UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File No. 0-22744
VIKING CAPITAL GROUP, INC.
-------------------------------------------
(Exact name of small business issuer as specified in its charter)
Utah 87-0442090
---- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Two Lincoln Centre, Suite 300, 5420 LBJ FWY, Dallas, Texas 75240
----------------------------------------------------------------
(Address of principal executive offices)
(972) 386-9996
--------------
(Issuer's telephone 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 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
--- ---
As of June 30, 2000, approximately 33,638,865 shares of Common Stock of the
issuer were outstanding. As of June 30, 2000, 100,000 shares of Class B Common
Stock of the issuer were outstanding.
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<PAGE>
VIKING CAPITAL GROUP, INC.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 2000 and December 31, 1999 3
Consolidated Statements of Operations - For the three months ended
June 30, 2000 and 1999, and for the period from inception
(November 12, 1986) to June 30, 2000 5
Consolidated Statements of Operations - For the six months ended
June 30, 2000 and 1999, and for the period from inception
(November 12, 1986) to June 30, 2000 6
Consolidated Statements of Cash Flows - For the six months ended
June 30, 2000 and 1999, and for the period from inception
(November 12, 1986) to June 30, 2000 7
Notes to Consolidated Condensed Financial Statements 9
Item 2. Management's Discussion and Analysis or Plan of Operations. 11
PART II - OTHER INFORMATION
Item 5. Other Information 13
Item 6. Exhibits 13
SIGNATURES 15
EXHIBITS 16
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<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
ASSETS
------
(Unaudited)
June 30, December 31,
2000 1999
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 15,372 $ 8,434
Accounts receivable 7,674 14,024
Notes and other accounts receivable and accrued interest 72,704 76,617
---------- ----------
Total current assets 95,750 99,075
---------- ----------
OFFICE FURNITURE, EQUIPMENT, SOFTWARE AND
CAPITALIZED SOFTWARE DEVELOPMENT COSTS 794,279 823,260
OTHER ASSETS 85,027 90,359
---------- ----------
TOTAL ASSETS $ 975,056 $1,012,694
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
(Unaudited)
June 30, December 31,
2000 1999
------------ -----------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 380,216 $ 463,997
Accrued officer's payroll 1,104,221 921,422
Lease obligation, current portion 13,533 20,923
Note payable and accrued interest 231,121 219,201
------------ -----------
Total current liabilities 1,729,091 1,625,543
------------ -----------
LONG-TERM DEBT
Obligations under capital leases, less current portion 5,886 14,389
------------ -----------
Total liabilities 1,734,977 1,639,932
------------ -----------
STOCKHOLDERS' DEFICIT
Preferred stock $1.00 par value; 50,000,000 shares authorized;
Series A Preferred Stock $1.00 par value; 2,500,000 shares
authorized, no shares issued and outstanding - -
Series AA Preferred Stock $1.00 par value; 6,000,000 shares
Authorized, no shares issued and outstanding - -
Common stock $0.001 par value; 150,000,000 shares authorized;
34,164,490 and 32,029,192 issued as of June 30, 2000
and December 31, 1999, respectively 34,164 32,029
Common stock Class B $0.001 par value; 100,000 shares
authorized and outstanding 100 100
Paid-in capital 9,792,133 9,197,191
Deficits accumulated in the development stage (9,773,078) (9,062,318)
------------ -----------
53,319 167,002
------------ -----------
Less treasury stock - 525,625 shares at cost (41,206) (41,206)
------------ -----------
Less stock issued for notes receivable (772,034) (753,034)
------------ -----------
Total stockholders' deficit (759,921) (627,238)
------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 975,056 $ 1,012,694
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended June 30, 2000 and 1999 and
Period from November 12, 1986 (inception) to June 30, 2000
Three months ended Period from
June 30, November 12, 1986
2000 1999 to June 30, 2000
------------ ------------ ----------------
<S> <C> <C> <C>
Revenue $ 2,674 $ -- $ 475,060
Cost of Revenue 2,451 -- 91,324
------------ ------------ ------------
Gross Profit 223 -- 383,736
------------ ------------ ------------
Cost and expenses
Depreciation and amortization 13,622 11,686 159,899
