UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended December 31, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File Number: 0-9083
Enercorp, Inc.
(Exact name of Registrant as specified in its Charter)
Colorado 84-0768802
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
32751 Middlebelt Road, Suite B
Farmington Hills, Michigan 48334
(Address of principal executive offices) (Zip Code)
(248) 851-5651
(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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Number of shares of common stock outstanding at February 18, 2004: 695,897
1 of 14
Enercorp, Inc.
Form 10-QSB Filing for the First Quarter Ended December 31, 2003
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Assets and Liabilities
December 31, 2003 (Unaudited) and June 30, 2003 3
Schedule of Investments December 31, 2003 (Unaudited)
And June 30, 2003 4-6
Statements of Operations (Unaudited) for the Three and Six
Months Ended December 31, 2003 and 2002 7
Statements of Cash Flows (Unaudited) for the Six
Months Ended December 31, 2003 and 2002 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3 Controls and Procedures. 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Exhibits and Reports on Form 8-K 12
Signature Page 13
Certification pursuant to 18 USC, Section 1350, as adopted
pursuant to Sections 302 and 906 of the Sarbanes-Oxley
Act of 2002 14-15
2 of 14
Enercorp, Inc.
Statements of Assets and Liabilities
December 31 June 30
2003(Unaudited) 2003
ASSETS
Investments, at fair value, cost of $1,231,638
And $1,231,638 at December 31,
2003 and June 30,2003 $ 1,027,016 $900,645
Cash 1,618 618
-----------------------
$ 1,028,634 $901,263
LIABILITIES AND NET ASSETS
Liabilities
Note payable-Related Party $ 50,650 $39,950
Note payable-Wen Group 30,000 30,000
Accounts payable and accrued liabilities 15,786 16,142
Interest Payable-related party 7,249 4,898
Accrued management fees-related party 65,000 50,000
Accrued salaries payable 145,000 120,000
---------------------
313,685 260,991
Net assets
Common stock, no par value: 10,000,000
shares authorized, 695,897 shares issued
and outstanding at December 31, 2003 and
June 30, 2003 1,888,251 1,888,251
Accumulated deficit (968,680) (916,985)
Unrealized net loss on investments, net of
deferred income taxes at December 31, and
June 30, 2003 (204,622) (330,994)
-----------------------
714,948 640,272
-----------------------
$ 1,028,634 $ 901,263
=======================
See notes to financial statements
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Enercorp, Inc.
Schedule of Investments
December 31, 2003(Unaudited)
Affiliated Description Expir. # Shares Share Cost Fair Mkt Net Fair
Companies Date Rest. Price Equity Value Discount Market
Value
Common Stocks-Public Market Method of Valuation
CompuSonics Video Corp - Digital Video Product & Web Site Dev.
1,751 0.055 96 96
10,000,000 0.055 106,477 550,000 (165,000) 385,000
Ajay Sports, Golf 294,118 0.006 600,000 1,765 1,765
16,667 0.006 37,500 100 100
Preferred Stocks-Public Market Method of Valuation
Ajay Sports, Golf 2,000 0.019 20,000 38 38
Common Stocks-Board Appraisal Method of Valuation
Pro Golf Intern'l Retail Golf Stores Franchisor
a & b 7,450 195,000 424,972 (84,994) 339,978
ProGolf.com, Web Sales of Inc. Golf Equipment
a & b 300,000 2.5 252,000 750,000 (450,000) 300,000
---------------------------------------------
Subtotal 1,210,977 1,726,971 (699,994) 1,026,977
Warrants and Stock Options-Board Appraisal Method of Valuation
CompuSonics Digital Video
Video Product
Corporation 300,000
Williams Manuf. Of Sensors &
Controls, Control Systems
Inc. 08/04/04 b 25,000
05/03/05 b 25,000
09/13/06 b 50,000
03/12/06 b 50,000
10/02/08 b 50,000
Unaffiliated Companies
Common Stocks-Public Market Method of Valuation
Vitro Diagnostics 300 .13 1,500 39 39
Proconnextions, Inc.-Sports Memor'blia a
191,610 19,161 -- --
-----------------------------------------------
Total All Companies $1,231,638 $1,727,010 (699,994) $1,027,016
===============================================
a No public market for this security
b Subject to Rule 144
See notes to financial statements
4 of 14
Enercorp, Inc.
