<PAGE>
United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1998
-----------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ -------------------
Commission file number 0-23903
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TRANSFORMATION PROCESSING INC.
(Exact name of small business issuer as specified in its charter)
Nevada 95-4583945
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 Argentia Road, Suite 200, Mississauga, Ontario L5N 2X4
(Address of principal executive offices)
(905) 812-7907
(Issuer's telephone number)
Not Applicable
(Former Name, Former Address and Former Fiscal Year,
if changed Since Last Report)
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES NO X*
------------ -------------
* The issuer became subject to the filing requirements on May 12, 1998.
As of April 30, 1998, the issuer had 15,298,505 shares of Common Stock,
par value $.001 per share, issued and outstanding.
<PAGE>
PART I- FINANCIAL INFORMATION
Item 1. Financial Statements
TRANSFORMATION PROCESSING INC.
(a development stage company)
<TABLE>
<CAPTION>
BALANCE SHEET
April 30, 1998 July 31, 1997
-------------- -------------
Unaudited
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 274,206 $ 16,431
Time deposits -- 23,368
Accounts receivable 216,904 3,674
Due from related parties 122,342 127,405
Prepaid expenses and other current assets 4,952 3,399
------------ ------------
Total current assets 618,404 174,277
Property and Equipment, net 164,224 109,077
Software Marketing Rights, net 442,826 606,340
Deferred debt cost, net 357,843 --
Other Assets -- 4,684
------------ ------------
Total Assets $ 1,583,297 $ 894,378
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 362,474 $ 25,904
Accrued expenses and other current liabilities 130,031 88,582
Convertible debt 968,392 --
Settlement liability 87,155 --
Current maturities of loan payable - bank 54,228 36,259
Current maturities of notes payable - stockholders 43,506 85,793
------------ ------------
Total current liabilities 1,645,786 236,538
Loan Payable - bank, net of current maturities 16,729 21,137
Notes Payable - stockholders, net of current maturities -- 28,195
------------ ------------
Total liabilities 1,662,515 285,870
------------ ------------
Stockholders' Equity (Notes 1 and 2)
Common stock - $.001 par value; authorized 50,000,000
shares issued and oustanding 15,298,505 shares at
April 30, 1998 and 12,169,282 at July 31, 1997 15,299 12,169
Preferred stock - $.001 par value;
authorized 5,000,000 shares
none issued
Additional paid-in capital 4,596,974 3,358,020
Deficit accumulated during the development stage (4,818,135) (2,784,536)
Cumulative foreign currency translation adjustments 126,645 22,855
------------ ------------
Stockholders' equity (79,217) 608,508
------------ ------------
Total Liabilities and Stockholders' Equity $ 1,583,297 $ 894,378
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
2
<PAGE>
TRANSFORMATION PROCESSING INC.
(a development stage company)
STATEMENT OF OPERATIONS
Unaudited
<TABLE>
<CAPTION>
Cumulative
Period from Nine-month Three-month Three-month amounts
April 1, 1996 Period ended Period ended Period ended from
(date of incorporation) April 30,1998 April 30,1997 April 30,1998 inception
to April 30,1997
----------------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Revenue $ 24,147 $ 415,345 $ - $ 260,324 $ 462,662
----------- ----------- ----------- ---------- -----------
Expenses
Cost of consulting services 10,078 141,899 2,312 80,794 153,171
Cost of software translation services 172,895 304,536 18,230 277,967 997,265
Software development 131,683 329,806 119,605 119,886 548,018
General and administrative 605,435 1,611,680 177,868 355,480 1,986,104
Noncash consulting costs 1,536,341 1,536,341
----------- ----------- ----------- ---------- -----------
Total Expenses 2,456,432 2,387,922 318,015 834,127 5,220,899
----------- ----------- ----------- ---------- -----------
Loss from operations (2,432,285) (1,972,577) (318,015) (573,803) (4,758,237)
Interest income, net of interest expense 1,030 (61,023) (20) (11,159) (59,898)
----------- ----------- ----------- ---------- -----------
Net loss $(2,431,255) $(2,033,599) $ (318,035) $ (584,962) $(4,818,135)
----------- ----------- ----------- ---------- -----------
Net loss per common share $ (0.25) $ (0.14) $ (0.03) $ (0.04)
----------- ----------- ----------- ----------
Weighted average number of common shares outstanding 9,697,753 14,187,071 9,697,753 14,187,071
----------- ----------- ----------- ----------
</TABLE>
See notes to financial statements
3
<PAGE>
TRANSFORMATION PROCESSING INC.