General and administrative expenses 256,956 487,205 9,761,281
------------ ------------ ------------
Total cost and expenses 270,578 498,891 9,921,180
------------ ------------ ------------
Loss from operations (270,355) (498,891) (9,537,444)
Other income(expenses)
Interest income 9,123 12,917 103,742
Interest and penalty expense (6,523) (5,764) (267,405)
Other -- 6,000 (40,750)
------------ ------------ ------------
Total other income(expense) 2,600 13,153 (204,413)
------------ ------------ ------------
Loss before income taxes (267,755) (485,738) (9,741,857)
Income tax provision -- -- (32)
------------ ------------ ------------
Net loss $ (267,755) $ (485,738) $ (9,741,889)
============ ============ ============
Loss per common share attributable to
common stockholders
Basic and Fully Diluted $(.008) $(.016)
Weighted average common shares outstanding 33,532,064 29,434,226
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six months ended June 30, 2000 and 1999 and
Period from November 12, 1986 (inception) to June 30, 2000
Six months ended Period from
June 30, November 12, 1986
2000 1999 to June 30, 2000
------------ ------------ ----------------
<S> <C> <C> <C>
Revenue $ 15,666 $ -- $ 475,060
Cost of Revenue 13,366 -- 91,324
------------ ------------ ------------
Gross Profit 2,300 -- 383,736
------------ ------------ ------------
Cost and expenses
Depreciation and amortization 28,982 21,792 159,899
General and administrative expenses 685,369 964,359 9,761,281
------------ ------------ ------------
Total cost and expenses 714,351 986,152 9,921,180
------------ ------------ ------------
Loss from operations (712,051) (986,152) (9,537,444)
Other income(expenses)
Interest income 18,815 23,227 103,742
Interest and penalty expense (14,035) (14,774) (267,405)
Other (3,490) 1,914 (40,750)
------------ ------------ ------------
Total other income(expense) 1,290 10,367 (204,413)
------------ ------------ ------------
Loss before income taxes (710,761) (975,785) (9,741,857)
Income tax provision -- -- (32)
------------ ------------ ------------
Net loss $ (710,761) $ (975,785) $ (9,741,889)
============ ============ ============
Loss per common share attributable to
common stockholders
Basic and Fully Diluted $(.022) $(.033)
Weighted average common shares outstanding 33,101,871 29,434,226
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30, 2000 and 1999 and
Period from November 12, 1986 (inception) to June 30, 2000
Six months ended Period from
June 30, November 12, 1986
2000 1999 to June 30, 2000
------------ ------------ ----------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (710,761) $ (975,785) $ (9,741,889)
Non-cash charges included in operations
Allowance for doubtful accounts 65,062
Depreciation and amortization 28,982 21,792 159,899
Common stock issued for services and interest 167,629 231,169 2,454,342
Note payable issued for services - - 6,860
Common stock issued for services and
accrued expenses - - 187,672
Provision for doubtful notes receivable - - 52,754
Common stock issued for interest payable - - 141,296
Loss on assets - - 15,000
Advances to stockholder expensed to consulting - - 57,706
Changes in assets and liabilities
Accounts receivable 6,350 193 (7,469)
Accrued interest receivable (16,087) 16,537 (65,264)
Deposits - - (31,767)
Other assets 5,332 15,147 (52,675)
Accounts payable and accrued expenses (63,650) (241,867) 433,812
Accrued payroll and payroll taxes 169,587 136,611 1,089,219
------------ ------------ -------------
Net cash used for operating activities (412,618) (795,933) (5,235,442)
Cash flows from investing activities
Capital expenditures - (66,433) (837,940)
Loans made - (77,500) (315,748)
Loan repayments - 8,200 94,500
Other - - (15,050)
------------ ------------ -------------
Net cash used for investing activities - (135,733) (1,074,238)
Cash flows from financing activities
Stock sale expenses - - (11,716)
Proceeds from sale of common stock 405,249 897,862 4,574,888
Proceeds from notes payable 120,199 5,000 2,574,270
Principal repayments of notes payable (89,999) (6,822) (727,018)
Principal payments on capital lease obligations (15,893) (5,934) (88,219)
Proceeds from preferred stock sale - - 20,000
Repurchase of preferred stock - - (11,319)
Preferred dividends paid - - (5,834)
------------ ------------ -------------
Net cash provided by financing activities 419,556 890,106 6,325,052
