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 September 30,1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to __________
Commission file number ___________________________________
INTERUNION FINANCIAL CORPORATION
--------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 52-2002396
- -------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
249 Royal Palm Way, Suite 301 H, Palm Beach, Fl 33480
- ----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(561) 820 - 0084 (561) 655 - 0146
- ---------------- ----------------
(Issuer's telephone number) (Issuer's telecopier number)
------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: $0.001 Par Value Common Shares -
1,935,945 as of October 31,1998.
Transitional Small Business Disclosure Format (Check One) Yes [ ] No [X]
Page 1 of 10
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE PERIOD ENDED SEPTEMBER 30
Three Months Ended Six Months Ended
1998 1997 1998 1997
REVENUES
Investment Banking $ (8,523) $ 1,035,395 $ 265,489 $ 2,425,794
Investment Management 448,544 119,853 739,988 202,445
Interest Income 20,939 10,107 59,827 35,574
-------------- ------------- -------------- -------------
460,960 1,165,354 1,065,304 2,663,813
-------------- ------------- -------------- -------------
EXPENSES
Selling, General & Administration 707,193 1,087,823 1,325,966 2,345,174
Amortization & Depreciation 56,694 58,093 138,399 116,191
Foreign Exchange Loss (Gain) (88,737) (4,209) (62,797) (17,241)
Interest Expense 43,815 58 115,763 44,999
-------------- ------------- -------------- -------------
718,965 1,141,765 1,517,331 2,489,123
-------------- ------------- -------------- -------------
PROFIT (LOSS) FROM CONTINUING
OPERATIONS - BEFORE INCOME TAXES (258,005) 23,589 (452,027) 174,690
PROVISION FOR INCOME TAXES (RECOVERABLE) 2,548 11,370 --- 64,370
EQUITY IN NET EARNING (LOSSES) OF
CONSOLIDATED AFFILIATES (36,577) --- (24,995) ---
-------------- ------------- -------------- -------------
PROFIT (LOSS) FROM CONTINUING OPERATIONS (297,130) 12,219 (477,022) 110,320
Loss from Discontinued Operations --- --- --- 691
Gain on Disposal of Discontinued Assets --- 803,483 --- 803,483
-------------- ------------- -------------- -------------
NET PROFIT (LOSS) FOR THE PERIOD (297,130) 815,702 (477,022) 914,494
FOREIGN EXCHANGE TRANSLATION EFFECT (155,458) (32) (198,243) 344
RETAINED EARNINGS (DEFICIT)
- BEGINNING OF PERIOD (1,801,296) (1,468,310) (1,578,619) (1,567,478)
-------------- ------------- -------------- -------------
RETAINED EARNINGS (DEFICIT)
- End of Period $ (2,253,884) $ (652,640) $ (2,253,884) $ (652,640)
============== ============= ============== =============
FINANCIAL OVERVIEW
Common Shares Outstanding 1,935,945 1,220,250 1,935,945 1,220,250
Weighted Average Shares Outstanding - Basic 1,770,466 1,256,663 1,766,456 1,192,835
Weighted Average Shares Outstanding - Diluted 2,683,795 1,730,993 2,592,637 1,622,732
EPS - From Continuing Operations (Basic) (0.17) 0.01 (0.27) 0.09
EPS - From Discontinuing Operations (Basic) 0.00 0.64 0.00 0.67
EPS (Basic) (0.17) 0.65 (0.27) 0.77
EPS - From Continuing Operations (FD) (0.17) 0.01 (0.27) 0.07
EPS - From Discontinuing Operations (FD) 0.00 0.46 0.00 0.50
EPS (FD) (0.17) 0.47 (0.27) 0.56
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 2 of 10
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEET
As at September 30, As at March 31,
1998 1997 1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 338,877 $ 816,750 $ 2,873,731 $ 349,738
Due from brokers and dealers 587,548 1,737,083 2,012 166,062
Due from clients 153,223 1,577,419 715,871 5,967,989
Marketable securities 180,412 689,840 35,169,986 29,457,965
Accounts receivable 535,942 357,150 882,491 226,663
Income tax receivable --- --- 7,789 22,197
Notes receivable 415,456 678,074 616,579 ---
Prepaid expenses and other current assets 121,318 32,927 56,733 151,483
-------------- ------------- -------------- -------------
2,332,776 5,889,243 40,325,192 36,342,097
-------------- ------------- -------------- -------------
Property & equipment, net 1,315,568 1,507,259 1,425,192 1,609,905
Notes receivable, non-current portion 778,942 302,460 952,106 ---
Other long-term assets 84,710 256,945 84,710 256,945
Investment in unconsolidated affiliates 4,156,363 2,995,288 3,488,322 ---
Goodwill, net 1,999,918 383,378 2,468,210 394,332
Net assets related to discontinued assets --- --- --- 217,228
-------------- ------------- -------------- -------------
8,335,501 5,445,330 8,418,540 2,478,410
-------------- ------------- -------------- -------------
$ 10,668,277 $ 11,334,573 $ 48,743,732 $ 38,820,507
============== ============= ============== =============
CURRENT LIABILITIES
Due to brokers and dealers $ 145,225 $ 1,841,092 $ 34,663,322 $ 33,012,864
Due to clients 595,547 1,329,759 3,057,747 1,320,874
Accounts payable and accrued liabilities 219,489 422,795 1,063,956 257,470