(a development stage company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Period from Nine-month Three-month Cumulative
April 1, 1996 Period ended Period ended amounts
(date of incorporation April 30, 1998 April 30, 1998 from inception
to April 30, 1997
--------------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss from development stage operations (2,784,536) (2,033,599) (584,962) (4,818,135)
Adjustment to reconcile net loss from development
stage operations to net cash used in
operating activities
Depreciation and amortization 197,483 168,816 60,698 366,299
Issuance of options to purchase common
stock for services 27,588 (718) - 26,870
Issuance of common stock for services in
reverse acquisition 1,549,056 (40,316) - 1,508,740
Changes in operating assets and liabilities:
Increase in accounts receivable (3,705) (217,161) (150,625) (220,865)
Decrease in time deposits (23,561) 23,561 - -
Increase in prepaid expenses and
other current assets (3,426) (1,617) 46,417 (5,043)
(Increase) decrease in other assets (4,723) 4,723 - -
Increase in accounts payable 26,116 342,980 31,830 369,096
Increase in litigation liability settlement - 88,742 (4,950) 88,741
Increase in due to related party - - (265,784) -
Increase (decrease) in accrued expenses and
other current liabilities 89,317 43,090 122,504 132,407
---------- ----------- --------- -----------
Net cash used in operating activities (930,391) (1,621,499) (744,872) (2,551,890)
---------- ----------- --------- -----------
Cash flows from investing activities:
Purchase of property and equipment (124,733) (91,953) - (216,686)
Purchase of intangible assets (24,156) - - (24,156)
Advances to related parties (129,621) (112) 541 (129,733)
---------- ----------- --------- -----------
Cash used in investing activities (278,510) (92,065) 541 (370,575)
---------- ----------- --------- -----------
Cash flows from financing activities:
Proceeds from loan - bank 73,158 50,425 - 123,583
Repayments of loan payable - bank (15,054) (34,792) (15,085) (49,846)
Repayments of notes payable - stockholders (74,924) (67,369) (16,393) (142,293)
Proceeds from issuance of common stock 1,240,109 1,038,998 - 2,279,107
Proceeds from issuance of convertible debenture - 986,120 992,214 986,120
---------- ----------- --------- -----------
Net cash provided by financing activities 1,223,289 1,973,382 960,736 3,196,671
---------- ----------- --------- -----------
Effect of exchange rate changes on cash (2,043) (2,043) (24,609) -
---------- ----------- --------- -----------
Net increase in cash 16,431 257,775 191,796 274,206
Cash at beginning of period - 16,431 82,410
---------- ----------- --------- -----------
Cash at end of period 16,431 274,206 274,206 274,206
---------- ----------- --------- -----------
---------- ----------- --------- -----------
</TABLE>
See notes to financial statements
4
<PAGE>
TRANSFORMATION PROCESSING INC.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
Nine month period ended April 30, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated Foreign
Additional During the Currency Stock-
Common Stock Paid-in Development Translation holders'
Shares Amount Capital Stage Adjustments Equity
<S> <C> <C> <C> <C> <C> <C>
---------- -------- ----------- ------------ --------- -----------
Balance at July 31, 1997 12,169,282 $ 12,169 $ 3,358,020 $ (2,784,536) $ 22,855 $ 608,508
---------- -------- ----------- ----------- --------- -----------
Issuance of common
stock for cash 3,129,223 $ 3,130 $ 970,108 $ 973,238
Issuance of convertible
debentures for cash $ 268,846 $ 268,846
Net loss $(2,033,599) (2,033,599)
Cumulative foreign currency $ 103,790 103,790
translation adjustment
---------- -------- ----------- ----------- --------- -----------
Balance at April 30, 1998 15,298,505 $ 15,299 $ 4,596,974 $(4,818,135) $ 126,645 $ (79,217)
---------- -------- ----------- ----------- --------- -----------
</TABLE>
See notes to financial statements
5
<PAGE>
TRANSFORMATION PROCESSING INC.
