FORM 10-QSB
Securities and Exchange Commission Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File No. 0-22372.
GRAND TOYS INTERNATIONAL, INC.
(Exact name of Issuer as specified in its charter)
Nevada 87-0454155
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization identification No.)
1710 Route Transcanadienne, Dorval, Quebec, Canada H9P 1H7
(Address of principal executive offices)
(514) 685-2180
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act 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.
Yes {X} No { }
Indicate the number of shares outstanding of each of the
issuer's classes of common equity, as of October 23, 1997: 1,577,597.
<PAGE>
Part I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
GRAND TOYS INTERNATIONAL, INC.
Consolidated Balance Sheets
<CAPTION>
September 30, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Accounts receivable
(net of allowance for doubtful accounts;
1997 - $82,755; 1996 - $74,228) $10,191,254 $5,229,177
Due from affiliated company 9,482 325,356
Inventory 6,833,375 2,554,384
Prepaid expenses 594,196 525,850
Total current assets 17,628,307 8,634,767
Equipment and leasehold
improvements, net (note 3) 459,407 389,281
Total assets $18,087,714 $9,024,048
</TABLE>
3
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Bank indebtedness (note 4) 7,882,998 1,633,068
Trade accounts payable 3,363,279 2,207,896
Other accounts payable and
accrued liabilities 932,100 509,903
Royalties payable 329,557 354,066
Income taxes payable 1,266,115 979,455
Total current liabilities 14,074,049 5,684,388
Loan payable to a director (note 5) - 427,129
Minority interest 100 100
Stockholders' equity:
Capital stock (note 6) 1,578 7,888
Additional paid-in capital 10,599,559 10,593,249
Deficit (6,192,674) (7,248,104)
Cumulative currency translation
adjustment (394,897) (440,602)
4,013,566 2,912,431
Commitments and contingencies
(notes 9 and 10)
Total liabilities and
stockholders' equity $18,087,714 $9,024,048
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<TABLE>
GRAND TOYS INTERNATIONAL, INC.
Consolidated Statements of Earnings
(Unaudited)
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $11,562,834 $8,391,261 $21,704,326 $18,144,695
Cost of goods sold 7,267,669 4,639,577 13,305,405 10,515,448
Gross profit 4,295,165 3,751,684 8,398,921 7,629,247
Operating expenses:
Selling, general and
administrative 2,469,715 2,362,030 5,651,483 5,278,013
Interest 130,160 184,404 273,759 363,865
Bad debt expense 38,120 161,159 109,590 219,916
Depreciation 36,693 40,349 95,844 103,921
2,674,688 2,747,578 6,130,676 5,965,714
Earnings before income taxes 1,620,477 1,004,106 2,268,245 1,663,532
Income taxes 847,767 521,291 1,212,815 828,513
Net earnings $772,710 $482,815 $1,055,430 $835,019
PER COMMON SHARE (NOTE 1):
Basic $0.49 $0.32 $0.67 $0.55
Diluted 0.31 0.19 0.47 0.32
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
<TABLE>
GRAND TOYS INTERNATIONAL, INC.
Consolidated Statements of Stockholders' Equity
(Unaudited)
<CAPTION>
Cumulative
Additional Retained Currency
Common Paid-In Earnings Translation
Stock Capital (Deficit) Adjustment Total
<S> <C> <C> <C> <C> <C>
January 1, 1997 $7,888 $10,593,249 $(7,248,104) $(440,602) $2,912,431
Reverse Stock Split (6,310) 6,310 - - -
(note 1(g))
Net earnings for
the period - - 1,055,430 - 1,055,430
Foreign currency
translation - - - 45,705 45,705
September 30, 1997 $1,578 $10,599,559 $(6,192,674) $(394,897) $4,013,566
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
<TABLE>
GRAND TOYS INTERNATIONAL, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
For the nine months
Ended September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net earnings $1,055,430 $835,019
Items not affecting cash:
Depreciation 95,844 103,921
Gain on disposal of equipment - (25,407)
Changes in operating working capital
items, (note 8) (6,878,523) (4,667,073)
Net cash used for operating
activities (5,727,249) (3,753,540)
Cash flows from financing activities:
Increase in bank indebtedness 6,253,980 4,071,408
Decrease in loan payable to a director (422,070) (255,798)
Repayment of long-term debt - (34,074)
Issuance of capital stock,
net of issue costs - (29,142)
Other 61,309 11,680
Net cash provided by financing
activities 5,893,220 3,764,074
Cash flows from investing activities:
Additions to equipment (165,970) (35,941)
Proceeds on sale of equipment - 25,407
Net cash used for investing activities (165,970) (10,534)
Net change in cash, being cash at end of
period $ - $ -
Supplementary disclosure of cash flow information
Cash paid during the period for:
Interest $279,759 $363,865
Income taxes 833,296 303,296
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
Grand Toys International, Inc., a publicly held company, is organized under
the laws of the State of Nevada. Its principal business activity, through
its Canadian subsidiaries, is the distribution of toys and related items.