Schedule of Investments
June 30, 2003
Affiliated Description No. of Share Cost Fair Mkt Net Fair
Companies Rest. Shares Price Equity Value Discount Mkt Value
Common Stocks-Public Market Method of Valuation
CompuSonics Video Corp Digital Video Product & Web
1,751 65 65
10,000,000 $0.037 106,477 550,000 (165,000) 385,000
Ajay Sports, Golf 294,118 $0.005 600,000 1,471 1,471
16,667 $0.005 37,500 83 83
Preferred Stocks-Public Market Method of Valuation
Ajay Sports, Golf 2,000 $0.019 20,000 38 38
Common Stocks-Board Appraisal Method of Valuation
Pro Golf Franchisor of Intern'l Retail Golf Stores
a & b 7,450 195,000 424,972 (84,994) 339,978
ProGolf.com, Web Sales of Inc. Golf Equipment
b 300,000 2.5 252,000 750,000 (450,000) 300,000
-----------------------------------------
Subtotal $1,210,977 1,546,629 (645,994) 900,634
Warrants and Stock Options-Board Appraisal Method of Valuation
CompuSonics Digital Video
Video Product
Corporation 300,000
Williams Manuf. Of Sensors &
Controls, Control Systems
Inc. 08/04/04 b 25,000
05/03/05 b 25,000
09/13/06 b 50,000
03/12/06 b 50,000
10/02/08 b 50,000
Unaffiliated Companies
Common Stocks-Public Market Method of Valuation
Vitro Diagnostics 300 $0.03 1,500 9 9
Proconnextions, Inc.-Sports Memor'blia
191,610 19,161 -- --
--------------------------------------------------
Total All Companies $1,231,638 $1,546,638 $(645,994) $900,643
==================================================
a No public market for this security
b Subject to Rule 144
See notes to financial statements
5 of 14
Enercorp, Inc.
Statements of Operations
(Unaudited)
For the three Months For Six Months
Ended Dec. 31 ended Dec.31.
2003 2002 2003 2002
REVENUES
Miscellaneous Income $-0- $-0- $-0- $-0-
---------------------------------
-0- -0- -0- -0-
EXPENSES
Officer salaries -0- 30,000 25,000 60,000
Legal, accounting and other professional
fees 4,943 9,118 7,994 10,832
Management fees related 7,500 7,500 15,000 15,000
Interest expense - related party 1,256 796 2,350 1,477
Other general and administrative expenses 177 222 1,350 495
----------------------------------
13,876 47,636 51,694 87,804
Net gain (loss) from operations
before taxes (13,876) (47,636) (51,694) (87,804)
Income taxes -0- -0- -0- -0-
-----------------------------------
Net gain (loss) from operations
after taxes (13,876) (47,636) (51,694) (87,804)
Net unrealized gain (loss) on investments
Before Taxes (59,180) 2,956 126,372 (309,311)
Income taxes -0- -0- -0- -0-
-----------------------------------
Net unrealized gain (loss) on
investment after taxes (59,180) 2,956 126,372 (309,311)
Increase (decrease) in net assets
resulting from operations $(73,058) $44,681 74,678 $(397,116)
======================================
Increase (decrease) in net assets
per share $ (0.10) $(0.06) $0.11 $ (0.57)
======================================
See notes to financial statements
6 of 14
Enercorp, Inc.
