10QSB 1 doc1.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [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 PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Crescent Communications, Inc. (Exact name of registrant as specified in its charter) Commission file number: 0-22711 Nevada 76-0640970 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 701 North Post Oak, Road, Suite 630, Houston, Texas 77024 (Address of Principal Executive Office) (Zip Code) (713) 682-7400 (Registrant's Telephone Number, Including Area Code) BERENS INDUSTRIES, INC. (Former Name) As of May 8, 2003 the registrant had 23,926,105 shares of Common Stock outstanding. Transitional Small Business Disclosure Format: Yes [ ] No [X]
CRESCENT COMMUNICATIONS, INC. (FORMERLY BERENS INDUSTRIES, INC.) TABLE OF CONTENTS __________ PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements. . . . . . . . . F-1 Condensed Consolidated Consolidated Condensed Balance Sheet as of March 31, 2003 (Unaudited) and December 31, 2002 . . . . . . . . . . F-2 Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2003 and 2002 . . . . . . . . . F-3 Unaudited Condensed Consolidated Statement of Stockholders' Equity for the three months ended March 31, 2003 . . . . . . . . . . F-4 Unaudited Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2003 and 2002 . . . . . . . . . F-5 Notes to Condensed Consolidated Condensed Financial Statements . . . . F-6 Item 2. Management's Discussion and Analysis. . . . . . . . . . . . . . . . . . I-1 Item 3. Evaluation of Disclosure Controls and Procedures . . . . . . . . . . . I-3 PART II. OTHER INFORMATION Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . . . . . . II-1 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . II-2 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2 Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3
2 ITEM 1. FINANCIAL STATEMENTS CRESCENT COMMUNICATIONS, INC. __________ UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 F-1
CRESCENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEET __________ MARCH 31, DECEMBER 31, 2003 2002 ASSETS (UNAUDITED) (NOTE) ------ ------------ -------------- Current assets: Cash and cash equivalents $ 17,011 $ - Accounts receivable, net of allowance for doubtful accounts of $40,000 and $50,000 at March 31, 2003 and December 31, 2002 308,835 255,983 Prepaid and other 5,208 12,736 ------------ -------------- Total current assets 331,054 268,719 Property and equipment, net of accumulated depreciation of $251,266 and $196,266 at March 31, 2003 and December 31, 2002 533,974 580,008 Goodwill 200,346 200,346 Other assets 53,861 53,861 ------------ -------------- Total assets $ 1,119,235 $ 1,102,934 ============ ============== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Book overdraft $ - $ 33,898 Notes payable 135,300 67,300 Notes payable to related parties 470,205 447,470 Accounts payable 649,925 621,686 Due to employees 15,722 2,987 Accrued liabilities 244,974 255,030 Deferred revenue 133,329 146,895 ------------ -------------- Total current liabilities 1,649,455 1,575,266 ------------ -------------- Commitments and contingencies Stockholders' deficit: Series A Convertible Non-Redeemable Preferred stock, $.001 par value, 20,000,000 shares authorized; 120 issued and outstanding - - Series B Convertible Non-Redeemable Preferred stock, $.001 par value, 10,000,000 shares authorized; 23 issued and outstanding Common stock, $.001 par value, 50,000,000 shares authorized, 19,561,251 and 13,637,511 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively 19,561 13,107 Additional paid-in capital 4,342,909 3,767,410 Subscription receivable (156,289) - Deferred compensation (9,000) (93,100) Accumulated deficit (4,727,401) (4,159,749) ------------ -------------- Total stockholders' deficit (530,220) (472,332) ------------ -------------- Total liabilities and stockholders' equity $ 1,119,235 $ 1,102,934 ============ ==============
Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See accompanying notes. F-2
CRESCENT COMMUNICATIONS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS MARCH 31, 2003 AND 2002 __________ MARCH 31, MARCH 31, 2003 2002 ------------ ------------ Service revenue $ 603,389 $ 425,981 Cost of services 411,754 308,653 ------------ ------------ Gross margin 191,635 117,328 Selling, general and administrative expenses 748,315 539,419 ------------ ------------ Loss from operations (556,680) ( 422,091) Interest expense 10,972 140,869 ------------ ------------ Net loss $ (567,652) $( 562,960) ============ ============ Basic and diluted net loss per common share $ (0.04) $ (0.13) ============ ============ Weighted average shares outstanding 14,459,265 4,314,324 ============ ============
See accompanying notes. F-3
