HARP & EAGLE LTD - 10QSB - 20030107 - FINANCIAL_STATEMENTS
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
1
HARP & EAGLE, LTD. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
September 30, 2002 December 31, 2001
------------------ -----------------
ASSETS
Current assets
--------------
Cash and cash equivalents $ 185,289 $ 105,383
Accounts receivable 6,599 3,639
Due from related party 38,671 16,883
Inventory 12,089 11,925
Prepaid expenses 54,161 25,106
---------- ----------
Total current assets 296,809 162,936
---------- ----------
Property and equipment
----------------------
Land 204,309 218,750
Buildings and improvements 1,263,343 1,006,709
Furniture, fixtures and equipment 312,204 351,448
Construction in progress 30,000 -
---------- ----------
1,809,856 1,576,907
Less accumulated depreciation 209,949 160,255
---------- ----------
Net property and equipment 1,599,907 1,416,652
---------- ----------
Other assets
------------
Goodwill, net of accumulated amortization of $3,755 at
September 30, 2002 and $3,101 at December 31, 2001 14,337 14,337
Amounts receivable from shareholder 19,411 19,411
Costs of issuing stock - 201,396
Deferred tax asset 12,500 25,000
Investment in affiliated company 330,350 326,300
---------- ----------
Total other assets 376,598 586,444
---------- ----------
$2,273,314 $2,166,032
========== ==========
See notes to consolidated financial statements.
2
(Unaudited)
LIABILITIES AND September 30, 2002 December 31, 2001
--------------- ------------------ -----------------
STOCKHOLDERS' EQUITY
--------------------
Current liabilities
-------------------
Notes payable - related parties $ 25,000 $ 112,700
Notes payable - other 5,534 33,000
Current maturities of long-term debt 374,812 371,252
Accounts payable 15,028 152,910
Accrued liabilities:
Interest 19,400 17,135
Other 76,223 71,420
Customer deposits 203,684 123,134
----------- -----------
Total current liabilities 719,681 881,551
Long-term debt, less current maturities 528,359 508,102
----------- -----------
Total liabilities 1,248,040 1,389,653
----------- -----------
Commitments and contingencies
Stockholders' equity
--------------------
Preferred stock - -
Common stock 72 65
Additional paid-in capital 1,267,934 1,185,305
Retained earnings (accumulated deficit) (175,562) (212,556)
Foreign currency translation adjustment (67,170) (196,435)
----------- -----------
Total stockholders' equity 1,025,274 776,379
----------- -----------
$ 2,273,314 $ 2,166,032
=========== ===========
3
HARP & EAGLE, LTD. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited) (Unaudited)
Three months ended September 30, Nine months ended September 30,
2002 2001 2002 2001
---- ---- ---- ----
Sales $ 457,505 $ 406,949 $ 1,093,240 $ 1,085,108
Cost of sales 77,549 34,502 182,216 89,112
Operating expenses 362,691 338,652 820,250 900,993
----------- ----------- ----------- -----------
Income from operations 17,265 33,795 90,774 95,003
----------- ----------- ----------- -----------
Other income (expense)
Interest income 738 1,349 2,414 5,651
Interest expense (13,470) (19,403) (43,694) (53,730)
----------- ----------- ----------- -----------
Other expense, net (12,732) (18,054) (41,280) (48,079)
----------- ----------- ----------- -----------
Income before provision for income taxes 4,533 15,741 49,494 46,924
Income tax expense 1,000 8,915 12,500 9,312
----------- ----------- ----------- -----------
Net income $ 3,533 $ 6,826 $ 36,994 $ 37,612
=========== =========== =========== ===========
Net income per common share $ 0.00 $ 0.01 $ 0.05 $ 0.07
See notes to consolidated financial statements.
4
HARP & EAGLE, LTD. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
Common
Preferred Shares Common
Stock Outstanding Stock
----- ----------- -----
Balance December 31, 2001 $ -- 649,661 $ 65
Issuance of stock offering 68,105 7
Comprehensive income:
Net income -- -- --
Foreign currency translation adjustment -- -- --
------- ------- -------
Total comprehensive income
Balance September 30, 2002 $ -- 717,76 $ 72
======= ======= =======
Common stock - par value of $.0001; 10,000,000 shares authorized, 717,766 and
649,661 shares issued and outstanding at September 30, 2002 and December 31,
2001, respectively.
