U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10Q-SB
(Mark One)
[X] Quarterly report under section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended September 30, 2002.
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[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from____________________ to
______________________.
Commission File No: 33-9640-LA
LOGISTICS MANAGEMENT RESOURCES, INC.
------------------------------------
(Formerly U.S. Trucking, Inc.)
(Name of small business in its charter)
COLORADO 68-0133692
-------- ----------
(State or other jurisdiction of incorporation) (IRS Employer Id. No.)
10602 Timberwood Circle, Suite 9
--------------------------------
Louisville, Ky 40223
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(Address of Principal Office including Zip Code)
Issuer's telephone Number: (502) 339-4000
Applicable only to issuers involved in bankruptcy proceedings during the past
five years:
Check whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes_X_ No ___
Applicable only to corporate issuers:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Common Stock, no par value, 43,250,465 shares at October 31, 2002.
-----------------
Transitional Small Business Disclosure Format (Check one): Yes___ NO _X_
LOGISTICS MANAGEMENT RESOURCES, INC.
(Formerly U.S. Trucking, Inc.)
Form 10-QSB - Quarter Ended June 30, 2002
INDEX
Page
PART I FINANCIAL INFORMATION...............................................2
Item 1. Financial Statements...............................................2
Condensed Balance Sheet at September 30, 2002 and December 31,2001.3
Condensed Statements of Operations for the Nine Months and
Three Months Ended September 30, 2002 and September 30, 2001....4
Condensed Statements of Stockholders' Equity (Impairment)..........5
Condensed Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and September 30, 2001.......................6
Notes to Condensed Financial Statements............................7
Item 2. Management's Discussion and Analysis...............................8
PART II OTHER INFORMATION..................................................10
Item 1. Legal Proceedings.................................................10
Item 6. Exhibits and Reports on Form 8-K..................................12
SIGNATURE PAGE....................................................12
EXHIBITS..........................................................13
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited condensed financial statements of Registrant as of
September 30, 2002, and for the nine months and three months ended September 30,
2002, and September 30, 2001 follow. The condensed financial statements reflect
all adjustments that are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented.
2
Logistics Management Resources, Inc.
F.T.A. U.S. Trucking, Inc.
Condensed Balance Sheets
September 30, December 31,
2002 2001
Unaudited (Audited)
--------- --------
Assets
Equipment, net of accumulated depreciation $ 5,367 $ 6,696
------------ ------------
Total Assets 5,367 6,696
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accrued expenses 85,722 264,825
Accrued interest 5,609,010 4,996,675
Due to related parties 1,762,749 773,835
Loans payable 2,559,000 2,584,015
Convertible debentures 5,198,460 5,198,460
Net liabilities of discontinued operations 5,460,504 16,960,504
------------ ------------
Total Current Liabilities 20,675,445 30,778,314
------------ ------------
Total Liabilities 20,675,445 30,778,314
------------ ------------
Stockholders' Equity (Impairment)
Preferred stock, no par value; (10,000,000 shares authorized)
Series A (99,000 shares outstanding) 132 132
Series B (2,000 shares outstanding) 2,000,000 2,000,000
Series C (50,000 shares outstanding) 15,000 15,000
Series D (950 shares outstanding) 950,000 950,000
Series E (2,300 shares outstanding) 2,300,000 2,300,000
Common stock, no par value; 75,000 shares authorized,
43,250,465 shares issued and outstanding -- --
Additional paid-in capital 14,713,201 14,713,201
Accumulated (deficit) (40,648,411) (50,749,951)
------------ ------------
Total Stockholders' Equity (Impairment) (20,670,078) (30,771,618)
------------ ------------
Total Liabilities and Stockholders' Equity (Impairment) $ 5,367 $ 6,696
============ ============
See notes to the condensed financial statements.
3
Logistics Management Resources, Inc. and Subsidiary
F.T.A. U.S. Trucking, Inc.
