10QSB 1 t10q.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly Report under Section 13 Or 15(D) Of the Securities Exchange Act Of 1934 for the quarterly period ended September 30, 2003 [ ] Transition Report under Section 13 or 15(D) Of The Exchange Act For the transition period from ____________ to ____________ Commission File No. 0-31507 International Trust & Financial Systems, Inc. (Name of Small Business Issuer in Its Charter) Florida 06-1588136 State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1024 S. Greenville Avenue Suite 240 Allen, Texas 75002 (Address of Principal Executive Offices) (214) 236-8480 (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _______ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of September 30, 2003, the Company had 29,660,776 shares of Common Stock outstanding, $0.001 par value and 2,870,000 shares of convertible, voting preferred stock outstanding, $0.001 par value. Transitional Small Business Disclosure Format (check one): Yes No X__ PART I - FINANCIAL INFORMATION Item 1. Financial Statements: BASIS OF PRESENTATION As used in this report, the term "Company" refers to International Trust & Financial Systems, Inc., a Florida corporation, unless otherwise indicated. The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying statements should be read in conjunction with the financial statements for the year ended December 31, 2002 which are included in our Form 10-KSB/A filed with the Securities and Exchange Commission ("SEC") on July 28, 2003. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the nine months ended September 30, 2003 are not necessarily indicative of results that may be expected for the year ending December 31, 2003. The financial statements are presented on the accrual basis. Randy Simpson CPA, P.C. 11775 South Nicklaus Road Sandy, Utah 84092 Phone (801) 572-3009 Fax (801) 606-2895 Board of Directors and Stockholders International Trust & Financial Systems, Inc. (A Development Stage Company) INDEPENDENT ACCOUNTANT'S REVIEW REPORT I have reviewed the accompanying balance sheet of International Trust & Financial Systems, Inc. (a development stage company) as of September 30, 2003, and the related statements of operations for the three and nine months then ended and statements of stockholders' (deficit) and cash flows for the nine months then ended, in accordance with Statements on Standards of Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of International Trust & Financial Systems, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming the company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred net losses of $919,774, has no stockholders' equity, and needs additional capital to finance operations. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. I have audited, in accordance with generally accepted auditing standards, the balance sheet of International Trust & Financial Systems, Inc. (a development stage company) as of December 31, 2002 and the related statements of operations, stockholders' (deficit), and cash flows for the year then ended (not presented herein); and in my report dated June 27, 2003, I expressed an unqualified opinion on those financial statements. In my opinion, the information set forth in the accompanying balance sheet as of December 31, 2002, is fairly stated in all material respects in relation to the balance sheet from which it has been derived. /s/ Randy Simpson, CPA, P.C. A Professional Corporation November 20, 2003 Sandy, Utah INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS September 30, 2003 and 2002 (Unaudited) TABLE OF CONTENTS Page No INDEPENDENT ACCOUNTANT'S REVIEW REPORT 1 FINANCIAL STATEMENTS Balance Sheets 2 Statements of Operations 3 Statement of Stockholders' (Deficit) 4-6 Statements of Cash Flows 7 Notes to Financial Statements 8 - 9 INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS September 30, 2003 AND DECEMBER 31, 2002 September 30, December 31, 2003 2002 (Unaudited) (Audited) ASSETS CURRENT ASSETS $ $ Cash - 354 TOTAL CURRENT ASSETS - 354 PROPERTY AND EQUIPMENT, NET - 8,410 OTHER ASSETS - 1,000 TOTAL ASSETS $ - $ 9,764 LIABILITIES AND STOCKHOLDERS' (DEFICIT) CURRENT LIABILITIES Accounts payable $ - $ 5,541 Other Current Liabilities - 26,131 TOTAL CURRENT LIABILITIES - 31,672 STOCKHOLDERS' (DEFICIT) Preferred stock, par value $ 0.001 2,870 per share Authorized 10,000,000 shares. 