Preferred stock - 2,000,000 shares authorized, no shares have been issued.
(Unaudited)
Nine months ended September 30,
2002 2001
---- ----
Operating activities
--------------------
Net income $ 36,994 $ 37,612
Adjustments to reconcile net income to net
cash used by operating activities:
Amortization of goodwill -- 872
Depreciation 52,449 55,661
Deferred tax expense 12,500 9,312
Noncash compensation of officer -- 900
Decrease (increase) in:
Accounts receivable (2,960) 722
Inventory (164) (6,257)
Prepaid expenses (29,055) (27,324)
Increase (decrease) in:
Accounts payable (137,882) (10,602)
Accrued liabilities 7,068 1,441
Customer deposits 80,550 (106,787)
--------- ---------
Net cash used by
operating activities 19,500 (44,450)
--------- ---------
Investing activities
--------------------
Purchases of property and
equipment (64,553) (371,574)
Investment in unconsolidated subsidiary (4,050) --
Decrease in amounts due to/from
related parties (109,488) --
--------- ---------
Net cash used for investing
activities (178,091) (371,574)
--------- ---------
See notes to consolidated financial statements.
7
HARP & EAGLE, LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(Unaudited)
Nine months ended September 30,
2002 2001
---- ----
Financing activities
--------------------
Proceeds from long term debt $ -- $ 307,796
Retirement of long term debt (79,467) (40,000)
Issuance of common stock 344,442 --
Costs of issuing stock (60,410) (59,325)
--------- ---------
Net cash provided by financing activities 204,565 208,471
--------- ---------
Effect of exchange rate changes
on cash 33,932 (6,133)
--------- ---------
Cash and cash equivalents
-------------------------
Net increase (decrease) 79,906 (213,686)
Beginning of period 105,383 260,485
--------- ---------
End of period $ 185,289 $ 46,799
========= =========
Supplemental cash flow information
----------------------------------
Cash paid for interest $ 41,429 $ 48,955
Cash paid for taxes $ -- $ --
8
HARP & EAGLE, LTD. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 - Basis of presentation
In management's opinion, the financial information, which is unaudited, reflects
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of the financial information as of and for the three month
periods ended September 30, 2002 and 2001, in conformity with accounting
principles generally accepted in the United States of America. The financial
statements include the accounts of Harp & Eagle, Ltd. (Company), was formed in
September 1999 under the laws of the state of Wisconsin for the purpose of
acquiring all of the issued and outstanding common stock of Castledaly
Acquisition Corporation (Castledaly). In 2000, the Company acquired
approximately 63% of the outstanding common stock of Castledaly in a series of
transactions. The acquisition of Castledaly has been accounted for in a manner
similar to a pooling of interest since it was acquired from a company under
joint control and common management. In 2001, the Company acquired the remaining
37% ownership interest of Castledaly. Castledaly owns 100% of its subsidiary,
Castledaly Manor Limited (Manor), which owns and operates an Irish manor house
inn located in the village of Castledaly, Ireland. Operating results for the
three-month period ended September 30, 2002 are not necessarily indicative of
the results that may be expected for future periods.
The business of the Company, accounting policies followed, and other information
are contained in the notes to the consolidated financial statements for the
Company as of and for the years ended December 31, 2001 and 2000, filed as part
of the Company's annual report on Form 10-KSB. These consolidated financial
statements should be read in conjunction with the annual consolidated financial
statements.
In June 2001, the Financial Accounting Standards Board (FASB) issued two
Statements of Financial Accounting Standards, No. 141, Business Combinations
(SFAS No. 141), and No. 142, Goodwill and Other Intangible Assets (SFAS No.
142). SFAS No. 141 addresses financial accounting and reporting for business
combinations and supersedes APB Opinion No. 16, Business Combinations, and FASB
Statement No. 38, Accounting for Preacquisition Contingencies of Purchased
Enterprises. All business combinations in the scope of SFAS No. 141 are to be
accounted for using one method, the purchase method. The provisions of SFAS No.