1. SIGNIFICANT ACCOUNTING POLICIES:
(a) Financial statement presentation:
The accompanying consolidated financial statements are not audited for the
mentioned period but include all adjustments (consisting of only normal
recurring accruals) which management considers necessary for the fair
representation of results at September 30, 1997.
Moreover, these financial statements do not purport to contain complete
disclosures in conformity with generally accepted accounting principles and
should be read in conjunction with the Company's audited financial statements
at and for the fiscal year ended December 31, 1996 contained in the Company's
Annual Report on Form 10-KSB.
The results for the three and nine months ended September 30, 1997 are not
necessarily indicative of the results for the entire fiscal year ending
December 31, 1997.
(b) Principles of consolidation:
These consolidated financial statements, presented in U.S. dollars and in
accordance with accounting principles generally accepted in the United
States, include the accounts of Grand Toys International, Inc. (the "Company"),
and its subsidiaries with the exception of Grand Group Inc. (see note 2). All
significant intercompany balances and transactions have been eliminated.
(c) Inventory:
Inventory is valued at the lower of cost and net realizable value. Cost is
determined by the first-in, first-out method.
(d) Equipment and leasehold improvements:
Equipment and leasehold improvements are stated at cost less accumulated
depreciation. Depreciation methods and annual rates adopted by the Company
are as follows:
<TABLE>
<CAPTION>
Asset Method Rate
<S> <C> <C>
Computer equipment Declining balance 30%
Machinery and equipment Declining balance 20%
Furniture and fixtures Declining balance 20%
Trucks and automobiles Declining balance 30%
Telephone equipment Declining balance 30%
Leasehold improvements Straight-line Term of lease
plus one
renewal term
</TABLE>
8
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
(e) Revenue:
Sales are recorded net of merchandise returns.
(f) Foreign currency translation:
(i) Grand Toys Ltd., an indirectly wholly-owned Canadian subsidiary (Grand
Canada) is classified as a self-sustaining foreign operation, with assets and
liabilities translated into U.S. dollars at the exchange rates prevailing at
the balance sheet date and sales, expenses and cash flows translated at the
average exchange rate for the year. The resulting currency translation
adjustments are accumulated and reported as a separate component of
stockholders' equity.
(ii) Other monetary assets and liabilities denominated in foreign currencies
are translated at the exchange rates prevailing at the balance sheet date.
Revenues and expenses denominated in foreign currencies are translated at
the rates of exchange prevailing at the transaction dates. All exchange
gains and losses are included in income.
(g) Earnings per share:
(i) Effective August 4, 1997, the stock of the Company underwent a one-for-five
reverse stock split. For purposes of earnings per share calculations, the
compartive number of shares have been restated to reflect the split.
(ii) Earnings per share is determined by dividing the weighted average number
of common shares outstanding during the period into net earnings. Common
share equivalents in the form of options and warrants are excluded from the
calculation if they have an anti-dilutive effect on per share figures (note
7).
The weighted-average number of shares is as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
<C> <C>
1,568,423 1,358,900
</TABLE>
(h) Stock option plan:
The Company accounts for its stock option plan (the "Option Plan") in
accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, Accounting for Stock Issued to Employees. As such, compensation
expense is recorded on the date of grant only if the current market price of
the underlying stock exceeded the exercise price. FASB Statement No. 123,
which became effective in 1996, allows entities to continue to apply the
provisions of APB Opinion No.25 and requires pro forma net earnings and pro
forma earnings per share disclosures for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in FASB
Statement No. 123 had been applied.