CRESCENT COMMUNICATIONS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2003 __________ SERIES A SERIES B ------------------- ------------------ COMMON STOCK PREFERRED STOCK PREFERRED STOCK ADDITIONAL SUBSCRIP- ------------------- ------------------- ------------------ PAID-IN TION DEFERRED SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL RECEIVABLE COMPENSATION ---------- ------- -------- --------- ------- --------- ---------- ------------ -------------- Balance at December 31, 2002 13,107,511 $13,107 120 $ - 23 $ - $3,767,410 $ - $ (93,100) Issuance of common stock for compensa- tion 50,000 50 - - - - 14,950 - - Compensatory stock options issued to employees and con- sultants (1,200,288 options) - - - - - - 9,000 - (9,000) Issuance of common stock for cash 6,403,740 6,404 - - - - 551,549 (156,289) - Amortization of deferred compen- sation - - - - - - - - 93,100 Net loss - - - - - - - - - ---------- ------- -------- --------- ------- --------- ---------- ------------ -------------- Balance at March 31, 2003 19,561,251 $19,561 120 $ - 23 $ - $4,342,909 $ (156,289) $ (9,000) ========== ======= ======== ========= ======= ========= ========== ============ ============== ACCUMULATED DEFICIT TOTAL ------------- ---------- Balance at December 31, 2002 $ (4,159,749) $(472,332) Issuance of common stock for compensa- tion - 15,000 Compensatory stock options issued to employees and con- sultants (1,200,288 options) - - Issuance of common stock for cash - 401,664 Amortization of deferred compen- sation - 93,100 Net loss (567,652) (567,652) ------------- ---------- Balance at March 31, 2003 $ (4,727,401) $ 530,220 ============= ==========
See accompanying notes. F-4
CRESCENT COMMUNICATIONS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 __________ MARCH 31, MARCH 31, 2003 2002 ----------- ----------- Cash flows from operating activities: Net loss $ (567,652) $ (562,960) Adjustments to reconcile net loss to net cash used in operating activities: 79,999 303,643 ----------- ----------- Net cash used in operating activities (487,653) (259,317) ----------- ----------- Cash flows from investing activities: Capital expenditures - (2,101) ----------- ----------- Net cash used in investing activities - (2,101) ----------- ----------- Cash flows from financing activities: Proceeds from notes payable 127,000 134,000 Payments on notes payable (24,000) (22,207) Collection of receivable from stockholder - 150,000 Issuance of common stock for cash 401,664 - ----------- ----------- Net cash provided by financing activities 504,664 261,793 ----------- ----------- Net increase in cash and cash equivalents 17,011 375 Cash and cash equivalents at beginning of period - 10,773 ----------- ----------- Cash and cash equivalents at end of period $ 17,011 $ 11,148 =========== ===========
See accompanying notes. F-5 CRESCENT COMMUNICATIONS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS __________ 1. BASIS OF PRESENTATION ----------------------- The unaudited consolidated condensed financial statements included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to such rules and regulations. These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Crescent Communications, Inc. (the "Company") included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2002. In the opinion of management, the unaudited consolidated condensed financial information included herein reflect all adjustments, consisting only of normal, recurring adjustments, which are necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the interim periods presented. The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for a full year or any other interim period. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term. 2. GOING CONCERN CONSIDERATIONS ------------------------------ During the three months ended March31, 2002, the year ended December 31, 2002 and the period from inception, July 23, 2001, to December 31, 2001 the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on debt and equity raised from qualified individual investors. During the year ended December 31, 2002 and the period from inception, July 23, 2001 to December 31, 2001, the Company experienced negative financial results as follows:
2002 2001 ------------ ------------ Net loss $(2,946,382) $(1,213,367) Negative cash flow from operations (1,774,837) (396,500) Negative working capital (1,276,547) (1,072,959) Stockholders' deficit (442,332) (430,687)
These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company has supported current operations by: 1) raising additional operating cash through private placements of its common stock, 2) issuing debt convertible to common stock to certain key stockholders and 3) issuing stock and options as compensation to certain employees and vendors in lieu of cash payments. These steps have provided the Company with the cash flows to continue its business plan, but have not resulted in significant improvement in the Company's financial position. Management is considering alternatives to address its critical cash flow situation that include: - Raising capital through additional sale of its common and preferred stock and/or debt securities. F-6 CRESCENT COMMUNICATIONS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS __________ 2. GOING CONCERN CONSIDERATIONS, CONTINUED ------------------------------------------ - Merging the Company with another business that compliments current activities. - Reducing cash operating expenses to levels that are in line with current revenues. Reductions can be achieved through the issuance of additional common shares of the Company's stock in lieu of cash payments to employees or vendors. These alternatives could result in substantial dilution of existing stockholders. There can be no assurances that the Company's current financial position can be improved, that it can raise additional working capital or that it can achieve positive cash flows from operations. The Company's long-term viability as a going concern is dependent upon the following: - The Company's ability to locate sources of debt or equity funding to meet current commitments and near term future requirements. - The ability of the Company to achieve profitability and ultimately generate sufficient cash flow from operations to sustain its continuing operations. 