Notes payable 731,548 877,412 1,703,441 ---
Bank loan 656,313 --- --- ---
-------------- ------------- -------------- -------------
2,348,122 4,471,058 40,488,466 34,591,208
-------------- ------------- -------------- -------------
Due to related parties 522,566 300,000 --- ---
Other liabilities 68,852 --- 77,033 ---
Notes payable, long-term portion 614,944 199,338 1,485,801 ---
Discontinued liabilities --- --- --- 504,962
Deferred income tax liability --- 110,000 --- 85,000
-------------- ------------- -------------- -------------
1,206,362 609,338 1,562,834 589,962
-------------- ------------- -------------- -------------
SHAREHOLDERS' EQUITY
Capital Stock and additional paid-in capital 9,367,677 6,906,817 8,271,051 5,206,815
Accumulated comprehensive income (203,294) (8,853) (5,051) (9,197)
Retained Earnings (Deficit) (2,050,590) (643,787) (1,573,568) (1,558,281)
-------------- ------------- -------------- -------------
7,113,793 6,254,177 6,692,432 3,639,337
-------------- ------------- -------------- -------------
$ 10,668,277 $ 11,334,573 $ 48,743,732 $ 38,820,507
============== ============= ============== =============
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 3 of 10
INTERUNION FINANCIAL CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED
6 Months to September 30, 12 Months to March 31,
1998 1997 1998 1997
OPERATING ACTIVITIES
Net income (loss) $ (477,022) $ 914,494 $ (15,287) $ (230,153)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Amortization 138,399 116,191 240,886 240,912
Gain on disposition of discontinued operations --- --- (804,174) ---
Non cash compensation --- 60,000 60,000 117,500
Deferred income tax --- 25,000 (85,000) 85,000
Unrealized gain (loss) on marketable securities (11,813) 84,378 159,831 (529,854)
-------------- ------------- -------------- -------------
(350,436) 1,200,063 (443,744) (316,595)
Increase (decrease) in due to/from brokers and
dealers, net (35,103,633) (32,832,793) 1,814,508 31,515,327
Increase (decrease) in due to/from clients, net (2,060,496) 4,399,455 6,988,991 (5,588,459)
Increase (decrease) in marketable securities 35,128,577 27,726,400 (5,871,852) (26,352,526)
Increase (decrease) in accounts receivable and
sundry assets 289,753 10,266 (452,610) (184,970)
Decrease (increase) in accounts payable and
accrued liabilities (844,467) 165,325 633,103 (56,560)
Increase in assets and liabilities related to
discontinued operations --- (287,734) (287,734) 129,296
-------------- ------------- -------------- -------------
CASH PROVIDED (USED) BY OPERATING
ACTIVITIES (2,940,702) 380,982 2,380,662 (854,487)
-------------- ------------- -------------- -------------
FINANCING ACTIVITIES
Capital stock and additional paid-in capital issued 133,000 270,000 270,000 727,339
Increase (decrease) in due to related parties 522,566 300,000 --- ---
Proceeds (repayment) of notes payable (541,847) 678,074 1,508,712 (119,462)
Proceeds (repayment) of bank loan 656,313 --- --- ---
-------------- ------------- -------------- -------------
CASH PROVIDED (USED) BY FINANCING
ACTIVITIES 770,032 1,248,074 1,778,712 607,877
-------------- ------------- -------------- -------------
INVESTING ACTIVITIES
Property and equipment, net --- (12,688) (2,032) (10,866)
Long term investments, net (364,184) (471,282) (485,336) (66,945)
Notes receivable --- (678,074) (1,299,935) ---
-------------- -------------- -------------- -------------
CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (364,184) (1,162,044) (1,787,303) (77,811)
-------------- ------------- -------------- -------------
INCREASE (DECREASE) IN CASH (2,534,854) 467,012 2,372,071 (324,421)
CASH - Beginning of period 2,873,731 349,738 349,738 674,159
CASH - Acquired on acquisition --- --- 151,922 ---
-------------- ------------- -------------- -------------
CASH - End of period $ 338,877 $ 816,750 $ 2,873,731 $ 349,738
============== ============= ============== =============
See Accompanying Notes to Unaudited Consolidated Financial Statements
Page 4 of 10
INTERUNION FINANCIAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
===============================================================================
1. Interim information is unaudited; however, in the opinion of management, all
adjustments necessary for a fair statement of interim results have been included
in accordance with Generally Accepted Accounting Principles. All adjustments are
of a normal recurring nature unless specified in a separate note included in
these Notes to Unaudited Consolidated Financial Statements. The results for
interim periods are not necessarily indicative of results to be expected for the
entire fiscal year. These financial statements and notes should be read in
conjunction with the Company's annual consolidated financial statements and the
notes thereto for the fiscal year ended March 31, 1998, included in its Form
10-KSB for the year ended March 31,1998.
