10QSB 1 chartwell403.txt 10QSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2003 Commission File No. 000-27395 CHARTWELL INTERNATIONAL, INC. ----------------------------- (Exact name of small business issuer as specified in its charter) NEVADA 95-3979080 ------ ---------- (State or Other Jurisdiction of (I.R.S Employer Incorporation or Organization) Identification No.) 333 South Allison Parkway, Suite 100 Lakewood, Colorado 80226 (303) 804-0100 -------------------------------------------------- (Address, including zip code and telephone number, including area code of registrant's executive offices) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding twelve 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 [ ] As of June 10, 2003, the Registrant had 21,486,718 shares of common stock, $.001 par value per share outstanding. Transitional small Business Disclosure Format (check one): Yes [ ] No [X]
CHARTWELL INTERNATIONAL, INC. FORM 10-QSB APRIL 30, 2003 INDEX PAGE Part I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Condensed Consolidated Balance Sheets as of April 30, 2003 and July 31, 2002................3 Condensed Consolidated Statements of Operations for the Three-Month and Nine-Month Periods Ended April 30, 2003 and 2002.....................................................4 Condensed Consolidated Statements of Cash Flows for the Three-Month and Nine-Month Periods Ended April 30, 2003 and 2002.....................................................5 Notes to Condensed Consolidated Financial Statements........................................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......8 Part II. OTHER INFORMATION Item 1. Legal Proceedings..........................................................................11 Item 2. Changes in Securities......................................................................11 Item 3. Defaults Upon Senior Securities............................................................11 Item 4. Submission of Matters to a Vote of Security Holders........................................11 Item 5. Other Information..........................................................................11 Item 6. Exhibits and Reports of Form 8-K...........................................................11 2 ITEM 1. FINANCIAL INFORMATION CHARTWELL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS ASSETS: April 30, 2003 July 31, 2002 -------------- ------------- Current Assets: Cash $ 10,823 $ 4,089 Trade credits and related receivable 68,077 77,396 Receivables from related parties 12,517 10,739 ------------ ------------ Total current assets: 91,417 92,224 Investment in real estate 1,195,655 1,195,655 Mineral properties 2,014,800 2,014,800 Recruiting systems, publishing and franchise rights, net 1,111,606 1,204,498 Receivables from related parties 87,594 107,326 Other assets, net 5,025 9,552 ------------ ------------ TOTAL ASSETS $ 4,506,097 $ 4,624,055 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Bank loan payable $ 10,000 $ 10,000 Accounts payable and accrued expenses 202,279 194,769 ------------ ------------ Total current liabilities: 212,279 204,769 Long-term Debt: Due to related parties 406,171 1,651,367 Other notes payable 600,000 600,000 ------------ ------------ Total liabilities 1,218,450 2,456,136 Stockholders' Equity: Preferred Series B Stock (preferable in liquidation to other classes of stock) 300,000 300,000 Preferred Series A Stock (preferable to common stock and equal to Preferred Series C Stock in liquidation) 600 600 Preferred Series C Stock (preferable to common stock and equal to Preferred Series A Stock in liquidation) 506,120 506,120 Common stock; $.001 par value; 50,000,000 shares authorized; 21,486,718 and 6,083,918 shares issued and outstanding, respectively 21,487 6,084 Additional paid-in capital 12,174,504 10,749,072 Treasury stock at cost (68,850 shares) (6,885) (6,885) Accumulated deficit (9,708,179) (9,387,072) ------------ ------------ Total stockholders' equity 3,287,647 2,167,919 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,506,097 $ 4,624,055 ============ ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 3 CHARTWELL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Nine Months Ended Three Months Ended April 30, April 30, ---------------------------- ---------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------ REVENUE: Management and license fee revenue $ 157,500 $ 112,500 $ 52,500 $ 37,500 OPERATING EXPENSES: General and administrative 230,943 60,166 47,668 40,445 Depreciation and amortization 92,892 92,635 30,964 32,875 ------------ ------------ ------------ ------------ Total operating expenses 323,835 152,801 78,632 73,320 ------------ ------------ ------------ ------------ Operating Loss (166,335) (40,301) (26,132) (35,820) Other income (expense) Gains on dispositions of stock -- 4,000 -- -- Interest income (expense), net (154,772) (161,000) (43,039) (57,318) ------------ ------------ ------------ ------------ Total other income (expense) (154,772) (157,000) (43,039) (57,318) ------------ ------------ ------------ ------------ Net (loss) $ (321,107) $ (197,301) $ (69,171) $ (93,138) ============ ============ ============ ============ (Loss) per common share (basic and diluted) $ (0.04) $ (0.03) $ (0.01) $ (0.02) ============ ============ ============ ============ Average common shares outstanding 8,473,420 6,038,900 12,203,190 6,038,900 ============ ============ ============ ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 4 CHARTWELL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE-MONTH PERIOD ENDED April 30, 2003 April 30, 2002 -------------- -------------- Cash Flows from Operating Activities Net income (loss) $(321,107) $(197,301) Adjustments: Depreciation and amortization 92,892 92,635 Compensatory stock issuance to related parties 28,698 -- Services and other expenses paid for with stock -- 4,000 Changes in operating assets and liabilities: Trade credits 9,319 (2,274) Accounts receivable -- 5,874 Due from related parties 17,954 3,086 Prepaids and other assets 4,527 (26,162) Accounts payable and accrued expenses 7,510 (96,136) Related party liabilities 146,895 186,742 --------- --------- Net cash (used in) operating activities (13,312) (29,536) Cash Flows from Investing Activities -- -- --------- --------- Net cash provided by investing activities -- -- Cash Flows from Financing Activities Proceeds from borrowings from related parties 20,046 18,000 --------- --------- Net cash provided by financing activities 20,046 18,000 Net increase (decrease) in cash 6,734 (11,536) Cash at beginning of period 4,089 18,072 --------- --------- Cash at end of period $ 10,823 $ 6,536 ========= ========= Supplemental Cash Flow information Cash paid for interest $ 54,000 $ 54,000 ========= ========= Non-cash Investing and Financing Activities: During the nine months ended April 30, 2003, the Company paid certain liabilities totaling $1,403,137 to related parties by issuing 15,068,657 shares of the Company's common stock to the parties. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 5
CHARTWELL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2003 AND 2002 NOTE 1. UNAUDITED, INTERIM INFORMATION: Chartwell International, Inc. (formerly Chartwell Publishing Company, Inc.) ("Chartwell" or the "Company") was incorporated in the State of Nevada on December 27, 1984. The Company's principal line of business is oversight of its investment in College Partnership, Inc. ("CPI") (f/k/a College Bound Student Alliance, Inc.), which includes career planning, test preparation, and college selection services for college bound students and their families. The Company also hold claims for gypsum deposits and owns a 200 acre parcel of real estate which is being held for future development or sale. Chartwell International, Inc. and its wholly-owned subsidiaries prepare and report financial results using a fiscal year ending July 31. This Form 10-QSB includes the consolidated financial statements of the Company and its wholly-owned subsidiaries. The Company's consolidated financial statements included in this Form 10-QSB for the interim periods ended April 30, 2003 and 2002, include all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position, and cash flows as of the dates and for the periods presented. The Company's operating results for the three months ended April 30, 2003 and 2002 are not necessarily indicative of the result that may be expected for the fiscal year ending July 31, 2003. The Notes to the Consolidated Financial Statements included in the Company's July 31, 2002 annual report on Form 10-KSB should be read in conjunction with these consolidated financial statements. RECENT PRONOUNCEMENTS In August 2001, the FASB approved SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144 replaces SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The new accounting model for long-lived assets to be disposed of by sale applies to all long-lived assets, including discontinued operations, and replaces the provisions of APB Opinion No. 30, "Reporting Results of Operations-Reporting the Effects of Disposal of a Segment of a Business," for the disposal of segments of a business. SFAS 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. Therefore, discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that have not yet occurred. SFAS 144 also broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. The provisions of SFAS 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001 and, generally, are to be applied prospectively. At this time, adoption of this statement is not expected to have