3. INCOME TAX ----------- The difference between the Federal statutory income tax rate of 34% and the Company's effective rate is primarily attributable to increases in the valuation allowance offset against deferred tax assets associated with the Company's net operating losses. 4. NOTES PAYABLE TO RELATED PARTIES ------------------------------------ Certain notes payable to related parties totaling $300,185 are convertible into shares of the Company's common stock at $.05 per share, at the election of the payee, any time prior to repayment of the note. At March 31, 2003 the notes are convertible into 6,003,700 common shares. During the three months ended March 31, 2003 certain members of the executive management team advanced $80,000 under short term borrowing agreements. The amounts are due on demand and call for interest at 10% of the face value of the loan. In order to meet cash requirements, one of the Company's officers entered into an agreement to factor certain receivables of the Company. The arrangement, which began in May allows for receivables to be sold at 90% of their book value. At March 31, 2003 $22,264 was outstanding under this agreement. 5. STOCKHOLDERS' EQUITY --------------------- During the three months ended March 31, 2003, the Company engaged in various transactions affecting stockholders' equity, as follows: - The Company sold common stock under Regulation S to various foreign investors under investment agreements entered into during 2002. The investment agreements generally provide for the sale of restricted common stock at 35% of the current trading price in the United States. During the three month period ended March 31, 2003 6,403,740 shares were issued for $551,549. F-7 CRESCENT COMMUNICATIONS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS __________ 5. STOCKHOLDERS' EQUITY, CONTINUED --------------------------------- - The Company issued common stock for legal services totaling $15,000. - The Company issued options to acquire shares of the Company's common stock to employees and consultants. The options are exercisable after a vesting period at $.20 per share. F-8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS This management's Discussion and Analysis as of March 31, 2003 and for the three months ended March 31, 2003, should be read in conjunction with the unaudited condensed financial statements and notes thereto set forth in Item 1 of this report. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. For example, words such as, "may," "will," "should," "estimates," "predicts," "potential," continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to the risks discussed in our other SEC filings. These forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company's discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. REVENUE RECOGNITION ------------------- Revenue from broadband telecommunications services are recognized based upon contractually determined monthly service charges to individual customers. Telecommunications services are billed in advance and, accordingly, revenues are deferred until the period in which the services are provided. At March 31, 2003, deferred service revenue was $133,329. STOCK-BASED COMPENSATION ------------------------- Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") established financial accounting and reporting standards for stock-based employee compensation plans. It defined a fair value based method of accounting for an employee stock option or similar equity instrument and encouraged all entities to adopt that method of accounting for all of their employee stock compensation plans and include the cost in the income statement as compensation expense. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees". The Company accounts for compensation cost for stock option plans in accordance with APB Opinion No. 25. I-1 GENERAL Crescent Communications is a Nevada corporation that began operations on July 23, 2001, providing co-location hosting and connectivity systems to small to mid-size businesses in Texas. The Company, headquartered in Houston, Texas is a Value Added Network provider that develops and deploys specific technological internet related solutions for businesses. The Company was formed through a Stock Exchange Agreement ("Agreement") whereby the shareholders of Solis Communications, Inc ("Solis") exchanged all the issued and outstanding shares of Solis for 600 shares of newly issued Series A Convertible Non-Redeemable Preferred Stock of Berens Industries, Inc. ("Berens"). Solis, the ultimate acquirer of Berens in this reverse merger, agreed to contribute $600,000 cash and cash equivalents. Berens was a development stage enterprise involved in the development of an online auction site for exclusive paintings and other art works. At the date of the Agreement, Berens had ceased all activity due to their inability to generate sufficient revenue or obtain additional capital funding. This transaction is exempt from section 4.2 of the Securities Act. On September 17, 2001 Berens filed a name change to Crescent Communications, Inc. d.b.a. Crescent Broadband and approved a 5-for-1 reverse stock split to be effective on