-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ih4RWT2U+sTADsX6uljvWEwItFPwzhIwTDp6oCh8ZRgEof4GFbr2rWshbQsBd8yC +qzhf9JtXFvfIVHbj6nVKg== 0000897101-03-000163.txt : 20030227 0000897101-03-000163.hdr.sgml : 20030227 20030227163439 ACCESSION NUMBER: 0000897101-03-000163 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021218 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSIGNIA SYSTEMS INC/MN CENTRAL INDEX KEY: 0000875355 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 411656308 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13471 FILM NUMBER: 03583777 BUSINESS ADDRESS: STREET 1: 5025 CHESHIRE LANE NORTH CITY: PLYMOUTH STATE: MN ZIP: 55446 BUSINESS PHONE: 7633926200 MAIL ADDRESS: STREET 1: 5025 CHESHIRE LANE NORTH CITY: PLYMOUTH STATE: MN ZIP: 55346 8-K/A 1 insignia030927_8ka.txt INSIGNIA SYSTEMS, INC. FORM 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549-1004 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) December 18, 2002 INSIGNIA SYSTEMS, INC. ---------------------- (Exact name of registrant as specified in its chapter) Minnesota 0-19380 41-1656308 - ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 6470 Sycamore Court North, Maple Grove, Minnesota 55369 - ------------------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (763) 392-6200 -------------- (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS This Form 8-K/A includes the following financial statements and pro forma financial information for the Registrant's acquisition of the assets comprising the ValuStix (R) business from Paul A. Richards, Inc., as described in Form 8-K filed December 31, 2002. (a) Financial statements of businesses acquired. Audited Financial Statements of ValuStix as of and for the Years Ended December 31, 2000 and 2001 And Unaudited Financial Statements of ValuStix as of and for the Nine Months Ended September 30, 2001 and 2002 Report of Independent Auditors Balance Sheets Statements of Operations and Owners' Equity Statements of Cash Flows Notes to Financial Statements (b) Pro forma financial information Unaudited Pro Forma Condensed Combined Financial Statements of Insignia Systems, Inc. Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2002 Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2002 Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2001 Notes to Unaudited Pro Forma Condensed Combined Financial Statements (c) Exhibits Ex. No. Description - ------- ----------- 23.1 Consent of Ernst & Young LLP, Independent Auditors (filed herewith) 2 Report of Independent Auditors The Board of Directors and Management ValuStix We have audited the accompanying balance sheets of ValuStix, an operating unit within Paul A. Richards, Inc., as of December 31, 2000 and 2001, and the related statements of operations and owners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ValuStix at December 31, 2000 and 2001, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Minneapolis, Minnesota January 22, 2003 3 VALUSTIX BALANCE SHEETS
DECEMBER 31, SEPTEMBER 30, 2000 2001 2002 ----------- ----------- ----------- (UNAUDITED) ASSETS Current assets: Receivables $ 47,500 $ 43,621 $ -- Deferred program costs 64,084 -- -- ----------- ----------- ----------- 111,584 43,621 -- Property and equipment: Equipment 83,097 96,754 97,695 Furniture, fixtures, and equipment 3,762 3,762 3,762 ----------- ----------- ----------- 86,859 100,516 101,457 Accumulated depreciation (48,805) (61,204) (71,740) ----------- ----------- ----------- Net property and equipment 38,054 39,312 29,717 ----------- ----------- ----------- Total assets $ 149,638 $ 82,933 $ 29,717 =========== =========== =========== LIABILITIES AND OWNERS' EQUITY Current liabilities: Accounts payable $ 38,751 $ 10,213 $ 3,491 Accrued liabilities 2,565 2,691 -- Deferred revenue 70,000 -- -- ----------- ----------- ----------- Total liabilities 111,316 12,904 3,491 Owner's equity Contributed capital 1,023,153 2,066,687 2,732,358 Accumulated deficit (984,831) (1,996,658) (2,706,132) ----------- ----------- ----------- 38,322 70,029 26,226 ----------- ----------- ----------- Total liabilities and owners' equity $ 149,638 $ 82,933 $ 29,717 =========== =========== ===========
SEE ACCOMPANYING NOTES. 4 VALUSTIX STATEMENTS OF OPERATIONS AND OWNERS' EQUITY
