U.S. Securities and Exchange Commission
Washington, DC 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 September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to ____________________
Commission File No. 0-10519
Bingo & Gaming International, Inc.
(Name of Small Business Issuer in its Charter)
OKLAHOMA 73-1092118
(State or Other Jurisdiction of (IRS Employer ID No.)
incorporation or organization)
13581 Pond Springs Rd. Suite 105
Austin, Texas 78729
(Address of Principal Executive Offices)
(512)335-0065
(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
(1) Yes X No (2) Yes X No
There were 8,551,819 shares of common stock, $.001 par value, outstanding as
of September 30, 1998.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statement
<TABLE>
BINGO & GAMING INTERNATIONAL, INC.
BALANCE SHEETS
<CAPTION>
September 30, December 31,
ASSETS 1998 1997
(unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 62,148 $ 53,934
Accounts receivable - trade (net) 528,322 347,029
Inventories 60,371 19,811
Prepaid expenses 21,576 6,445
Total current assets 672,417 427,219
Property and equipment, at cost - net of
accumulated depreciation and amortization 1,591,888 456,945
Other assets
Organizational costs and intangible
assets - net of accumulated amortization 7,267 19,705
Deposits 67,806 49,860
Note receivable 2,767 7,494
Total other assets 77,840 77,059
Total assets $ 2,342,145 961,223
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable - trade and accrued
expenses $ 355,811 180,862
Accounts payable - other - 253,190
Current maturities of long-term debt 163,683 122,898
Total current liabilities 519,494 556,950
Long-term debt, net of current maturities 1,235,113 227,162
Total liabilities 1,754,607 784,112
Stockholders equity
Common stock, $.001 par; 70,000,000
shares authorized; 8,418,602 and
8,551,819 issued and outstanding 8,745 8,418
Additional paid-in capital 469,039 393,197
Retained earnings (deficit) 109,754 (224,504)
Total stockholders' equity 587,538 177,111
Total liabilities and
stockholders' equity $ 2,342,145 $ 961,223
See note to consolidated financial statements.
</TABLE>
<TABLE>
BINGO & GAMING INTERNATIONAL, INC
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30,1997 and 1998
(unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenue:
Phone card sales $ 775,399 $ 323,458 $ 2,625,095 $ 1,110,766
Rental Income 126,494 125,844 380,707 377,132
Concession Income 14,777 20,285 42,348 47,855
Machine sales 65,415 - 133,298 -
Other 362 - 1,594 -
Total revenue 982,446 469,587 $ 3,183,041 $ 1,535,753
Cost of revenue:
Phone card and royalties 422,602 147,487 940,834 402,165
Machine and location
rental 2,600 50,908 2,908 253,964
Prizes paid 288,528 54,838 449,709 186,127
Hall rental 48,130 61,565 159,114 154,143
Machines sold 47,208 - 118,013 -
Total cost of revenue 809,068 314,798 1,670,578 996,399
Gross Margin 173,378 154,789 1,512,463 539,354
Expenses:
Operating expenses 49,694 106,950 293,982 279,836
Salaries 116,875 61,693 303,332 181,277
General and
administrative expenses 110,177 5,835 370,310 27,469
Total expenses 276,746 174,478 967,624 488,582
Operating income (loss) (103,368) (19,689) 544,839 50,772
Other Income - - - 1,198
Interest expense 57,254 10,010 210,579 28,104
Net income (loss) before
federal income tax (160,622) (29,699) 334,260 23,866
Federal income tax - - - -
Net income (loss) (160,622) (29,699) 334,260 23,866
Retained earnings:
Beginning (deficit) (224,504) (267,936) (224,504) (267,936)
Ending (deficit) $ (385,126) $(297,635) $ 109,756 $(244,070)
Basic and diluted Income
(loss) per common share $ (0.02) $ (0.01) $ 0.04 $ (0.01)
Weighted average shares
outstanding 8,508,830 8,417,600 8,508,830 8,417,600
</TABLE>
See notes to consolidated financial statements
<TABLE>
BINGO & GAMING INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30,1997 AND 1998
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (loss): $ 334,260 $ 23,865
Adjustments to reconcile net income
(loss) to net cash from operating
activities:
Depreciation and amortization 195,414 44,113
Provision for losses on accounts
receivable 102,861 -
