UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED June 30, 2003 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 333-88480 PRIME RESOURCE, INC. -------------------- (Exact name of registrant as specified in its charter) Utah 04-3648721 - ------------------------------- ----------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1245 East Brickyard Road, Suite 590 Salt Lake City, Utah 84106 ---------------------------- (Address of principal executive officers) (801) 433-2000 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes No Not Applicable -------------- APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock: 2,950,000 shares issued as of August 13, 2003, No Par Value. Authorized 50,000,000 common voting shares. INDEX Prime Resource, Inc. For The Quarter Ending June 30, 2003 Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheet - June 30, 2003 (Unaudited). Consolidated Statements of Operations (Unaudited) - For the three months and six months ended June 30, 2003 and for the three months and six months ended June 30, 2002. Consolidated Statements of Cash Flows (Unaudited) - For the six months ended June 30, 2003, and for the six months ended June 30, 2002. Notes to Consolidated Financial Statements (Unaudited) - June 30, 2003. Item 2. Management's Discussion and Analysis o Financial Condition or Plan of Operation. Controls and Procedures Part II. Other Information Item 2. Changes in Securities and Use of Proceeds Item 5. Other Matters Item 6. Exhibits and Reports on Form 8-K Signatures Certifications Part I - Financial Information Item 1. Financial Statements PRIME RESOURCE, INC. AND SUBSIDIARIES (Formerly Prime Resource, LLC and Subsidiaries) CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2003
Assets Current Assets: Cash and cash equivalents $ 698,399 Accounts receivable 436,121 --------------- Total current assets 1,134,520 Fixed Assets: Furniture and fixtures 123,963 Office equipment 33,365 Computer equipment 44,025 Software 18,914 Vehicles 110,591 --------------- Total fixed assets 330,858 Less accumulated depreciation (161,824) --------------- Net fixed assets 169,034 Advances and notes receivable from related parties 117,368 Other assets 35,503 --------------- Total assets $ 1,456,425 =============== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 17,533 Accrued expenses 273,134 Current portion of notes payable, related parties 87,149 --------------- Total current liabilities 377,816 Deferred income taxes 25,138 Notes payable to related party, less current portion 34,502 Common stock, no par value; authorized 50,000,000 shares; issued and outstanding 2,950,000 shares 750,000 Additional paid-in capital 197,763 Retained earnings 71,206 --------------- 1,018,969 --------------- Total liabilities and stockholders' equity $ 1,456,425 ===============
See notes to consolidated financial statements. PRIME RESOURCE, INC. AND SUBSIDIARIES (Formerly Prime Resource, LLC and Subsidiaries) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six months ended June 30, Three months ended June 30, 2003 2002 2003 2002 -------------- ------------- ------------- ------------- Net Revenues Commissions $ 1,647,232 $ 864,225 $ 827,286 $ 429,373 Investment and business advisory fees 159,199 252,742 72,814 162,096 -------------- ------------- ------------- ------------- Total net revenues 1,806,431 1,116,967 900,100 591,469 Operating Expenses Commissions 690,474 283,839 443,011 152,787 Compensation and benefits 571,012 688,069 292,248 304,629 General and administrative 265,528 163,028 147,426 48,228 Occupancy and equipment 57,859 52,205 28,489 26,480 Depreciation and amortization 23,717 23,172 12,329 11,007 -------------- ------------- ------------- ------------- Total operating expenses 1,608,590 1,210,313 923,503 543,131 -------------- ------------- ------------- ------------- Income (loss) from operations 197,841 (93,346) (23,403) 48,338 Interest and dividend income 1,068 7,398 808 5,453 Interest expense (2,327) (1,746) (1,305) (1,746) Other income (expense) (15,024) - (4,696) - -------------- ------------- ------------- ------------- Total other income (expense) (16,283) 5,652 (5,193) 3,707 Net income (loss) before income taxes 181,558 (87,694) (28,596) 52,045 -------------- ------------- ------------- ------------- Income tax expense (benefit) 102,652 19,801 18,957 19,801 -------------- ------------- ------------- ------------- Net income (loss) $ 78,906 $ (107,495) $ (47,553) $ 32,244 ============== ============= ============== ============= Earnings per weighted average shares outstanding $ 0.03 $ (0.08) $ (0.02) $ 0.01 ============== ============= ============== ============= Weighted shares outstanding to calculate earnings per share 2,862,155 1,345,856 2,923,626 2,676,923
See notes to consolidated financial statements. PRIME RESOURCE, INC. AND SUBSIDIARIES (Formerly Prime Resource, LLC and Subsidiaries) CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY (Unaudited) January 1, 2002 to June 30, 2003