Increase (decrease) in cash 6,938 (41,560) 15,372
</TABLE>
- continued -
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
Six months ended June 30, 2000 and 1999
and Period from November 12, 1986 (inception) to June 30, 2000
Six months ended Period from
June 30, November 12, 1986
2000 1999 to June 30, 2000
------------- ------------- ----------------
<S> <C> <C> <C>
Cash at beginning of period 8,434 47,506 -
------------- ------------- -------------
Cash at end of period $ 15,372 $ 5,946 $ 15,372
============= ============= =============
Cash flow information:
Interest paid $ 9,361 $ 14,774 $ 112,669
Income taxes paid $ - $ - $ 32
Non-cash investing activities:
Repayment of note receivable - non cash method $ - $ - $ 21,000
Common stock issued for:
Acquisition of Triple A $ - $ - $ -
Acquisition of NIAI $ - $ - $ 10,000
Acquisition of VISI $ - $ - $ 434
Oil lease $ - $ - $ 40,000
Non-cash financing activities:
Preferred stock issued for:
Note payable-related party $ - $ - $ 60,000
Accrued interest-related party $ - $ - $ 4,500
Accrued expenses-related party $ - $ - $ 25,500
Common stock issued for:
Repayment of notes payable $ 5,199 $ 151,318 $ 1,424,434
Payment of interest $ 49 $ 11,574 $ 141,346
Payment of accounts payable and exp reimbursement $ - $ - $ 15,000
Conversion of preferred stock $ - $ - $ 100,000
Payment of preferred stock dividend $ - $ - $ 25,556
Notes Receivable $ - $ 123,972 $ 753,034
Equipment $ - $ - $ 25,000
Note payable issued for services $ - $ - $ 6,860
Assignment of oil lease in payment of note payable $ - $ - $ 40,000
Common stock acquired for conversion of
note receivable $ - $ - $ 6,406
Common stock canceled for conversion of
note receivable $ - $ - $ 5,600
Additions to equipment under capital leases $ - $ - $ 107,631
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated interim financial statements include the accounts of Viking
Capital Group, Inc. and its wholly owned subsidiaries (collectively the
"Company").
The consolidated interim financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principals ("GAAP") have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Form 10-KSB as of and for the year ended December 31,
1999.
In the opinion of management, the unaudited interim consolidated financial
statements of the Company contains all adjustments, consisting only of those of
a normal recurring nature, necessary to present fairly the Company's financial
position and the results of its operations and cash flows for the periods
presented. The preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions. Such estimates and
assumptions affect the reported amounts of assets and liabilities, as well as
the disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
2. SOFTWARE DEVELOPMENT COSTS
The Company has capitalized certain software development costs in accordance
with SFAS No. 86 (see below).
During 1999, the Company began to amortize software costs of $96,962 associated
with the development of an e-commerce web-site and web based demonstration
software associated with IP Banker and Benefits IP, using an estimated useful
life of three years. The remaining software development costs of $666,767 will
be amortized over three years when placed in service. However, management
periodically evaluates the recoverability, valuation and amortization of
capitalized software cost and may begin amortizing such costs prior to placement
into service.
Financial Accounting Standard No. 86, "Accounting for the Cost of Computer
Software to be Sold, Leased, or Otherwise Marketed", provides for the
capitalization of certain costs related to development of computer software
products. Capitalized computer software costs include direct labor,
labor-related overhead costs and interest. The software will be amortized over
its expected useful life of 3 years after it is placed in service. Management
periodically evaluates the recoverability, valuation and amortization of
capitalized software cost. As part of this review, management considers the
undiscounted projected future net earnings. If the undiscounted future net
earnings are less than the stated value, software costs will be written down to
fair value.
3. RELATED PARTY TRANSACTIONS
During the current quarter, the Company entered into $20,000 of promissory notes
payables with related parties. At June 30, 2000, there were $20,000 in
promissory notes payable with related parties.
