epicureo, Ltd.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for the interim financial information and pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC"). The
accompanying consolidated financial statements for the interim periods
are unaudited and reflect all adjustments (consisting only of normal
-4-
recurring adjustments) which are, in the opinion of management
necessary for a fair presentation of the financial position and
operating results for the periods presented. These financial statements
should be read in conjuction with the financial statements for the year
ended December 31, 2001 and notes thereto contained in the Report on
Form 10-KSB and Form 8-K of Urbani Holdings, Inc. (the "Company") as
filed with the Securities and Exchange Commission. The results of
operations for the three and nine months ended September 30, 2002 are
not necessarily indicative of the results for the full fiscal year
ending December 31, 2002.
The consolidated statements include the accounts of Urbani Holdings,
Inc. and its wholly owned subsidiaries. All significant inter-company
balances and transactions have been eliminated.
3. STOCK OPTION PLAN
The 2001 Plan provides for the grant to employees, officers, directors,
consultants and independent contractors of up to 750,000 non-qualified
stock options as well as for the grant of stock options to employees
that qualify as incentive stock options under Section 422 of the
Internal Revenue code of 1986 ("Code"). The purpose of the 2001 Plan is
to enable the Company to attract and retain qualified persons as
employees, officers and directors and others whose services are
required by the Company, and to motivate such persons by providing them
with an equity participation in the Company. As of September 30, 2002
no options had been granted.
4. TERMINATION OF "S CORP"
Effective January 1, 2002 Rosario's Epicureo, Ltd. and its shareholder
elected to terminate such entity's tax status and accordingly became
subject to Federal and New York State taxes on income.
5. STOCKHOLDERS' EQUITY
In August 2002, the Company issued 1,282,051 shares of its common stock
to one of its suppliers in exchange for the cancellation of $500,000 in
trade debt owed to such supplier. The shares were valued at $.39 per
share.
In August 2002, the Company entered into a consulting agreement with
Domenic Russi, a principal shareholder of the Company's major supplier
of mushrooms, under which Mr. Russi will receive 641,044 shares of the
Company's common stock. In connection with this issuance, the Company
recorded stock based compensation expense of $250,323 based on the fair
market value of the shares. The Company has the right to repurchase all
or a portion of the shares at a price of $.26 per share.
In September 2002, the Company agreed to sell up to 6,111,059 shares of
its common stock to Pacific Continental Securities Ltd. As of September
30, 2002, Pacific has purchased 2,480,255 shares and has paid the
Company $300,378 for such shares. In October 2002, Pacific purchased an
additional 893,391 shares for $96,122.
In August 2002, the Company sold 143,286 shares of its common stock to
various shareholders for a total of $27,500.
In August 2002, the Company issued 1,200,000 shares of its common stock
to a consultant. In connection with this issuance, the Company recorded
stock based compensation of $492,000 based on the fair market value of
the shares.
-5-
Item 2. Management's Discussion and Analysis or Plan of Operations
Based on industry reports, the specialty food industry is a $20 billion
a year industry, which has grown at an annual rate of 7% per year since 2000. We
believe that the industry is highly fragmented consisting of small and medium
sized companies selling a limited number of items and as a result, there is an
opportunity for consolidation. Our consolidation strategy is based on leveraging
our industry knowledge, experienced management team, and brand recognition to
acquire other specialty food distributors which market products that complement
our current product lines, serve new customers or add geographic coverage to our
existing operations. We intend to leverage our distribution infrastructure and
combined purchasing power to realize operating efficiencies and reduce
duplicative overhead.
Results of Operations
Nine months ended September 30, 2002 compared to Nine months ended
September 30, 2001
Net Sales
For the nine months ended September 30, 2001 net sales were $8,653,899
as compared to $8,800,290 for the nine months ended September 30, 2002. The
decrease is attributed to lower demand caused by general economic conditions.
Gross Profit
For the nine months ended September 30, 2001 gross profit was
$1,833,758, 21.2% as a percentage of net sales, as compared to $2,749,930, 31.2%
as a percentage of net sales for the nine months ended September 30, 2002.