Condensed Statements of Operations
Nine Nine
Three Months Three Months Months
Ended Months Ended Ended Ended
September 30, September September September
2002 30, 2001 30, 2002 30, 2001
--------------- -------------- -------------- --------------
Continuing Operations:
Net Revenue $ - $ - $ - $ -
--------------- -------------- -------------- --------------
Operating Expenses
Depreciation and amortization 443 - 1,329 -
Interest expense - 210,699 612,335 1,532,720
Administrative expenses - 78,586 9,160 300,000
--------------- -------------- -------------- --------------
Total Operating Expenses 443 289,285 622,824 1,832,720
--------------- -------------- -------------- --------------
Operating (Loss) before Discontinued Operations (443) (289,285) (622,824) (1,832,720)
Other Income (Expense)
Loss on investment - - (17,672) -
--------------- -------------- -------------- --------------
Rescission of investment 17,672 - 17,672 -
--------------- -------------- -------------- --------------
Total Other Income (Expense) 17,672 - - -
--------------- -------------- -------------- --------------
Income (Loss) Before Discontinued Operations 17,229 (289,285) (622,824) (1,832,720)
Discontinued Operations:
Gain (loss) on disposal of discontinued
operations net of tax of $0 10,650,015 (484,848) 10,724,364 (2,456,430)
--------------- -------------- -------------- --------------
Net Income (Loss) $ 10,667,244 $ (774,133) $ 10,101,540 $ (4,289,150)
--------------- -------------- -------------- --------------
Earnings (Loss) Per Common Share
(Loss) from continuing operations $ 0.00 $ (0.04) $ (0.02) $ (0.12)
Income (Loss) from discontinued operations 0.25 (0.08) 0.25 (0.16)
---- ----- ---- ------
Basic and diluted earnings per share $ 0.25 $ (0.12) $ 0.23 $ (0.28)
==== ===== ==== ======
Weighted Average Number of Common Shares Outstanding 43,250,465 6,292,527 43,250,465 15,279,795
--=============== ============== -============== -=============
See notes to the condensed financial statements.
4
Logistics Management Resources, Inc. and Subsidiary
F.T.A. U.S. Trucking, Inc.
Condensed Statements of Stockholders Equity (Impairment)
Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock
Series A Series B Series C Series D Series E
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------ ------ ------ --------- ------ ------ ------ ------ ------ ----------
Balance, January 1, 2001 99,000 $132 2,000 $2,000,000 50,000 $15,000 950 $950,000 2,300 $2,300,000
Issuance of shares for services rendered -- -- -- -- -- -- -- -- -- --
Issuance of shares in exchange for
rescission -- -- -- -- -- -- -- -- -- --
Purchase of treasury shares -- -- -- -- -- -- -- -- -- --
Sale of treasury shares -- -- -- -- -- -- -- -- -- --
Cancellation of shares -- -- -- -- -- -- -- -- -- --
Cancellation of subscriptions -- -- -- -- -- -- -- -- -- --
Net loss -- -- -- -- -- -- -- -- -- --
------ ---- ----- ---------- ------ ------- --- -------- ----- ----------
Balance, September 30, 2001 99,000 $132 2,000 $2,000,000 50,000 $15,000 950 $950,000 2,300 $2,300,000
====== ==== ===== ========== ====== ======= === ======== ===== ==========
Balance, January 1, 2002 99,000 $132 2,000 $2,000,000 50,000 $15,000 950 $950,000 2,300 $2,300,000
Net income (loss) -- -- -- -- -- -- -- -- -- --
------ ---- ----- ---------- ------ ------- --- -------- ----- ----------
Balance, September 30, 2002 99,000 $132 2,000 $2,000,000 50,000 $15,000 950 $950,000 2,300 $2,300,000
====== ==== ===== ========== ====== ======= === ======== ===== ==========
Subscrip- Additional Retained Stockholders'
Common Stock tions Paid In Earnings Equity
Shares Amount Receivable Capital (Deficit) (Deficiency)
------ ------ ----------- ------------- ---------- ------------
Balance, January 1, 2001 61,186,903 $ - $(906,788) $ 12,197,922 $ (38,937,160) $(22,380,894)
Issuance of shares for services rendered 15,488,764 - - 3,310,468 - 3,310,468
Issuance of shares in exchange for rescission 1,500,000 - - 180,000 - 180,000
Purchase of treasury shares (18,000) - - (118,401) - (118,401)
Sale of treasury shares 18,000 - - 50,000 - 50,000
Cancellation of shares (34,925,202) - - - - -
Cancellation of subscriptions - - 906,788 (906,788) - -
Net loss - - - - (4,289,150) (4,289,150)
---------- ----- ---------- ----------- ------------ -------------
Balance, September 30, 2001 43,250,465 $ - - $ 14,713,201 $(43,226,310) $(23,247,977)
========== ===== ========== =========== ============ =============
Balance, January 1, 2002 43,250,465 $ - - $ 14,713,201 $(50,749,951) $(30,771,618)
Net income (loss) - - - - 10,101,540 10,101,540
---------- ----- ---------- ----------- ------------ -------------
Balance, September 30, 2002 43,250,465 $ - - $ 14,713,201 $(40,648,411) $(20,670,078)
========== ===== ========== =========== ============ =============
See notes to the condensed financial statements.