2. During the period, the Company issued:
- 35,000 shares of common stock and 17,500 common stock purchase
warrants for net proceeds of $140,000. A $7,000 fees was paid to
an intermediary;
- 231,918 shares of common stock as partial payment for a
$1,140,000 note due July 1998 and 1999, in conjunction with
its acquisition of Leon Frazer, Black & Associates Limited and
Black Investment Management Limited. The balance of the note:
C$250,000 (US $170,000) was paid in cash in July 1998 and
C$150,000 (US $98,000) is still outstanding;
- 27,244 shares of common stock to Leon Frazer, Black &
Associates Limited and $3,688 in cash, in order to acquire the
8.55% it did not own in InterUnion Asset Management ("IUAM"),
making IUAM a wholly owned subsidiary.
In addition, during the period the Company cancelled 32,200 shares
of common stock it received in reduction of a note receivable.
The shareholders approved the increase of the authorized number of
common shares to 5,000,000.
3. Earning per share is computed using the weighted average number of common
shares outstanding during the period. Loss per share is computed using the
weighted average number of common shares outstanding during the period.
4. During the period, the Company exercised 13,761,702 Receptagen Ltd. ("RCG")
Share Purchase Warrant to hold 30,117,582 common shares, or 34.6% of RCG. The
Company also holds 7,970,938 Share Purchase Warrants with an exercise price of
C$0.035 that expire on June 30, 2000. The Company will continue to account for
its interest in RCG on the cost basis as: (i) although the restructuring plans
have been altered due to market conditions affecting small capitalization
companies and this particular sector, it is still in progress; and (ii) the
Company does not intend to increase its current interest in RCG but intends to
reduce it. It should be noted that should the Company not be able to reduce its
current interest in RCG, for any reason, by the end of the current fiscal year,
then the Company may be required under applicable accounting principles to
change its method of accounting from the cost basis to the equity method of
accounting. Such a change in accounting policy may cause the Company to record a
charge against income.
5. As of April 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". This statement establishes
standards for reporting and display of comprehensive income and its components.
Comprehensive income is net income, plus certain items that are recorded
directly to shareholders' equity, bypassing net income. The only such item
currently applicable to the Company is foreign currency translation adjustments.
For the period ended September 30, 1998 and 1997, total comprehensive
income was ($675,265) and $914,838, respectively. The adoption of this Statement
had no effect on the Company's results of operations or financial position as
the only item that is added to Net income (loss) is foreign currency
adjustments.
Page 5 of 10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
(1) OVERVIEW
During the first six months of fiscal 1999 (six months ending September 30,
1998), InterUnion reported consolidated revenues of $1.1 million versus $2.7
million a year earlier.
