10QSB 1 heritage10-qsb.txt UNITED STATES 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 March 31, 2003. [ ] Transition report under Section 13 or 15(d) of the Exchange Act for the transition period from: _________________ to: _________________ Commission file number: 000-49998 Heritage Scholastic Corporation ------------------------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) Nevada 88-0502934 ---------------------------------------- ------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1954 Kellogg Avenue, Carlsbad, California 92008 ------------------------------------------------------------------------ (Address of Principal Executive Offices) 760-268-0700 ---------------------------------------- (Issuer's Telephone Number, Including Area Code) Check whether 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: Common Stock, $0.001 par value per share: 7,718,875 (as of March 31, 2003) ------------------------------------------------------------------------ /1/ Table of Contents Heritage Scholastic Corporation Part I Financial Information Item 1.Financial Statements (unaudited) Condensed consolidated balance Sheet - March 31, 2003. Condensed consolidated statements of operations and comprehensive loss - Three months ended March 31, 2003 and March 31, 2002 and nine months ended March 31, 2003 and March 31, 2002 Condensed consolidated statements of cash flows - Nine months ended March 31, 2003 and March 31, 2002 Notes to condensed consolidated financial statements - March 31, 2003 Item 2.Management's Discussion and analysis of Financial Condition and Results of Operations Item 3.Quantitative and Qualitative Disclosures About Market Risk Item 4.Controls and Procedures Part II. Other Information Item 6.Exhibits and Reports on Form 8-K Signatures Certifications /2/ PART I - FINANCIAL STATEMENTS **** Independent auditors have not performed a SAS 700 Review on the 3rd Quarter ending March 31, 2003 and the nine- month period ending March 31, 2003 numbers contained in this report. **** ITEM 1.FINANCIAL STATEMENTS Heritage Scholastic Corporation Balance Sheet (unaudited) ========================================================================== March 31, 2003 2002 ------------------------------------------------------------------------- Assets Current Assets Cash $ 56 $ 841 Accounts receivable 1,940 0 Inventory (Note 2) 8,286 0 Advances - related party 0 0 ------------------------------------------------------------------------- Total current assets 10,282 841 Fixed Assets Capitalized book expenses 20,455 7,000 Deferred Stock Offering Issuance Costs 0 7,000 ------------------------------------------------------------------------- Total fixed assets 20,455 14,000 Total assets $ 30,737 $ 14,841 ========================================================================= Liabilities and Stockholders' Equity Current Liabilities Accounts payable and accrued expenses $ 30,110 $ 14,767 Wages payable and related taxes 3,655 0 Loan from shareholder 300 0 Income taxes payable 745 0 ------------------------------------------------------------------------- Total liabilities $ 34,810 $ 14,767 /3/ Stockholders' Equity Preferred stock; $0.001 par value, 20,000,000 shares 0 0 authorized and no shares issued and outstanding Common stock; $0.001 par value, 100,000,000 shares 7,719 6,781 authorized and 7,718,875 shares issued and outstanding at March 31, 2003 Additional paid-in capital 85,386 20,444 Accumulated deficit at March 31, 2003 and (27,775) (124) March 31, 2002 Current year loss (69,403) (27,027) ------------------------------------------------------------------------- Total stockholders' equity $ (4,073) $ 74 ------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 30,737 $ 14,841 ========================================================================= The accompanying notes are an integral part of these financial statements. /4/ Heritage Scholastic Corporation Statements of Operations (unaudited) ========================================================================== Three Months Three Months ended ended 31-Mar-2003 31-Mar-2002 ------------------------------------------------------------------------- Revenues $ 3,162 $ 0 Cost of Sales 0 0 ------------------------------------------------------------------------- Gross Profit 3,162 0 General and administrative expenses 7,364 19,873 ------------------------------------------------------------------------- Net Loss $ (4,202) $(19,873) ------------------------------------------------------------------------- Loss Per Share of Common Stock $ (0.00) $ (0.00) ------------------------------------------------------------------------- Weighted Average Shares Outstanding 7,718,875 6,780,625 ========================================================================= ------------------------------------------------------------------------- Nine Months Nine Months ended ended 31-Mar-2003 31-Mar-2002 ------------------------------------------------------------------------- Revenues $ 3,300 $ 0 General and administrative expenses $ 74,783 $ 20,258 ------------------------------------------------------------------------- Net Loss $(71,483) $(20,258) ------------------------------------------------------------------------- Loss Per Share of Common Stock $ (0.01) $ (0.00) ------------------------------------------------------------------------- Weighted Average Shares