a material effect on the Company's financial position, results of operations, or cash flows. However, the SEC is inquiring about the carrying value of the Company's gypsum assets. In April 2002, the FASB approved for issuance SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of SFAS 13, and Technical Corrections". SFAS 145 rescinds previous accounting guidance, which required all gains and losses from extinguishment of debt be classified as an extraordinary item. Under SFAS 145 classification of debt extinguishment depends on the facts and circumstances of the transaction. SFAS 145 is effective for fiscal years beginning after May 15, 2002 and adoption is not expected to have a material effect on the Company's financial position or results of its operations. 6 In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities". SFAS 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by SFAS 146 include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity. SFAS 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The adoption of SFAS 146 is not expected to have a material effect on the Company's financial position or results of its operations NOTE 2. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Chartwell International, Inc. and its wholly owned subsidiary, National College Recruiting Association, Inc. ("NCRA"), through which it licenses marketing and publishing rights to CPI. As of April 30, 2003, Chartwell had an approximate 22% equity interest in CPI, which is accounted for in the consolidated financial statements by the equity method. Intercompany accounts and transactions have been eliminated. Impairment Testing for Long-Lived Assets The Company accounts for its long-lived assets in conformity with FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." Statement 121 requires impairment losses to be recorded on long-lived assets used in operations or expected to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. NOTE 3. EQUITY TRANSACTIONS On March 3, 2003 the Board of Directors approved the conversion of $603,835 of obligations due our CEO (including entities of which our CEO is a 100% owner or trustee) and our Senior Advisor for 5,489,409 shares of post reverse split shares of common stock. These shares were issued at $0.11 per share, a premium to the then trading price of $.08 per share. On March 3, 2003, members of our Board of Directors, other than the Chairman and CEO, received an aggregate of 54,545 shares in lieu of $6,000 in Board of Director fees earned. These shares were issued at $0.11 per share, a premium to the then trading price of $.08 per share. On April 14, 2003, the Board of Directors approved the conversion of $616,000 of obligations due its CEO (including entities of which the CEO is a 100% owner or trustee) and its Senior Advisor for 8,800,000 shares of common stock. Such converted obligations included a $500,000 note convertible into 1,000,000 shares of the Company's investment in CPI common stock. These shares were issued at the then trading price of $0.07 per share. On April 14, 2003, members of our Board of Directors, other than the Chairman and CEO, received an aggregate of 42,857 shares in lieu of $3,000 in Board of Director fees earned. These shares were issued at the then trading price of $0.07 per share. NOTE 4. SEC INQUIRY The Company received an inquiry from the SEC staff regarding the Company's accounting for its mineral properties and is currently discussing the basis for the balance sheet carrying values of these assets with the SEC staff. The Company is continuing to discuss the valuation and accounting treatment of its mineral properties with the staff of the Securities and Exchange Commission. If these discussions are not concluded on a basis favorable to the Company, the Company may be required to adjust the carrying values of these assets. The Company has recently begun to explore various marketing opportunities for these properties. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Report. In connection with, and because we desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this Report and in any other statement made by us, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements. Results of Operations The following information is intended to highlight developments in our operations, to present our results of operations, to identify key trends affecting our businesses and to identify other factors affecting our results of operations for the nine months ended April 30, 2003 and 2002. Comparison of Results of Operations for the Nine Months Ended April 30, 2003 and 2002 Our revenues increased to $157,500 for the nine months ended April 30, 2003, from $112,500 in 2002, an increase of $45,000, or 40%. All of our revenues were from license fees generated from CPI. Effective August 1, 2000, the