U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________.
Commission File Number 000-25253
SUMMIT LIFE CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1448244
-------- ----------
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
3021 Epperly Dr., P.O. Box 15808, Oklahoma City, Oklahoma 73155
---------------------------------------------------------------
(Address of principal executive offices)
(405) 677-0781
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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
--- ---
The number of shares outstanding of the Issuer's Common Stock, $.01 par value,
as of May 14, 2003 was 2,691,255. Transitional Small Business Disclosure Format
(check one): Yes No X
--- ---
FORM 10-QSB
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 2003 (unaudited) and
December 31, 2002.................................................... 3
Consolidated Statements of Operation - Three months ended
March 31, 2003 and 2002 (unaudited).................................. 5
Consolidated Statement of Stockholders' Equity - Three months ended
March 31, 2003 (unaudited)........................................... 6
Condensed Consolidated Statement of Cash Flows - Three months ended
March 31, 2003 and 2002 (unaudited).................................. 7
Notes to Consolidated Financial Statements........................... 8
Item 2. Management's Discussion and Analysis or Plan of Operation......... 9
Item 3. Controls and Procedures.......................................... 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................. 12
Signatures............................................................... 13
Certifications........................................................... 14
2
Summit Life Corporation and Subsidiaries
Consolidated Balance Sheets
ASSETS
March 31, 2003 December 31, 2002
----------------- -----------------
(Unaudited)
INVESTMENTS
Debt securities-held to maturity $ 423,289 $ 423,060
Debt securities-available for sale 960,853 1,113,919
Equity securities-trading 88,942 67,655
Equity securities-available for sale 133,090 159,740
Equity securities-other 0 79,275
Mortgages 892,699 622,383
Notes receivable 485,579 426,331
Short-term investments 0 0
Policy loans 117,788 113,020
Investment in lim 32,404 32,404
----------------- -----------------
3,134,644 3,037,787
CASH AND CASH EQUIVALENTS 2,954,680 2,109,388
RECEIVABLES
Accrued investment income 57,772 41,689
Other 14,318 13,305
----------------- -----------------
72,090 54,994
PROPERTY AND EQUIPMENT-AT COST
Building and improvements 1,017,140 1,017,140
Furniture and equipment 120,848 120,848
Automobiles 22,015 22,015
----------------- -----------------
1,160,003 1,160,003
Less accumulated depreciation (167,333) (153,738)
----------------- -----------------
992,670 1,006,265
Land 321,000 321,000
----------------- -----------------
1,313,670 1,327,265
OTHER ASSETS
Cost in excess of net assets of businesses
acquired, less accumulated amortization 28,750 30,000
Deferred policy acquisition costs 148,360 145,960
Value of purchased insurance business 262,066 282,006
Deferred income taxes 31,800 31,800
Other 540,458 43,750
----------------- -----------------
1,011,434 533,516
----------------- -----------------
$ 8,486,518 $ 7,062,950
================= =================
The accompanying notes are an integral part of these interim financial
statements
3
Summit Life Corporation and Subsidiaries
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2003 2002
------------ ------------
(Unaudited)
LIABILITIES
Policy reserves and policyholder funds $ 5,753,629 $ 5,777,027
Unpaid claims 5,000 10,000
Accounts payable 22,887 8,910
Accrued liabilities 9,972 9,950
Notes payable 1,804,255 277,364
Other liabilities 0 0
------------ ------------
7,595,743 6,083,251
STOCKHOLDERS' EQUITY
Common stock, $.01 par value 26,913 26,913
Preferred stock, series A, $.001 par value, stated at
liquidation value 500,000 500,000
Preferred stock, series B, $1.00 par value 350,000 350,000
Additional paid-in capital 3,286,507 3,286,507
Accumulated other comprehensive income (loss)
Unrealized appreciation (depreciation) of available 38,194 41,729
for sale securities
Accumulated deficit (3,310,839) (3,225,448)
------------ ------------
890,775 979,699
------------ ------------
$ 8,486,518 $ 7,062,950
============ ============
The accompanying notes are an integral part of these interim financial
statements
4
Summit Life Corporation and Subsidiaries
Consolidated Statements of Operation
(Unaudited)
Three Months Ended
March 30,
--------------------------
-----------------
2003 2002
----------- -----------
Revenues
Insurance premiums $ 57,970 $ 58,571
Reinsurance premium ceded (7,267) 15,169
----------- -----------
Net premium income 50,703 73,740
Investment activity
Investment income 55,084 67,399
Net realized gains on sale of available for sale securities 454 --