Changes in current assets and liabilities:
Accounts receivables (279,430) (68,083)
Inventories (40,559) 31,027
Prepaid expenses (15,131) (26,067)
Accounts payables - trade and accrued
expenses (78,240) 7,198
Increase (decrease) in other assets (17,946) (3,711)
Net cash provided for operating
activities 201,229 8,342
INVESTING ACTIVITIES:
Payments for the purchase of property and
equipment (190,248) (30,437)
Payments received on notes receivable - 32,625
Net cash provided by (used) for investing
activities (190,248) 2,188
FINANCING ACTIVITIES:
Payments on long-term debt (78,937) (54,648)
Proceeds from long term debt - 31,997
Issuance of common stock 76,170 1,651
Cash used by financing activities (2,767) (21,000)
Net increase (decrease) in cash and cash
equivalents 8,214 (10,470)
Cash and cash equivalents at beginning of
period 53,934 53,307
Cash and cash equivalents at end of period $ 62,148 $ 42,837
Supplemental disclosures of cash flow information:
Interest paid $ 210,579 $ 10,010
Supplemental disclosure of non-cash investing
and financing activities:
Financing of equipment purchases $1,127,672 $ -
</TABLE>
See notes to consolidated financial statements.
BINGO & GAMING INTERNATIONAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1998
Note 1. BASIS OF PRESENTATION
The Company's consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. All significant inter-company
balances and transactions have been eliminated in consolidation.
Such financial statements as of September 30, 1998, and for the three
months ended September 30, 1998 and 1997, and for the nine months ended
September 30, 1998 and 1997 are unaudited, but, in management's opinion,
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results from such interim periods.
The results from interim periods are not necessarily indicative of results
from full years.
Such interim period financial statements, including the notes thereto, are
condensed and do not include all disclosures required by generally accepted
accounting principles. They should, therefore, be read in conjunction with
the Company's consolidated financial statements included in the Company's Form
10-KSB for the year ended December 31, 1997.
Note 2. INCOME TAXES
At September 30, 1998 and 1997, the Company had, for tax reporting
purposes, net operating loss carryfowards of approximately $148,166 and
$200,000, respectively, available to offset future taxable income. The
statutory federal tax rate was 34% for the nine months ended September 30,
1998 and 1997.
Note 3. EARNINGS PER SHARE
Net Income (loss) per share is based upon the weighted average number of
shares outstanding during the periods (8,508,830 shares outstanding during the
nine months ended September 30, 1998 and 8,417,600 during the nine months
ended September 30, 1997).
Note 4. RECLASSIFICATION
Certain amounts previously reported have been reclassified to conform to
current year presentation.
Item 2. Management's Discussion and Analysis and Plan of Operations.
Introduction:
Plan of Operation
Since approximately December 1994, the Company has been engaged in the
business of owning and operating, as commercial lessors, charity bingo
locations of their own and in the past operated similar locations for other
owners. In May 1996, the Company began distributing prepaid phone card vending
machines in the state of Texas.
The Company's revenues are generated primarily from and the sale of
prepaid phone cards through the industry's most unique dispenser and the
rental of bingo facilities in the charitable bingo industry.
Through its wholly-owned subsidiaries, Tupelo Industries, Inc.
("Tupelo"), Meridian Enterprises, Inc. ("Meridian"), and Red River Bingo, Inc.
("Red River"), the Company has operated as a sub-lessor of real property to
charitable bingo operations in Texas, Mississippi, Louisiana. The current
operations consist of three bingo halls located in Meridian, Iuka, and Tupelo,
Mississippi. Additionally, the Company through Monitored Investments Inc.,
("Monitored") has in the past managed similar bingo operations for others in
Texas, Louisiana, and Mississippi.