9
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
2. FORMER INVESTMENT IN NON-CONSOLIDATED SUBSIDIARY:
Grand Group Inc., ("Grand Group") an indirect wholly-owned U.S. subsidiary
incorporated in August 1993, started active operations in March 1994 and ceased
operations in September 1995. In November 1995, an involuntary petition into
bankruptcy was filed against Grand Group Inc. As a result, Grand Group is
being liquidated in a Chapter 7 proceeding under the United States Bankruptcy
Code and a trustee has been appointed to oversee the liquidation. As control
since November 1995 does not rest with Grand Toys International, Inc., the
financial statements of Grand Group are no longer consolidated in these
financial statements.
<TABLE>
3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
<CAPTION>
September 30 December 31
1997 1996
Accumulated Accumulated
Cost depreciation Cost depreciation
<S> <C> <C> <C> <C>
Computer equipment $860,997 $566,320 $692,007 $516,083
Machinery and equipment 369,907 329,369 373,589 325,419
Furniture and fixtures 504,099 459,181 509,106 448,102
Trucks and automobiles 88,425 84,467 89,305 84,149
Telephone equipment 42,295 36,168 42,716 35,436
Leasehold improvements 355,305 286,116 358,020 266,273
$2,221,028 $1,761,621 $2,064,743 $1,675,462
NET BOOK VALUE $459,407 $389,281
</TABLE>
4. BANK INDEBTEDNESS:
On March 28, 1996, Grand Canada entered into a three year banking agreement
with a lending institution. The Company has a secured line of credit of
$9,524,000 (Canadian $13,000,000) and can draw down working capital advances
and letters of credit in amounts determined by percentages of its accounts
receivable and inventory. The working capital advances bear interest at prime
plus 1 1/4%, and are secured by all of Grand Canada's assets and are guaranteed
by Grand Toys International, Inc. As at September 30, 1997, the unused portion
of the credit facility is approximately $391,000.
5. LOAN PAYABLE TO A DIRECTOR:
The loan payable to a director bore interest at 12% and had no specified terms
of repayment. The final balance of the loan was repaid in the first quarter of
1997.
10
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
6. CAPITAL STOCK:
(a) Authorized capital:
50,000,000, $0.001 par value voting common stock;
50,000,000, $0.001 par value preferred shares, issuable in series with such
designation, rights and preferences as may be determined from time to time by
the Board of Directors.
<TABLE>
(b) Issued and outstanding:
<CATION>
September 30, December 31,
1997 1996
<S> <C> <C>
1,577,597 common shares $1,578 $7,888
(1996 - 7,887,986)(note 1 (g))
</TABLE>
7. STOCK OPTIONS AND WARRANTS:
The Company's Option Plan provides for the issuance of up to 300,000
options to acquire the common stock of the Company. Stock options granted
under the Option Plan may be Incentive Stock Options under the requirements
of the Internal Revenue Code, or may be Non-qualified Stock Options which do
not meet such requirements. Options may be granted under the Option Plan to,
in the case of Incentive Stock Options, all employees (including officers) of
the Company, or, in the case of Non-statutory Stock Options, all employees
(including officers) or non-employee directors of the Company.
Options have also been granted outside the Option Plan to directors, key
executives, outside consultants and a supplier. As well, warrants have been
issued to the underwriter pursuant to the public offering.
Under each plan, the exercise price of each option equals the market price of
the Company's stock on the date of grant and an option's maximum term is ten
years.
Details of options and warrants, all of which are exercisable at the period
end, are as follows:
11
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
<TABLE>
7. STOCK OPTIONS AND WARRANTS, CONTINUED:
<CAPTION>
Weighted-
average
Other exercise
Option Stock price per
Plan Options Warrants Total Share
<S> <C> <C> <C> <C> <C>
Outstanding,
December 31, 1996 64,500 996,011 280,000 1,340,511 18.72
(see note 1(g))
Granted - 1,113,000 - 1,113,000 4.39
Forfeited - (450,000) - (450,000) 18.67
Expired - - (230,000) (230,000) 40.00
Outstanding,
September 30, 1997 64,500 1,659,011 50,000 1,773,511 6.98
</TABLE>
<TABLE>
8. CHANGES IN OPERATING WORKING CAPITAL ITEMS:
<CAPTION>
For the nine months ended
September 30,
1997 1996
<S> <C> <C>
Increase in accounts receivable $(4,993,882) $(2,852,494)
Decrease in due from affiliated company 312,054 -
Increase in inventory (4,295,920) (3,300,482)
Increase in prepaid expenses (72,811) (403,007)
Increase in trade accounts payable 1,470,786 863,110
Increase in other accounts payable
and accrued liabilities 426,417 411,448
Decrease (increase) in royalties payable (20,958) 97,087
Increase in income taxes 295,791 517,266
$(6,878,523) $(4,667,073)
</TABLE>
12
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
9. COMMITMENTS:
The Company has entered into long-term leases with minimum annual rental
payments approximately as follows:
<TABLE>
<S> <C>
1997 170,000
1998 423,000
1999 216,000
2000 213,000
2001 141,000
Thereafter 530,000
$1,693,000
</TABLE>
Rent expense for the periods ended September 30, 1997 and 1996 amounted to
approximately $148,344 and $129,777 respectively.