Statements of Cash Flows
(Unaudited)
For Six Months Ended December 31
2003 2002
Cash flows from operating activities
Increase (decrease) in net assets $ 74,678 $(397,116)
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation -0- -0-
Bad debt provision on notes receivable
and interest net of write offs -0- -0-
Gain on sale of investments -0- -0-
(Gain) Loss on sale of fixed assets -0- -0-
Unrealized (gain) loss on
Investments (126,372) 309,311
(Increase) Decrease in other assets -0- -0-
Increase (Decrease) in accounts payable
and accrued expenses 41,995 81,423
Increase (Decrease) in deferred taxes -0- -0-
----------------------------
Total adjustments (84,378) 390,734
----------------------------
Net cash (used) by operating activities (9,700) (6,381)
Cash flows from investing activities:
Purchase of investments -0- -0-
Net cash provided (used) by investing
Activities -0- -0-
Cash flows from financing activities:
Proceeds from notes payable 10,700 6,150
Cash used for financing activities -0- -0-
Net cash provided by financing
Activities 10,700 -0-
Increase (Decrease) in cash 1,000 (231)
----------------------------
Cash, beginning of period 618 1,123
----------------------------
Cash, end of period $ 1,618 $ 892
----------------------------
Supplemental disclosures of cash flow
information:
Interest paid $ -0- $ -0-
Taxes Paid $ -0- $ -0-
See notes to financial statements
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Notes to Financial Statements
Note 1. Financial Statements
The accompanying interim unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not include
all the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included, and the
disclosures are adequate to make the information presented not misleading.
Operating results for the three months ended December 31, 2003 are not
necessarily indicative of the results that may be expected for the year ending
June 30, 2004. These statements should be read in conjunction with the
financial statements and notes thereto included in the Annual 10-K Report
(filed with the Securities and Exchange Commission) for the year ended June 30,
2003
Note 2: Investments-related party
Investments consist of holdings of securities in publicly and privately held
companies. The Registrant holds its principal common stock investments in
CompuSonics Video Corporation (10,001,751 shares), Ajay Sports, Inc. (310,785
common and 2,000 preferred shares), ProGolf.com (300,000 common shares) and
Pro Golf International, Inc. (7,450 shares), and continues to hold 200,000
warrants in Williams Controls, Inc., which are fully vested at the time of
this filing.
CompuSonics Video Corporation "CPVD" is one of the biggest investees of the
Registrant. CPVD is a publicly held corporation, which specializes in
licensing its patented technology related to audio and video analog-to-digital
signal compression. CPVD is currently searching new business opportunities
in presenting into the NAFTA market TreeSoft software used in electrical
engineering. The Registrant owns 10,001,751 shares of CPVD, which were
trading at $0.055 per share at December 31, 2003. The Registrant is taking
a 30% discount from the total FMV of this investment, which reflects an
accurate representation of the fair value of the investment in the statement
of assets and liabilities.
One of the Registrant's investees is Ajay Sports, Inc (" Ajay"). Through its
operating subsidiaries, including Pro Golf, Ajay is a franchisor of retail
golf stores. The Registrant owns 310,785 shares of common stock of Ajay, which
were trading at $0.006 per share at December 31, 2003, and 2,000 shares of
preferred stock of Ajay valued at $0.019 per share at December 31, 2003.
8 of 14
One of the Registrant's other current investee is Pro Golf International, Inc.
(PGI) a majority-owned subsidiary of Ajay Sports, Inc., which was formed
during 1999, and owns 100 % of the issued and outstanding stock of Pro Golf
of America, Inc. (PGoA) and a majority of the stock of ProGolf.Com, Inc.
(PG.com).PGoA is the franchiser of Pro Golf Discount Retail Stores. Fair
Market Value of PGI investment was $424,972 at December 31, 2003.The
Registrant took a (20)% discount based on marketability, liquidity and the
progress of PGI and its wholly owned subsidiary Pro Golf of America, Inc
("PGoA"), reducing the Net Fair Value to $339,987.