Members' Common Stock Paid-in Retained Equity Shares Amount Capital Deficit -------------- ----------- ----------- ----------- ------------ Balance, January 1, 2002 $ 220,338 - $ - $ - $ - Net loss through date of incorporation (April 4, 2002) (135,575) - - - - Member contribution 113,000 - - - - Reorganization from LLC to corporation (April 4, 2002) (197,763) 2,800,000 - 197,763 - Net loss from April 4, 2002 through December 31, 2002 - - - - (7,700) -------------- ----------- ----------- ----------- ------------ Balance, December 31, 2002 - 2,800,000 - 197,763 (7,700) Shares issued in IPO - 150,000 750,000 - - Net income - - - - 78,906 -------------- ----------- ----------- ----------- ------------ Balance, June 30, 2003 $ - 2,950,000 $ 750,000 $ 197,763 $ 71,206 ============== =========== =========== =========== ============
See notes to consolidated financial statements. PRIME RESOURCE, INC. AND SUBSIDIARIES (Formerly Prime Resource, LLC and Subsidiaries) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2003 and 2002
2003 2002 --------------- --------------- OPERATING ACTIVITIES Net Income (loss) $ 78,906 $ (107,495) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 23,717 23,172 Write-off of notes receivable from related parties 5,768 194,181 Change in deferred taxes 51,644 15,774 Changes in operating assets and liabilities Accounts receivable (295,494) (26,818) Other assets (22,399) (67,687) Accounts payable (54,819) 34,586 Accrued expenses 105,229 (176,553) --------------- --------------- NET CASH USED IN OPERATING ACTIVITIES (107,448) (110,840) INVESTING ACTIVITIES Purchase of property and equipment (28,888) (11,381) Proceeds from sale of investment - 50,125 --------------- --------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (28,888) 38,744 FINANCING ACTIVITIES Proceeds from notes payable to related parties - 52,349 Stock issuance 750,000 - Member investments - 113,000 --------------- --------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 750,000 165,349 INCREASE (DECREASE) IN CASH 613,664 93,253 Cash and cash equivalents, beginning of period 84,735 32,102 --------------- --------------- Cash and cash equivalents, end of period $ 698,399 $ 125,355 =============== =============== Additional required disclosures: Interest paid in cash $ 2,327 $ -
See notes to consolidated financial statements. PRIME RESOURCE, INC. AND SUBSIDIARIES (Formerly Prime Resource, LLC and Subsidiaries) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2003 (1) INTERIM FINANCIAL STATEMENT POLICIES AND DISCLOSURES The unaudited, consolidated, condensed financial statements of Prime Resource, Inc. and Subsidiaries (the Company) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally required in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated, condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present a fair statement of the results of operations for the interim periods presented. All of the adjustments that have been made in these consolidated, condensed financial statements are of a normal recurring nature. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report. (2) INITIAL PUBLIC OFFERING The Company commenced an initial public offering of its shares on April 16, 2003, when its registration became effective. The Company raised $750,000 through the sale of 150,000 shares and closed the offering on July 16, 2003. Item 2. Management's Discussion and Analysis of Financial Condition or Plan of Operation Forward-Looking Information Certain statements in this Section and elsewhere in this report are forward-looking in nature and relate to trends and events that may affect the Company's future financial position and operating results. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms "expect,""anticipate,""intend," and "project" and similar words or expressions are intended to identify forward-looking statements. These statements speak only as of the date of this report. The statements are based on current expectations, are inherently uncertain, are subject to risks, and should be viewed with caution. Actual results from experience may differ materially from the forward-looking statements as a result of many factors, including changes in economic conditions in the markets served by the company, increasing competition, fluctuations in raw materials and energy prices, and other unanticipated events and conditions. It is not possible to foresee or identify all such factors. The company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward- looking statement. Plan of Operation Prime Resource, Inc. ("Prime") is a Utah Corporation which was organized and filed of record on March 29, 2002 as a successor entity to Prime, LLC. Prime is an integrated business entity that conducts all of its