agreement called for 1.5% of the first $10,000,000 in revenues of CPI and 1% of revenues over $10,000,000, subject to a minimum monthly license fee of $12,500. CPI reported revenues for the quarter ended July 31, 2002 indicated estimated annual revenue for fiscal 2003 of at least approximately $16,000,000. Therefore, license fees for the first nine months of fiscal 2003 were $17,500 per month compared to the minimum license fee of $12,500 per month during the first six months of the prior fiscal year. For the nine months ended April 30, 2003, our operating expenses increased to $323,835 compared to $152,801 for the same period in the prior fiscal year, an increase of $171,034 or 112%. This was due primarily to an increase in general and administrative expenses of $170,777 for the nine month period that resulted from various factors, principally an increase to professional fees in connection with the gypsum claims and the reverse stock split, and reductions of certain obligations as a result of renegotiations during the periods ended 2002. Net interest expense decreased from $161,000 to $154,772 for the nine months ended April 30, 2003 compared to the similar period in 2002. The decrease in interest expense was principally due to changes in total debt outstanding during fiscal 2003 as a result of the conversions of liabilities to common stock during the quarter ended April 30, 2003. As a result of the items discussed above, we generated net losses of ($321,107) for the nine months ended April 30, 2003, compared to a net loss of $(197,301) for the same period of the prior year. These losses resulted in loss per share of $.04 for the nine-month period ended April 30, 2003 compared to loss per share of $.03 for the nine month period ended April 30, 2002. 8 Liquidity and Capital Resources At April 30, 2003, we had $10,823 in cash and cash equivalents, an increase of $6,734 from July 31, 2002. At April 30, 2003, our working capital ratio was 0.43 to 1 based on current assets of $91,417 and current liabilities of $212,279. In our statement of cash flows, net cash used in operations was $13,312 for the nine months ended April 30, 2003 compared to net cash used in operations of $(29,536) for the nine months ended April 30, 2002. Cash flows from financing activities totaled $20,046 and $18,000 for the nine months ended April 30, 2003 and 2002, respectively. These consist of borrowings from related parties. We believe we have sufficient cash flows and sources of funding to meet our obligations over the next 12 months. In addition to the receivables included in our balance sheet, we have a note receivable related to an advance to CPI of $70,000, which we were required to write off during the fiscal year ended July 31, 2000. CPI has been paying its obligations to us in accordance with the stated terms and we expect that this $70,000 note receivable will also be paid by CPI. When this $70,000 is paid, we will recognize income of $70,000. Recovery of our investment in Recruiting Systems and Publishing Rights, ($1,111,606, net at April 30, 2003) is dependent on royalty payments received from CPI in which we have an approximate 22% ownership interest as of June 10, 2003, and the underlying value of the common stock investment in CPI (market value of approximately $2,400,000 at June 10, 2003). Our CEO, Dr. Janice A. Jones is an officer and director of CPI and our Senior Advisor, John J. Grace, is an officer of CPI. Dr. Jones and Mr. Grace are husband and wife. On August 1, 2000, we agreed with CPI to a 50% deferral ($75,000) of the fiscal year's royalty payments, without interest, with the full royalty payment to be made beginning August 1, 2001. CPI has met its commitments in both fiscal 2001 and in fiscal 2002, and has paid $50,500 of the fiscal 2001 deferral as of April 30, 2003. During the nine months ended April 30, 2003, CPI experienced profits compared to losses for the same period of the prior fiscal year. Net student service revenues increased more than 70% during the nine months ended April 30, 2003 from the nine months ended April 30, 2002. In its Form 10-KSB for the fiscal year ended July 31, 2002, CPI reported that it incurred significant operating losses and deterioration in working capital as it revamped and improved product lines and its marketing organization, consolidated the operations of it's acquired companies and invested in expansion of it's operations and infrastructure. CPI stated these activities consumed considerable focus and resulted in significant losses during the first three quarters of fiscal 2001. A portion of these costs and operating deficits were funded by a financing of its on and off-balance sheet customer contract receivables. The losses sustained in 2001 and the first two quarters of fiscal 2002 were gradually diminished and