Selected financial data from InterUnion's financial statements is (figures in
000's except per share data):
6 mos. ended 6 mos. ended 6 mos. ended
Sept. - 98 Sept. - 97 Sept. - 96
Revenues 1,065 2,664 2,427
Net Profit (Loss) (477) 914 (254)
EPS - Operations (basic) (0.27) 0.09 (0.30)
EPS - Discontinued Operations (basic) 0.00 0.67 (0.05)
EPS (basic) (0.27) 0.77 (0.34)
Working Capital (15) 1,418 1,489
Cash Flow (350) 396 (92)
Total Assets 10,668 11,335 10,951
Shareholders' Equity 7,114 6,254 3,483
Common Share, # 1,935,945 1,220,250 969,714
Book Value Per Share 3.67 5.13 3.59
(2) NET REVENUES
During the first six months of fiscal 1999, InterUnion reported consolidated
revenues of $1.1 million versus $2.7 million a year earlier, for a decrease of
60.0%. Investment banking revenues decreased by 89.1% to $265,489 from
$2,425,794 the previous year. Investment management revenues increased by 265.5%
to $739,988 from $202,445 the previous year. The decrease of revenues in
investment banking can be attributed to the following factors: (i) steep
reduction of new issue activity; (ii) lack of institutional support to the small
cap market thus reducing the flow of agency trading activity; (iii)
concentration of human and financial resources in the M&A sector which, although
generating monthly work fees, is subject to payout at the end of a process which
can be lengthy; (iv) diversion from client oriented activities of administration
and audit personnel in order to build the investment management sector; (v)
diversion from marketing efforts in order to raise the funds necessary for the
investment management business. The increase in investment management revenues
is due to: (i) the acquisition in late fiscal 1998 of The Glen-Ardith
Corporation contributed $378,556; and (ii) a portion of Guardian Timing Services
revenue is based on performance, its revenue increased to $361,432 from $202,445
for an increase of 78.5%. Due to the nature of the increase, it may not be
sustainable.
(3) EXPENSES
During the first six months, the Company reduced its expenses from $2,489,123 to
$1,517,331 from a year earlier, representing a decrease of 39.0%. This decrease
is attributable to the reduction in Selling, General and Administration relating
to a drop in financing activity, which was reduced by 43.5%, to $1,325,966 from
$2,345,174.
The reduction in expenses was offset by increases in Interest charges due to the
notes payable assumed in the acquisition of Leon Frazer, Black & Associates
Limited, Black Investment Management Limited and InterUnion Asset Management
Limited in fiscal 1998. The interest expense is expected to be reduced in the
following quarters as most of the debt was reduced by the issuance of common
shares.
(4) NET INCOME
Net loss from operations (basic) for the six months ending September 30, 1998
was $477,022 or $0.27 per share versus a profit of $110,320 or $0.09 per share a
year earlier. The decrease in EPS is due to the decrease in revenue, as the
Page 6 of 10
Company devoted most of its resources to assist in the Receptagen Ltd.
restructuring and the administration and development of the investment
management activity. During the first six months of fiscal 1998, InterUnion
recorded a gain from discontinued operation of $691 and a gain on disposal of
discontinued assets of $803,483.
The basic weighted average number of common shares outstanding for the six
months ending September 30, 1998 is 1,766,456 versus 1,192,835 a year earlier.
The increase is due to the issuance of shares in the form of Regulation "S"
financings, for the acquisition of investment managers and the settlement of
liabilities that arose from these acquisitions.
(5) LIQUIDITY AND CAPITAL RESOURCES
In order to meet its growth plans and fund any operating cash requirements, the
Company's policy is to issue additional capital stock, when possible. To date
the Company has done this either through the issuance of common stock under
Regulation "D" or Regulation "S". The following are details of these private
placements during the previous three fiscal years:
Date # of Shares Amount Type
June 1995 62,500 $ 125,000 Regulation "D"
October 1995 100,000 200,000 Regulation "D" & "S"
March 1996 160,000 320,000 Regulation "D"
September 1996 277,142 759,710 Regulation "S"
May 1998 17,002 68,008 Regulation "S"
June 1998 35,000 140,000 Regulation "S"
July 1998 262,142 1,048,568 Regulation "S"
In July 1998, the Company and the selling shareholders of Leon Frazer, Black &
Associates Limited reached an agreement to settle the Notes due in July 1998 and
1999. The C$1,677,864 (US $1,140,000) note has been settled by the issuance of
common stock and cash: 231,918 shares of common stock, C$250,000 (US $170,000)
in cash paid in July 1998 and $150,000 (US $105,000) to be paid at a later date.
When market conditions do not allow the issuance of Common Shares, the Company
issues other instruments such as Promissory Notes and/or Preferred Shares. The
Company was debt free until the restructuring of RCG and the acquisition of the
investment management business. In the RCG restructuring, the entirety of the
debt assumed by the Company has been matched by receivables from RCG with
similar terms. Furthermore, the Company has received as security all the assets
of RCG, including the intellectual properties. The Company is currently seeking
financing in order to do further acquisitions in the investment management
sector and reimburse certain loans.
