Item 1. Business
(a) Hynes & Howes Insurance Counselors, Inc. (hereafter the "Registrant") was an independent insurance agency handling principally all types of casualty, fire and surety insurance. Registrant was organized as a corporation under the laws of the State of Iowa on June 28, 1969, as Hynes & Howes Insurance Company. Because it became apparent this name created confusion as to the business of Registrant, an amendment to the Articles of the Incorporation was filed on November 17, 1970, with the Secretary of the State of Iowa changing the name to Hynes & Howes Insurance Counselors, Inc. This action was ratified by the stockholders at a meeting February 5, 1971.
At the annual stockholders meetings for 1973, 1974, 1975, 1976, 1977, 1978, and 1979, a proposal was made to amend the Articles of Incorporation to change the name of the registrant from Hynes & Howes Insurance Counselors, Inc., to the United Insurance Counselors Corporation. The Iowa Business Corporation Act requires an affirmative vote of the majority of the outstanding shares of the corporation to effectuate such amendment. Although a quorum was present at each of these annual meetings, fifty per cent (50%) required to change the Articles of Incorporation were not represented, and the proposal could not be acted upon.
(b) The general insurance agency and brokerage business was highly competitive. Registrant competed locally and regionally with many direct-line writers of fire, casualty and surety insurance who were much larger than Registrant in all respects including premium volume, capital and personnel employed. Registrant was also in competition with thousands of independent insurance agencies, some of whom had higher premium volume and more employees than Registrant. Registrant was not a significant factor in the total volume of general insurance business.
Registrant has sold Davenport agency to Ralph Parry Insurance Agency Ltd. in January 1981.
(At the present time, the Registrant does not have any plans to acquire any insurance agencies.)
At fiscal year end, Registrant, in its business has no employees. The Trustee of the Frank B. Howes Trust which holds 36.5% of the outstanding common stock, Janice Howes died in July 1983, and John Howes became Trustee of the Frank B. Howes Trust.
During the fiscal year ending September 30, 1980, the Viking Agency and the Hansen and Hansen, Inc. general insurance agencies, were sold on contract to R.A.P. Enterprises, Inc., Ralph A. Parry, former president of Registrant and the former manager of the Davenport agency owned by Registrant is the owner of R.A.P. Enterprises, Inc.
During the fiscal year ending September 30, 1981, the Davenport agencies were sold to Ralph A. Parry Insurance Agency, Ltd., as of January 1, 1981. Also owned by Ralph A. Parry.
The intention at this time is to continue to loan on and invest in real estate properties and equities.
(c) Line of Business
The Registrant has not engaged in more than one line of business which meets the requisites of item 1 (c) (A), (B) or (C) for business with sales and revenues which do not exceed $50,000.00.
Registrant and its subsidiaries are not engaged in material operations in foreign countries, nor does Registrant or its subsidiaries have a material portion of sales or revenues derived from customers in foreign countries.
ITEM 2.
ITEM 2. MANAGEMENT DISCUSSION FOR 9/30/03
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE STATEMENT OF OPERATIONS
Liquidity
Registrant receives approximately $7,676 of cash each month from payments of principal and interest on Real Estate Contracts Receivable. Registrant has very little liquidity because most of these payments are used to pay management fees and other operating expenses.
Capital Resources
The principal assets of the registrant at September 30, 2003 are eighteen real estate contracts receivable.
Results of Operations
The income from operations for the year ended September 30, 2003 decreased $24,606 compared to the year ended September 30, 2002.
Total revenue decreased $14,428. This was primarily due to a decrease in profit on sale of real estate contracts.
Operating expenses increased $10,178. The increase resulted from the following:
The Company utilizes the employees of a related entity. Beginning in the fiscal year ended September 30, 2002, the Company paid the related entity $18,210 for it's prorata share of wages and payroll tax costs. For the year ended September 30, 2003, those payments were $21,678. The related entity began charging the company for computer usage. That cost was $5,100.
	Other operating expenses increased $1,610.
Item 3.
Item 3. Properties
The Registrant has its offices at 2920 Harrison Street, Davenport, Iowa. The Company rents approximately 700 square feet of space with furnishings at a monthly rate of $1,350 dollars.
Registrant feels this office space is of adequate size and capacity to handle the business of Registrant and its anticipated growth for foreseeable future needs.
Item 4.