5
Logistics Management Resources, Inc. and Subsidiary
F.T.A. U.S. Trucking, Inc.
Condensed Statements of Cash Flows
Nine Months Ended September 30,
2002 2001
---- ----
Cash Flows From Operating Activities
Continuing Operations:
(Loss) before income taxes $ (622,824) $ (1,832,720)
Adjustments to Reconcile Net (Loss) to Net Cash Used By
Operating Activities
Depreciation and amortization expense 1,329 44,848
Loss on investment -- --
Decrease in inventory -- 162,000
Increase in prepaid expenses -- (1,266,724)
Decrease in cash overdraft -- (29,688)
Decrease in accrued expenses (179,103) 94,750
Increase in accrued interest 612,335 1,524,055
------------ ------------
Net Cash Used in Continuing Operations (188,263) (1,303,479)
------------ ------------
Discontinued Operations:
Income (loss) before income taxes 10,724,364 (2,456,430)
Adjustments to Reconcile Net Income (Loss) to Net Cash Used By
Discontinued Operating Activities
Increase (decrease) in net liability of discontinued operations (11,500,000) (154,781)
------------ ------------
Net Cash Provided by (Used in) Discontinued Operations (775,636) (2,611,211)
------------ ------------
Net Cash Used in Operating Activities (963,899) (3,914,690)
------------ ------------
Cash Flows from Financing Activities
Net proceeds from related parties 988,914 375,846
Purchase of equipment -- (7,640)
Purchase of treasury shares -- (118,401)
Sale of treasury shares -- 50,000
Increase (reduction) in loans payable (25,015) 124,416
Issuance of common shares for purchase of business -- 180,000
Issuance of common shares for services received -- 3,310,469
------------ ------------
Net Cash Provided By Financing Activities 963,899 3,914,690
------------ ------------
Net Increase (Decrease) in Cash -- --
Cash at beginning of period -- --
------------ ------------
Cash at end of period $ -- $ --
============ ============
See notes to the condensed financial statements.
6
Logistics Management Resources, Inc. and Subsidiary
F.T.A. U.S. Trucking, Inc.
Notes to the Condensed Financial Statements
BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Item 310 of Regulation S-B.
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 and nine months ended September 30, 2002, and
2001 are not necessarily indicative of the results that may be expected for the
years ended December 31, 2002, and 2001.
The unaudited condensed financial statements should be read in conjunction with
the consolidated financial statements and footnotes thereto included in the
Registrant's annual report on Form 10-K for the year ended December 31, 2001.
Certain amounts in the 2001 financial statements have been reclassified to
conform to the 2002 presentation.
ACQUISITION AND RESCISSION
On April 1, 2002, the Registrant acquired ninety-nine percent (99%) of the
issued and outstanding common stock of Interstate University, Inc.