ProGolf.Com, Inc. is a Company formed to help direct traffic to its franchise
stores and to sell golf equipment and other golf-related products and services
over the Internet. It is anticipated that traditional sales and distribution
methods will be enhanced by the ProGolf.com Internet site.
The Board of Directors has valued the investment for 300,000 shares of PG.Com
at $750,000
After careful deliberation, however, the Board of Directors has agreed that
Enercorp, Inc will continue to take a (60)% reduction in reserves, equaling
$450,000 discount. The Registrant is using the total value of $300,000
($1/share) for this position.
Note 3: Capital Stock Transactions
There were no capital stock transactions during quarter ended December 31, 2003
Note 4: Related party transactions
CompuSonics Video Corporation ("CPVD") is one of the largest investees of the
Registrant Enercorp, Inc. and also a related party. Thomas W. Itin, former
Chairman, President and CEO of the Registrant, holds the position of Chairman
and CEO in CPVD. Mr. Itin may be deemed a 17% beneficial ownership in CPVD.
Ajay Sports, Inc is a related party with the Registrant Enercorp, Inc.
Thomas W. Itin, former Chairman, President, and CEO of the Registrant, holds
the position of Chairman in Ajay Sports, Inc. Thomas W. Itin has a controlling
interest in Ajay Sports, Inc.
Pro Golf International, Inc ("PGI") is a related party with the Registrant
Enercorp, Inc. Thomas W. Itin former Chairman, President, and CEO of the
Registrant, holds the position of Chairman and CEO in PGI, a 91% owned
subsidiary of Ajay Sports, Inc. Thomas W. Itin has a controlling interest
by reason of attribution in Pro Golf International, Inc.
ProGolf.com, Inc is a related party with the Registrant Enercorp, Inc.
Thomas W. Itin, former Chairman, President, and CEO of the Registrant,
holds the position of Chairman and CEO in ProGolf.com, Inc, an 85% owned
subsidiary of Pro Golf International, Inc. Thomas W. Itin has a controlling
interest by reason of attribution in ProGolf.com, Inc.
9 of 14
The Registrant Enercorp, Inc. has a Note Payable of $50,650 to Dearborn Wheels,
Inc. The Note was issued on December 6, 2001 at 10% interest rate per annum,
and was renewed on September 10, 2003. The Note is due after 180 days.
The terms were approved by the independent directors of the Registrant
Enercorp, Inc. As of December 31, 2003, balance of interest payable on this
Note is $7,229.
The Registrant Enercorp, Inc. is accruing $2,500 per month in Management fees
due to Acrodyne Corporation. As of December 31, 2003, balance of accrued fees
due to Acrodyne Corporation was $ 65,000.
Note 5: Note payable Wen Group.
The Registrant has a Note Payable to Yueh Yun Chang (a member of the "Wen
Group") in the face amount of $ 30,000. The note bears no interest. No
principal payments on this Note have been made during fiscal year ending June
30, 2003. The note was due on June 12, 2002. The Registrant is past due on
repayment of this note.
Note 6: Board of Directors Changes.
Effective September 14, 2003 the following changes occurred in the Board of
Directors: Thomas W. Itin offered his resignation from all positions in the
Registrant. James C. Sargent was elected to the Board of Directors and to the
position of the Chairman and CEO of the Registrant. Jeffrey E. Rautio was
elected to the position of President and COO of the Registrant.
Item 2. Management's Discussion and Analysis of Financial Condition / Results
of Operations
Material Changes in Financial Condition:
The Registrant's liquidity is affected primarily by the business success,
securities prices and marketability of its investee companies and by the
amount and timing of new or incremental investments it makes, as well as the
availability of borrowing under its credit lines.
For the six-month period ended December 31, 2003, the investments
the investments value.increased with $126,372. This change is mainly due to
increase in market value of the common stock of CompuSonics Video
Corporation.The value of CompuSonics Video Corporation stock significantly
increased from $0.037 per share at June 30, 2003 to $0.055 per share at
September 30, and December 31, 2003. Total net fair market value of CompuSonics
Video common stock at December 31, 2003 was $385,096.