Item 4. Parents and Subsidiaries of the Registrant
The Frank B. Howes Trust, which holds 36.5 per cent of the Registrant's outstanding common stock, is the parent of the Registrant. This percentage includes 3,000,000 shares which is held in escrow by the Insurance Department of Iowa. The escrow arrangement was required by the Commissioner of Insurance of the State of Iowa in order to gain approval of Registrant's new stock issue of April 1971. Under the terms of this arrangement, those shares could not be sold for a period of five (5) years or until Registrant attained certain profitable operating goals for three (3) consecutive years. The escrow arrangement also required that should Registrant dissolve during this period, the shares held in escrow will not participate in the assets of Registrant legally available for distribution until after there has been paid or irrevocable set aside for all other shares an amount equal to the other shares at the per offering price of $1.25, adjusted for stock splits and stock dividends. As of April 6, 1976, five (5) years elapsed.
The Insurance Department of Iowa, Securities Division has indicated that under the terms of the Escrow Agreement the approval of the Commissioner of Insurance was required. The Insurance Department, reviewing the condition of the Registrant, did conclude that the requisite approval of the Commissioner would not be forthcoming at that time, and furthermore, that the Insurance Department will act as escrow agent for the shares of the Frank B. Howes Trust.
Item 5.
Item 5. Legal Proceedings
None
Item 6.
Item 6. Increases and Decreases in Outstanding Securities and Indebtedness
(a) In the fiscal year, Registrant has not issued any new shares or otherwise created additional outstanding securities; neither has it reduced outstanding securities by purchase or acquisition of treasury shares. Therefore, there were 11,222,600 shares of Registrant's stock outstanding on September 30, 2003.
(b) None
(c) None
Item 7.
Item 7. Changes in Securities and Changes in Security for Registered Securities
None
Item 8.
Item 8. Defaults upon Senior Securities
None
Item 9.
Item 9. Approximate Number of Equity Security Holders
The approximate number of holders of each class of equity securities of Registrant, as of September 30, 2003, is indicated in the following table:
(2) (2) TITLE OF CLASS NUMBER OF RECORD HOLDERS
Common Stock, Approximately 4,774 no par value
Item 10.
Item 10. Submission of Matters to a Vote of Security Holders
On February 3, 1986, Harold L. Luebken was elected a member of the Board of Directors and to the office of President.
On July 12, 1983, Dan B. Davis was elected to the Board of Directors.
Item 11.
Item 11. Executive Officers of the Registrant
(a) The following table indicates, as of September 30, 2003, the names and ages of the executive officers of Registrant. Their term of office with Registrant held by such person:
Position and Office with Held Office Term of Name Age Registrant Since Office
Sharon Miller 52 President July 2002 Next Annual Shareholders' Meeting
Jennifer Burkhart 36 Secretary June 2003 Next Annual Shareholders' Meeting
There are no family relationships among the executives of the registrant.
There is no arrangement or understanding between any executive officer and any other person to which she was selected as an officer.
(b) The following is a brief account of the business experiences during the past five (5) years of each executive officer.
1. Sharon Miller has been involved in the real estate business for the past three (3) years. She has been actively involved in property management/investment during that period.
2. Jennifer Burkhart has worked for six (6) years for a real estate investment property company, buying and selling real estate for the company.
Item 12.
Item 12. Indemnification of Directors and Officers
Provisions regarding indemnification of directors and officers of Registrant, pursuant to Chapter 496A of the Iowa Code of 1973, were detailed in Item 17 --Indemnification of Directors and Officers, pages 59--63 of Registrant's Form 10 filed with the Securities and Exchange Commission August 23, 1973.
Item 13.
Item 13. Financial Statements and Exhibits Filed
(a) Financial Statements and audited financial statements are herewith included.
Exhibits
None
(b) Reports on Form 8-K
1. Registrants filed a Form 8 Amendment to the Form 10-K filed December, 1991.
2. Registrants filed a Form 8 Amendment to the Form 10-K filed December, 1993, on April 04, 1993, reporting on February 17, 1994 Brigitta Anderson had resigned from the Board of Directors.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Dated By: Sharon Miller, President
This corporation has no treasurer.