NOTES TO FINANCIAL STATEMENTS
(The information pertaining to the nine-month period ended April 30, 1998 and
for the period from April 1,1996 (date of incorporation) to April 30, 1997 are
unaudited)
1. BASIS OF PRESENTATION, EVENTS, AND REVERSE ACQUISITION
The financial statements of Transformation Processing Inc., ("the
Company") included herein have been prepared pursuant to generally accepted
accounting principles and have not been examined by independent public
accountants. In the opinion of management all adjustments which are of a
normal recurring nature necessary to present fairly the results of operation
have been made. Pursuant to Securities and Exchange Commission ("SEC") rules
and regulations, certain information and footnote disclosure normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from these statements
unless significant changes have taken place since the end of the most recent
fiscal year. The disclosure contained herein should be read in conjunction
with the financial statements and notes included in the Company's audited
financial statements for the period ended July 31, 1997. The results of
operations for the nine-month period ended April 30, 1998 and the period ended
April 30, 1997 are not necessarily indicative of the results to be expected for
the full year.
On August 20, 1996, Samuel Hamann Graphix, Inc. acquired all of the
outstanding common stock of Transformation Processing Inc. ("Ontario"), a
Canadian corporation. For accounting purposes the acquisition has been treated
as a recapitalization of Ontario with Ontario as the acquirer (reverse
acquisition). Samuel Hamann Graphix, Inc. changed its name to Transformation
Processing Inc. (the "Company"). In February 1998, Ontario merged into the
Company. The accompanying financial statements reflect this merger as if it
had occurred on July 31, 1997.
Loss per share is based on the weighted-average number of shares of common
stock outstanding during the year.
The Company's functional currency is the Canadian Dollar. Balance sheet
accounts are translated into U.S. dollars using current exchange rates in
effect at the balance sheet date and revenue and expense accounts are
translated using an average exchange rate for the period. The gains and losses
resulting from translation are included in stockholders equity.
6
<PAGE>
2. STOCKHOLDERS' EQUITY
The Company issued shares of common stock for cash, as follows:
<TABLE>
<CAPTION>
Common Stock
------------ Additional Stockholders'
Shares Amount Paid-in Capital Equity
------ ------ --------------- -------------
<S> <C> <C> <C> <C>
August 28, 1997 198,000 $198 $88,496 $88,694
September 4, 1997 589,000 589 121,450 122,039
September 26, 1997 400,000 400 195,779 196,179
October 23, 1997 400,000 400 199,600 200,000
October 31, 1997 100,000 100 49,900 50,000
December 10, 1997 997,778 998 215,327 216,326
January 26, 1998 444,445 445 99,556 100,000
--------- ------ -------- --------
3,129,223 $3,130 $970,108 $973,238
</TABLE>
3. EQUITY TRANSACTIONS
On May 21, 1998, the Company issued for cash, two $250,000.00 6%
Convertible Debentures.
These convertible debentures are convertible to common stock at 80%
(eighty percent) of the five day average closing ask price prior to the
date of conversion. Each debenture is covered by a registration rights
agreement that prevents the conversion to common stock without the
securities being registered under the Securities Act. Each debenture
carries warrants that are calculated at 20% (twenty percent) of the
initial cash consideration times 120% (one hundred and twenty percent) of
the closing ask price at closing date. Each debenture carries a placement
fee payable to Thomson Kernaghan of 4% (four percent) of the debenture
value.