In April 1996, the Company executed an exclusive Distribution Agreement
for the state of Texas for the Lucky Shamrock Emergency Phone Card Dispenser,
a video enhanced prepaid phone card dispenser. This Distribution Agreement was
mutually terminated in August 1997. During the quarter ended June 30, 1997,
the Company operated approximately 134 of the dispensers. Between August and
December 1997, all of the 134 Lucky Shamrock Emergency Phone Card Dispensers
were returned to Diamond Game Enterprises, Inc.
In October 1997, the Company executed an Exclusive Distribution
Agreement with Cyberdyne Systems, Inc. to distribute the Lucky Strike Prepaid
Phone Card Dispenser, which is based on Cyberdyne's patented cartridge based
technology. This agreement provides for the Company to have the exclusive
distribution rights for the United States and Canada for five years with two
five year options. Distribution of the Lucky Strike Prepaid Phone Cards began
in October 1997, and as of September 30, 1998, over 300 dispensers were in
operation in Texas, Oklahoma, Idaho, Illinois, Kentucky, and Connecticut.
The Company intends to further develop and substantially expand its
business, principally by continuing to operate and expand the distribution of
the video enhanced phone card dispensers by employing locate distributors,
operators and chain retailers to market our products. In addition, the
Company will market the product directly to the retail location, where this is
preferable. The Company will utilize various avenues to locate and
communicate with these entities including trade shows, trade magazines,
trade organizations, direct mail, Internet site, E-mail and industry contacts.
Each territory has its own unique set of marketing characteristics; however,
the Company will target among others the following retailers: bingo halls,
bars and taverns, pool halls, bowling alleys, truck stops, major public
transportation centers, adult game arcades, prepaid phone card routes,
amusement/vending routes, convenience stores, and fraternal organizations.
The prepaid phone card industry has grown to over a $2 billion a year
business, well ahead of previous estimates. Future growth will be based on
numerous factors, such as the current regulatory, taxation, and competitive
environments, which are subject to change and are beyond the Company's
control. While the regulations have not yet been issued, new federal taxation
has placed a three percent tax on the sale of prepaid phone cards. In order
to offset any increased cost of sales, the Company plans to modify its
promotional sweepstakes structure. The Company currently uses three payout
structures for its promotional sweepstakes marketing campaign: 70%, 65%, and
55%. The 65% and 55% sweepstakes provide sufficient margin to maintain the
current level of profitability.
The Company has added distributors for the states of Idaho and
Illinois. Eight dispensers are currently in operation in Kentucky, five in
Illinois and ten in Idaho. Operations are pending judicial approval in
Washington State and regulatory approval in New Jersey and Pennsylvania.
Negotiations with potential distributors for other states are on going.
Total revenue from the sale of phone cards decreased by approximately
$105,000 this quarter compared to the previous quarter, which ended June 30,
1998. Of this amount, approximately $60,000 resulted from a change to sales
for the correction of the accounting for inventory. In addition, the Company
wrote off bad debts in the amount of $102,868. In Oklahoma sales of
phone cards continued to decrease significantly due to increased competition
in the Indian bingo facilities. Gaming devises such as skill-stop eight-
liners and electronic pull tab machines cut into the per capita spending on
the Company's pre-paid phone card dispensers. Recently, however, certain
skill-stop eight-liner devices have been declared illegal for Indian bingo
facilities, and the Company has completed the development of software with
Cyberdyne Systems, Inc., which prints four free game pieces with the purchase
of each phone card. These have been placed in use in Oklahoma, and additional
new promotional sweepstakes games are being developed. Some dispensers have
been moved from Oklahoma to Texas, where sales have continued to increase.