Dated By: Jennifer Burkhart, Secretary
HYNES & HOWES INSURANCE COUNSELORS, INC. Statistical Data for Form 10k September 30, 2003
September 30, 2003 2002 2001 2000 1999 1. Net Operating Revenues $ 69,675 $ 84,103 $ 146,158 $ 102,944 $104,619
2. Income (Loss) from Operations $(38,529) $ (13,923) $ 41,683 $ 12,710 $ 35,287
Per Share Earnings (Loss) $ ( .00) $ .00 $ .00 $ .00 $ .00
3. Working Capital $ 12,852 $ 28,304 $ 116,950 $ 60,557 $ 2,844
4. Total Assets $728,849 $ 772,058 $ 791,359 $ 756,621 $731,356
5. Long Term Obligations Mortgage Payable $ .00 $ 3,294 $ 8,167 $ 12,947 $ .00
6. Cash Dividends per Common Share $ .00 $ .00 $ .00 $ .00 $ .00
Hynes & Howes Insurance Counselors, Inc. Davenport, Iowa
Independent Auditor's Report
We have audited the balance sheet of Hynes & Howes Insurance Counselors, Inc. as of September 30, 2003, 2002 and 2001, and the related statements of income, retained earnings, paid-in-capital, and cash flows for the years ended September 30, 2003, 2002, and 2001. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hynes & Howes Insurance Counselors, Inc. as of September 30, 2003, 2002, and 2001, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Shapley, Shapley & Moorhead, P.C. Certified Public Accountants
Davenport, Iowa November 17, 2003
HYNES & HOWES INSURANCE COUNSELORS, INC. Balance Sheet September 30, 2003, 2002, and 2001
September 30, Assets 2003 2002 2001 Current Assets: Cash in Bank $ 842 $ 21,244 $ 106,704 Other Current Assets (Note 4) 19,106 15,542 19,233
Total Current Assets $19,948 $ 36,786 $ 125,937
Other Assets: Investments in Affiliated Company(Note 2) $.00 $ - $ 3,271 Real Estate Contracts Receivable(Note 5) 702,046 670,761 651,129 Equipment (Note 6)			 6,855 $ 10,657	 11,022 Investment in real estate .00 53,854 - Total Other Assets	 $708,901 $ 735,272 $ 665,422
Total Assets $728,849 $ 772,058 $ 791,359
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Balance Sheet September 30, 2003, 2002 and 2001
September 30, Liabilities & Stockholders' Equity 2003 2002 2001 Current Liabilities: Buyers Escrow $5,096 $ 3,304 $ 4,169 Accounts Payable 2,000 315 373 Contracts Payable .00 $ 4,863 $ 4,445
Total Current Liabilities $7,096 $ 8,482 $ 8,987 Long Term Liabilities: Contracts Payable .00 $ 3,294 $ 8,167
Total Liabilities $7,096 $ 11,776 $ 17,154
Stockholders' Equity: Capital Stock, no par value, 100,000,000 Shares Authorized, 11,260,675 shares Issued $3,780,765 $3,780,765 $ 3,780,765 Paid in Capital 100 100 100 Retained Earnings (Deficit) (3,025,860) (2,987,331) (2,973,408) Treasury Stock, at Cost (33,252) (33,252) (33,252)
Total Stockholders' Equity $ 721,753 $ 760,282 $ 774,205
Total Liabilities & Stockholders'Equity$728,849 $ 772,058 $ 791,359
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Statement of Retained Earnings (Deficit) For the Years Ended September 30, 2003, 2002 and 2001
Year Ended September 30, 2003 2002 2001
Balance at Beginning of Year $ (2,987,331) $ (2,973,408) $ (3,015,091)
Income (Loss) for the Year (38,529) (13,923) 41,683
Balance at End of Year $ (3,025,860) $ (2,987,331) $ (2,973,408)
Statement of Paid-In Capital For the Years Ended September 30, 2003, 2002 and 2001
Balance at Beginning and End of Year $ 100 $ 100 $ 100
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Statement of Operations For the Years Ended September 30, 2002, 2001 and 2000
Year Ended September 30, 2003 2002 2001 Operating Income: Interest Income $ 82,464 $ 86,803 $ 80,656 Other Income (12,789) (2,700) 65,502 Total Operating Income 69,675 $ 84,103 $ 146,158
Operating Expenses: Interest Expense $ 84 $ 945 $ 1,352 Legal and Audit Fees 9,127 8,637 9,385 Payroll expense (Note 3) 21,679 18,210 0 Management Fees (Note 3) 48,000 48,000 48,000 Repairs and Maintenance 3,010 1,023 25,074 Other Operating Expenses 26,304 21,211 20,664 Total Operating Expenses $ 108,204 $ 98,026 $ 104,475