Outstanding 7,718,875 6,780,625 ========================================================================= The accompanying notes are an integral part of these financial statements. /5/ Heritage Scholastic Corporation Statements of Cash Flows (unaudited) ========================================================================== Period from Period from July, 1 2002 to July, 1 2001 to March 31, 2003 March 31, 2002 --------------------------------------------------------------------------- Cash Flows From Operating Activities Net loss $ (71,538) $ (27,027) Adjustments to reconcile netloss to net cash used in operating activities: Change in operating assets and liabilities: Accounts receivable (1,940) 0 Inventory (8,286) 0 Accounts payable and accrued expenses 8,527 7,467 Wages payable (2,722) 0 Income taxes payable (800) 0 --------------------------------------------------------------------------- Net cash used in operating activities (76,758) (19,560) --------------------------------------------------------------------------- Cash Flows From Investing Activities Net change in advances-related party 14,436 3,100 Increase in deferred stock offering issuance 0 (7,000) Increase in capitalized publishing costs (6,071) (3,000) --------------------------------------------------------------------------- Net cash provided by (used in) 8,365 (6,900) investing activities Cash Flows From Financing Activities Net proceeds from issuance of common stock 11,800 27,225 Net change in advances-related party 0 0 --------------------------------------------------------------------------- Net cash provided by (used in) 11,800 27,225 financing activities --------------------------------------------------------------------------- Net increase (decrease) in cash (56,593) 765 Cash at Beginning of Period 56,649 76 --------------------------------------------------------------------------- Cash at End of Period $ 56 $ 841 =========================================================================== /6/ --------------------------------------------------------------------------- Noncash Investing and Financing Activities: During the year ended June 30, 2001, the Company issued 6,100,000 common shares valued at $7,300 in exchange for notes receivable. This amount was collected in 2002. During the year ended June 30, 2002, the Company issued 280,000 common shares valued at $28,000 in exchange for services performed in a common stock offering. During the year ended June 30, 2002, the Company recorded non-cash stock based compensation expense of $5,700 for stock options issued to non-employees. =========================================================================== The accompanying notes are an integral part of these financial statements. /7/ Heritage Scholastic Corporation Statements of Stockholders' Equity (unaudited) ============================================================================== Common Stock Additional Shareholder -------------- Paid-in Notes Accumulated Shares Amount Capital Receivable Deficit Total ------------------------------------------------------------------------------ Balance at 7,618,875 $7,619 $ 73,686 $ - $ (27,775) $ 53,530 June 30, 2002 Common stock 50,000 500 4,500 - - 5,000 issued for cash at $0.10 per share on November 27, 2002 Common stock 50,000 500 4,500 - - 5,000 issued for cash at $0.10 per share on November 27, 2002 Net Loss - - - - (71,538) (71,538) ----------------------------------------------------------------------------- Balance at 7,718,875 $8,619 $ 82,686 $ - $ (99,313) $ (8,008) March 31, 2003 ============================================================================= The accompanying notes are an integral part of these financial statements. /8/ Heritage Scholastic Corporation Notes to Financial Statements 1. Basis of The accompanying condensed financial Presentation statements of Heritage Scholastic Corporation ("the Company"), a Nevada corporation. In the opinion of management, the condensed financial statements reflect all normal and recurring adjustments, which are necessary for a fair presentation of the Company's financial position, results of operations and cash flows as of the dates and for the periods, presented. The condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Consequently, these statements do not include all disclosures normally required by generally accepted accounting principles of the United States of America for annual financial statements nor those normally made in an Annual Report on Form 10-KSB. Accordingly, reference should be made to the Company's Amended Form 10-SB filed on December 9, 2002 the Company filed with the U.S. Securities and Exchange Commission for additional disclosures, including a summary of the Company's accounting policies, which have not materially changed. The results of operations for the periods ended March 31, 2003 are not necessarily indicative of results that may be expected for the fiscal year ending June 30, 2003 or any future period, and the Company makes no representations related thereto. The accompanying condensed financial statements as of March 31, 2003 have been prepared assuming the Company will continue as a going concern. However, the Company had a working capital deficit of $5,873 as of March 31, 2003, and incurred a net loss for the nine month period ended March 31, 2003 and period from inception to March 31, 2003 of $71,203 