September 24, 2001. On a fully convertible post-split basis, the former shareholders of Solis beneficially owned an aggregate of approximately 28,000,000 shares of common stockAs a result, the former shareholders control approximately 67% of the common stock. The Series A Preferred Stock does not receive dividends. Of the $600,000 committed under the Agreement, $105,000 was used to purchase certain assets of Crescent Services Corporation, a Houston, Texas based company that provided broadband and wireless services. The assets were purchased under the review and approval of the court appointed trustee as part of an involuntary petition under Chapter 7 of the U.S. Bankruptcy Code, filed against Crescent in the U.S. Bankruptcy Court in the Southern District of Texas in January 2001. Approximately $165,000 of connectivity assets were contributed by Solis as partial satisfaction of its $600,000 commitment and $194,000 was used to fund working capital requirements. An additional $136,000 remained due under the agreement which was paid by the shareholders of Solis in January 2002 and used for working capital. The Company has incurred a significant loss from operations since inception, and is in a negative working capital position at March 31, 2003. The Company remains dependent on outside sources of funding for continuation of its operations. Based on these factors, our auditors issued a qualified opinion at December 31, 2002 that reflects the significant doubt about the company's ability to continue as a going concern. RESULTS OF OPERATIONS During the three months ended March 31, 2003, the Company's revenue from connectivity systems, web site hosting, engineering services and hardware sales was $603,389 versus $425,981 for the three month period ended March 31, 2002. This increase of $177,408 is a 42 percent improvement and is primarily attributable to higher connectivity revenue. Revenue from connectivity increased $128,143 as compared to the first quarter of 2002. The Company also realized improvement in the areas of Engineering and Product sales in 2003. Cost of sales for the three months ended March 31, 2003 were $411,754 versus $308,653 for the preceding comparable period. The increase is due to higher interconnect fees and product costs associated with the larger customer base being served. The gross margin for the three month period just ended is 32% as compared with the 27% gross margin for the same time period in 2002. The improvement in gross margin is attributable to the fact that our margins improve as revenues increase due to fixed costs. I-2 Selling general and administrative expenses of $748,315 represents and increase of $208,896 as compared to the period ended March 31, 2002. The increase is attributable to higher direct payroll expenses partially offset by lower costs attributable to stock based compensation. Interest expense is lower in 2003 by $129,897 due almost entirely to the cost associated with convertible notes issued to related parties in 2002. The discounts on the notes associated with the conversion feature resulted in the entire stated amount of the notes of $134,000 being charged to interest expense. No significant capital expenditures were made during the period. PLAN OF OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES At March 31, 2003 the Company had cash and cash equivalents of $17,011. Operations for the three month period ended March 31, 2003 have been funded by the issuance of common stock for cash of $551,549, newly issued short term notes payable to management for $80,000, advances under a line of credit agreement of $47,000 and nonqualified stock options issued to certain employees and contractors in lieu of cash compensation. The Company has continued to take steps to reduce its monthly operating expenses relating to its core business and has expanded its efforts in creating a market for the health care industry. Because of the uncertainty associated with this new market, break even cash flow is not expected until late 2003 at the earliest. The Company is seeking additional capital to fund expected operating costs and has engaged in negotiations to merge or sell part or all of the Company. No commitments for mergers or acquisitions have been obtained at this time and the Company continues to negotiate with certain parties to address the operating cash flow shortfalls. During the three months ended March 31 the Company raised $551,549 from the sale of equity securities. We believe future fundings may be obtained from public or private offerings of equity securities, debt or convertible debt securities or other sources. Stockholders should assume that any additional funding will likely be dilutive. If we are unable to raise additional funding, we may have to limit our operations to an extent that we cannot presently determine. The effect on our business may include the sale of certain assets, the reduction or curtailment of new customer acquisition, reduction in the scope of current operations or the cessation of business operations. Our ability to achieve profitability will depend upon our ability to raise additional operating capital, continued growth in demand for connectivity services and our ability to execute and deliver high quality, reliable connectivity services. ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Manfred Sternberg, our Chief Executive Officer and Mike McDonald, our Chief Financial Officer, have concluded that our disclosure controls and procedures are appropriate and effective. They have evaluated these controls and procedures as of a date within 90 days of the filing date of this report of Form 10-QSB. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of his evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. I-3 PART II ITEM 2. CHANGES IN SECURITIES In June 2002, the Company entered into and agreement with Pacific Continental Securities UK to sell common stock under Regulation S to various foreign investors. Among other things, the agreement provided for the company to issue shares of Regulation S stock at 35% of the average bid price for the preceding five day period of the exercise with a floor price of $.40. The term was originally to expire August 31, 2002, but has been extended. On October 24, 2002 the Company entered into a second agreement with a different firm with similar terms allowing for up to 10 million shares to be issued through January 31, 2003. Both agreements have been amended and extended. The transactions during the quarter totaled 6,403,740 shares for $551,549 and were as follows: Date Issued Title of Securities Shares ----------------- ------------------- --------- January 14, 2003 Common Shares 600,527 February 3, 2003 Common Shares 66,333 February 11, 2003 Common Shares 677,310 February 17, 2003 Common Shares 320,192 March 3, 2003 Common Shares 600,356 March 11, 2003 Common Shares 640,378 March 18, 2003 Common Shares 1,048,214 March 26, 2003 Common Shares 278,359 March 31, 2003 Common Shares 2,172,071 The Company issued common stock to a consultant for legal services. This transaction is exempt pursuant to Section 4(2) of the Securities Act of 1933. Through March 31, 2003, 50,0000 shares aggregating $15,000 as shown below have been issued under this arrangement. Date Issued Title of Securities Shares ------------ --------------------- ------ February 14, 2003 Common Shares 50,000 The Company issued options and warrants to acquire certain common shares to employees and consultants in lieu of cash compensation under section 4(2) of the Securities Act of 1933. The options and warrants are exercisable after a vesting period at the employees election, at an option price of $.10 per share: Date Issued Title of Securities Vesting Period Shares Granted ----------- ------------------- -------------- -------------- March 14, 2003 Common Shares One Year 200,000 II-1 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits - None (b) Reports on Form 8-K - None SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized Crescent Communications, Inc. Date: May 15, 2003 -------------------------------- /s/ Manfred Sternberg Manfred Sternberg, Chief Executive Officer Crescent Communications, Inc. Date: May 15, 2003 -------------------------------- /s/ Mike McDonald Mike McDonald, Chief Financial Officer II-2 Certification of Chief Executive Officer of Crescent Communications, Inc. ------------------------------------------------------------------------- pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 -------------------------------------------------------------------------------- U.S.C. 63. --------- I, Manfred Sternberg, the Chief Executive Officer of Crescent Communications, Inc., hereby certify that Crescent Communications, Inc.'s periodic report on Form 10-QSB, for the period ending March 31, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that information contained in the periodic report on Form 10-QSB fairly presents, in all material respects, the financial condition and results of the operations of Crescent Communications, Inc. -------------------------------- Date: May 15, 2003 /s/ Manfred Sternberg Manfred Sternberg Chief Executive Officer Certification of Chief Financial Officer of Crescent Communications, Inc. ------------------------------------------------------------------------- pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 -------------------------------------------------------------------------------- U.S.C. 63. --------- I, Mike McDonald, the Chief Financial Officer of Crescent Communications, Inc., hereby certify that Crescent Communications, Inc.'s periodic report on Form 10-QSB, for the period ending March 31, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that information contained in the periodic report on Form 10-QSB fairly presents, in all material respects, the financial condition and results of the operations of Crescent Communications, Inc. -------------------------------- Date: May 15, 2003 /s/ Mike McDonald Mike McDonald Chief Financial Officer II-3 CERTIFICATIONS -------------- I, Manfred Sternberg, the Chief Executive Officer of Crescent Communications, Inc, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Crescent Communications, 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 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: May 15, 2003 ________________________________ /s/ Manfred Sternberg Manfred Sternberg Chief Executive Officer II-4 CERTIFICATIONS -------------- I, Mike McDonald, the Chief Financial Officer of Crescent Communications, Inc, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Crescent Communications, 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 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: May 15, 2003 _______________________________ /s/ Mike McDonald Mike McDonald Chief Financial Officer II-5