Income From Operations $ (38,529) $ (13,923) $ 41,683
Income (Loss) Before Income Taxes $ (38,529) $ (13,923) $ 41,683 Provision for Income Taxes (Note 12) 0 0 0 Net Income (Loss) $ (38,529) $ (13,923) $ 41,683
Earnings (Loss) Per Common Share (Note 7) $ .00 $ .00 $ .00
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Statement of Cash Flow For the Years Ended September 30, 2003, 2002 and 2001 Increase (Decrease) in Cash and Cash Equivalent
Year Ended September 30, 2003 2002 2001 Cash Flow from Operating Activities: Interest Received $ 82,464 $ 86,803 $ 80,656 Miscellaneous Income Received 3,910 2,898 2,741 Interest Paid ( 84) ( 945) (1,352) Legal, Audit and Management Fees Paid (57,127) (56,637) (53,385) Repairs and Maintenance Paid ( 3,010) ( 1,081) (25,074) Cash Paid to Suppliers for Operating Expenses (44,496) (36,053) (18,534)
Net Cash Provided (Used) by Operating Activities $ (18,343) $ ( 5,015) $ (14,948)
Cash Flows from Investing Activities: Principal Collected on Real Estate Contracts $ 189,340 $ 94,120 $ 175,334 Sale of Real Estate 40,000 0 0 Buyers Escrow Collected (Paid) 1,792 (866) (3,270) Purchase of Real Estate Contracts Receivable (224,925) (150,377) (90,870) (Purchase) Redeem Tax Certificates (2,064) (3,268) 2,576 Acquisition of Equipment 0 (3,002) (7,144) Purchase of Real Estate 0 (15,868) 0 Earnest Money Received 0 0 373 Sale of investment in affiliate 0 3,271 0 Advance from (to) affiliate 1,955 0 0 Net Cash Provided (Used) by Investing Activities $ 6,098 $ (75,990) $ 76,999
Cash Flows from Financing Activities: Payments on Loans $ (8,157) $ (4,455) $ (4,048)
Net Cash Provided (Used) by Financing Activities $ (8,157) $ (4,455) $ (4,048)
Net Increase (Decrease) in Cash and Cash Equivalents $ (20,402) $ (85,460) $ 58,003 Cash and Cash Equivalents at Beginning of Year 21,244 106,704 48,701
Cash and Cash Equivalents at End of Year $ 842 $ 21,244 $106,704
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Statement of Cash Flows For the Years Ended September 30, 2003, 2002 and 2001 Reconciliation of Net Income to Cash Provided by Operating Activities
Year Ended September 30, 2003 2002 2001
Net Income (Loss) $(38,529) $ (13,923) $ 41,683 Adjustments to Reconcile Net Income to Net Cash Provided (Used) by: Decrease (Increase) in Investment in Affiliate 0 0 (421) Loss (Gain) on Sale of Real Estate 16,699 5,598 (62,761) Depreciation 3,802 3,368 2,551 Decrease (Increase) in Prepaid Expense 0 0 4,000 Increase (Decrease) in Accounts Payable (315) (58) 0
Total Adjustments $ 20,186 $ 8,908 $ (56,631)
Net Cash Provided (Used) by Operating Activities $(18,343) $ ( 5,015) $ (14,948)
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC. Notes to Financial Statements Years Ended September 30, 2003, 2002 and 2001
Note 1 - Summary of Significant Accounting Policies
Nature of operations: The Company invests in real estate, primarily single family residences, which it then resells on contract. The Company operates exclusively in the Quad City metropolitan area of Eastern Iowa and Western Illinois. The Company has a concentration of credit risk, in that all of its creditors live and work in the Quad City area.
Accounting Policies: The books and records of the Company are maintained on the accrual basis of accounting. The Company uses the equity method of accounting for investments in affiliated companies. Investments in contracts receivable are stated at the collectible balance. All gains and losses are recognized in the year of sale. Earnings per share are computed on the basis of weighted average number of common shares outstanding. Cash and cash equivalents are considered to be any investment with an original maturity of three months or less.
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Other significant accounting policies are detailed in other Notes to Financial Statements.