Charges relating to the issuance of convertible debentures are being
amortized over the period the debentures are convertible, ninety days. In
addition, the Company incurred debt issue costs of approximately $85,000,
which will be amortized using a straight-line method over the term of the
conversion period of the debentures.
4. SUBSEQUENT CHARGES
The Company will incur a charge of $286,294.00 to operations in the fourth
fiscal quarter ending July 31, 1998 in relation to the issuance of
convertible debt instruments. This charge is related to warrants issued
as part of the convertible debenture and, will be offset to Additional
Paid-in Capital.
7
<PAGE>
5. MATERIAL DISCLOSURE
The Company entered into an agreement with Martin E. Janis & Company
("Janis") to provide the Company public and investor relations. Under the
terms of the agreement, the Company will grant Janis 150,000 common shares
of the Company as compensation for services that had not been provided as
of April 30, 1998. The common stock will be restricted under Rule 144
under the Securities Act.
6. SETTLEMENT LIABILITY
The Company reached an out of court settlement with IBS Conversions, Inc.
("IBS") concerning an outstanding lawsuit filed by IBS with the district
court of Illinois. The Settlement Agreement called for the payment of
$90,000 to IBS over a period of six months. In return, the Company
received the full release of IBS. The Company agreed to pay $30,000 on
June 26, 1998 and, $12,000 on the 26th of each consecutive month until
fully paid.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with the
Company's third quarter ended financial statements and notes thereto dated
April 30, 1998 and 1997 and cumulative results from April 1, 1996 (date of
incorporation) to April 30, 1998. The period ended April 30, 1997 includes
the results of operation of the Company for the period from April 1, 1996 to
April 30, 1997 (hereinafter the "nine-month period ended April 30, 1997").
The results of operations for the period from April 1, 1996 to July 31, 1996
were not material.
Net Losses
For the quarters ended April 30, 1998 and 1997, the Company incurred net losses
of $584,962 and $318,035, respectively. For the nine-month period ended April
30, 1998 and 1997, the Company incurred net losses of $2,033,599 and
$2,431,255, respectively. Cumulative losses from April 1, 1996 totaled
$4,818,135. Explanations of these results are set forth below. The Company
expects to continue to incur operating losses until such time, if ever, as it
generates substantial revenues from the performance of its service offerings.
Revenue
For the quarter ended April 30, 1998 the Company's revenue was $260,324. The
Company had no revenue for the quarter ended April 30, 1997. For the
nine-month period ended April 30, 1998 the Company's revenue was $415,345 as
compared to $24,147 for the same period ended April 30, 1997. The Company saw
continuing gains in the Groupware business vertical. Conversion Services,
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<PAGE>
the Company's core business, accounted for $43,084 or 10% of gross revenue for
the nine-month period ended April 30, 1998, as compared to $14,786 for the same
period in 1997. While no revenue was recorded in the quarter ending April 30,
1998 as it relates to Year 2000 services, the Company expects activity in this
area to increase substantially for the fiscal year ending July 1998.
Through the fall of 1996, the Company positioned itself to market its core
translation software and target the mid frame environment. The Company's
product offerings received good exposure and acceptance, however, the plan to
upgrade systems was receiving less attention as a new technical problem was
taking hold; namely Year 2000 compliance. Never before had the information
technology industry seen the scope of this problem and the dollar volumes
attached to repair it. The Company negotiated several vendor relationships
and, by April of 1997 was selling year 2000 solutions. The Company also
developed its own proprietary tool which is referred to as "Century Scan". The
product was commercially introduced on March 25, 1998 and has received good
reviews and, is gaining acceptance. The Company continues to develop the
product and new releases have been introduced.
As the Company had shifted its marketing and sales efforts to the Year 2000, a
number of industry specialists were brought on board to represent the Company's
interests. TPI is now bidding on, and, may participate in contracts, ranging
in size from $100,000 to $1,000,000. This environment will introduce the
Company to many cross-selling engagements whereas other products and services
can be delivered.