and $97,978, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. During the period from inception to March 31, 2003, management raised net proceeds of approximately $86,000 through sales of common stock. Subsequent to March 2003, management intends to continue to raise additional financing through a combination of public and/or private equity placements, commercial project financing and government program funding to fund future operations and commitments. There is no assurance that additional debt and equity financing needed to fund operations will be consummated or obtained in sufficient amounts necessary to meet the Company's needs. The accompanying condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. /9/ Heritage Scholastic Corporation Notes to Financial Statements 1. Basis of The preparation of financial statements in Presentation conformity with generally accepted accounting Cont'd principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the results of operations during the reporting period. Actual results could differ materially from those estimates. 2. Significant These condensed financial statements do not Accounting include the complete list of significant Policies accounting policies, reference should be made to the Company's Amended Form 10-SB filed on December 9, 2002 for a more complete description of the relevant accounting policies. Supplies inventory consists of operating supplies and are stated at lower of cost or market as determined by the first-in, first-out method. Deferred income taxes are recognized for the tax consequences in future periods of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of March 31, 2003 a current deferred tax asset of approximately $29,000 had been recognized for the temporary differences related to net operating losses carried forward. A valuation allowance of approximately $29,000 has been recorded to fully offset the deferred tax asset as it is not more likely than not that the assets will be utilized. The Federal net operating losses of approximately $98,000 expire in 2022 and the state net operating losses of approximately $98,000 expire in 2011, unless previously utilized. California law imposes a franchise tax of 1.5% of taxable income on companies doing business in the state with a certain minimum amounts per year. /10/ Heritage Scholastic Corporation Notes to Financial Statements 3. Advances Heritage Media Corporation's (HMC) sole with shareholders are Charles and Lori Parks. The a Related Parks' are also shareholders in the Company. Party The Company also shares officers, directors, facilities, and other various resources with HMC. From time to time the Company and a HMC advance money to cover common expenses related to graphic design and other operating expenses. The advances are due on demand and bear interest at 6% per annum. During the nine month period ended September 30, 2002, the Company paid the $3,255 due to HMC at June 30, 2002 and advanced HMC an additional $6,969. 4. Recent In April 2002, the Financial Accounting Accounting Standards Board ("FASB") issued Statement of Pronounceme Financial Accounting Standards ("SFAS") No. 145, nts "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and an amendment of that SFAS, SFAS No. 64, "Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers." Further, SFAS No. 145 amends SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale- leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or described their applicability under changed conditions. This pronouncement requires gains and losses from extinguishment of debt to be classified as an extraordinary item only if the criteria in Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations--Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," have been met. Further, lease modifications with economic effects similar to sale-leaseback transactions must be accounted for in the same manner as sale-leaseback transactions. The provisions of SFAS No. 145 related to the rescission of SFAS No. 4 shall be applied in fiscal years beginning after May 15, 2002. The provisions of SFAS No. 145 related to Statement 13 shall be effective for transactions occurring after May 15, 2002, with early application encouraged. The adoption of SFAS No. 145 did not have a material impact on the Company's consolidated financial position or results of operations. /11/ Heritage Scholastic Corporation Notes to Financial Statements 4. Recent In July 2002, the FASB issued Statement of Accounting Financial Accounting Standards No. 146, Pronounceme "Accounting for Costs Associated with Exit or nts Disposal Activities" ("SFAS 146"). SFAS 146 Cont'd requires that a liability for costs associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred. SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002. Management does not expect the adoption of SFAS 146 to have a material impact on our operating results or financial position. /12/ Heritage Scholastic Corporation Notes to Financial Statements 5 Common Stock to the Company's founders at $0.001 per share for a note receivable that was repaid in the year ended June 30, 2002. On September 29, 2000 the Company issued 600,000 shares of common stock to a key officer of the Company at $0.003 per share for a note receivable that was repaid in the year ended June 30, 2002. On September 14, 2001 the Company issued 680,625 shares