This is the result of adding new dispensers to several locations, the removal
of illegal eight-liners in certain jurisdictions in the state, as well as the
placement of dispensers in new locations. Continued enforcement activities to
prosecute the estimated 50,000 eight-liner slot machines in Texas will provide
for expansion opportunities for the Company's products.
To increase profitability without additional capital outlay the Company
has expanded its program of optimizing machine locations. An aggressive
campaign to find new locations, effectively analyze each dispenser's
profitability, and act more quickly to relocate dispensers has been
instituted. The recent development of management information system software
and the expanded analysis of sales will enhance this process.
Additional dispensers will be distributed by selling them directly to
vending and amusement route operators. Results from recent trade show
appearances indicate that more dispensers can be sold directly to the customer
with the Company continuing to sell the replacement cartridges. In the first
quarter of 1998 the Company executed a leasing agreement for 125 of the
dispensers, and in the second quarter of 1998 another 125 were leased under
more favorable terms with the same leasing company. The Company will continue
to use this avenue as well as other opportunities that become available to
increase the number of dispensers on location in the remainder of the fiscal
year.
The Company's ability to increase the number of income producing
dispensers will be limited by its available liquidity, and other capital
resources, as to which no assurance can be given.
Results of Operations
Three Months ended September 30, 1998
Compared with Three Months ended September 30, 1997
Revenues include rental income from charitable organizations that
lease the Company's bingo facilities, related concession and vending income,
and phone card sales related to the video-enhanced dispensers. Phone card
sales were $775,399 for the three months ended September 30, 1998, compared to
$323,458 for the three months ended September 30, 1997. This increase results
from the increased number of phone card dispensers operations for 1998
compared to the same three month period in the previous year. Rental income
remained consistent at $126,494 for the quarter ended September 30, 1998,
compared with $125,844 for the quarter ended September 30, 1997. Concession
income decreased to $14,777 for the quarter ended September 30, 1998 from
$20,285 for the prior year. Machine sales produced $65,415 in the three
months ended September 30, 1998 compared to 1997 when the Company sold no
machines.
Cost of revenues represent expenses directly attributable to the
operations of the phone card dispensers and operations of the bingo
facilities. In total, such cost was $809,068 and $314,798 for 1998 and 1997,
respectively.
Cost of revenue specifically related to the phone card dispensers
include phone cards, taxes, and royalty costs, machine and location rental,
prizes paid and the cost of machines. Phone card and royalty costs were
$422,602 for the three-months ending September 30, 1998, compared to $147,487
for the previous year. This 187% increase was due to the corresponding
increased sales of phone cards for the three months ended September 30, 1998
compared to three months for the prior year. Machine and location rental
costs decreased by $48,308 for the three-months ended September 30, 1998. The
95% decrease was the result of financing dispensers under a capital lease
structure.
In 1998, prizes paid increased to $288,528 from $54,838 in 1997. A
prize paid reflects the amount paid to winners from dispensers operated
directly by the Company, rather than those operated by the retail location.
This 426% increase is the result of a larger number of dispensers being
directly operated by the Company for three months ended September 30, 1998, as
compared to the three months ended September 30, 1997.
Operating expenses, salaries, and general and administrative expenses
for the three months ended September 30, 1998 increased to 276,746 from
$174,478 in the same three month period of 1997. Of this amount, salaries
increased about $55,182 as the result of the addition of a national sales
director, and customer support representatives. Significant increases were
also experienced in legal costs, travel related to attendance at trade shows
and deployment of dispensers, as well as the development of a networked
internal computer system and management information software. In addition,
the size of the corporate office space has doubled during this period.
Interest expense increased by $47,244 from $10,010 for the three
months ended September 30, 1997 to $57,254 for 1998. This increase is the
result of an increase in debt related to the financing of dispensers.
Principally, for the reasons set forth in the four preceding
paragraphs, the Company had a net loss of ($160,622) for the three months
ended September 30, 1998, compared with a net loss of ($29,699) for 1997.