("Interstate"), located in Evansville, Indiana, from Midwest Merger Management,
LLC ("Midwest"). The purchase price consisted of a $200,000 promissory note,
secured by a pledge of the shares of Interstate, payable over five years
commencing April 1, 2003, with interest at 4% per annum. Midwest is also
entitled to receive bonus payments equal to ten percent (10%) of Interstate's
net income through December 31, 2006.
Midwest is partially owned by the spouse of an individual who owns 3,250,000
shares of the Registrant's common stock and the trustee of a trust, which owns
200,000 shares of the Registrant's Series C Preferred Stock, with voting rights
equivalent to 20,000,000 shares of common stock.
During September 2002, the Registrant and Midwest reached agreement that
Interstate had failed to meet the performance criteria of the original
acquisition terms, and that it would likely continue to do so for the
foreseeable future. Accordingly, the parties mutually agreed to a rescission of
the original transaction.
DISCONTINUED OPERATIONS
During November 2000, the Registrant's operating business was discontinued and
its subsidiaries sought the protection of the Federal Bankruptcy Act. In this
connection, the Registrant had provided for losses on the disposal of such
operations during 2000 and 2001in the aggregate amount of $43,665,770. As the
Registrant's estimate of its losses upon disposition of its discontinued
operations was largely determined by the claims of its creditors, the favorable
settlement of any of such creditors' claims may give rise to the reversal of a
portion of the Registrant's original provision for losses in a subsequent
period. The September 2002 settlement of the claims of GE Credit Corporation for
$875,000, which were originally estimated in the accompanying financial
statements at $11,500,000, has resulted in the appearance of such a gain. In
actuality, this amount is a reduction of the original $43,665,770 estimated loss
by the $10,625,000 net savings resulting from the favorable settlement.
7
INCOME TAXES
For the three and nine months ended September 30, 2002, the Registrant has not
provided for income tax on its earnings as the Registrant, at December 31, 2001,
had available approximately $50,000,000 of net operating losses which may be
carried forward to reduce future federal and state taxable income. These tax
loss "carryforwards" expire between 2008 and 2021.
EARNINGS PER SHARE
The convertible preferred stock and debentures were not included in computing
diluted EPS because their effects were anti-dilutive.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion contains forward-looking statements regarding
the Registrant, its business, prospects and results of operations that are
subject to certain risks and uncertainties posed by many factors and events that
could cause the Registrant's actual business, prospects and results of
operations to differ materially from those that may be anticipated by such
forward-looking statements. Factors that may affect such forward-looking
statements include, without limitation, the Registrant's ability to successfully
develop new products for new markets; the impact of competition on the
Registrant's revenues, changes in law or regulatory requirements that adversely
affect or preclude customers from using its products for certain applications,
delays in our introduction of new products or services, and failure by the
Registrant to keep pace with emerging technologies.
When used in this discussion, words such as "believes," "anticipates,"
"expects," "intends," and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. The Registrant undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect the Registrant's business.
Nine Month Periods Ended September 30, 2002 and 2001:
Revenue - Total revenue for the nine months ended September 30, 2001 ("9M1") was
$-0- compared to $-0- for the nine months ended September 30, 2002 ("9M2"). The
Registrant's lack of revenue was principally attributable to the Registrant
being in a restructuring phase since placing its operating subsidiaries into
bankruptcy in November of 2000. The Registrant continues working through the
restructure of its debt and the mitigation of outstanding litigation.
Operating Expenses - Operating expenses for 9M1 were $1,832,720 compared to
$622,824 for 9M2. This decrease was principally attributable to the elimination
of all administrative expenses not required in the restructuring of the
Registrant and the Registrant's decision to freeze accruing any additional
interest related to the ongoing litigation with G.E. Capital Corporation.
8
Income (Loss) before Discontinued Operations - Operating loss before
discontinued operations for 9M1 was ($1,832,720) as compared to ($622,824) for
9M2. This decrease was principally attributable to non-existence of business
activity in 9M2.