Net gains (losses) on trading securities (7,519) 14,063
Other 3,127 18,685
----------- -----------
101,849 173,887
Benefits, losses and expenses
Policy benefits 27,748 54,422
Change in policy reserves 38,901 17,870
Interest expense 2 74
Taxes, licenses and fees 7,211 5,581
Depreciation and amortization 22,478 23,697
General, administrative and other operating expenses 90,900 82,077
----------- -----------
187,240 183,721
----------- -----------
Earnings (Loss)
before income taxes (85,391) (9,834)
Provision for income taxes --
-----------
----------- -----------
NET EARNINGS (LOSS) $ (85,391) $ (9,834)
Preferred Stock Dividend Requirement 12,500
12,500
----------- -----------
NET EARNINGS (LOSS) APPLICABLE
TO COMMON SHARES $ (97,891) $ (22,334)
=========== ===========
Earnings (Loss) per common share -
Basic and diluted
$ (0.04) $ (0.01)
=========== ===========
Weighted average outstanding common shares,
basic and diluted 2,691,305 2,670,861
=========== ===========
The accompanying notes are an integral part of these interim financial
statements
5
Summit Life Corporation and Subsidiaries
Consolidated Statement of Stockholders' Equity
Three Months Ended March 31, 2003
(Unaudited)
Series A cumulative Series B convertible
Common Stock Preferred Stock Preferred Stock
------------------------- ------------------------- -------------------------
Shares Liquid- Shares Liquid-
Shares Par Out- ation Out- ation
Total Issued Value standing Value standing Value
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at January 1, 2003 $ 979,699 2,691,305 $ 26,913 5,000 $ 500,000 350,000 $ 350,000
Dividends on preferred stock -- -- -- -- -- -- --
Common stock subscribed -- -- -- -- -- -- --
Comprehensive income
Net income (loss) (85,391) -- -- -- -- -- --
Other comprehensive inc. (loss)
Unrealized gain on investments (3,533) -- -- -- -- -- --
-----------
Comprehensive inc. (loss) (88,924)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at March 31, 2003 $ 890,775 2,691,305 $ 26,913 5,000 $ 500,000 350,000 $ 350,000
=========== =========== =========== =========== =========== =========== ===========
Accumulated
Other
Additional Comprehensive
Paid-in Income Accumulated
Capital (Loss) Deficit
----------- ----------- -----------
Balance at January 1, 2003 $ 3,286,507 $ 41,727 $(3,225,448)
Dividends on preferred stock -- -- --
Common stock subscribed -- -- --
Comprehensive income
Net income (loss) -- -- (85,391)
Other comprehensive inc. (loss)
Unrealized gain on investments -- (3,533) --
Comprehensive inc. (loss)
----------- ----------- -----------
Balance at March 31, 2003 $ 3,286,507 $ 38,194 $(3,310,839)
=========== =========== ===========
The accompanying notes are an integral part of these interim financial
statements
6
Summit Life Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
--------------------------
2003 2002
----------- -----------
Increase (Decrease) in Cash and Cash Equivalents
Net cash provided by (used in) operating activities $ 26,154 $ 46,431
Net cash provided by (used in) investing activities (154,806) 52,415
Net cash provided by (used in) financing activities 973,944 (11,358)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 845,292 87,488
Cash and cash equivalents at the beginning of the period 2,109,388 1,661,410
----------- -----------
Cash and cash equivalents at the end of the period $ 2,954,680 $ 1,748,898
=========== ===========
The accompanying notes are an integral part of these interim financial
statements
7
Summit Life Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 2003
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2003. For further information, refer to the consolidated
annual financial statements and footnotes thereto for the year ended December
31, 2002.
NOTE B - SUBSEQUENT EVENTS
The Company financed the acquisition of Security General Life Insurance Company
during the first quarter of 2003, in part, with a $1,500,000 bridge loan. The
loan was to be repaid using proceeds from the liquidation of Great Midwest Life
Insurance Company and in the event such proceeds were insufficient to repay the
loan, the Company intended to sell shares of a series of its preferred stock to
pay any remaining balance of the loan. The offering of preferred stock was
deferred, and the Company repaid the loan in April 2003 with proceeds from the
liquidation of Great Midwest Life Insurance Company and with funds in the amount
of approximately $440,058, which the Company borrowed from Security General Life
Insurance Company. The Company advised the Oklahoma Insurance Department during
the acquisition of Security General Life Insurance Company that such
transactions might occur as part of the liquidation of Great Midwest Life
Insurance Company and agreed to advise the Department with the appropriate
filings. Such filings were made with the Department prior to the filing of this
statement.