Nine Months Ended September 30, 1998
Compared with Nine Months Ended September 30, 1997
Revenues were $3,183,041 for the nine months ended September 30, 1998
and $1,535,753 for the nine months ended September 30, 1997. This 107%
increase was principally the result of additional phone card sales generated
during the nine months ended September 30, 1998 and matters more fully
described in the above "Three Months Compared with Three Months" discussion.
Cost of revenues was $1,670,578 and $996,399 for the nine-months
ended September 30, 1998 and 1997, respectively. This 68% increase was
principally the result of the increase in the long distance phone time used
during the nine months ended September 30, 1998 and matters more fully
described in the above "Three Months Compared with Three Months" discussion.
Other expenses were $967,624 and $488,582 for the nine months ended
September 30, 1998 and 1997, respectively. This 98% increase was principally
the result of travel to locations to place new prepaid phone card dispensers,
hiring additional staff, freight, legal, computer upgrades, system development
and matters more fully described in the above "Three Months Compared with
Three Months" discussion.
The significant changes in revenue and related expenses are explained
in the above paragraphs under matters more fully described in the above "Three
Months Compared with Three Months" discussion and " Management's Discussion
and Analysis".
Financial Position
The Company's financial position improved significantly during the nine
months ended September 30, 1998 as net income increased to $334,260
compared to $23,866 for nine months ended September 30, 1997. Cash and cash
equivalents were $62,148 at September 30, 1998, an increase of 15% compared to
$53,934 in 1997.
The Company's working capital (current assets less current liabilities)
position also improved significantly during the nine months ended September
30, 1998: $152,923 at September 30, 1998 compared with a deficit of $(122,237)
at December 31, 1997.
Liquidity
The Company intends to substantially expand its sweepstakes-enhanced
prepaid phone card business during 1998. It had over 300 dispensers placed and
operating at September 30, 1998 and it would like to place and have operating
additional dispensers by December 31, 1998. The actual rate of expansion will
be dependent on (1) the number of dispensers that the Company's supplier can
manufacture and make available and (2) the number of dispenser
purchases/leases that the Company can internally fund and/or otherwise finance
with either borrowing or leasing arrangements or through the sale of
dispensers directly to the retail operator.
At the present level of dispensers currently in operation, the Company
anticipates increased earnings in the remainder of the 1998 Fiscal Year. As
stated earlier, its rate of growth will depend on the availability of
either borrowing or leasing opportunities and the number of dispensers it can
sell directly to retail operators. No assurance can be given that the Company
can arrange such additional financing.
When used anywhere in this Form 10-QSB, in future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases and in oral statements made with the approval of an authorized
executive officer of the Company, the words or phrases, "will likely result",
"are expected to", "is anticipated", "estimated", "projected", "outlook",
"believes", or similar expressions are intended to identify "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements include the Company's plans to
establish new distributorships, expand markets, increase profitability of
dispensers, and similar statements. The Company wishes to caution readers not
to place undue reliance on any such forward-looking statements, which speak
only as of the date made. Such statements are subject to certain risks and
uncertainties that cause actual results to differ materially from historical
earnings and those presently anticipated or projected. The Company
specifically declines any obligation to publicly release the result of any
revisions which may be made to any forward looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the
date of such statements, or to update the reasons why actual results could
differ from those projected in the forward looking statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Except as set forth in the following paragraphs, the Company is not the
subject of any pending legal proceedings, and to the knowledge of management,
no proceedings are presently contemplated against the Company by any federal,
state, or local governmental agency. Further, to the knowledge of management,
no director or executive officer is party to any action that has an interest
adverse to the Company.
Red River Bingo, Inc. was assessed civil penalties totaling $25,000 in
1995 by the state of Louisiana for alleged charitable gaming law violations.