actual business activities through its wholly owned subsidiaries: Belsen Getty, LLC ("Belsen Getty") and Fringe Benefit Analysts, LLC ("Fringe"). Unless otherwise specifically described in this offering, the reference to Prime shall collectively mean both Prime and its two operating subsidiaries. Prime has recently created a new subsidiary, described under Item 5, but which limited liability company has not yet commenced business operations. The principal business activity of Prime has been, and will continue to be, providing insurance and related insurance products principally in the health, life, dental and disability areas, as well as implementing and managing various employee related benefit programs and plans, such as 401(k) retirement accounts. The insurance activities of Prime are primarily conducted through Fringe. Belsen Getty supplies collateral services related primarily to pension and investment management programs, as well as retirement planning and general business consulting. Management intends to attempt to grow the company primarily through the acquisition of other insurance providers into the Fringe Benefit entity. Concurrently, Belsen Getty is attempting to expand its financial and business consulting and pension planning services principally by creating a more extensive investment advisory role and aggressive marketing. The company completed an initial public offering of its shares on June 16, 2003 in which it raised $750,000 in gross proceeds and $709,664 in net proceeds. It intends to employ these funds for acquisitions to grow its core insurance services and products as generally discussed above. A more detailed description of the use of proceeds is contained in the prospectus for the completed public offering. Any person wishing to obtain a copy of that prospectus material, including the use of proceeds outline, may obtain a copy online at the Securities and Exchange Commission ("SEC") website at www.sec.gov\edgar. Alternatively, a copy of the prospectus will be made available to any shareholder, or other interested party, upon request to the company at its principal address at 1245 East Brickyard Road, Suite 590, Salt Lake City, UT 84106. To date, the company has expended only a minimal portion of offering proceeds which is reported under Item 5 of this report pursuant to SEC Rule 463. It is intended that most of the offering proceeds will be used for acquiring other insurance providers in an effort to grow our business. The company's long term growth and potential to realize profits is substantially dependent upon the ability of management of the company to successfully employ the proceeds of the recent public offering in a manner which will generate additional revenues and potential net income to Prime. No assurance or warranty of the success of Prime can be made or implied at this time. The proceeds of the offering have just recently been received and have not been significantly employed in any manner. This section is not included in this 10-QSB because none of the proceeds, as of the date of this report, have been expended, except for costs of the offering which totaled approximately $40,336.00 of the gross proceeds. As may be noted from the foregoing financial statements, the company experienced a net loss of $107,495 for the six months ended June 30,2002. In the first six months of 2003 the company realized a small net profit of $ 78,906 primarily due to increased insurance revenues. In the current quarter we had net loss of $ 47,553 on gross revenues of $ 900,100. We attribute this growth in revenue primarily to aggressive marketing of our services and products to new clients. Each person reviewing this report should understand that the company has not had historical profits and that the first six months of 2003 evidences the first profit realized by the company since inception. The failure of the company to have historical profits should be considered as a potential risk factor to any person acquiring securities of the company in that it does not have a proven or sustained profit history. At present, the outstanding current liabilities of the company are presently $ 377,816 as of June 30, 2003. The company has accumulated retained earnings from its inception as a corporate entity to June 30, 2003 of $ 71,206 . Products and Markets As generally described above, the revenue sources to Prime are primarily divided into two categories. The first being the sale of a broad line of insurance products and services through Fringe with a primary emphasis on group health, disability and life policies. The insurance activities of Prime are primarily offered within twelve western states. Prime acts as a general agent through Fringe for various companies in supplying the insurance policies and services. However, four companies account, collectively, for almost all of the policies provided. These four