2,870,000 shares outstanding @ September 30, 2003 1,000 Common stock, par value $ 0.001 per share Authorized 50,000,000 shares Issued and outstanding 29,660,776 shares @ September 30, 2003 29,661 24,389 Paid in capital in excess of par value of stock 887,243 719,835 Deficit accumulated during the development stage (919,774) (767,132) TOTAL STOCKHOLDERS' (DEFICIT) - (21,908) TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ - $ 9,764 See Accompanying Notes and Independent Auditor's Report INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 AND FOR THE PERIOD FROM SEPTEMBER 1, 1996 (DATE OF INCEPTION) TO SEPTEMBER 30, 2003 (UNAUDITED)
For the Period from Three Months Ended Nine Months Ended September 1, 1996 September 30 September 30 Date of Inception) to 2003 2002 2003 2002 September 30, 2003 REVENUE $ - $ - $ - $ - $ 6,768 EXPENSES General and Administrative Expenses 121,552 30,895 144,232 76,122 300,158 Development Costs 466,361 Bad debt expense 150,677 150,677 150,677 Loss on disposition of equipment 7,473 7,473 7,473 Depreciation 468 937 468 1,873 TOTAL EXPENSES 129,024 182,040 152,642 227,267 926,542 NET (LOSS) $ (129,024) $(182,040) $ (152,642) $ (227,267) $ (919,774) NET LOSS PER COMMON SHARE Basic and diluted $ (0.004) $ (0.046) $ (0.006) $ (0.085) Weighted Average Common Shares Outstanding 28,873,966 3,985,399 25,884,599 2,668,597 See Accompanying Notes and Independent Auditor's Report INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (Formerly PRECOM TECHNOLOGY, INC.) STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) FOR THE PERIOD FROM SEPTEMBER 1, 1996 (DATE OF INCEPTION) TO June 30, 2003 Paid in Deficit Capital in Accumulated Excess of during the Par Value Development Preferred Stock Common Stock of Stock Stage Total Shares Amount Shares Amount August 1998- Shares issued for services - - 300,000 300 99,700 - 100,000 Net (loss) for the year ended December 31, 1998 - - - - - (171,241) (171,241) BALANCE, DECEMBER 31, 1998 $ - $ - $960,410 $960 $357,333 $(366,144) $(7,751) Net (loss) for the year ended December 31, 1999 - - - - - (7,249) (7,249) BALANCE, DECEMBER 31, 1999 $ - $ - $960,410 $960 $357,333 $(373,393) $(15,000) August 2000-issuance of common stock for Provence Capital Corporation, Inc. - - 100,000 100 6,870 - 6,970 Net (loss) for the year ended December 31, 2000 - - - - - (58,741) (58,741) BALANCE, DECEMBER 31, 2000 $ - $ - $1,060,410 $1,060 $364,203 $(432,134) $(66,771) Net (loss) for the year ended December 31, 2001 - - - - - (38,446) (38,446) BALANCE, DECEMBER 31, 2001 $ - $ - $1,060,410 $1,060 $364,203 $(470,580) $(105,217) See Accompanying Notes and Independent Auditor's Report INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (Formerly PRECOM TECHNOLOGY, INC.) STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) FOR THE PERIOD FROM SEPTEMBER 1, 1996 (DATE OF INCEPTION) TO June 30, 2003 Paid in Deficit Capital in Accumulated Excess of during the Par Value Development Preferred Stock Common Stock of Stock Stage Total Shares Amount Shares Amount April 2002- Shares issued for conversion of debt - - 1,015,406 1,015 100,526 - 101,541 April 2002-preferred shares issued for interest in venture fund 5,000,000 1,000 - - - - 1,000 May 2002-shares issued for services - - 1,326,250 1,326 57,909 - 59,235 September 2002- shares issued for debt - - 1,750,000 1,750 71,542 - 73,292 October 2002- shares issued for services - - 18,287,850 18,288 65,026 - 83,314 December 2002- shares issued for services - - 950,000 950 60,529 - 61,479 Net (loss) for the year ended December 31, 2002 - - - - - (296,552) (296,552) BALANCE, DECEMBER 31, 2002 5,000,000 $1,000 23,439,916 $24,389 $719,735 $(767,132) $(21,908) Cancellation of preferred shares (Unaudited) (5,000,000) $(1,000) $(1,000) June 30, 2003 Issue of shares (Unaudited) 550,000 550 - $ 550 See Accompanying Notes and Independent Auditor's Report July 18, 2003 issue of preferred shares 2,870,000 2,870 119,799 122,669 (Unaudited) July 18, 2003 issue of common shares 4,720,860 4,722 47,609 52,331 (Unaudited) Net (loss) for the nine months ending September 30, 2003 (Unaudited) (152,642) (152,642) BALANCE, SEPTEMBER 30, 2003 2,870,000 $ 2,870 29,660,776 $29,661 $887,243 $ (919,774) $ 0