of common stock to various investors for cash of $0.04 per share. On June 30, 2002 the Company issued 558,250 shares of common stock in a Nevada- registered offering filed under Rule 504 of Regulation D of the Securities Act of 1933 to various investors for cash of $0.10 per share. Related to the shares issued on June 30, 2002 the Company issued 275,000 shares to a stock offering consulting firm and 5,000 shares to an individual for work performed on the stock offering. These shares were valued at the stock-offering price of $0.10 per share, or $28,000. The shares issued to the consulting firm were in addition to cash fees under an agreement for various stock offering services. The Company incurred a total of approximately $43,000 in direct costs related to above common stock offering, inclusive of the shares issued for services issued at a fair value of $28,000. On November 27, 2002 the Company issued 50,000 shares of common stock to an investor for cash of $0.10 per share. On February 8, 2003 the Company issued 50,000 shares of common stock to an investor for cash of $0.10 per share. /13/ Part I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS As of March 31, 2003, we have generated revenues of $3,300, representing two sales, both occurring in the 3rd quarter (January 1 - March 31). The Company expects revenue to grow in the 4th quarter as more sales contacts are made. Currently, the Company's CEO, Charles Parks is the sole salesperson and he is working on a part time basis between one and two days per week. Once sales increase to approximately $20,000 per month, the Company plans to hire a full time sales person. This is expected to occur in the first quarter of the next fiscal year based on current sales projections. Currently the company is selling books only in the Los Angeles area. This is expected to continue through the end of the current fiscal year. Plans are to expand into other markets once we have our first full time sales person. Expenses during the third quarter of this year were $7,400 compared with $19,900 for the same quarter last year. As was also the case then, approximately two-thirds of the expenses were legal and professional. These expenses were all related to the 10-sb filing for the SEC. The company is currently engaged in discussions and correspondence with the NASD to complete the company's listing on the bulletin board. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2003, we had approximately $60 in cash, $1,940 in receivables and $8,290 in books inventory. The rent expense continues to accrue as a payable due to an affiliate. During the third quarter, the Company raised an additional $10,000 in capital via private placement of stock to qualified private investors. We believe our total current assets of $10,280 as of March 31, 2003 plus projected cash flows will provide sufficient capital to implement our plan to place our textbooks throughout the targeted school districts. Our current monthly operating expense is less than $1,000, exclusive of management's salaries, which continued to be deferred until we have sufficient sales and cash flow to pay them. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS Accounting for Business Combinations In July 2001 the FASB issued Statements No. 141, Business Combinations (SFAS 141) and No. 142, Goodwill and Other Intangible Assets (SFAS 142). These standards change the accounting for business combinations by, among other things, prohibiting the prospective use of pooling-of- interests accounting and requiring companies to stop amortizing goodwill and certain intangible assets with an indefinite useful life created by business combinations accounted for using the purchase method of accounting. Instead, goodwill and intangible assets deemed to have an indefinite useful life will be subject to an annual review for impairment. We adopted the new standards on January 1, 2002; the adoption did not have an effect on our financial statements. /14/ Asset Retirement Obligations In July 2001 the FASB issued Statement No. 143, Accounting for Asset Retirement Obligations (SFAS 143). SFAS 143 addresses the accounting and reporting for obligations associated with the retirement of tangible long- lived assets and the associated asset retirement costs. We adopted the new standard on January 1, 2002; the adoption did not have an effect on our financial statements. Impairment or Disposal of Long-Lived Assets In August 2001 the FASB issued Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. We adopted the new standard on January 1, 2002; the adoption did not have an effect on our financial statements. RISKS AND UNCERTAINTIES Limited Operating History We have a limited operating history on which to base estimates for future performance and face all of the risks inherent in the educational textbook industry. These risks include, but are not limited to, market acceptance and penetration of our products, our ability to obtain a pool of qualified personnel, management of the costs of conducting operations, general economic conditions and factors that may be beyond our control. We cannot assure you that we will be successful in addressing these risks. Failure to successfully address these risks could have a material adverse effect on our operations. Need for Additional Financing We may need to obtain additional financing in the event that we are