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4. OPTIONS ISSUED
During the current quarter, the Company granted 36,667 common restricted share
options exercisable at $0.45 per share. All of these options are exercisable
within one year and expire within one year and were issued in conjunction with
common restricted stock sales. The company also issued 26,241 common restricted
share options exercisable at $0.30 per share. These options are exercisable and
expire within one year and were issued in conjunction with the conversion of a
promissory note.
5. OTHER
The financial statements have been prepared on the assumption that the Company
will continue as a going concern. The Company's continued existence depends upon
the success of management's efforts to raise additional capital necessary to
meet the Company's obligations as they come due and to obtain sufficient capital
to execute its business plan.
There can be no degree of assurance given that the Company will be successful in
completing additional financing transactions. Should the Company be unsuccessful
in its efforts to obtain adequate financing, it's current financial condition
may be affected adversely, and such affects may be material.
6. EVENTS SUBSEQUENT TO JUNE 30, 2000
Subsequent to June 30, 2000, approximately sixteen hundred common restricted
shares were issued in connection with a promissory note. The Company also
reserved shares for performance based options for one million five hundred
thousand common restricted shares. These options are to be exercisable only upon
the occurrence of certain financial events should they occur within one year. If
and when the options become exercisable, they will expire within two years and
are exercisable at the rate of one dollar per share.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
This Quarterly Report on Form 10-QSB contains certain "forward-looking"
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to the Company and its subsidiaries that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this report, the words "anticipate," "believe," "estimate," "expect" and
"intend" and words or phrases of similar import, as they relate to the Company
or its subsidiaries or Company management, are intended to identify
forward-looking statements. Such statements reflect the current risks,
uncertainties and assumptions related to certain factors including, without
limitations, changes or anticipated changes in regulatory environments,
competitive factors, general economic conditions, customer relations,
relationships with vendors, the interest rate environment, governmental
regulation and supervision, seasonality, distribution networks, product
introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in other
filings made by the company with the Securities and Exchange Commission. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.
Material Changes in Results of Operations
The current and prior quarter's activities have been focused on reducing
operating costs and continuing efforts to explore growth through acquisition.
Management is using more than one source for potential candidates and believes
that an acquisition will result from such activities.
Prior to and including the current quarter, the Company has been engaged in
preparing the necessary business alliances and relationships to fulfill its full
plan of operations including both growth through acquisitions of insurance
companies and growth through building of technology based revenue streams
through non-acquisition methods. The company's plan for non-acquisition revenue
growth has focused on its business model of being an application service
provider (ASP), formerly referred to as a "service bureau environment", in fee
and transaction fee generating areas. These areas consist of internet based
banking(IP Banker) , securities trading (IP Trader), human resource/benefit plan
information (Benefits IP), life insurance information relevant to policyholders
and agents (Universal IP) and direct marketing organizations (IP Marketer).
In support of these goals, the Company has developed software capabilities
encompassing various aspects of each of these functions and is currently focused
on pursuing bank clients. Sales efforts for bank clients have been hampered due
to lack of funds for sales support and financial stability factors required to
compete effectively. The Company has also developed strategic partners to handle
secure communications and bandwidth needs, implementation requirements, ongoing
maintenance, upgrade and training needs. The Company's marketing niche is small
to medium sized banks, credit unions, S&L's etc. focusing on their desire to
retain their current customer base and enhance fee income in the face of
sweeping regulatory changes and increased services based competition primarily
from larger institutions. Each service provided by or proposed to be provided by
the Company to a bank is added to the basic on-line banking service and marketed
through/with our bank client. Our business model generates additional fee income
for our clients by sharing fee income generated through the bank depositors' use
of different services. The business model has been well received in the
marketplace and the Company intends to continue to pursue these customers.
The lack of availability of cash has been a detriment to the Company in two
areas. The first area is that insurance company targets have almost
exclusively desired a cash purchase and the Company has not
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<PAGE>
been able to move fast enough before a competitor buys a potential target. The
second area is that without a larger cash balance, bank customers are not eager
to sign contracts for reasons of stability. While a lack of cash has hindered
the Company's progress, management does not believe that it will ultimately
prevent the Company from moving forward.