8
Item 2. Management's Discussion and Analysis or Plan of Operation.
This Report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts included in this Report,
including, without limitation, statements regarding the Company's future
financial position, business strategy, budgets, projected costs and plans and
objectives of Management for future operations, are forward-looking statements.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate" or "believe" or the negative thereof or variations
thereon or similar terminology. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct. Such
statements are based upon numerous assumptions about future conditions which may
ultimately prove to be inaccurate and actual events and results may materially
differ from anticipated results described in such statements. Important factors
that could cause actual results to differ materially from the Company's
expectations ("cautionary statements") include the risks inherent generally in
the insurance and financial services industries, the impact of competition and
product pricing, changing market conditions, the risks disclosed in the
Company's Annual Report on Form 10-KSB for the Year Ended December 31, 2002
under "ITEM 6--MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIOn," as
well as the risks disclosed in this Report. All subsequent written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf, are expressly qualified in their entirety by these cautionary
statements. The Company assumes no duty to update or revise its forward-looking
statements based on changes in internal estimates or expectations or otherwise.
As a result, the reader is cautioned not to place reliance on these
forward-looking statements.
General
The Company's primary focus is its life insurance operations.
Results of Operations
Three Months Ended March 31, 2003 Compared to Three Months ended March
31, 2002
Revenue. Total revenues decreased from $173,887 to $101,849 for the
three months ended March 31, 2002 and March 31, 2003, respectively. Revenues
attributable to life insurance decreased $23,037 from $73,740 to $50,703 for the
three months ended March 31, 2003, compared to the same period ended March 31,
2002. The decrease was due primarily to recoveries made during the first quarter
of 2002 from reinsurance contracts as a result of the acquisition of
Presidential Life Insurance Company ("Presidential"), which was completed in
August 2001. These amounts were recovered as the Company corrected billing
notices, reviewed lapsed policies and reinsurance charges and requested refunds
of overcharges.
Investment income decreased from $67,399 for the three months ended
March 31, 2002 to $55,084 for the three months ended March 31, 2003, primarily
as a result of interest rates remaining at historic lows. The low rates of
interest lowered the rate of return received on the Company's investments and
accelerated principal payments on its higher-return investments.
Net losses on trading securities of $7,519 were reported for the first
quarter of 2003 and compared to net gains on trading securities of $14,063 for
March 31, 2002. The Company is required to report unrealized gains and losses in
operations. The realized gain or loss for each trading security may differ
materially depending on the date of sale, the underlying performance of the
represented company and other market conditions.
9
Other income decreased from $18,685 for the three months ended March
31, 2002 to $3,127 for the three months ended March 31, 2003, due to the
discontinuation of a contract whereby the Company performed administrative
services for another company.
Costs and Expenses. Total expenses increased 2% from $183,721 to
$187,240 for the three months ended March 31, 2002 and 2003, respectively. Such
increase was primarily attributable to costs associated with the acquisition of
Security General Life Insurance Company ("Security General") during the first
quarter of 2003. See "Liquidity and Capital Resources."
Policy benefits decreased from $54,422 to $27,748 for the comparable
periods due in part to the Presidential acquisition which impacted expenses
during 2002. Policy reserves increased $21,031 for the comparable periods.
Depreciation and amortization decreased from $23,697 to $22,478 for the three
months ended March 31, 2002 and 2003, respectively, as the Company continued to
amortize the block of business acquired with Great Midwest Life Insurance
Company ("Great Midwest"). General expenses increased 11% from $82,077 to
$90,900 as a result of costs associated with the acquisition of Security
General. The acquisition of Security General, and subsequent liquidation of
Great Midwest, now allows the Company to offer its products in 15 states
throughout the western and southeastern United States. Great Midwest was
licensed only in Texas and Oklahoma.
Losses. The Company reported a net loss for the three months ended
March 31, 2003 of $85,391, compared to a net loss for the three months ended
March 31, 2002 of $9,834. The Company expects its marketing programs will begin
to build revenues and will complement any acquisitions which the Company may be
able to complete.
The Company reported a net loss per share of $0.04 per share for the
three months ended March 31, 2003, compared to a net loss of $0.01 per share for
the three months ended March 31, 2002.