See Accompanying Notes and Independent Auditor's Report INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 AND FOR THE PERIOD FROM SEPTEMBER 1, 1996 (DATE OF INCEPTION) TO SEPTEMBER 30, 2003 (UNAUDITED) For the period From September Nine Months 1, 1996 (Date of Ended September 30, Inception) to 2003 2002 September 30,2003 CASH USED IN OPERATING ACTIVITIES $ (149,223) $ 91,092) $ (450,948) CASH USED IN INVESTING ACTIVITIES Purchase of property and equipment - (9,239) (9,346) CASH PROVIDED BY FINANCING ACTIVITIES: Proceeds from issuance of capital stock 175,000 174,833 913,933 Advances by officer (26,131) (73,292) - NET CASH PROVIDED BY FINANCING 148,869 101,541 - NET INCREASE (DECREASE) IN CASH (354) 1,210 - CASH AT BEGINNING OF PERIOD 354 - - CASH AT END OF PERIOD $ - $ 1,210 $ - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ - $ - $ - Taxes $ - $ - $ 150 SCHEDULE OF NON-CASH FINANCING ACTIVITIES: Issuance of common stock for merger expenses $ - $ - $ 14,179 Issuance of common stock for Services $ 550 $ 59,334 $ 305,678 Issuance of common stock for debt assumption $ 175,000 $ 174,833 $ 349,833 See Accompanying Notes and Independent Auditor's Report INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2003 AND 2002 (UNAUDITED) NOTE 1 DEVELOPMENT STAGE OPERATIONS As of September 30, 2003, the Company was in the development stage of operations. A development stage company is defined as a company that devotes most of its activities to establishing a new business activity. In addition, planned principal activities have not commenced, or have commenced and have not yet produced significant revenue. The Company expensed $466,361 of development costs for the period from September 1, 1996 (date of inception) to September 30, 2003. During the Third Quarter, the Company entered into a Merger Agreement with Clear Wire Technologies, Inc. of Dallas, Texas, as a result of which Clear Wire would merge into the Company. A total of 4,720,860 shares of the Company's common stock and 2,870,000 shares of Series A voting, convertible preferred shares were issued under the Merger Agreement to the principal shareholders of Clear Wire Technologies, representing control of the Company, for assumption of all outstanding liabilities of the Company. Final closing of the merger was dependent on Clear Wire's ability to secure additional operational capital to satisfy certain obligations and for working capital. Final closing was scheduled for September 20, 2003, but was later extended to October 20, 2003. Clear Wire was unable to raise the additional capital required, and the Company concluded that the merger with Clear Wire should be abandoned. In its place, the Company has begun discussing a letter of intent for a merger with a Houston, Texas based manufacturer of explosion proof air conditioning systems for hazardous sites, and the transfer of the 4,720,860 shares of common stock and 2,870,000 shares of voting, convertible preferred stock to be transferred to the principals of the new company, for assumption of the Company obligations assumed but unpaid by Clear Wire. NOTE 2 CAPITAL STOCK Preferred Stock By agreement dated June 18, 2003, amended August 5, 2003 and September 24, 2003, the Company agreed with Clear Wire Technologies, Inc. to issue a total of 4,720,860 shares of the Company's common stock and 2,870,000 shares of Series A voting, convertible preferred shares in exchange for the agreement by Clear Wire to assume and satisfy a total of $175,000 in obligations of the Company as part of a proposed merger. The Series A preferred shares are each convertible into forty shares of common stock of the Company, and have voting power equal to their converted common share equivalents. This transaction is reflected in the September 30, 2003 financial statements. Common Stock During July, 2003, as part of the proposed merger with Clear Wire, the Company issued additional shares of its common stock, as follows: Infinite Technology Corporation 2,360,430 shares Vida Technologies Corp. 2,360,430 shares NOTE 2 CAPITAL STOCK (continued) Infinite Technology and Vida Technologies are the equal owners of Clear Wire Technologies, Inc., the proposed merger partner