YEAR ENDED NINE MONTHS ENDED DECEMBER 31, SEPTEMBER 30, 2000 2001 2001 2002 --------------------------- --------------------------- (UNAUDITED) Sales $ 105,000 $ 113,621 $ -- $ 29,292 Cost of sales 147,272 166,482 -- 61,280 --------------------------- --------------------------- Gross margin (loss) (42,272) (52,861) -- (31,988) Operating expenses: Sales and marketing 691,187 808,430 735,680 561,553 General and administrative 127,261 150,536 163,667 115,933 --------------------------- --------------------------- 818,448 958,966 899,347 677,486 --------------------------- --------------------------- Net loss (860,720) (1,011,827) (899,347) (709,474) Owners' equity Beginning of year 38,581 38,322 38,322 70,029 Contributions of services by owner -- 69,902 69,902 -- Contributions by owner 860,461 973,632 842,599 665,671 --------------------------- --------------------------- End of year $ 38,322 $ 70,029 $ 51,476 $ 26,226 =========================== ===========================
SEE ACCOMPANYING NOTES. 5 VALUSTIX STATEMENTS OF CASH FLOWS
YEAR ENDED NINE MONTHS ENDED DECEMBER 31, SEPTEMBER 30, 2000 2001 2001 2002 --------------------------- --------------------------- OPERATING ACTIVITIES Net loss $ (860,720) $(1,011,827) $ (899,347) $ (709,474) Adjustments to reconcile net loss to net cash (used in) operating activities: Depreciation 16,044 12,399 12,305 10,536 Contribution of services by owner -- 69,902 69,902 -- Changes in operating assets and liabilities: Receivables (47,500) 3,879 47,500 43,621 Prepaid expenses (64,084) 64,084 43,541 -- Accounts payable 38,751 (28,538) (38,751) (6,722) Accrued liabilities 2,565 126 (1,163) (2,691) Deferred revenue 70,000 (70,000) (70,000) -- --------------------------- --------------------------- Net cash used in operating activities (844,944) (959,975) (836,013) (664,730) INVESTING ACTIVITIES Capital expenditures (15,517) (13,657) (6,586) (941) --------------------------- --------------------------- Net cash used in investing activities (15,517) (13,657) (6,586) (941) FINANCING ACTIVITIES Capital contributed by owner 860,461 973,632 842,599 665,671 --------------------------- --------------------------- Net cash provided by financing activities 860,461 973,632 842,599 665,671 --------------------------- --------------------------- Net increase (decrease) in cash $ -- $ -- $ -- $ -- =========================== ===========================
SEE ACCOMPANYING NOTES. 6 16 VALUSTIX NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS ValuStix (the Company) is an operating unit within Paul A. Richards, Inc. (PAR), a New York company. These financial statements reflect the financial position, results of operations, and cash flows of ValuStix, as if it were a stand-alone company. The ValuStix business is a proprietary system that allows retailers and manufacturers to attach coupons and other promotional materials to products that are sold in grocery stores and other retail locations. Coupons and promotional materials are applied to any product at the point-of-production in pressure sensitive booklets via customized equipment. The booklets can be adhered to all categories of products, including frozen foods, refrigerated foods, dairy products and produce. BASIS OF PRESENTATION The financial statements have been derived from the financial statements and accounting records of Paul A. Richards, Inc. using the historical results of operations and historical basis of certain assets and liabilities of the Company's business. Management believes the assumptions underlying the financial statements are reasonable. However, the financial statements included herein may not necessarily reflect the Company's results of operations, financial position, and cash flows in the future or what its results of operations, financial position, and cash flows would have been had the Company been a stand-alone company during the periods presented. The financial statements include allocations of certain Paul A. Richards, Inc. corporate assets, liabilities, and expenses to the ValuStix business that is being sold to an outside party (see Note 3). Product costs are based on direct labor, overhead and materials assigned to each coupon project. Sales, marketing, and general and administrative wages and benefits are based on actual time devoted to ValuStix operations. Overhead costs have been allocated based on the ratio of wages and benefits allocated to ValuStix as a percentage of Paul A. Richards, Inc.'s total wages and benefits. Overhead primarily includes rent, utilities, accounting and other administrative costs. Management believes the costs of these services charged to the Company are a reasonable representation of the costs that would have been incurred if the Company had performed these functions as a stand-alone company. 