Discontinued Operations - The Registrant's loss from discontinued operations for
9M1 of ($2,456,430) was turned around to a gain during 9M2 of $10,724,364. This
turnaround was principally attributable to the net gain of $10,625,000 resulting
from the Registrant's favorable settlement of the GE Capital matter, among
others, during the period.
Net Income (Loss) - The Registrant's net loss of ($4,289,150) for 9M1 may be
compared to a net income of $10,101,540 for 9M2. This increase was principally
attributable to the Registrant's successful resolution of the claims of its
larger creditors during the period together with the virtual curtailment of any
significant administrative expenses while the Registrant continues its
restructuring efforts.
Quarters Ended September 30, 2002 and 2001:
Revenue - Total revenue for the third quarter 2001 ("TQ1") was $-0- compared to
$-0- for the third quarter 2002 ("TQ2"). The Registrant's lack of revenue was
principally attributable to the Registrant being in a restructuring phase since
placing its operating subsidiaries into bankruptcy in November of 2000. The
Registrant continues working through the restructure of its debt and the
mitigation of outstanding litigation.
Operating Expenses - Operating expenses for TQ1 were $289,825 compared to $443
for TQ2. This decrease was principally attributable to the elimination of
virtually all administrative expenses not required in the restructuring of the
Registrant; and the Registrant's decision to freeze any additional accrual of
interest expense related to the claims of its larger creditors effective April
1, 2002.
Income (Loss) before Discontinued Operations - Operating loss before
discontinued operations for TQ1 was ($289,285) compared to income of $17,229 for
TQ2. This improvement was principally attributable to the effect of the
rescission of the Interstate acquisition during TQ2, net of $443 of depreciation
and amortization expense for the period.
9
Discontinued Operations - The Registrant's loss from discontinued operations for
the TQ1 of ($484,848) was reversed during TQ2 to a gain of $10,650,015. This
improvement was principally attributable to the net gain of $10,625,000 on the
Registrant's resolution, during TQ2, of the claims of G.E. Capital, among
others, and the virtual non-existence of expenses attributable to the
Registrant's previously discontinued operations.
Net Income (Loss) - The Registrant had net a loss of ($774,133) for TQ1 compared
to net income of $10,667,244 for TQ2. This increase was principally attributable
to the Registrant's successful resolution of the claims of some of its larger
creditors during the period together with the virtual curtailment of any
significant administrative expenses while the Registrant continues its
restructuring efforts.
Liquidity and Capital Resources. The Registrant has no capital resources. Given
the Registrant's lack of operating revenue and material pending litigation,
management believes that the Registrant's only realistic source of capital is
private placements of its common stock sold to accredited investors with
experience in investing in high risk entities of this sort. Given the limited
options for capital available to the Registrant, and the extent of material
pending litigation, there can be absolutely no assurance that the Registrant
will be able to survive as a viable entity.
10
ITEM 1. LEGAL PROCEEDINGS -
CIT Group/Equipment Financing, Inc. filed suit against the Registrant and
certain other parties in the Superior Court of NJ, Law Division Union County,
Docket No. UNN-L-3556-00 on July 7, 2000, for the return of six tractors
formerly used in the business of American Intermodal Services, Inc., some of the
operations of which Gulf Northern Transport took over in the spring of 2000. The
Registrant denied it ever received the tractors. A default judgment was granted
in November of 2001, against all defendants in the amount of $384,599.89. The
Registrant understands that certain of the tractors have since been recovered by
CIT. The Registrant denies that CIT had jurisdiction over the Registrant in the
New Jersey court wherein the lawsuit was brought, and that the judgment is
therefore invalid. CIT has not pursed collecting the judgment.
Allstates World Cargo, filed suit against the Registrant and its chairman for
$678,000. The suit claims the Registrant and its chairman defaulted on certain
business guarantees related to the acquisition of Trans-Logistics as of January
1, 2001. The Registrant and the chairman filed an answer in this matter on or
about August 2001. Recently, this action was settled among all of the parties.
The terms of settlement included a judgment by consent as against the Registrant
in the amount of $728,242.23, inclusive of interest and costs and subject to
further offset for payments made on behalf of the defendant officer.