with the Company under the Merger Agreement dated June 18, 2003. NOTE 3 GOING CONCERN These financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company has incurred net losses of $919,774, has no stockholders' equity and needs additional capital to finance its operations. These factors raise substantial doubt as to the Company's ability to continue as a going concern. Management's plans to eliminate the going concern situation include, but are not limited to, seeking a merger candidate. NOTE 4 AMOUNTS DUE SHAREHOLDER During 2002, the Company's former President paid rent and other expenses on behalf of the Company totaling $26,131. During the first and second quarters of 2003, the former President paid additional rent and other expenses on behalf of the Company in the amount of $19,200. The amount due the former President at June 30, 2003 was $45,481 which was included in the Other Current Liabilities. This liability was assumed by Clear Wire Technologies as part of the merger transaction with the Company, and the shares of common stock and preferred stock of the Company issued during the third quarter were issued in consideration for this assumption. Following the decision not to pursue the merger with Clear Wire after it was unable to raise the required working capital by October 20, 2003, this liability will be assumed by the new potential merger partner. As a result of this transaction, all of the liabilities of the Company have been removed from the September 30, 2003 financial statements. Item 2. Management's Discussion and Analysis RESULTS OF OPERATIONS --------------------- The Company had no operations in the third quarter of 2003 and its sole business model since early 2000 has been to identify, acquire or merge with a viable business operation. Management made numerous efforts to pursue the Company's original business plan and to raise capital to operate the business. Unfortunately the equity markets underwent significant turmoil and uncertainty over the past two years. As a result, our ambitious plans for a capital intensive business were unsuccessful and our capital needs could not be realized. Accordingly we abandoned our original business plan and began to look for potential acquisition candidates. In addition, as of the most recent quarter ending September 30, 2003, we have incurred cumulative net losses of $919,774 from inception. We have abandoned all further development activities and have no assets as of September 30, 2003. These factors raise doubt as to our ability to continue as a going concern. Management's plans to eliminate the going concern situation include but are not limited to seeking a merger or acquisition candidate. A mature and businesslike evaluation of our affairs requires consideration of the foreseeable possibility of business failure. Accordingly, a reverse acquisition transaction or other merger transaction becomes a possible and foreseeable solution. The Company incurred general and administrative expenses of $121,552 during the third quarter of 2003, resulting in a loss for the quarter of $129,024 and a cumulative loss of $152,642 for the full year to date. Currently the Company does not have sufficient resources to meet the Company's cash requirements. The Company is current seeking to raise additional capital through various vehicles including but not limited to acquisitions of other business concerns, private stock placements, or public offerings. On June 18, 2003, the Company issued a press release announcing that it was in merger discussions with Clear Wire Networks, Inc. of Dallas, Texas. A Merger Agreement was executed on June 18, 2003 calling for the merger of Clear Wire Networks, Inc. into the Company. The press release was furnished as Exhibit 99.3 to the Form 10-QSBA filed with the SEC on August 12, 2003. As part of the merger process, 4,720,860 shares of the common stock of the Company and 2,870,000 shares of the voting, convertible Series A preferred stock of the common were issued to the controlling owners of Clear Wire Technologies, Inc. and certain officers and directors of those shareholders. As a result, control of the Company was transferred to the Clear Wire partners, and on August 18, 2003, the following were appointed as the directors and