principal suppliers of policies to Prime are Altius Insurance, (previously Pacific Health Care); United Health Care; Intermountain Health Care and Regence Blue Cross. Commissions for the placement of these products range from approximately 2-20%. The company currently has, as of March 31, 2003, approximately 829 customers who are receiving ongoing insurance coverage and related services from Fringe. Fringe also has what it believes to be a unique program related to its insurance activities in which it provides at little or no cost to the client the administration for various insurance programs such as COBRA, HIPAA and State continuation plans and other insurance related plans that require ongoing filing and consulting/management services. Fringe believes it has been successful in growing its business through supplying these services to the insurance policy client. The company believes it has been successful in maintaining a profit while providing these services without additional cost by obtaining discounts from its insurance providers on insurance products in partial consideration for providing these ongoing management services. This program is generally called the "Advantage Program". Belsen Getty supplies investment advisory and pension management services to various clients of Prime. Some, but not all, of these clients are referred by Fringe incident to completion of insurance funded products sold to various individuals and entities which then require pension fund management. The compensation for these valuable services are derived on a fee basis. The fees range from 38 basis points to 125 basis points per year depending upon the size of the portfolio or program managed. There are no commissions paid on investment products and the assets are held by third party custodians, such as various brokerage firms. It is anticipated that the Belsen Getty portion of the business will grow concurrently with the growth of the Fringe business, but for the foreseeable future will generate revenues substantially less than the Fringe component of the business. At present, Belsen Getty has approximately 437 customers as of June 30, 2003. Liquidity and Sources of Capital As previously noted, the parent entity, Prime Resource, Inc., completed a public offering as of April 16, 2003 resulting in net proceeds to the company of $709,664. It is believed and anticipated that these proceeds will be sufficient to implement the general growth plan of the company, as generally described above, and which includes primarily acquisition of other insurance companies or insurance lines of business, as well as the recruitment and training of insurance agents with existing books of business and clients. No warranty or assurance of the success of this proposed plan of operation can be made, but it is believed that there is sufficient existing capital in the company to implement this plan from the proceeds of the offering. Prime is presently in a position where it believes that its general revenues can sustain other business operations, including salaries, rent, utilities and other overhead costs, without the employment of offering proceeds for those general operating purposes. The company has no present plans for any additional offering of its securities or other capital formation activities for the foreseeable future. Further, the company does not significantly rely on lines of credit or other bank loans for its present operations and has total outstanding debt obligations, as of June 30, 2003, of approximately $ 437,456. Controls and Procedures (a) Prime maintains controls and procedure designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the chief executive officer and the principal financial officer of the Company concluded that the Company's disclosure controls and procedures were adequate for its present activities. (b) Changes in internal controls. The Company made no significant changes in its internal controls since completing its public offering. The company is presently seeking a listing of its stock on the National Association of Securities Dealers ("NASD") sponsored Electronic Bulletin Board, but does not view such listing as requiring a change in its accounting or auditing practices at the present time. (c) Should the company subsequently seek a listing on an exchange or any established NASD listing, such as the NASDAQ small cap markets, it is aware that other accounting/auditing standards, such as the establishment of an independent audit committee, would be required. (d) The company is aware of the general standards and requirements of the recent Sarbanes-Oxley Act of 2002 and has implemented procedures and rules to comply so far as applicable, such as a prohibition on company loans to management and affiliates. Part II - Other Information Item 5. Other Matters (1) Public Offering & Use of Proceeds. As generally noted above, Prime completed its initial public offering of 150,000 shares to 17 new shareholders as of June 16, 2003. Pursuant to SEC Rule 463, the use or employment of the proceeds are periodically disclosed as part of this report. We have elected to set-out such information in a tabular format: 1. Offering Effective Date 4/16/2003 2. Offering Closed 6/16/2003 $ 750,000 $ 709,664 Gross Proceeds Net Proceeds 3. Costs of offering including legal, accounting, filing fees, consulting and miscellaneous (No commissions were paid) $ 40,336 4. No direct payments were made to any officer, director or affiliated person. The offering was a self-underwriting with no commissions. 