141 apply to all business combinations initiated after June 30, 2001. Use of the
pooling-of-interest method for those business combinations is prohibited. The
Company adopted this statement effective July 1, 2001. The adoption of the
provisions of this statement did not have a material impact on the consolidated
financial statements of the Company.
SFAS No. 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB Opinion No. 17, Intangible
Assets. It addresses how intangible assets that are acquired individually or
with a group of other assets (but not those acquired in a business combination)
should be accounted for in financial statements upon their acquisition. SFAS No.
142 also addresses how goodwill and other intangible assets should be accounted
for after they have been initially recognized in the financial statements. Under
SFAS No. 142, goodwill and intangible assets that have indefinite useful lives
will not be amortized but rather will be tested at least annually for
impairment. Intangible assets that have finite useful lives will continue to be
amortized over their useful lives, but without the constraint of the 40-year
maximum life required by SFAS No. 142. The provisions of SFAS No. 142 are
required to be applied starting with fiscal years beginning after December 15,
2001. The Company adopted the provisions of SFAS No. 142 effective January 1,
2002. The adoption of the provisions of this statement did not have a material
impact on the consolidated financial statements of the Company.
In August, 2001, the FASB issued the Statement of Financial Accounting
Standards, No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS No. 144). The Statement supercedes FASB Statement 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of, and APB Opinion No. 30, Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS No. 144 also amends ARB No.
51,
9
Consolidated Financial Statements. SFAS No.144 establishes a single accounting
model, to dispose of by sale, for disposal of long-lived assets. The provisions
of this Statement are effective for fiscal years beginning after December 15,
2001. The Company adopted the provisions of SFAS No. 144 effective January 1,
2002. The adoption of the provisions of this statement did not have a material
impact on the consolidated financial statements of the Company.
Note 2 - Earnings per share
Earnings per share has been computed based on the weighted average shares
outstanding for the periods below:
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic income per common share:
Income available to common stockholders:
Three months ended September 30, 2002 $ 3,533 717,766 $ .00
------------ ============
Three months ended September 30, 2001 $ 6,826 649,661 $ .01
------------ ============
Nine months ended September 30, 2002 $ 36,994 691,495 $ .05
------------ ============
Nine months ended September 30, 2001 $ 37,612 532,332 $ .07
------------ ============
During December, 2000 the Company granted options to purchase approximately
33,332 shares of common stock to four individuals, all of whom are officers,
directors and/or employees of the Company. These options were granted pursuant
to a plan adopted by the board of directors. All of these options are
exercisable for a period of ten years, at the price of $3.00 per share; however,
such options will not become fully vested and exercisable until July 1, 2007.
The exercise price of these options was determined by the Company to reflect the
fair value of the common stock as of December 31, 2000. These options have been
cancelled.
Note 3 - Reclassification
For comparability, prior period figures have been reclassified, where
appropriate, to conform with the financial statement presentation used for the
third quarter 2002.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following commentary in conjunction with the financial
statements and related notes contained elsewhere in this report.
FORWARD-LOOKING STATEMENTS
Certain information in this report, including the following discussion, may
include forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
We intend the disclosure in these sections and throughout this report to be
covered by the safe harbor provisions for forward-looking statements. All
statements regarding our expected financial position and operating results,
business strategy, financing plans, and the outcome of any contingencies are
forward-looking statements. These statements can sometimes be identified by our
use of words such as "may", "believe", "plan", "will", "anticipate", "estimate",
"expect", "intend", and other phrases of similar meaning. Known and unknown
risks, uncertainties and other factors could cause the actual results to differ
materially from those contemplated by the statements. Forward-looking
information is based on various factors and was derived using numerous
assumptions.
BACKGROUND
Our Castledaly Manor inn and restaurant facility, located on 37 acres
outside of Athlone, in County Westmeath, Ireland, is housed in a renovated manor
house and stable blocks which were originally constructed as a working estate in
the early 18th Century. During 1997, a group of Wisconsin investors organized
Castledaly Acquisition Corporation which purchased one-half of the outstanding
"ordinary shares" of Castledaly Manor, Ltd., an Irish limited company; an Irish
entrepreneur owned the balance. Castledaly Manor, Ltd. owns 100% of the equity
in Castledaly Manor. An Irish limited company, which is comparable to a typical
business corporation in the United States, provides limited liability to its
shareholders; its equity shares, which are comparable to common stock, are
referred to as "ordinary shares."