10. CONTINGENCIES:
(a) A lawsuit for alleged breach of contract was filed in 1994 against Grand
Canada by a sales representative. In the opinion of management, the case
should be settled, however, at this point in time it is difficult to
ascertain or estimate the value of the settlement, if any.
The Company has been named in two lawsuits by a supplier of and a lessor
to Grand Group for recovery of amounts totalling approximately $300,000
although the Company is not party to either contract. In the opinion of
management, the actions are in their early stages and it is difficult to
ascertain the likelihood of an unfavorable outcome to the Company.
(b) Grand Canada is also contingently liable for outstanding letters of
credit of approximately $1,250,000.
11. FINANCIAL INSTRUMENTS:
(a) Risk Management Activities:
The Company enters into forward foreign exchange contracts to minimize its
foreign currency exposure on purchases. The contracts oblige the Company
to buy US Dollars in the future at predetermined exchange rates. The Company's
policy is to enter into forward foreign exchange contracts on a portion of its
purchases anticipated in the next selling season.
(b) Fair Value:
The fair value of the Company's accounts receivable, bank indebtedness, trade
and other payables approximate their carrying value due to the immediate or
short-term maturity of these financial instruments.
13
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Grand Toys International, Inc., (the "Company"), through its Canadian
subsidiary, Grand Toys Ltd. ("Grand Canada"), has been engaged in the toy
business in Canada for over 35 years and currently distributes a wide
variety of toys throughout Canada. Through Grand Concepts, a recently
organized subsidiary, the Company distributes, in Canada, various
accessories, including backpacks and luggage.
<TABLE>
RESULTS OF OPERATION
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales 100.00% 100.00% 100.00% 100.00%
Cost of goods sold 62.85 55.29 61.30 57.95
Gross profit 37.15 44.71 38.70 42.05
Operating expenses:
Selling, general and
administrative 21.36 28.15 26.05 29.09
Interest 1.13 2.19 1.26 2.01
Bad debt expense .33 1.92 .50 1.21
Depreciation .32 .48 .44 .57
Total operating expenses 23.14 32.74 28.25 32.88
Earnings before income taxes 14.01 11.97 10.45 9.17
Net earnings 6.68% 5.75% 4.86% 4.60%
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1997 TO THE THREE MONTHS
ENDED SEPTEMBER 30, 1996
NET EARNINGS. Net earnings were $772,710 for the third quarter of 1997
compared to net earnings of $482,815 for the same period last year. The
increase of $289,895 in net earnings was due to an increase in sales (38%),
and an overall decrease, as a percentage of sales, of 9.61%, in operating
expenses.
NET SALES. Net sales increased by $3,171,573 or by 38% over net sales of the
third quarter of 1996. The higher sales volume was attributed to increased sales
in the Toymax (1997), Tiger, Toybiz, Oddzon and Spectra product lines. The
addition of the Toymax line, in conjunction with the strength of the Company's
product line, resulted in increased sales as compared to the same period last
year.
GROSS PROFIT. Gross profit for the Company increased by $543,481 or by 14% of
sales. The decrease in gross profit percentage was due to the sales mix in
the product line, to an increase in sales discounts and to higher product costs.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by $107,685 over the third quarter of 1996. This increase
was mainly due to increases in bank charges, advertising, travel and
entertainment, and warehousing expenses. However, the significant decrease in
selling, general and administrative expenses as a percentage of net sales was
a result of successful cost containment.
14
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Management's Discussion and Analysis of Financial Condition and Results of
Operation
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1997 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1996.
NET EARNINGS. Net earnings were $1,055,430 for the first nine months of 1997
compared to net earnings of $835,019 for the same period in the prior year.