Management vigorously contested this claim, and Louisiana's Charitable Gaming
Division canceled a hearing scheduled on this matter in 1996. No further
correspondence has been received from the state of Louisiana and management
believes that no future action will be forthcoming that could have a material
adverse affect on the Company, particularly since there have been no
operations in Louisiana since 1995.
The Company contested the Mississippi Gaming Commission's decision to
reject an appraisal on the fair market value of rents charged to the charity
at its Tupelo bingo facility. The Company secured both a temporary and
permanent injunction requiring the Mississippi Gaming Commission to issue the
Company a license renewal for the Tupelo facility based on the two appraisals
already submitted. The Mississippi Gaming Commission issued a temporary
ninety-day license, which failed to comply with the injunctions. A hearing
was held to determine whether the Commission was in contempt of court and the
Mississippi Gaming Commission was held to be in contempt of court. Subsequent
to the hearing a license was issued for the Tupelo facility. Following this, a
license renewal for the Company's Iuka location was issued.
The Mississippi Gaming Commission has now appealed the injunctions, as
well as the contempt of court hearings. No date has been set on these
appeals.
Subsequent to the receipt of its license renewals in Tupelo and Iuka,
the Mississippi Gaming Commission denied the Company's license renewal
application for its Meridian facility; however, this bingo hall continues to
operate pending the results of a hearing. No date has been set for the
hearing. The Company believes that the application was denied based on the
amount of rent charged to the charitable organization conducting bingo there;
however, this same amount of rent had been approved for the three previous
license years and was approved for the Tupelo and Iuka locations.
The Mississippi Gaming Commission has also rejected a renewal
application for Bell's Educare, the charitable organization conducting bingo
in our Iuka facility. This matter has also been appealed by the charity,
which continues to conduct bingo there.
In the state of Washington, the Company's attorneys have filed for a
summary judgement to declare that the prepaid phone card dispensers and
promotional sweepstakes comply with state law. The hearing took place
September 25, 1998.
The Washington Gambling Commission sought a Summary Judgement, which
would have declared the Lucky Strike Prepaid Phone Card Dispensers to be
illegal gaming devices and the sweepstakes to be an illegal lottery. The
court denied this Motion. The Company sought to have the court rule that the
dispensers and promotional sweepstakes were a legal promotional sweepstakes.
The court also denied this Motion. The Company is currently contemplating the
cost effectiveness of proceeding with this matter.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
The Company has undertaken a program to ensure that it is Year 2000
compliant. Cyberdyne Systems, Inc., the manufacturer of the Lucky Strike
Prepaid Phone Card Dispensers, has provided information that this product is
Y2000 compliant. Correspondence with the manufacturers of all of the computer
hardware and software products used by the Company has been sent to determine
whether or not these products are Y2000 compliant. Currently, such additional
vendors as banks, insurance companies, and others are being contacted to
further ensure a smooth transition into the next century.
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBIT
Annual Report on Form 10 - KSB for the year **
ended December 31, filed April 15, 1998
(b) REPORTS ON FORM 8-K
Form 8-K, filed January 5, 1998, Regarding **
Changes in Company's Certifying Accountant
** These documents and related exhibits have been previously filed
with the Securities and Exchange Commission and by this reference are
incorporated herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BINGO & GAMING INTERNATIONAL, INC.
Date: 11/30/98 By/s/Reid Funderburk
Reid Funderburk
Chairman, C.E.O., Director
Date: 11/30/98 By/s/George Majewski
George Majewski
President, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
BINGO & GAMING INTERNATIONAL, INC.
Date: 11/30/98 By/s/Reid Funderburk
Reid Funderburk, Chairman, CEO & Director
Date: 11/30/98 By/s/George Majewski
George Majewski, President, Director
Date: 11/30/98 By/s/R. E. Wilkin
R. E. Wilkin, Director
Date: 11/30/98 By/s/Rick Redmond
Rick Redmond, Director
Date: 11/30/98 By/s/Rhonda McClellan
Rhonda McClellan, Chief Financial Officer
<TABLE> <S> <C>
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
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