CPI was able to achieve profitability for the fifteen-month period ended April 30, 2003. CPI management believes that CPI's cash requirements through next year will be satisfied by the following sources: (1) cash expected to be generated from operations, (2) obtaining further senior debt financing (3) obtaining subordinate debt financing, and (4) possible equity financing. No assurance can be given, however, that they will be successful in obtaining additional capital to take advantage of replacing existing obligations at a significant discount and fund future expansion and at what terms such capital will be available. For the three and nine-month periods ended April 30, 2003 CPI has met its obligations to us and we anticipate that CPI will be able to continue to meet its obligations to us. 9 Potential Change in Zoning for the Company's San Diego Property --------------------------------------------------------------- The Company's 200 acres of undeveloped property in San Diego County, California is zoned residential 5 acres. The Company had preliminary mapping of said properties which would allow for an estimated 33 to 36 parcels for development at maximum density. The County has proposed changing the zoning from 5 acres to 40 acres per parcel for numerous properties in the county, including the Company's property. The Company's legal counsel in this regard has held discussions with the County's Planning Commission which has indicated the County is willing to consider a significant reduction in the number of acres per parcel from the 40 acres they proposed, although no final decision has yet been made. An independent appraisal of this property was made last year at a value of $2,700,000 and the Company has listed the property for sale at $2,900,000. It is unknown what effect, if any, said re-zoning will have on the potential selling price of the property, although it may reduce the number of potential developers which might be interested in purchasing the land for development. On May 15, 2003, the Company received an updated appraisal at $3,000,000. 10 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS As of the date of this Report we are not party to any material legal proceedings, nor have any such proceedings been threatened against us. ITEM 2. CHANGES IN SECURITIES On March 3, 2003 the Board of Directors approved the conversion of $603,835 of obligations due our CEO (including entities of which our CEO is a 100% owner or trustee) and our Senior Advisor for 5,489,409 shares of post reverse split shares of common stock. These shares were issued at $0.11 per share, a premium to the then trading price of $.08 per share. On March 3, 2003, members of our Board of Directors, other than the Chairman and CEO, received an aggregate of 54,545 shares in lieu of $6,000 in Board of Director fees earned. These shares were issued at $0.11 per share, a premium to the then trading price of $.08 per share. On April 14, 2003, the Board of Directors approved the conversion of $616,000 of obligations due its CEO (including entities of which the CEO is a 100% owner or trustee) and its Senior Advisor for 8,800,000 shares of common stock. Such converted obligations included a $500,000 note convertible into 1,000,000 shares of the Company's investment in CPI common stock. These shares were issued at the then trading price of $0.07 per share. On April 14, 2003, members of our Board of Directors, other than the Chairman and CEO, received an aggregate of 42,857 shares in lieu of $3,000 in Board of Director fees earned. These shares were issued at the then trading price of $0.07 per share. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K. (a) Exhibits. 99.1 Certification of Financial Statements in accordance with Sarbanes-Oxley Act. (b) Reports on Form 8-K We did not file any reports on Form 8-K during the three-month period ended April 30, 2003. 11 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on June 13, 2003. CHARTWELL INTERNATIONAL, INC. (Registrant) By: /s/ Janice A. Jones ----------------------------------------- Janice A. Jones, Chief Executive Officer, Treasurer 12 CERTIFICATION I Janice A. Jones, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chartwell International, 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: 5. 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; 6. 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 7. 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; 8. 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); 9. 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 10. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 11. 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. June 13, 2003 By: /s/ Janice A. Jones ----------------------- Janice A. Jones Chief Executive Officer Chief Financial Officer 13