Note 2 - Investment in Affiliated Company
Investment at September 30, 2001 consisted of a 3% ownership of Triton Investments, Ltd common stock. Cost of the stock was $1,700. (The stock was sold in September 2002 for $3271). The Company used the equity method of accounting for investment in affiliated company, although the investment was below the 20% level of ownership. The level of control exercised by common officers and directors warrant this adoption.
HYNES & HOWES INSURANCE COUNSELORS, INC. Notes to Financial Statements Years Ended September 30, 2003, 2002 and 2001
Note 3 - Related Party Transactions
The Company has entered into a management consultant agreement with Oak Helm Partners. The Company paid a retainer fee of $3,250 per month until January 1, 2000 when the fee was increased to $4000 per month. Oak Helm Partners is an affiliated company due to common ownership and control.
The Company occupies office space in a building located at 2920 Harrison Street, Davenport, Iowa, owned by the Heather Trust. The Company rents approximately 700 square feet of space with furnishings at a monthly rate of $600 until January 1, 2000 when a new 5 year lease was signed. The new lease provides for monthly rent of $1,350. The Company made 12 payments in the year ended September 30, 2002 and 	 11 payments in the year ended September 30, 2001. Heather Trust is an 	 affiliated entity due to common ownership and control.
The following is a schedule of rent commitments for the next 2-years.
Year Ending: September 30, 2004 16,200 September 30, 2005 4,050
The Company utilizes the employees of Oak Helm Partners. Beginning 	in the fiscal year ended September 30, 2002, the Company paid Oak Helm 	Partners for it's prorata share of wages and payroll taxes. Beginning 	in the fiscal year ended September 30, 2003, the Company paid Oak Helm 	Partners a computer fee based on the number of real estate contracts. 	The fee is $25 per month per contract.
Note 4 - Other Current Assets 2003 2003 2001
	Account receivable-affiliate $ 45 0 0 	Real estate contracts receivable current portion (Note 5) 9,747 $ 8,292 $ 15,251 Real estate tax certificates 9,314 7,250 3,982 Total $19,106 $ 15,542 $ 19,233
Note 5 - Real Estate Contracts Receivable
2003 2002 2001
Contracts receivable $711,793 $679,053 $666,380 Less current portion (Note 4) 9,747 8,292 15,251 Long-term portion $702,046 $670,761 $651,129
At September 30, 2003, 2002, and 2001 there were eighteen, eighteen 	and seventeen contracts receivable, respectively. The monthly payment 	of principal and interest was $7,676 at September 30, 2003, $7,104 at 	September 30, 2002, and $7,462 at September 30, 2001. Interest rates 	on these contracts varies from 11% to 13%.
Management is of the opinion that an allowance for uncollectibility is not necessary due to the collateral value of the properties.
HYNES & HOWES INSURANCE COUNSELORS, INC. Notes to Financial Statements Years Ended September 30,2003, 2002 and 2001
Note 6 - Equipment
	2003 2002 2001
Office equipment $19,330 $ 19,330 $ 16,328 Accumulated depreciation 12,475 8,674 5,306 Book value $ 6,855 $ 10,656 $ 11,022
Depreciation expense (A) $3,802 $ 3,368 $ 2,551 (A) Depreciation is calculated using 5-7 year, straight line rates.
Note 7 - Common Stock
The Company is authorized to issue 100,000,000 shares of no par value common stock. Shares outstanding at September 30, 2003, 2002 and 2001 	 were 11,260,675. The Company has purchased 37,976 shares of treasury 	 stock, leaving 11,222,669 shares issued and outstanding.
Earnings (Loss) Per Share 2003 2002 2001
Net Income (Loss) $(38,529) $ (13,923) $ 41,683 Average number of shares outstanding 11,222,699 11,222,699 11,222,699
Earnings Per Share $(0.003433) $(0.001241) $ 0.003714
HYNES & HOWES INSURANCE COUNSELORS, INC. Notes to Financial Statements Years Ended September 30, 2003, 2002 and 2001
Note 8 - Contract Payable
On February 16, 2000, the Company purchased a real estate contract receivable and assumed the underlying contract payable. The contract payable was due to R. Geraldine Fanth payable at $450 per month 	 including 9% interest. The balance at September 30, 2002 was $8,157. Residential real estate at 435 Waverly Rd., Davenport, IA was pledged as collateral. The contract was paid off December 10, 2002.