Management attributes the increase in gross profit percentage primarily to an
increase in net sales of higher profit margin products.
Selling General and Administrative Expenses
For the nine months ended September 30, 2001, selling general and
administrative expenses were $1,724,372, 19.9% as a percentage of net sales, as
compared to $2,529,033, 28.7% as a percentage of net sales for the nine months
ended September 30, 2002. Management attributes the increase in selling general
and administrative expenses as a percentage of net sales to an increase in
organizational costs, professional fees associated with being a public entity
and an expansion of its sales efforts.
Stock Based Compensation
During the nine months ended September 30, 2002, the Company issued
shares of its common stock to consultants for services rendered. The shares were
recorded as compensation expense totaling $817,323.
Interest Expense
For the nine months ended September 30, 2001 and 2002, the Company had
interest expense of $107,210 and $207,606, respectively.
Net Loss
Net loss of $804,032 as compared to income of $1,414 for the nine
months ended September 30, 2001, was a result of the recognition of $817,323 in
stock based compensation for the current period with no recognition in the
comparable period of the prior year. Exclusive of this expense, net income would
have been $13,291 from operations.
Liquidity and Capital Resources
The Company has funded its requirements for working capital primarily
through the sale of its products and borrowings from financial institutions. As
of September 30, 2002, the Company had working capital of $1,394,641.
As of September 30, 2002, the Company had advanced the sum of $85,805
to Rosario Safina, its chairman and chief executive officer. The loan is payable
upon demand and bears interest at the rate of 6.24% per annum.
-6-
The Company has a $3,068,337 secured credit facility out of a $3.6
million facility with HSBC Bank which provides for short-term loans, banker's
acceptances, and letters of credit, which letters of credit and acceptances are
issued in connection with the purchases of inventories. Advances for direct
loans, banker's acceptances and letters of credit are based on a monthly
borrowing base of up to 80% of eligible accounts receivable and up to 40% of
eligible inventory. The loan is secured by all of the Company's assets and the
pledge of certain assets of Rosario Safina valued at $925,000. The facility
contains certain reporting and other conditions, and financial covenants. In
addition, Rosario Safina has personally guaranteed the loan.
For the nine months ended September 30, 2002, net cash used in
operating activities was $120,899 consisting of decreases in accounts payable of
$811,760 and an increase in inventories of $545,419 offset by depreciation and
amortization of $113,280, decreases in accounts receivable of $1,072,736 and
decreases in prepaid and other assets of $36,973.
For the nine months ended September 30, 2002, net cash used in financing
activities was $128,717 which was attributable to a repayment of a stockholder
in the amount of $202,543 and a decrease in bank loans of $331,663.
Although the Company has no material commitments for capital
expenditures, it anticipates an increase in its capital expenditures consistent
with anticipated growth in operations, infrastructure and personnel.
The Company's capital requirements depend on numerous factors,
including, market acceptance of our products, the resources we devote to
marketing and selling our services and our brand promotions, capital
expenditures and other factors. We believe that our current cash will be
sufficient to meet our anticipated needs for working capital and capital
expenditures for the next 12 months. However, if cash generated from operations
is insufficient to satisfy our liquidity requirements, we may seek to sell
additional equity or debt securities. The sale of additional equity or
convertible debt securities could result in additional dilution to our
stockholders. There can be no assurance that financing will be available in
amounts or on terms acceptable to us, if at all.
In exchange for Mr. Safina's guarantee of a loan in the amount of
$3,600,000, on October 3, 2002, we issued 3,500,000 shares of our common stock
to Mr. Safina in consideration for such guarantee.
In August, 2002, one of our suppliers converted $500,000 in trade debt
owed to it into 1,282,051 shares of the Company's common stock in full
satisfaction of such debt.
In September, 2002, the Company agreed to sell up to 6,111,059 shares
of its common stock to Pacific Continental Securities (UK) Ltd. ("Pacific"). As
of September 30, 2002, Pacific has purchased an aggregate of 2,480,255 shares
and has paid the Company $300,378 for such shares. The shares were sold to
Pacific pursuant to Section 4(2) and Regulation S of the Securities Act of 1933,
as amended.