unable to realize sufficient revenue or collect accounts receivable when we emerge from the development stage. We may incur additional indebtedness from time to time to finance acquisitions, provide for working capital or capital expenditures or for other purposes. However, we currently anticipate that our expected operating cash flow and the funds raised from our offering of common stock will be sufficient to meet our operating expenses for at least the next 12 to 24 months. Furthermore, our ability to pay future cash dividends on our Common Stock, or to satisfy the redemption of future debt obligations that we may enter into will be primarily dependent upon the future financial and operating performance of our Company. Such performance is dependent upon financial, business and other general economic factors, many of which are beyond our control. If we are unable to generate sufficient cash flow to meet our future debt service obligations or provide adequate long-term liquidity, we will have to pursue one or more alternatives, such as reducing or delaying capital expenditures, refinancing debt, selling assets or operations, or raising additional equity capital. There can be no assurance that such alternatives could be accomplished on satisfactory terms, if at all, or in a timely manner. /15/ ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Technological change, continuing process development and a reduction in school district spending may affect the markets for our products. Our success will depend, in part, upon our continued ability to provide quality textbooks that meet changing customer needs, successfully anticipate or respond to technological changes in technological processes on a cost-effective and timely basis and enhance and expand our client base. Current competitors or new market entrants may provide products superior to ours that could adversely affect the competitive position of our Company. Any failure or delay in achieving our priorities for the next six to twelve months of operations as stated on page 12 could have a material adverse effect on our business, future results of operations and financial condition. ITEM 4. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures The management of the Company, including the President and Chief Executive Officer and the Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-14 (c) and 15d- 14 (c) under the Securities Exchange Act) as of a date (the "Evaluation Date") within 90 days prior to the filing date of this report. Based on that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that, as of the evaluation date, the Company's disclosure controls and procedures were effective in ensuring that all material information relating to the Company, including its consolidated subsidiaries, required to be filed in this quarterly report have been made known to them in a timely manner. Changes in internal controls There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of the most recently completed evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /16/ Part II - Other Information Item 6. Exhibits Exhibit Name and/or Identification of Exhibit Number 3 Articles of Incorporation & By-Laws (a) Articles of Incorporation of the Company filed July 30, 1999. Incorporated by reference to the exhibits to the Company's General Form For Registration Of Securities Of Small Business Issuers on Form 10-SB, previously filed with the Commission. (a) Amended Articles of Incorporation of the Company filed January 11, 2002. Incorporated by reference to the exhibits to the Company's General Form For Registration Of Securities Of Small Business Issuers on Form 10-SB, previously filed with the Commission. (c) By-Laws of the Company adopted July 1, 2000. Incorporated by reference to the exhibits to the Company's General Form For Registration Of Securities Of Small Business Issuers on Form 10-SB, previously filed with the Commission. 99.1 Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. SECTION 1350) /17/ SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Heritage Scholastic Corporation (Registrant) Date: June 6, 2003 ------------- By: /s/ Charles Parks ----------------------------------- Charles E. Parks, President and CEO Date: June 6, 2003 ------------- By: /s/ Randall Peterson -------------------------------------- Randall L. Peterson, Treasurer and CFO /18/ Attachment A Form of Certification for Form 10-QSB CERTIFICATIONS I, Charles E. Parks, President and CEO of Heritage Scholastic Corp (the "registrant"), certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Heritage Scholastic Corp.; 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: 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 /19/ 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: June 6, 2003 ------------ /s/ Charles Parks ----------------- Charles E. Parks President/CEO /20/ Attachment A Form of Certification for Form 10-QSB CERTIFICATIONS I, Randall L. Peterson, Treasurer and CFO of Heritage Scholastic Corp (the "registrant"), certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Heritage Scholastic Corp.; 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: 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 /21/ 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: June 6, 2003 ------------ /s/ Randall Peterson -------------------- Randall L. Peterson Treasurer/CFO /22/