Note 9 - Stock Held in Escrow
At September 30, 2003, 2002 and 2001 there were 3,546,000 shares of the Company's common stock held in trust. Those shares were owned by the Frank B. Howes Trust and by directors or former directors of the Company. The Trust agreement was required by the Commissioner of Insurance of the State of Iowa in order to gain approval of the Company's stock issue of April, 1971. Under terms of this agreement these shares were to be released after a period of five years or when the Company attains certain profitable goals for three consecutive years and upon written approval from the Commissioner of Insurance of the State of Iowa. It is also required that should the Company dissolve during this period that the pro-rated distribution of assets to stockholders would be done on a basis which would pay these shareholders less per share than would be distributable to the shareholders of the new issue. The Company's earnings to date have not been sufficient to qualify for the release of these shares held in escrow. The condition requiring that these shares be held in escrow for five years has been fulfilled, however, the Commissioner of Insurance of the State of Iowa has not granted the written approval for the release of these shares at this time. The shares will continue to be held in escrow until the Commisioner grants written approval for their release.
Note 10 - Contingent Liability for Rescission of Capital Stock Sales
Since its inception, the Company has issued and sold 11,222,699 shares of its common stock. Although most of these shares were registered with the State of Iowa, none of these shares were registered for sale under the federal securities law. These shares were issued and sold in reliance either upon the exemption provided in Section 4 (2) or Section 3 (a) (11) of the Securities Act of 1933.
The Company feels that any possible shares and federal contingent liabilities that may have existed because of the issuance of securities which may not have been exempt from registration under the Securities Act of 1933 and unless the subject of an existing legal proceeding filed appropriately, may now be extinguished as a result of the new Iowa Uniform Securities Act which became effective on January 1, 1976 under Section 613 of that Act, liability must now be ascertained by looking to the statute in effect at the time that the stock issue was sold. The two year statute of limitations in effect on January 14, 1973, at the time of the closing of the issue has run, as have the other applicable federal statutes of limitation. As a result, with the exception of the Federal and State Tolling Doctrines, possible contingent liabilities may no longer exist.
Note 11 - Contingent Liability on Pending Litigation
On November 2, 1973, in U. S. District Court a Final Judgment of permanent Injunction was brought against the Company because of a complaint filed by the Securities and Exchange Commission. The Injunction enjoins the Company from failing to file timely and proper reports as required by Section 12 (a) of the Securities Exchange Act 	 of 1934. The Company is currently complying with filing requirements, however, it may be subject to subsequent court action and potential fine if there are future filing deficiencies.
Note 12 - Provision for Income Taxes
Due to loss carryforwards from previous years, a provision for income taxes has not been made.
Net operating loss carryovers will expire as follows:
September 30, 2004 136,681 September 30, 2005 103,586 September 30, 2006 151,762 September 30, 2007 115,144 September 30, 2010 6,515 September 30, 2017 4,385 September 30, 2022 6,032 September 30, 2023 38,528 ________ Total deferred income tax: $562,633 		Less-valuation allowance (562,633) ________ Net Deferred Income Tax $ 0
EX-99.23 ART. 5 FDS FOR 9/30/02
PERIOD-TYPE 12-MOS FISCAL-YEAR-END SEP-30-2003 PERIOD-END SEP-30-2003 CASH				 842 SECURITIES				 0 RECEIVABLES				 702,046 ALLOWANCES 0 INVENTORY 0 CURRENT-ASSETS 19,948 PP&E 19,330 DEPRECIATION 12,475 TOTAL-ASSETS 728,849 CURRENT-LIABILITIES 7,096 BONDS 0 PREFERRED-MANDATORY 0 PREFERRED 0 COMMON 3,780,765 OTHER-SE 100 TOTAL-LIABILITY-AND-EQUITY 728,849 SALES 0 TOTAL-REVENUES 69,675 CGS 0 TOTAL-COSTS 108,204 OTHER-EXPENSES 0 LOSS-PROVISION 0 INTEREST-EXPENSE 0 INCOME-PRETAX (38,529) INCOME-TAX 0 INCOME-CONTINUING 0 DISCONTINUED 0 EXTRAORDINARY 0 CHANGES 0 NET-INCOME (38,529) EPS-PRIMARY 0 EPS-DILUTED 0