7 VALUSTIX NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The information presented as of September 30, 2002 and for the nine months ended September 30, 2001 and 2002 is unaudited. In the opinion of management of PAR, the accompanying unaudited financial statements contain all adjustments considered necessary for the fair presentation of ValuStix's financial position as of September 30, 2002, the results of its operations for the nine month periods ended September 30, 2001 and 2002 and its cash flows for the nine months ended September 30, 2001 and 2002. ACCOUNTS RECEIVABLE The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support amounts due. PROPERTY AND EQUIPMENT Property and equipment is recorded at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows: Equipment 3 - 5 years Furniture and fixtures 7 years IMPAIRMENT OF LONG-LIVED ASSETS The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) 144 "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS," which was effective January 1, 2002. SFAS 144 supercedes SFAS 121 and further clarifies the accounting for disposals of long-lived assets. The Company will record impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. REVENUE RECOGNITION The Company recognizes revenue over the period of service related to the coupon projects. 8 VALUSTIX NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAXES PAR, with the consent of its shareholder, elected to be taxed as an S corporation under the Internal Revenue Code and applicable state statutes. Consequently, no income taxes are recorded in the financial statements since the net income (loss) will be included in the tax returns of the shareholder. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include an allocation of costs by Paul A. Richards, Inc., among other estimates. Actual results could differ from those estimates. 2. CONCENTRATIONS MAJOR CUSTOMERS During the year ended December 31, 2000 six customers each accounted for 16% of the Company's total net sales. At December 31, 2000 two customers accounted for all of the Company's accounts receivable. During the year ended December 31, 2001 one customer accounted for 38% of the Company's total net sales and all of its accounts receivable as of December 31, 2001. Although there are a number of customers that the Company sells to, the loss of a major customer could cause a delay in and possible loss of sales, which would adversely affect operating results. SUPPLIERS The Company subcontracts with one vendor for the printing of the ValuStix coupons. Although there are a limited number of printers capable of providing this service, management believes that other printers could provide the coupons on comparable terms. The time required to locate and qualify other printers, however, could cause a delay that may be financially disruptive to the Company. 9 VALUSTIX NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. SUBSEQUENT EVENT On December 23, 2002, all of the assets comprising the ValuStix business were acquired by Insignia Systems, Inc. (Insignia), a Minnesota company, for $3,000,000 in cash, plus a five-year royalty based on annual net sales over a threshold amount, pursuant to an Asset Purchase Agreement dated December 23, 2002 between Paul A. Richards, Inc. and Insignia. The price was determined based on the value of the assets transferred and expectations concerning future sales of the product line. Insignia is not related to Paul A. Richards, Inc. in any manner. 