officers of the Company, effective immediately and until the next annual meeting or until their successors are duly elected: Tim B. Smith Chairman and Director John Schoenfeld CEO and Director Todd Grassi President David Pells Secretary At the same time, the new Board determined to relocate the principal offices of the Company to Allen, Texas, a suburb of Dallas, Texas. Effective June 19, 2003 the Company was delisted from the OTC Bulletin Board for failure to comply with NASD Rule 6530. The Company's stock continued to trade on the Over The Counter Pink Sheets. Effective August 1, 2003, the Company's common stock was reinstated to the OTC Bulletin Board. As a result of the delisting of the Company's common shares from the OTC BB effective June 19, 2003, the merger was postponed; however. Merger discussions continued with the relisting of the Company's shares on the OTC BB effective August 1, 2003, and an Amendment to the Merger Agreement was signed on August 5, 2003, with an anticipated closing on September 20, 2003. On September 20, 2003, the closing date was extended to October 20, 2003 to allow additional time for Clear Wire Networks to raise the capital needed under the Merger Agreement. On the failure of Clear Wire to raise the required capital, the merger was then cancelled, and a letter of intent is now being negotiated for a new merger with an unrelated Houston company engaged in the manufacture and sale of specialized explosion proof air conditioning systems. FORWARD-LOOKING STATEMENTS -------------------------- Forward-looking statements, based on management's current views and assumptions, are made throughout this Form 10-QSB. These statements, including consolidated pro forma financial statements, are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected. Among the factors that may affect operating results are the following: success of the Company's change in focus, competitive environment, limited capital resources and general economic conditions. 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. Other information. None Item 6. Exhibits and reports on Form 8-K Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits on page 21 of this Form 10-QSB, and are incorporated herein by this reference. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this 10-QSB report to be signed on its behalf by the undersigned thereunto duly authorized. International Trust & Financial Systems, Inc. a Florida corporation By: ------------------------- Tim B. Smith President, CEO and CFO DATED: November _____, 2003 INDEX TO EXHIBITS EXHIBIT NO. PAGE NO. DESCRIPTION 3.1* Articles of Incorporation, as amended, incorporated by reference to the Registrant's Form 8-K12g3, filed on September 12, 2000. 3.2* Bylaws, as amended, incorporated by reference to the Registrant's Form 8-K12g3, filed on September 12, 2000. 99.1 Certification of Chief Executive Officer and Chief Financial Officer, for the period ending September 30, 2003 99.2 Certification Pursuant to Section 302(A) of the Sarbanes-Oxley Act of 2002 99.3* Press Release, dated June 18, 2003, announcing the merger between the Company and Clear Wire Networks, Inc. * Previously filed as indicated and incorporated herein by reference from the referenced filings previously made by the Company. CERTIFICATION OF CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER 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 on Form 10-QSB of INTERNATIONAL TRUST & FINANCIAL SYSTEMS, INC. (the "Company") for the quarterly period ended September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Tim B. Smith, as Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: (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 results of operations of the Company. Date: November _____, 2003 by: ___________________________ Tim B. Smith Chief Executive Officer This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. CERTIFICATION PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002 I, Tim B. Smith, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of International Trust & Financial Systems, 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 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: November ___, 2003 _______________________ Tim B. Smith Chief Executive Officer