Southtrust Bank, filed suit against the Registrant and numerous other parties in
the U.S. District Court for the Northern District of Alabama, Southern Division
on April 30, 2001 (No. CV-01-AR-1068-S). The suit claimed that the Registrant is
liable as guarantor on approximately $4.7 million of debt owed by Professional
Transportation Group Ltd., Inc. and Timely Transportation, Inc. as primary
obligors. PTG and Timely are entities with which we were engaged in merger
negotiations in 2000. Southtrust received a judgment in the amount of $2.8
million against the Registrant, but has not taken any actions to collect the
judgment to date.
General Electric Capital Corporation, filed suit against the Registrant on
October 25, 2001 in Circuit Court of Randolf County, Missouri for $60,000 in
unpaid copier lease payments and the return of three copiers. The suit is in the
discovery stage.
Porter, Levay & Rose, Inc., sued us in Jefferson Circuit Court, Jefferson County
Kentucky in September 2000 to collect $30,000 allegedly due for public relations
services. The Registrant has denied the claim for a lack of consideration and
breach of contract. The suit is in the discovery stage.
Sandra Sherman, sued the Registrant in the Iowa District Court, Des Moines
County Iowa for unspecified damages for claims relating to Ms. Sherman's
participation in the Registrant's bankrupt subsidiary, Gulf Northern Transport's
health care plan. The claims relating to unpaid benefits are believed to amount
to approximately $50,000. The suit is in the discovery stage.
11
G.E. Capital Corporation ("G.E."), commenced an action against the Registrant on
October 1, 2001 in the U.S. District Court for the Western District of Kentucky,
Louisville Division, seeking recovery of more than $22,000,000; and alleging a
breach of the Registrant's obligations under a Restructuring Agreement executed
by G.E., the Registrant, its subsidiaries and certain affiliates on November 28,
2000. The agreement between the Registrant and G.E. related to the restructuring
of certain obligations to G.E. in connection with its revolving line of credit
and an equipment loan. By agreement dated September 27, 2002, the parties
settled all underlying obligations in consideration of an $875,000 wire transfer
payment arranged for by the defendants and the exchange of mutual general
releases.
Emergent Capital, L.P., filed suit against the Registrant in the U.S. District
Court for the Southern District of New York on September 20, 2000. The complaint
alleged that Emergent Capital was owed $300,000 in contractual penalties for the
failure to register certain shares for resale, which Emergent purchased in
September of 1999. The matter was settled for the sum of $140,000 payable over
several months, and the action discontinued by the order of the court dated May
17, 2001. The Registrant has not met all of its obligations under the settlement
agreement and judgment in the amount of $130,846.54 was entered on September 10,
2001. To date Emergent Capital has made no attempt to enforce the judgment
against the Registrant.
First Insurance Funding Corporation, filed suit against the Registrant in
Circuit Court of Cook County Illinois on February 19, 2002 in connection with a
settlement the Registrant had allegedly entered into with respect to payments
allegedly owed First Insurance by the Registrant and certain other parties in an
insurance premium finance arrangement. The amount claimed due under the
promissory note entered into in connection with the agreement is $123,000. The
Registrant is evaluating the claims and has reached a settlement in principle.
The action has been withdrawn without prejudice.
Michael P. Forbes and P/R Strategies International, Inc., filed suit against the
Registrant, its President Dan L. Pixler and several other defendants on May 13,
2002 in the Supreme Court of New York, County of Suffolk. The Plaintiffs allege
that the Registrant had breached a contract for professional services rendered
and that they were damaged in the amount of $11,500. The Registrant and Mr.
Pixler have filed a motion to dismiss the action, which motion was granted by
order dated September 27, 2002.
Mr. Chester Bedell filed an action against the Registrant in the Supreme Court
of the State of New York, County of Suffolk on or about March 28, 2002. The
Registrant filed an answer and affirmative defenses shortly thereafter. On or
about October 2, 2002, the parties entered into an agreement settling the action
for $80,000, payable $10,000 down and $3,125 a month until the unpaid balance is
paid in full. The Registrant is in full compliance with the settlement agreement
and expects that the action will be withdrawn with prejudice pursuant to the
terms thereof.