10 UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations for future periods or the financial position or results of operations that actually would have been realized had Insignia Systems, Inc. and ValuStix been a combined company during the specified periods. The unaudited pro forma condensed combined financial statements, including the related notes, are qualified in their entirety by reference to, and should be read in conjunction with, the historical financial statements and related notes of Insignia Systems, Inc., included in its Form 10-K and Form 10-Q filed with the Securities and Exchange Commission on March 29, 2002 and October 31, 2002, respectively, and the historical audited financial statements and related notes of ValuStix, included elsewhere in this Form 8-K/A. The following unaudited pro forma condensed combined financial statements are accounted for in accordance with Statement of Financial Accounting Standards No. 141, BUSINESS COMBINATIONS (SFAS 141). The purchase price allocation is preliminary. The pro forma condensed combined financial statements are based on the respective historical financial statements of Insignia Systems, Inc. and ValuStix and assumes the acquisition took place on January 1, 2001. The pro forma adjustments are based on the estimates and assumptions set forth in the notes to such statements. 11 INSIGNIA SYSTEMS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2002
Insignia Systems, Pro Forma Inc. ValuStix Adjustments Combined ------------ ------------ ------------ ------------ (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) ASSETS Current Assets: Cash and cash equivalents $ 2,640,777 $ -- $ (3,000,000) (a) $ 6,681,777 7,041,000 (c) Accounts receivable, net 3,420,395 -- 3,420,395 Inventories 803,743 -- 803,743 Prepaid expenses 275,109 -- 275,109 ----------------------------------------------------------------- Total Current Assets 7,140,024 -- 4,041,000 11,181,024 -- Property and Equipment, at cost 3,132,727 101,457 (101,457) (b) 3,132,727 15,000 (a) 15,000 Accumulated depreciation and amortization (2,531,901) (71,740) 71,740 (b) (2,531,901) ----------------------------------------------------------------- Total Property and Equipment 600,826 29,717 (14,717) 615,826 Other Assets: Goodwill -- -- 2,985,000 (a) 2,985,000 ----------------------------------------------------------------- Total Assets $ 7,740,850 $ 29,717 $ 7,011,283 $ 14,781,850 ================================================================= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Line of credit $ 322,458 $ -- $ 322,458 Accounts payable 486,418 3,491 (3,491) (b) 486,418 Accrued liabilities 2,416,869 -- -- 2,416,869 Deferred revenue 507,998 -- 507,998 ----------------------------------------------------------------- Total Current Liabilities 3,733,743 3,491 (3,491) 3,733,743 Shareholders' Equity: Common stock 109,274 8,161 (c) 117,435 Additional paid-in capital 18,759,854 7,032,839 (c) 25,792,693 Contributed capital 2,732,358 (2,732,358) (b) -- Accumulated deficit (14,862,021) (2,706,132) 2,706,132 (b) (14,862,021) ----------------------------------------------------------------- Total Shareholders' Equity 4,007,107 26,226 7,014,774 11,048,107 ----------------------------------------------------------------- Total Liabilities and Shareholders' Equity $ 7,740,850 $ 29,717 $ 7,011,283 $ 14,781,850 =================================================================
SEE ACCOMPANYING NOTES. 12 INSIGNIA SYSTEMS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
Insignia Systems, Pro Forma Inc. ValuStix Adjustments Combined ------------ ------------ ------------ ------------ (UNAUDITED) (UNAUDITED) (UNAUDITED) Net Sales $ 16,913,907 $ 29,292 $ 16,943,199 Cost of Sales 6,726,743 61,280 (6,840) (d) 6,781,183 ----------------------------------------------------------------- Gross Profit (Loss) 10,187,164 (31,988) 6,840 10,162,016 Operating Expenses POPS 5,460,173 -- -- 5,460,173 Sales and marketing 2,728,044 561,553 (61,560) (d) 3,228,037 General and administrative 1,876,021 115,933 (8,286) (e) 1,983,668 ----------------------------------------------------------------- 10,064,238 677,486 (69,846) 10,671,878 ----------------------------------------------------------------- Operating Income (Loss) 122,926 (709,474) 76,686 (509,862) Other Income (Expense) Interest income 37,895 -- -- 37,895 Interest expense (44,476) -- -- (44,476) Other income (expense) (93,943) -- -- (93,943) ----------------------------------------------------------------- (100,524) -- (100,524) ----------------------------------------------------------------- Net Income (Loss) $ 22,402 $ (709,474) 76,686 $ (610,386) ================================================================= Net income (loss) per share: Basic $ 0.00 $ (0.05) Diluted $ 0.00 $ (0.05) Shares used in calculation of net income (loss) per share: Basic 10,802,774 11,618,874 Diluted 11,679,294 12,495,394