Expenses
For the quarters ended April 30, 1998 and April 30, 1997, cost of consulting
services accounted for $80,794 and $2,312, respectively. For the nine-month
periods ended April 30, 1998 and 1997, cost of consulting services expenses
were $141,899 and $10,078, respectively. Cumulatively, cost of consulting
services accounted for $153,171, of total expenses. The Company anticipates
managed growth in this area as people are added to satisfy consulting services
provided to our customers. As the employment market becomes more competitive
as the result of channeling human resources toward the Year 2000 problem, the
Company expects to pay a premium for skilled consultants. These consulting
services will be allocated to projects in which the Company has signed
contracts.
Cost of software translation services accounted for $277,967 of total
expenses for the quarter ended April 30, 1998. Comparatively, the Company
spent $18,230 for the same quarter ended April 30, 1997 and, has spent
$997,265 cumulatively in the development stage. For the nine-month period
ended April 30, 1998 and 1997, software translation services expenses were
$304,536 and $172,895, respectively. The Company anticipates adding people
to this area by the end of the fiscal year ending July 31, 1998, but, only if
contracts are in hand. This growth will depend on the volume of conversion
services and year 2000 scan and repair services provided to our customers.
Software development accounted for $119,886 of total expenses for the quarter
ended April 30, 1998. Comparatively, the Company spent $119,605 for the same
quarter in 1997 and, has spent $548,018 cumulatively in the
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development stage. The increases in costs of product development are expected
to continue as the Company expands its product offerings.
General and administrative expense accounted for $355,480 of expenses for the
quarter ended April 30, 1998. Comparatively, the Company spent $177,868 for the
same quarter in 1997 and, has spent $1,986,104 cumulatively in the development
stage. General and administrative expense accounted for $1,611,680 of expenses
for the nine-month period ended April 30, 1998 compared to $605,435 for the
nine-month period in 1997. The Company's general and administrative expenses
consisted primarily of salaries, rent, consulting fees, advertising and legal
costs associated with running a publicly traded company.
For the quarter ending April 30, 1997, the Company incurred two unusual
expenses. The first was the settlement of an outstanding issue regarding the
distribution of additional shares of the Company to Jaford Holdings Limited
("Jaford") in relation to software marketing rights. The Company elected to
pay $259,500 in cash to settle the dispute. In turn, the Company received
full release from Jaford with no further exposure to the Company. In the
second instance, the Company negotiated an out of court settlement with IBS
Conversions, Inc. ("IBS") concerning an outstanding lawsuit filed by IBS with
the District Court of Illinois. The Settlement Agreement called for the
payment of $90,000 to IBS over a period of six months. In return, the Company
received the full release of IBS.
The Company incurred a charge of $1,536,341 for the fiscal period ended April
30, 1997 to record an expense related to shares issued to consultants involved
in the reverse acquisition of Samuel Hamann Graphix. The charge recognized the
fair value of the shares however, did not represent a cash outlay.
Cost of Consulting Services, Conversion Services and Product Development
The Company's variable costs of software consulting, translation services and
development are in a direct relation to the volume of sales. As a percentage
of revenue, these costs will vary depending on the nature of the sale and the
product mix required to satisfy customer needs. Sales based on mature product
will yield a higher margin while specific project type environments may call
for a higher degree of manpower and travel costs.
The Company will continue product development of the core software product to
enable the Company to broaden its impact on many vendor environments. The
development of translators to translate application code from any type of
machine language to virtually any target platform will serve as the benchmark
of the Company to respond effectively to end user requirements. The key to
this objective is a responsive, knowledgeable development team.
General and administrative
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<PAGE>
General and administrative costs consist of management and administrative
staff, professional services, office and occupancy costs. Significant costs
are attributed to the Company becoming a public company. This status will
increase audit and legal costs significantly. In relation to the Company
becoming a public company, the cost of corporate relations will also increase
as quarterly reports and other investor information is required. The Company
anticipates that its General and Administrative costs (as a percentage of
costs) will decline as the Company's operations expand.