Seasonality
The Company is seasonal. Its sales are typically strongest commencing
in September and continuing through December. If sales were to be
substantially below seasonal norms, then our profitability would be adversely
affected.
Item 3. Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer have evaluated
the Company's disclosure controls and procedures (as such term is defined in
Rule 13a-14 (c) under the Exchange Act) as of a date within 90 days of the date
of filing of this Form 10-QSB. Based upon such evaluation, the Company's Chief
Executive Officer and Chief Financial Officer have concluded that such controls
and procedures are effective to ensure that the information required to be
disclosed by the Company in the reports it files under the Exchange Act is
gathered, analyzed and disclosed with adequate timeliness. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to the date of the
evaluation described above.
-7-
PART II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
In September, 2002, the Company agreed to sell up to 6,111,059 shares of
its common stock to Pacific Continental Securities (UK) Ltd. ("Pacific"). At
September 30, 2002, Pacific has purchased an aggregate of 2,480,255 shares and
has paid the Company $300,378 for such shares. The shares were sold to Pacific
pursuant to Section 4(2) and Regulation S of the Securities Act of 1933, as
amended.
On August 21, 2002, the Company agreed to issue 1,282,051 shares of its
common stock to one of its suppliers in exchange for the cancellation of
$500,000 in trade debt owed to such supplier. The shares of common stock were
issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.
On August 20, 2002, the Company issued 641,044 shares in connection
with a consulting agreement with Domenic Russi, a principal shareholder of the
Company's major supplier of mushrooms. Pursuant to the consulting agreement, Mr.
Russi will assist the Company in procuring various types of wild mushrooms, as
well as to provide period information on market conditions, product supply,
competition and sales figures for European use, supply and consumption. Mr.
Russi will also provide the Company with his knowledge of the processing,
packaging and value added products for mushrooms, truffles in jars, as well as
dried, frozen and canned truffles. This agreement is for a period of three years
and the Company has the right to repurchase, at its sole discretion, all or a
portion of the shares issued to Mr. Russi pursuant to this agreement at a
repurchase price of $0.26 per share, during the term of this agreement.
On October 1, 2002, the Company entered into an investment banking
agreement with Josephberg Gross & Co., Inc. ("JGC"), pursuant to which the
Company agreed to issue to JGC 50,000 shares of its common stock as an
engagement fee. Pursuant to the agreement, JGC will assist and advise the
Company with respect to its financing requirements, including debt or equity,
letter of lines of credit, lease financing or other types of financial
transactions, as well as with respect to any potential mergers and/or
acquisitions.
In August 2002, the Company issued 1,200,000 shares of its common stock
to a consultant. In connection with this issuance, the Company recorded stock
based compensation of $492,000 based on the fair market value of the shares.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits required by item 601 of Regulation S-B
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
(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 report to be signed on its
behalf by the undersigned, thereunto duly authorized.
URBANI HOLDINGS, INC.
Dated: November 19, 2002 By: /s/ Rosario Safina
---------------------------
Rosario Safina
President
-9-
Certification
I, Rosario Safina, certify that:
1.I have reviewed this quarterly report on Form 10-QSB of Urbani Holdings, Inc.;
2.Based on my knowledge, this quarterly 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 quarterly 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.The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we 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.The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
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.The registrant's other certifying officers and I have indicated in this
quarterly report whether or not 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: November 19, 2002 By:/s/Rosario Safina
----------------
Rosario Safina
President
-10-
Certification
I, Marvin Jacobs, certify that:
1.I have reviewed this quarterly report on Form 10-QSB of Urbani Holdings, Inc.;
2.Based on my knowledge, this quarterly 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 quarterly 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.The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we 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.The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
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.The registrant's other certifying officers and I have indicated in this
quarterly report whether or not 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: November 19, 2002 By:/s/Marvin Jacobs
----------------
Marvin Jacobs
Chief Financial Officer
-11-