SEE ACCOMPANYING NOTES. 13 INSIGNIA SYSTEMS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001
Insignia Systems, Pro Forma Inc. ValuStix Adjustments Combined ------------ ------------ ------------ ------------ (UNAUDITED) Net Sales $ 19,933,166 $ 113,621 $ 20,046,787 Cost of Sales 8,571,771 166,482 (6,189) (d) 8,732,064 ----------------------------------------------------------------- Gross Profit (Loss) 11,361,395 (52,861) 6,189 11,314,723 Operating Expenses POPS 6,045,848 6,045,848 Sales and marketing 2,894,417 808,430 (26,873) (d) 3,675,974 General and administrative 2,302,361 150,536 (9,399) (e) 2,443,498 ----------------------------------------------------------------- 11,242,626 958,966 (36,272) 12,165,320 ----------------------------------------------------------------- Operating Income (Loss) 118,769 (1,011,827) 42,461 (850,597) Other Income (Expense) Interest income 61,895 -- 61,895 Interest expense (69,828) -- (69,828) Other income (expense) 9,994 -- 9,994 ----------------------------------------------------------------- 2,061 -- 2,061 ----------------------------------------------------------------- Net Income (Loss) $ 120,830 $ (1,011,827) 42,461 $ (848,536) ================================================================= Net income (loss) per share: Basic $ 0.01 $ (0.08) Diluted $ 0.01 $ (0.08) Shares used in calculation of net income (loss) per share: Basic 10,470,075 11,286,175 Diluted 11,539,760 12,355,860
SEE ACCOMPANYING NOTES. 14 INSIGNIA SYSTEMS, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION Certain historical data of ValuStix has been classified to conform to Insignia's presentation. The unaudited pro forma weighted average number of shares outstanding (basic and diluted) are based upon Insignia Systems, Inc.'s amounts, plus 816,100 shares issued in a December 18, 2002 private placement. 2. ALLOCATION OF PURCHASE PRICE The December 23, 2002 estimated purchase price of ValuStix has been allocated as follows: Goodwill $ 2,985,000 Property and equipment 15,000 ----------- $ 3,000,000 =========== 3. KEY TO PRO FORMA ADJUSTMENTS The unaudited pro forma condensed combined balance sheet and statements of operations include the adjustments necessary to give effect to the purchase price as if it had occurred on January 1, 2001 and to reflect the allocation of the purchase price to the fair value of the assets acquired as noted above, including the elimination of ValuStix's equity accounts. Summarized below are the pro forma adjustments necessary to reflect the acquisition of ValuStix based upon the purchase method of accounting in accordance with SFAS 141: a. Record the purchase price allocation. b. Eliminate the assets and liabilities not acquired as part of the acquisition and also eliminate the equity accounts of ValuStix. c. Record common stock issued in a private placement, a portion of the proceeds of which were used to purchase ValuStix. d. Reduce compensation paid to Paul A. Richards to agree to level in Employment Agreement dated December 23, 2002. e. Reduce depreciation expense to reflect lower cost basis of property and equipment. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Insignia Systems, Inc. ------------------------------------------ (Registrant) Date: February 27, 2003 ----------------- By /s/ Denni Jo Lester ------------------------------------------ (Denni Jo Lester, Chief Financial Officer) 16 EXHIBIT INDEX Ex. No. Description - ------- ----------- 23.1 Consent of Ernst & Young LLP, Independent Auditors (filed herewith) 17 EX-23.1 3 insignia030927_ex23-1.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-3 Nos. 333-82626, 33-60243 and 333-79915) and Registration Statements (Form S-8 Nos. 33-47003, 33-92376, 333-43781, 333-59709, 333-80261, 333-41242 and 333-65172) pertaining to the 1990 Stock Plan and in Registration Statements (Form S-8 Nos. 33-75372 and 33-92374) pertaining to the Employee Stock Purchase Plan of Insignia Systems, Inc. of our report dated January 22, 2003, with respect to the financial statements of ValuStix, a business unit of Paul A. Richards, Inc., included in this Report on Form 8-K/A of Insignia Systems, Inc. /s/ Ernst & Young LLP Minneapolis, Minnesota February 27, 2003 -----END PRIVACY-ENHANCED MESSAGE-----