Management is actively considering options for the Company including
acquisitions of revenue producing technology companies, with stock, that fit or
complement our business model. Other companies may be considered if management
believes that its assets or contracts, for example, would enhance the Company's
ability to generate revenues and raise additional capital. Management believes,
based upon discussions with potential targets, that a stock acquisition of
another company that is currently producing revenue is viable. Technology
companies are far more desirous of public company status and are therefore more
accepting of a non-cash transaction than insurance companies. This method of
growth is acceptable to Viking management. The Company is actively reviewing
acquisition candidates as the most expedient way to move the Company forward.
The Company has also considered the spin-off of one or more of its subsidiaries
to unlock shareholder value.
The Company is pursuing and intends to continue to pursue its full business
plan. On the insurance acquisition front, the Company continues to be solicited,
and continues to entertain such solicitations, by various state and local
government entities to place future acquired insurance company administrative
operations in their state or local area. The Company is seeking economic
incentive packages in the $20 to $30 million range in incentives and grants from
such entities. It is anticipated that this administrative business will employ
between 1,200 and 1,450 people. The Company has also been solicited by various
money managers to manage our future insurance company portfolios. The Company
has currently required that soliciting money managers must also be willing to
take an equity position in the Company. Such discussions are ongoing. If the
Company is successful in implementing its plan of operations, the Company will
be required to lease, acquire, or construct significant additional facilities
and equipment and hire substantial additional employees to carry out such
operations.
Material Changes in Financial Condition, Liquidity and Capital Resources
In connection with its efforts to attract capital and implement its plan of
business, the Company incurred losses for the quarters ended June 30, 2000 and
1999, of $267,755 and $485,738 respectively. The reduction in cost is due
primarily to reduced costs associated with employees, consultants, and
contractors. The Company generated $2,674 in revenue related to the sale of
Video Conferencing PCs and a specialty Multimedia board for PCs in the quarter
ended June 30, 2000 versus $0.00 for the same period in 1999. The Company is
continuing its efforts at overall cost reduction.
At June 30, 2000, the Company had cash on hand of $15,372, current assets of
$95,750 including cash and $7,674 in accounts receivable, total assets of
$975,056 and liabilities totaling $630,756 excluding accrued officer's salary of
$1,104,221. The Company anticipates that the funds on hand will not sustain
current operations beyond the first six months and are not sufficient to
implement any of the Company's full plan of operations. Accordingly, in order to
sustain operations past such period and to implement the Company's full plan of
operations, the Company must secure additional funds. There can be no degree of
assurance that the Company will be successful in securing additional funds. If
the Company is successful in implementing its full plan of operations, the
Company will be required to lease, acquire or construct significant additional
facilities and equipment and hire substantial additional employees to carry out
such operations.
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<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities
Prior to and during the quarter ended June 30, 2000, the Company sold common
restricted shares (Class A Common) in a private placement under exemption from
registration under the Securities Act pursuant to Section 4(2) and Regulation D,
Rule 506. Sales have been made to accredited investors only. On November 2, 1999
the first sale of this private placement of up to $500,000 was consummated. As
of 5/08/00, $500,000 of this private placement have been sold representing
1,666,667 common restricted shares at $0.30 per share and options to purchase an
additional 833,333 common restricted shares at $0.45 per share or 1.5 times the
original price paid for the common restricted shares. In summary for the current
quarter, 173,333 common restricted shares were purchased for cash, 72,334 common
restricted shares were issued for services rendered at $0.30 per share and
26,241 common restricted shares were purchased pursuant to conversion of a
promissory note. These shares were issued under exemption from registration
pursuant to Section 4(2) and/or Regulation D, Rule 506.
Item 5. Other Information
The Company's common stock trades on the OTC Electronic Bulletin Board.
Its symbol is "VGCP".
Company information can be found on the World Wide Web. The address is
www.vcgi.com.
Item 6. Exhibits and Reports
Exhibit 21.1 List of subsidiaries of the Registrant
Exhibit 27.1 Financial Data Schedule
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EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION
------- -----------
21.1 List of Subsidiaries of the Registrant
27.1 Financial Data Schedule
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<PAGE>
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.
VIKING CAPITAL GROUP, INC.
Dated: August 8, 2000 By: /s/ William J. Fossen
-------------------------------
William J. Fossen, President
Dated: August 8, 2000 By: /s/ Matthew W. Fossen
-------------------------------
Matthew W. Fossen
Chief Financial Officer
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