During 1999, Castledaly Acquisition Corporation acquired 100% ownership of
Castledaly Manor, Ltd. During 2000 and 2001, Harp & Eagle acquired all of the
outstanding common stock of Castledaly Acquisition Corporation, thereby becoming
the sole owner of Castledaly Manor.
Originally, Castledaly Manor had 11 rooms available for rent. Early in
2001, it expanded by renovation of the stable blocks behind the manor house,
thereby adding an additional 12 guest rooms; with these additional rooms, the
inn now has 23 guest rooms available for rent. We opened the new rooms for
occupancy in April 2001.
RESULTS OF OPERATIONS
Sales and costs of sales
Sales increased in the third quarter of 2002 over the comparable period of
2001 from $406,949 to $457,505, an increase of $50,556, or 12.4%. We believe
that this increase in sales reflects an increase in our tour price as of April
1, 2002.
For the third quarter of 2002, we received approximately 56% of our sales
revenue from airline tickets, 33% from room rentals, and 11% from food and
beverage sales.
Cost of sales increased in the third quarter 2002 over the comparable
period of 2001 from $34,502 to $77,549, an increase of $43,047, or 124.8%, due
primarily to increased costs associated with the greater capacity of Castledaly
Manor, such as utilities, food/beverage and other expenses incurred to supply
and maintain the expanded facility.
11
Operating Expenses
Our operating expenses increased in the third quarter of 2002 from the
comparable period in 2001 by $24,039, or 7.1%, from $338,652 to $362,691,
principally reflecting normal and generally anticipated increases in the prices
of airline tickets and other goods/services required to support operations. For
the third quarter of 2002, 62% of our aggregate operating expenses were incurred
for airline tickets (which approximates our cost for such tickets), 27% for room
rentals, 9% for food and beverage sales, and 2% for other miscellaneous costs.
Commencing as of April 1, 2001, the rentable-room capacity of Castledaly Manor
more than doubled, as described above. However, the enlarged facility did not
require us to double related operating costs, predominantly due to certain
"economies of scale." The same number of employees as had been required to
operate the pre-expansion Castledaly Manor were able to operate and maintain the
enlarged facility in approximately the same amount of time at substantially
equal cost, and our expenses associated with the operation of 11 rooms,
principally wages of housekeeping personnel, did not increase materially when we
grew to 23 rooms, thereby offsetting to some extent the increased operating
expenses experienced in the other areas referred to above.
Net Income
Due to increased costs of sales and operating expenses, we reported net
income for the third quarter of 2002 of $3,533, compared to $6,826 for the
comparable period of 2001, a decrease of $3,293, or 93.2%, despite our increased
sales.
Changes in Assets and Liabilities
From December 31, 2001 to September 30, 2002, our total liabilities
decreased 10%, due principally to an increase in customer deposits from $123,134
at December 31, 2001 to $203,684 at September 30, 2002, an increase of $80,550,
or 65%. We believe that such increase in customer deposits was due to factors
described above, including our greater capacity at Castledaly Manor, the
increase in our room and tour charges and the tendancy of tour patrons to
postpone travel following the September 11 terrorist attack.
FINANCIAL CONDITION
Our principal source of liquidity from operations has been and remains cash
earnings from rental of hotel rooms, and food and liquor sales.
To provide additional liquidity, we have obtained a revolving term loan
credit facility from a U.S. commercial bank, under which we may borrow up to a
maximum of $350,000 at a rate of interest equal to the U.S. prime rate plus
0.5%. Pursuant to the current agreement, the lending commitment terminates April
30, 2003, and any loan balance outstanding shall be paid on that date; however,
we have not experienced difficulty in renewing and extending previous credit
agreements and anticipate that the current agreement will be extended on
acceptable terms. Amounts outstanding under such credit facility are guaranteed
by County Clare, Ltd., a related party, and by a stockholder of Harp & Eagle. As
of September 30, 2002, approximately $338,000 was outstanding under this credit
facility at the rate of 5.75% per annum, all of which we intend to repay with
proceeds of our ongoing initial public offering. Following any such repayment,
we may if we choose to do so, re-borrow up to $350,000 on the same terms
described above.