Liquidity and Capital Resources
At April 30, 1998, the Company had a deficit accumulated during the development
stage of ($4,818,135), current assets of $618,404 and current liabilities of
$1,645,785, which resulted in a current ratio of 1:2.66. During the
three-month period ended April 30, 1998, the Company entered into a convertible
debenture with two private placement investors sponsored by Thomson Kernaghan a
registered broker dealer. The convertible debt will require the issuance of
common stock at date of conversion, not cash resources of the Company.
Otherwise, the Company did not incur any additional long-term debt. The Company
has funded its activities to April 30, 1998 primarily through private
placements of securities, the issuance of convertible debentures and to a
lessor extend, from cash flow from the proceeds of two bank loans. The
outstanding principal balance of the loans is currently approximately $70,957
and the loans bear interest at an annual rate equal to 2.5% over the bank's
prime rate of interest in effect from time to time. Repayment of the loans,
together with interest thereon, is secured by a lien on substantially all of
the assets of the Company and the Company's executive officers and directors
guarantee repayment of the loans. The Company expects to continue to raise
capital through these vehicles to fund operating activities and other capital
requirements. Failure to obtain such equity capital could have a material
adverse impact on the Company's ability to expand its operations. There can be
no assurance that equity capital will be available to the Company on acceptable
terms or at all.
In addition, implementation of the Company's business plan subsequent to the
Company's year end will require capital resources substantially greater than
those currently available to the Company. The Company may determine, depending
on the opportunities available to it, to seek additional debt or equity
financing to fund the cost of continuing expansion. To the extent that the
Company finances expansion through the issuance of additional equity
securities, any such issuance would result in dilution of the interests of the
Company's stockholders. Additionally, to the extent that the Company incurs
indebtedness or issues debt securities to finance expansion activities, it will
be subject to all of the risks associated with incurring substantial
indebtedness, including the risks that interest rates may fluctuate and cash
flow may be insufficient to pay the principal of, and interest on, any such
indebtedness.
The Company has no current arrangements with respect to, or sources of,
additional financing, and it is not contemplated that its existing stockholders
will provide any portion of the Company's future financing requirements. There
can be no assurance that any additional financing will be available
11
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to the Company on acceptable terms, or at all. The inability of the Company to
obtain financing when needed will have a material adverse effect on the
Company, including possibly requiring the Company to significantly curtail or
cease its operations.
During the nine-month period ended April 30, 1998, the Company had a net
increase in cash of $257,775 as compared to $112,430 in the nine-month period
ended April 30, 1997. This resulted primarily from a negative cash flow from
operating activities of $1,621,499 in the nine-month period ended April 30,
1998, which resulted primarily from a net loss from development stage
operations of $2,033,599 and a $217,161 increase in accounts receivable and a
$168,816 increase in depreciation and amortization offset, in part, by a
$342,980 increase in accounts payable. During the nine-month period ended
April 30, 1997 the Company had a net loss of $2,326,919. This loss resulted
primarily from operating results during the development stage and, a $1,504,978
non-cash charge from the issuance of common stock taken as a consulting fees
expense.
The Company used $91,953 to purchase property and equipment during the
nine-month period ended April 30, 1998, as compared to $113,614 in the
nine-month period ended April 30, 1997 and $127,405 of advances to related
parties.
The Company had net cash flow provided by financing activities of $1,973,382 in
the nine-month period ended April 30, 1998, consisting primarily of $1,038,998
obtained from the issuance of common stock and $986,120 upon the issuance of
convertible debentures. During the nine-month period ended April 30, 1997, the
company had net cash primarily from financing activities of $1,207,496. This
consisted primarily of $1,140,360 from the issuance of Common Stock.
Inflation
The Company believes that the impact of inflation and changing prices on its
operations since commencement of operations has bee negligible.
12
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PART II- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
[a] Financial Data Schedule
[b] Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the three-month
period ended April 30, 1998.
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.
TRANSFORMATION PROCESSING INC.
Date July 1, 1998 /s/ John McGee
--------------------------- ----------------------------------
John McGee, Chief Financial Officer
13