Boutine Capital, II, LLC and its principal Gary J. Graham have filed a
Third-Party Complaint against the Registrant and several of its officers in an
action commenced by A.B. Goldberg, as plaintiff, in the District Court of the
State of Colorado, Arapahoe County. Boutine and Graham allege that the
Registrant is responsible for their failure to perform under a contract with
A.B. Goldberg in connection with certain fund raising activities, seeking
judgment in the approximately sum of $200,000. The Registrant asserts that there
is no third-party liability and intends to vigorously defend this litigation.
Freightliner of Savanah filed a civil action against U.S. Trucking, Inc. in or
about 2001. The action has since languished and has not been actively pursued.
In February 2002, plaintiff filed a second amended complaint seeking recovery
against defendant Chancellor Corporation for a total of $3,806,100 for the
purchase of certain tractors and equipment. The Registrant has filed an Answer
and intends to vigorously defend this litigation should it be actively pursued.
Legion Insurance Registrant filed an action against the Registrant in the
Kentucky State Court sitting in Louisville seeking to recover payment for
insurance premiums in an undisclosed amount. The action was filed in January
2002, and is currently in the discovery phase. The Registrant has denied all
material allegations of wrongdoing and intends to vigorously defend this case.
Prologist Trust as landlord filed an action against the Registrant and others in
the Superior Court of New Jersey, Middlesex County, seeking to recover the sum
of $403,146.49 under a purported assignment of lease. The Registrant filed an
answer denying all material allegations in the complaint; and intends to
vigorously defend this action.
12
During the first quarter of 2002, the Registrant was notified that the
Securities and Exchange Commission (the "SEC") initiated a private investigation
pertaining to the aborted transaction between the Registrant and Professional
Transportation Group, Ltd., Inc., a publicly held corporation. According to the
Order Directing Private Investigation and Designating Officers to Take
Testimony, the SEC is investigating whether there were any violations of the
Federal securities laws, including Sections 5(a), 5(c) and 17(a) of the
Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2) and 13(b)(5) of the
Securities Exchange Act of 1934. The Registrant has provided documents and
members of management have given testimony in connection with the SEC
investigation. Based upon advice of counsel, the Registrant does not believe
that it committed any violations of the Federal securities laws, and intends to
cooperate fully with the SEC and its staff.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits:
15. Letter on Unaudited Interim Financial Information
(b) Reports Form 8-K filed October 28, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed by the undersigned, thereunto duly authorized.
LOGISTICS MANAGEMENT RESOURCES, INC.
(formerly U.S. Trucking, Inc.)
(Registrant)
/s/ Danny L. Pixler
-------------------
Danny L. Pixler
Chief Executive Officer
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CERTIFICATIONS
I, Danny L. Pixler, the Registrant's Chief Executive and Financial Officer,
certify that:
1. I have reviewed this quarterly report on Form 10-Q of Logistics Management
Resources, Inc.;
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 am responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we 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
function): 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: November 8, 2002
/s/ Danny L. Pixler
Chief Executive and Financial Officer
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Exhibit A
Letter of Rosenberg Rich Baker Berman & Company
To the Board of Directors and Stockholders of
Logistics Management Resources, Inc.
We have reviewed the accompanying consolidated balance sheet of Logistics
Management Resources, Inc. as of September 30, 2002, and the related
consolidated statements of operations for the three and nine months then ended,
and the consolidated cash flows for the nine months then ended. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements in order for them
to be in conformity with generally accepted accounting principles.
As discussed in our report dated March 26, 2002, certain conditions indicate
that the company may be unable to continue as a going-concern. The accompanying
financial statements do not include any adjustments to the financial statements
that might be necessary should the Company be unable to continue as a
going-concern.
/s/ Rosenberg Rich Baker Berman & Company
Bridgewater, New Jersey
November 1, 2002
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