In addition balance of note payable to Dearborn Wheels, Inc increased from
$39,950 at June 30, 2003 to $50,650 at December 31, 2003. The borrowings were
primarily made to pay the professional accounting expenses. Interest payable
on the note to Dearborn Wheels, Inc increased from $,4,879 at Juen 30, 2003 to
$ 7,229 at December 31, 2003. Balance of management fees owed to Acrodyne
Corporation, a related party, increased from $50,000 at June 30, 2003 to
$65,000 at December 31, 2003. Salary owed to Mr. Itin, former President
of Enercorp, Inc totals $145,000 at December 31, 2003.
Net assets value increased with $74,678 from June 30, 2003 to
December 31, 2003.
10 of 14
Liquidity and Capital Resources.
The Registrant has an issued and outstanding promissory note of $30,000 to Wen
Group. There are no general terms as to how the $30,000 note will be paid or
how the Registrant intends to raise the funds for repayment or how to fund
current operations. The validity of the Wen Group claim is under review.
Currently the Registrant's liquidity resources are provided from the
borrowings from a third party, Dearborn Wheels, Inc. The face value of this
promissory note is $50,650 and total amount of interest accrued is $7,229. The
Registrant plans to rely on Dearborn Wheels, Inc liquidity advances in the
near future. Salary owed to Mr. Itin, former Chairman of the Registrant, and
management fees owed to Acrodyne, constitute a significant part of the
liabilities of the Registrant. Currently there are no general terms on how
these liabilities will be paid off. The Registrant's current plan includes
bringing in other investors, borrowing against collateral or selling a portion
of its holdings.
Material Changes in Results of Operations:
Three- months ended December 31, 2003.
The Registrant's revenues were $0 and $0 for the quarter ended December 31,
2003 and 2002, respectively.There was no sale of investment, no consulting
services provided to other parties, no dividend or interest income from other
parties for this quarter.
The Company recorded $0 of officer salaries for the quarter ended December
2003 compared to officer salaries of $30,000 for the quarter ended December 31,
2002. Salary is owed to Mr. Itin, the former CEO of the Company. Mr. Itin
resigned from all the positions held with Enercorp, Inc on September 14, 2003.
The Registrant's interest expenses were $ 1,256 and $ 796 for the quarter
ended Dec. 2003 and 2002 respectively. The change is due to the increase in
principal of a note payable to a related party, therefore there is an increase
in interest expense for this quarter compared to the previous quarter.
The Registrant recorded general and administrative expenses of $ 177 for
this quarter ended December 31, 2003 compared to general and administrative
expenses of $ 222 the quarter ended December 31, 2002. General and
administrative expenses include travel, telephone and other miscellaneous
expenses.
The Registrant recorded an unrealized loss on investments of $ 59,180 for
the quarter ended December 31, 2003 compared to a gain of $ 2,956 for the
quarter ended December 31, 2002. This is mainly due to the changes in fair
market value of the Registrant's investment in the publicly traded companies
CompuSonics Video Corporation and Ajay Sports, Inc. The Registrant is also
taking higher discount rates for this quarter for its investment in ProGolf
International, Inc., ProGolf.com, Inc. and CompuSonics Video Corporation.
The Board of Directors after careful deliberation decided that the new discount
rates are more reasonable and fair. (See schedule of investments, page 5)
11 of 14
Six- months ended December 31, 2003.
The Registrant's revenues were $0 and $0 for the six months period ended
December 31, 2003 and 2002, respectively.There was no sale of investment, no
consulting services provided to other parties, no dividend or interest income
from other parties for this period.
The Company recorded $25,000 of officer salaries for the six month period
ended December 2003 compared to officer salaries of $60,000 for the six month
period ended December 31, 2002. Salary is owed to Mr. Itin, former CEO of the
Company. Mr. Itin resigned from all the positions held with Enercorp, Inc, on
September 14, 2003.