INFLATION AND OTHER FACTORS THAT MAY AFFECT FUTURE RESULTS.
We have not been affected by inflation in the past, and do not expect
inflation to have a significant effect on operations in the foreseeable future.
12
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
See Schedule A, attached.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
99.1 Certification 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.
(b) Reports on Form 8-k
No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements 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.
HARP & EAGLE, LTD.
Dated: January 6, 2003 By: /s/ CARY JAMES O'DWANNY
--------------------------------------------
Cary James O'Dwanny, President and Treasurer
(Principal Executive Officer
and
Principal Financial Officer)
13
CERTIFICATIONS
I, Cary James O'Dwanny, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Harp & Eagle,
Ltd.;
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 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; and
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: January 6, 2003
/S/ CARY JAMES O'DWANNY
---------------------------------------
Cary James O'Dwanny,
President (Chief Executive Officer)
and Treasurer (Chief Financial Officer)
14
SCHEDULE A
HARP & EAGLE, LTD.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
Pursuant to Securities Act Rule 463, the following information (as
identified in paragraphs (f)(2) through (f)(4) of Regulation S-B Item 701) is
provided concerning the initial public offering ("Offering") of its common
stock, par value $0.0001 per share ("Common Stock"), conducted by Harp & Eagle,
Ltd. ("Company"), pursuant to a registration statement on Form SB-2 under the
Securities Act of 1933 (File No. 333-55088), which initially became effective as
of December 11, 2001:
(f)(2) through (f)(4)(i): The Offering commenced as of December 11,
2001, and remained ongoing as of September 30, 2002.
(f)(4)(ii): As of September 30, 2002, the managing underwriter of the
Offering is J.E. Liss & Company, Inc. d/b/a Liss Financial Services, of
Milwaukee, Wisconsin.
(f)(4)(iii) through (f)(4)(iv): 1,000,000 shares of Common Stock were
registered on Form SB-2, all of which are included in the Offering; all
such shares were registered for the account of the Company; the
aggregate price of the Common Stock registered (calculated at $6.00 per
share, the initial public offering price) was $6,000,000; during the
period from December 11, 2001 through September 30, 2002, 68,105 shares
were sold in the Offering.
(f)(4)(v): From December 11, 2001 through September 30, 2002, the
Company incurred the following expenses in connection with the
Offering:
Underwriting commissions $ 35,350
Underwriters' expense allowances 8,838
Other expenses 103,980 *
---------------
Total expenses $ 148,168 *
===============
* Estimate
Approximately $30,500 of the above expenses consisted of fees and
expense reimbursements paid to Kranitz & Philipp, counsel to the
Company. Richard A. Kranitz, a partner in Kranitz & Philipp, is the
Secretary and a director of the Company. Apart from the foregoing, none
of the above expenses were paid, directly or indirectly, to directors
or officers of the Company, or to their affiliates, or to persons
owning ten percent or more of any class of equity securities of the
Company, or to affiliates of the Company.
(f)(4)(vi) through (f)(4)(vii): After deducting the total expenses
reported above, net proceeds of the Offering received by the Company
from December 11, 2001 through September 30, 2002 were $260,462. Of
such net proceeds, $120,700 was applied to debt reduction (including
$45,700 to affiliates of the Company), $50,000 was applied to the
purchase of real estate, and the balance was held in Company accounts
pending application. Apart from the $45,700 applied to repay
indebtedness to affiliates, no net proceeds were paid, directly or
indirectly, to directors or officers of the Company, or to their
affiliates, or to persons owning ten percent or more of any class of
equity securities of the Company, or to affiliates of the Company.
INDEX TO EXHIBITS
Exhibit
Number Description
99.1 Certification 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.
Exhibit Index
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Harp & Eagle, Ltd. ("Company")
on Form 10-QSB for the period ending September 30, 2002, as filed with the
Securities and Exchange Commission on September 4, 2002 ("Report"), I, Cary
James O'Dwanny, 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:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)),
except that such Report was not timely filed; 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/ CARY JAMES O'DWANNY
----------------------------
Cary James O'Dwanny
Chief Executive Officer and
Chief Financial Officer
January 6, 2003
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