Liquidity and Capital Resources
Total assets were $8,486,518 at March 31, 2003, compared to $6,643,158
at March 31, 2002, an increase of 28%. The increase was due to the acquisition
and financing of Security General during the first quarter of 2003.
Total liabilities (primarily insurance reserves for future policyholder
benefits) were $7,595,743 at March 31, 2003, compared to $5,595,510 at March 31,
2002, an increase of 36%. The increase was due primarily to financing obtained
to complete the acquisition of Security General.
Total stockholders' equity was $890,775 at March 31, 2003, compared to
$1,047,648 at March 31, 2002, a decrease of 15%. The decrease was attributable
to the Company's operating losses.
The principal requirements for liquidity in connection with the
Company's operations are its contractual obligations to policyholders and
annuitants. The Company's contractual obligations include payments of surrender
benefits, contract withdrawals, policy loans and claims under outstanding
insurance policies and annuities. Payment of surrender benefits is a function of
"persistency," which is the extent to which insurance policies are maintained by
the policyholder. Policyholders sometimes do not pay premiums, thus causing
their policies to lapse, or policyholders may choose to surrender their policies
for their cash surrender value. If actual experience of a policy or block of
policies is different from the initial or acquisition date assumptions, a gain
or loss could result. Depending on the nature of the underlying policy, a lapse
or surrender may result in surrender charge revenue or surrender benefit
expense. Such amounts may be less than, or greater than, unamortized acquisition
expenses and/or the related policy reserves; accordingly, current period
earnings may either increase or decrease. Additionally, policy lapses and
surrenders may result in lost future revenues and profits associated with those
policies that are lapsed or surrendered.
10
The Company currently funds most of its activity directly from cash
flow from operations and cash flow from financing activities, which includes
deposits to policyholders' account balances.
The Company has made and intends to make substantial expenditures in
connection with its subsidiary's acquisition and marketing programs.
Historically, the Company has funded these expenditures from cash flow from
operations.
On February 14, 2003, the Company acquired Security General, an
Oklahoma-domiciled life insurance company, for a net purchase price of $495,000.
Security General is licensed to operate as a life insurance company in multiple
states. The purpose of the acquisition was to acquire these licenses, which
constituted substantially all of the assets of Security General on the closing
date. As a result of the acquisition, Security General has become the Company's
primary operating subsidiary. In connection therewith, the Company has obtained
the necessary regulatory approval to transfer the entire block of insurance
policies of Great Midwest to Security General and to thereafter liquidate the
remaining assets of Great Midwest through a distribution to the Company as its
sole shareholder. As of the date of this report, the insurance policies of Great
Midwest have been transferred to Security General and the remaining assets of
Great Midwest have been liquidated. Security General is now the sole insurance
subsidiary of the Company and operates in approximately 15 states throughout the
southeastern and western United States.
Because the acquisition of Security General was structured so that the
only assets to be retained by Security General were the regulatory licenses held
by it, under the terms of the acquisition agreement the Company agreed to
reimburse the seller for the statutory capital and surplus required to be
retained by Security General. In connection with this provision, the Company
obtained a three-month bridge loan in the amount of $1,500,000 to reimburse the
seller for the approximately $1.5 million of statutory capital and surplus in
Security General. The loan was to be repaid using proceeds from the liquidation
of Great Midwest and in the event such proceeds were insufficient to repay the
loan, the Company intended to sell shares of its preferred stock to pay any
remaining balance of the loan. The offering of preferred stock was deferred and
the Company repaid the loan in April 2003 with proceeds from the liquidation of
Great Midwest and with funds in the amount of approximately $440,058, which the
Company borrowed from Security General. The Company advised the Oklahoma
Insurance Department during the acquisition of Security General that such
transactions might occur as part of the liquidation of Great Midwest and agreed
to advise the Department with the appropriate filings. Such filings were made
with the Department prior to the filing of this report.
The Company believes that the liquidity resulting from the transactions
described above, together with anticipated cash from continuing operations,
should be sufficient to fund its operations and to make the annual 10% dividend
on the Series A Preferred Stock, for at least the next 12 months. The Company
may not, however, generate sufficient cash flow for these purposes. The
Company's ability to fund its operations and to make scheduled principal and
interest payments will depend on its future performance, which, to a certain
extent, is subject to general economic, financial, competitive, legislative,
regulatory and other factors that are beyond its control.
Item 3. Controls and Procedures.