0 0 5. Of the net proceeds, the following expenditures have been made: (i) Marketing Advantage Program $ 2,915.00 (ii) Management Fees to Prime $ 10,000.00 (2) Formation of New Subsidiary. Prime reports, as a subsequent event, the creation of a new wholly owned subsidiary on July 3, 2003 known as Prime Retirement Services, LLC. This entity is a wholly owned Utah Limited Liability Company which intends to license from BenefitStreet, Inc. certain qualified retirement plan software, websites, and related services to offer daily valuation services to pension plans with an open investment platform, which provides potentially over 12,000 mutual funds to plan sponsors at a competitive cost. This subsidiary has not yet actively engaged in its intended business activities. (3) Appointment of New Auditors. . The company announced that, effective as of August 1, 2003, it has retained Child, Sullivan & Company of Kaysville, Utah as its new independent auditors. This notice is being filed as a substitute notice for an 8-K filing of this contemporary event. The new firm replaces the firm of Carver & Hovey, which resigned concurrently with the substitution of the new auditors. The company has no differences of opinion with its prior or current auditors. (4) Trading. The company presently does not have any active trading market and, as of the date of this report, is engaged in attempting to complete, through a Salt Lake City brokerage firm, a filing for NASD listing on the Electronic Bulletin Board. The Electronic Bulletin Board is essentially an informal trading mechanism managed by the National Association of Securities Dealers, but does not constitute a regular NASDAQ exchange or listing, but is essentially an electronic intra-dealer quotation system for small public companies not meeting the requirements for regular NASDAQ listing. The company cannot presently give any warranty or assurance that it will be successful in completing such listing, but is presently actively engaged through a designated broker/dealer in attempting to obtain this listing and will, subsequently, report the completion of any listing requirements as an 8-K filing. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 99.1 Certification under Section 906 of the Sarbanes Oxley Act of 2002 (18 U.S.C. SECTION 1350) (b) Reports on Form 8-K No reports on Form 8-K were filed during the reporting period. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 14, 2003 By: /s/ Terry M. Deru ---------------------------------- Mr. Terry M. Deru President, Director Date: August 14, 2003 By: /s/ Andrew W. Limpert ---------------------------------- Mr. Andrew W. Limpert Director, Treasurer/CFO 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 Prime Resource, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Mr. Terry Deru, President and Chief Executive Officer and Mr. Andrew Limpert, Chief Financial Officer, certify to the best of our knowledge, 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; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: August 14, 2003 /s/ Terry M. Deru ---------------------------------- Mr. Terry M. Deru President, Director Date: August 14, 2003 /s/ Andrew W. Limpert ---------------------------------- Mr. Andrew W. Limpert CFO, Director Attachment A CERTIFICATION I, Terry M. Deru, President and Director of Prime Resource, Inc certify that: (1) I have reviewed this quarterly report on Form 10-QSB of Prime Resource, Inc; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of 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 function): (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: August 14, 2003 /s/ Terry M. Deru ---------------------------------- Mr. Terry M. Deru President Attachment A CERTIFICATION I, Andrew W. Limpert, Chief Financial Officer and Director of Prime Resource, Inc certify that: (1) I have reviewed this quarterly report on Form 10-QSB of Prime Resource, Inc.; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of 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 function): (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: August 14, 2003 /s/ Andrew W. Limpert ---------------------------------- Mr. Andrew W. Limpert Chief Financial Officer, Director