In order to meet its cash requirements for accelerating the full payment of its
interest in the investee companies, the Company borrowed $500,000 in July 1998
and a further $100,000 in November 1998 from Rif Capital Inc, a shareholder of
the Company. In addition, the Company has a credit facility with a Canadian
chartered bank, of which $660,000 (C$1,005,000) had been drawn down as of
September 30, 1998.
(6) ACQUISITION PROGRAM
InterUnion has accelerated the payment of the notes payable to the shareholders
of some of its investee companies as well as the acquisition of the 8.55% of
InterUnion Asset Management Limited it did not own.
The Company continues to actively explore acquisition opportunities in the
investment management sector.
(7) CONCLUDING REMARKS
There are no other known trends, events or uncertainties that may have, or are
reasonably likely to have, a material impact on the Company's short-term or
long-term liquidity that it has not been discussed above.
Page 7 of 10
In addition, there are no significant income or losses that has risen from the
Company's continuing operations that has not been analyzed or discussed above.
In addition, there has not been any material change in any line item that is
presented on the financial statements that has not been discussed above.
(8) CERTAIN RISK FACTORS WHICH MAY IMPACT FUTURE OPERATIONS
The Company and its subsidiaries operate in a rapidly changing environment that
involves a number of factors, some of which are beyond management's control,
such as financial market trends and investors' appetite for new financings. It
should also be emphasized that should the Company not be successful in
completing its own financing (either by debt or by the issuance of securities
from treasury), its strategy to grow by acquisition will be affected.
Management has compiled a list of both internally and externally supplied
information systems that utilize imbedded date codes, which could experience
operational difficulties in the year 2000. The Company uses third party
applications or suppliers for all high level systems and reporting. These
systems will either be upgraded and tested to be in compliance for the year 2000
or the Company will take necessary steps to replace the supplier. Management is
testing new systems for which it is responsible. It is the Company's objective
to be year 2000 compliance for all systems by the end of fiscal 1999, however,
no assurances can be given. The Company believes that it has provisioned
sufficient amounts to cover future expenditures.
In the opinion of management the financial statements for the periods ending
September 30, 1998 accurately reflect the operations of the Company and its
subsidiaries. The Company has taken every reasonable step to ensure itself that
its quarterly financial statements do not represent a distorted picture to
anyone having a business reason to review such statements and who has also
reviewed its previous audited annual financial statements for the year ended
March 31, 1998.
Forward-looking statements included in Management's Analysis and Discussion
reflects management's best judgment based on known factors, and involves risks
and uncertainties. Actual results could differ materially from those anticipated
in these forward-looking statements. Forward-looking information is provided by
InterUnion pursuant to the safe harbor established by recent securities
legislation and should be evaluated in the context of these factors.
Page 8 of 10
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding, nor is its property
the subject of a pending legal proceeding for which the claims, exclusive of
interest and costs, exceed 10% of the current assets of the Company on a
consolidated basis.
ITEM 2 - CHANGES IN SECURITIES
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There have been no defaults in the payment of principal or interest with respect
to any senior indebtedness of InterUnion Financial Corporation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual General Meeting on September 3, 1998. At this
meeting the shareholders approved the following:
1. The Company's Audited Financial Statements for the year ended March 31,
1998;
2. The election of the Company's Board of Directors;
3. The appointment of Ahearn Jasco & Company, P.A.;
4. The remuneration of the Corporate Secretary of the Corporation for four
years of service to the Corporation through the issuance of an option
to purchase 50,000 shares of common stock of the Corporation at $4.00
per share.
5. All the actions taken by the Board of Directors since the last annual
meeting of shareholders held on August 21, 1997, as evidenced by the
Unanimous Consents in Lieu of Special Meetings of the Board of
Directors.
6. The increase of the authorized number of common shares to 5,000,000.
The amendment did not have any effect with regards to the par value or
any of the rights previously held by the common shares or other classes
of securities.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 Financial Data Schedule (for SEC use only).
Exhibit 99 Form 8-K dated June 24 regarding the issuance of
securities is incorporated herein by this reference.
Page 9 of 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
InterUnion Financial Corporation
--------------------------------
(Registrant)
Date November 12,1998 /s/ Georges Benarroch, Director
---------------- --------------------------------
(Signature)*
Date November 12,1998 /s/ Karen Lynn Bolens, Director
---------------- --------------------------------
(Signature)*
* Print the name and title of each signing officer under his signature.
Page 10 of 10