The increase of $220,441 in net earnings was due to an increase in sales (20%),
and an overall decrease as a percentage of net sales of 4.65%, in operating
expenses.
NET SALES. Net sales for the first nine months of 1997 increased by $3,559,631
or by 20% over the first nine months of the prior year. The higher sales volume
was attributed to increased sales in the Toymax (1997), Tiger, Toy Biz, Oddzon
and Spectra product lines. The addition of the Toymax line, in conjunction with
the strength of the Company's product line, resulted in increased sales as
compared to the same period last year.
GROSS PROFIT. Gross profit increased by $769,674 or 10% over the first nine
months of 1996. The increase was primarily attributable to the increase in net
sales by the Company. The decrease in gross profit percentage was due to the
sales mix in the product line, to an increase in sales discounts, and to higher
product costs.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by $373,470 over the same period last year. The increase is
due to increases in bank charges, advertising, travel and entertainment and
warehousing expenses. However, the decrease in selling, general and
administrative expenses as a percentage of sales was the result of successful
cost containment.
LIQUIDITY AND CAPITAL RESOURCES
The Company generally finances its operations through borrowings under Grand
Canada's Credit Agreement with its bank and by cash flow from operations.
During 1995 the Company issued 1,680,000 shares of its Common Stock in private
transactions under Regulation S pursuant to which it received gross proceeds
of $885,685.
In March 1996 Grand Canada entered into a banking arrangement with a new
lending institution. Grand Canada has a secured line of credit of
Canadian $13,000,000 or its US$ equivalent to enable it to meet its plan for
growth in the future. Grand Canada may draw down working capital advances
and letters of credit in amounts determined by percentages of its accounts
receivable and inventory. Working capital advances taken by Grand Canada
bear interest at prime plus 1 1/4%. The term of the loan agreement is three
years. The advances are guaranteed by the Company and secured by all of Grand
Canada's assets.
Accounts receivable at September 30, 1997 were $10,191,254 compared to
$5,229,177 at December 31, 1996. Inventory was $6,833,375 at September 30,
1997 compared to $2,554,384 at December 31, 1996. Due to the seasonality of the
toy industry, inventory levels will fluctuate according to customer demand.
Grand Canada's level of accounts receivable is subject to significant seasonal
variations due to the seasonality of sales. As a result, Grand Canada's
working capital requirements are greatest during its third and fourth quarters.
Working capital increased from $2,950,379 at December 31, 1996 to $3,554,258
at September 30, 1997. Net cash used for operating activities was $5,727,249
in the nine months ended September 30, 1997 compared to net cash used for
operations of $3,753,540 in the same period of 1996. Cash used for additions to
equipment was $165,970 for the nine months ended September 30, 1997, compared
to $35,941 in 1996.
15
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
Management's Discussion and Analysis of Financial Condition and Results of
Operation
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
If the funds available under the Company's financing agreements, together with
its current cash and cash equivalents are not sufficient to meet the Company's
cash needs, the Company may from time to time seek to raise capital from
additional sources, including extension of its current lending facilities,
project-specific financing and additional public or private debt or equity
financing. Management believes that the Company has sufficient funding at the
present time to meet its next twelve month forecast.
16
<PAGE>
GRAND TOYS INTERNATIONAL, INC.
PART II. - OTHER INFORMATION
Item 5. OTHER INFORMATION
A Special Meeting of Shareholders of the Company was held on July 28, 1997.
At the Special Meeting, the shareholders approved the proposed amendment to
the Company's Articles of Incorporation to effect a one-for-five reverse split
of the Company's Common Stock while keeping 50,000,000 authorized shares of
Common Stock, par value $.001 per share. 6,830,278 votes were cast in favor
of the proposal, 179,743 votes were cast against the proposal, and nil
shares abstained on the proposal.
The number of votes described above represent shares of Common Stock before the
one-for-five reverse stock split was effected.
17
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: October 23, 1997 GRAND TOYS INTERNATIONAL, INC.
/s/ Stephen Altro
Stephen Altro
President
In accordance with the requirements of the Exchange Act., this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Signature Title Date
/s/ Stephen Altro President and Director October 23, 1997
Stephen Altro Director (Principal
Executive Officer)
/s/ Ron Goldenberg Vice President, Chief October 23, 1997
Ron Goldenberg Financial Officer, Secretary,
Treasurer and Director
(Principal Financial and
Accounting Officer)
18