The Registrant's interest expenses were $ 2,350 and $ 1,477 for the six months
period ended Dec. 2003 and 2002 respectively. The change is due to the increase
in principal of note payable to a related party, therefore there is a increase
in interest expense for this period compared to the previous one.
The Registrant recorded general and administrative expenses of $ 1,350 for the
six months period ended December 31, 2003 compared to general and
administrative expenses of $ 495 the six-month period ended December 31, 2002.
This change is due to the decrease in the company's activity related to such
expenses. General and administrative expenses include travel, telephone and
other miscellaneous expenses.
The Registrant recorded an unrealized gain on investments of $ 126,372 for
the six-month period ended December 31, 2003 compared to a loss of $ 309,311
for the period ended December 31, 2002. This is mainly due to the changes in
market value of the Registrant's investment in the publicly traded companies
CompuSonics Video Corporation and Ajay Sports, Inc. Also the Registrant is
taking higher discount rates for this quarter for its investment in ProGolf
International, Inc., ProGolf.com, Inc. and CompuSonics Video Corporation. The
Board of Directors after careful deliberation decided that the new discount
rates are more reasonable and fair. (See schedule of investment, page 5)
Item 3. Controls and Procedures.
a) Evaluation of Disclosure Controls and Procedures.
Within the 90 days prior to the date of this report, Enercorp, Inc. carried
out an evaluation under supervision of the Company's management of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14. The management concluded
that the internal controls and procedures are effective.
b) Changes in Internal Controls
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these internal controls
subsequent to the date of the most recent evaluation.
12 of 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Exhibits and Reports on Form 8-K
A) Exhibits
None
B) Form 8-K
None
Enercorp, Inc.
Form 10-QSB
For the Quarter Ended December 31, 2003
Signature Page
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.
Enercorp, Inc.
------------------
(Registrant)
By: /s/Jeffrey E. Rautio
Jeffrey E. Rautio
President
Date: February 19, 2004
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CERTIFICATION PURSUANT TO 18 USC, SECTION 1350, AS ADOPTED PURSUANT TO
SECTIONS 302 AND 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Enercorp, Inc. (the "Company")
on Form 10-QSB for the quarter ended December 31, 2003(the "Report"), as filed
with the Securities and Exchange Commission on the date hereof, we, Jeffrey
Rautio, President and Majlinda Xhuti, Chief Financial Officer of the Company,
certify to the best of our knowledge, pursuant to 18 USC 1350, as adopted
pursuant to Sec.302 and promulgated as 18 USC 1350 pursuant to Sec.906 of the
Sarbanes-Oxley Act of 2002, that:
1. The Report referenced above has been read and reviewed by the
undersigned.
2. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934.
3. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
4. Based upon our knowledge, the Report referenced above does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances under
which such statements were made, not misleading.
5. Based upon our knowledge, the financial statements, and other such
financial information included in the Report, fairly present in all material
respects the financial condition and results of operations of the Company as
of, and for, the periods presented in the Report.
6. We acknowledge that the Chief Executive Officer and Chief Financial Officer:
A. are responsible for establishing and maintaining "disclosure controls and
procedures" for the Company;
B. have designed such disclosure controls and procedures to ensure that
material information is made known to us, particularly during the period
in which the Report was being prepared;
C. have evaluated the effectiveness of the Company's disclosure controls and
procedures within 90 days of the date of the Report; and
D. have presented in the Report our conclusions about the effectiveness of the
disclosure controls and procedures based on the required evaluation.
E. have disclosed to the issuer's auditors and to the audit committee of the
Board of Directors of the Company (or persons fulfilling the
equivalent function):
14 of 14
(i)all significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data and have identified for
the Company's auditors any material weaknesses in internal controls;
and
(ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal controls;
and
F have indicated in the 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 their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
/s/Jeffrey Rautio
President
/s/ Majlinda Xhuti
Chief Financial Officer
Dated: February 19, 2004
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