The Company's principal executive officers and principal financial
officers have concluded, based on their evaluation as of a date within 90 days
of the filing of this Form 10-QSB that its disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of
1934) are effective. There have been no significant changes in internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Name of Exhibit
------ ---------------
3.1 First Amended and Restated Certificate of Incorporation (filed as
Exhibit 3.1 to the Company's Registration Statement on Form SB-2, file
number 333-65097 and incorporated herein by reference).
3.2 First Amended and Restated Bylaws (filed as Exhibit 3.2 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.1 Specimen Certificate of the common stock (filed as Exhibit 4.1 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.2 See Articles V and X of the Company's Certificate of Incorporation and
Article VI of the Company's Bylaws (filed as Exhibit 4.2 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.3 Specimen Certificate of the Series A Preferred Stock (filed as Exhibit
4.1 to the Company's Quarterly Report on Form 10-QSB for the Quarter
ended June 30, 1999 and incorporated herein by reference).
4.4 Certificate of Designation of Series A Preferred Stock (filed as
Exhibit 4.2 to the Company's Quarterly Report on Form 10-QSB for the
Quarter ended June 30, 1999 and incorporated herein by reference).
4.5 Certificate of Designation of Series B Convertible Preferred Stock
(filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB
for the Quarter ended September 30, 2000 and incorporated herein by
reference).
99.1* Certification of Periodic Financial Report by Chief Financial Officer
Pursuant to 18 U.S.C.ss. 1350.
99.2* Certification of Periodic Financial Report by Chief Executive Officer
Pursuant to 18 U.S.C.ss. 1350.
99.3* Certification of Periodic Financial Report by Chief Accounting Officer
Pursuant to 18 U.S.C.ss. 1350.
* Filed herewith.
(b) Reports on Form 8-K: none.
12
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUMMIT LIFE CORPORATION
an Oklahoma corporation
Date: May 15, 2003 /s/Charles L. Smith
-------------------
Charles L. Smith
President, Chief Operating Officer
and Chief Financial Officer
Date: May 15, 2003 /s/Quinton L. Hiebert
---------------------
Quinton L. Hiebert
Chief Accounting Officer
13
CERTIFICATIONS
I, Charles L. Smith, President, Chief Operating Officer, Chief Financial Officer
and a Director of Summit Life Corporation certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Summit Life
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003
/s/Charles L. Smith
-------------------------------------
Charles L. Smith
President, Chief Operating Officer,
Chief Financial Officer, and Director
14
I, Quinton L. Hiebert, Chief Accounting Officer of Summit Life Corporation
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Summit Life
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003
/s/ Quinton L. Hiebert
------------------------
Quinton L. Hiebert
Chief Accounting Officer
15
I, James L. Smith, Chief Executive Officer and a Director of Summit Life
Corporation certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Summit Life
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003
/s/ James L. Smith
----------------------------------
James L. Smith
Chief Executive Officer and
Chairman of the Board of Directors
16
INDEX TO EXHIBITS
Exhibit
Number Name of Exhibit
------ ---------------
3.1 First Amended and Restated Certificate of Incorporation (filed as
Exhibit 3.1 to the Company's Registration Statement on Form SB-2, file
number 333-65097 and incorporated herein by reference).
3.2 First Amended and Restated Bylaws (filed as Exhibit 3.2 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.1 Specimen Certificate of the common stock (filed as Exhibit 4.1 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.2 See Articles V and X of the Company's Certificate of Incorporation and
Article VI of the Company's Bylaws (filed as Exhibit 4.2 to the
Company's Registration Statement on Form SB-2, file number 333-65097
and incorporated herein by reference).
4.3 Specimen Certificate of the Series A Preferred Stock (filed as Exhibit
4.1 to the Company's Quarterly Report on Form 10-QSB for the Quarter
ended June 30, 1999 and incorporated herein by reference).
4.4 Certificate of Designation of Series A Preferred Stock (filed as
Exhibit 4.2 to the Company's Quarterly Report on Form 10-QSB for the
Quarter ended June 30, 1999 and incorporated herein by reference).
4.5 Certificate of Designation of Series B Convertible Preferred Stock
(filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB
for the Quarter ended September 30, 2000 and incorporated herein by
reference).
99.1* Certification of Periodic Financial Report by Chief Financial Officer
Pursuant to 18 U.S.C.ss. 1350.
99.2* Certification of Periodic Financial Report by Chief Executive Officer
Pursuant to 18 U.S.C.ss. 1350.
99.3* Certification of Periodic Financial Report by Chief Accounting Officer
Pursuant to 18 U.S.C.ss. 1350.
* Filed herewith.
17