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 quarterly period ended: March 31, 2003
[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act
of 1934 forthe transition period from__________________ to________________.
Commission File No: 33-9640-LA
LOGISTICS MANAGEMENT RESOURCES, 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
(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 [ ] 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, 54,785,438 shares at March 31, 2003
Transitional Small Business Disclosure Format (Check one): Yes [ ] NO [ X ].
LOGISTICS MANAGEMENT RESOURCES, INC.
Form 10-QSB
Quarter Ended March 31, 2003
INDEX
Page
PART I FINANCIAL INFORMATION..........................................
Item 1. Financial Statements...........................................
Condensed Balance Sheets at March 31, 2003 and
December 31, 2002.........................................
Condensed Statements of Operations for the Three Months Ended
March 31, 2003 and March 31, 2002.........................
Condensed Statement of Stockholders' Equity (Impairment)
For the Period January 1, 2002 through March 31, 2003.....
Condensed Statements of Cash Flows for the
Three Months Ended March 31, 2003 and March, 31 2002......
Notes to the Condensed Financial Statements..................
Item 2. Management's Discussion and Analysis...........................
Item 3. Controls and Procedures........................................
PART II OTHER INFORMATION..............................................
Item 1. Legal Proceedings..............................................
Item 6. Exhibits and Reports on Form 8-K...............................
SIGNATURES..................................................
CERTIFICATIONS..............................................
EXHIBITS....................................................
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited condensed balance sheet of the Registrant as of March 31,
2003, the audited balance sheet at December 31, 2002, and the unaudited
condensed profit and loss statements for the three months ended March 31, 2003
and March 31, 2002 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.
Logistics Management Resources, Inc.
Condensed Balance Sheets
March 31, 2003 December,
Assets [unaudited] 31, 2002
Equipment
$ 4,731 $ 5,367
--------- --------
Total Assets $ 4,731 $ 5,367
========= ========
Liabilities and Stockholders' Equity (Impairment)
Current Liabilities
Accrued expenses $ 64,436 $ 63,908
Accrued interest 5,609,010 5,609,010
Due to related parties 2,616,430 2,589,615
Loans payable 2,544,000 2,544,000
Convertible debentures 5,198,460 5,198,460
Net liabilities of discontinued operations 4,601,504 4,601,504
---------- ----------
Total Current Liabilities 20,633,840 20,606,497
---------- ----------
Commitments and contingencies
Stockholders' Equity (Impairment)
Preferred stock, no par value;
(10,000,000 shares authorized)
Series A (999,000 shares outstanding) 762 762
Series B (2,000 shares outstanding) 2,000,000 2,000,000
Series C (450,000 shares outstanding) 135,000 135,000
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; 75,000,000 shares
authorized, 54,785,438
shares issued and outstanding -- --
Additional paid-in capital 14,592,571 14,592,571
Accumulated (deficit) (40,607,442) (40,579,463)
---------- ----------
Total Stockholders' Equity (Impairment) (20,629,109) (20,601,130)
---------- ----------
Total Liabilities and
Stockholders' Equity (Impairment) $ 4,731 $ 5,367
========== ===========
See notes to condensed financial statements.
Logistics Management Resources, Inc.
Condensed Statements of Operations
Three Months Ended March 31,
2003 2002
[unaudited] [unaudited]
---------------------------------
Net Revenue $ -- $ --
------------ -------------
Operating Expenses: -- --
General and administrative 528 9,160
Depreciation and amortization 636 443
Interest expense 26,815 612,335
------------- -------------
Total Operating Expenses 27,979 621,938
------------- -------------
Net Loss $ (27,979) $ (621,938)
============= =============
Net Loss Per Common Share -
Basic and fully-diluted $ (0.00) $ (0.01)
==== ====
Weighted Average Number of
Common Shares Outstanding 54,785,438 43,250,465
============= ===========
See notes to condensed financial statements.
Logistics Management Resources, Inc.
Condensed Statement of Stockholders' Equity (Impairment)
Preferred Preferred Preferred
Stock Stock Stock
Series A Series B Series C
Shs Amt Shs Amt Shs Amt
----- ----- ---- ---- ----- ------
Balance,
January 1, 2002 999,000 $762 2,000 $2,000,000 450,000 $135,000
Net income - - - - - -
------- ---- ----- --------- ------- -------
Balance,
December 31, 2002 999,000 $762 2,000 $2,000,000 450,000 $135,000
[2003 unaudited]
Net loss - - - - - -
-------- ---- ----- -------- ------ -------
Balance,
March 31, 2003 999,000 $762 2,000 $2,000,000 450,000 $135,000
======== === ===== ========= ======= =======
See notes to condensed financial statements.
Logistics Management Resources, Inc.
Condensed Statement of Stockholders' Equity (Impairment)
(Continued)
Preferred Preferred
Stock Stock
Series D Series E Common Stock
Shs Amt Shs Amt Shs Amt
----- ----- ---- ---- ----- ----
Balance,
January 1, 2002 950 $950,000 2,300 $2,300,000 54,785,438 $ -
Net income - - - - - -
---- ------- ----- --------- ---------- ---
Balance,
December 31, 2002 950 $950,000 2,300 $2,300,000 54,785,438 -
==== ======= ===== ========= ========== ===
[2003 unaudited]
Net loss - - - - - -
---- ------ ----- --------- ---------- ---
Balance,
March 31, 2003 950 $950,000 2,300 $2,300,000 54,785,438 $ -
==== ======= ===== ========= ========== ===
See notes to condensed financial statements.
Logistics Management Resources, Inc.
Condensed Statement of Stockholders' Equity (Impairment)
(Continued)
Additional Retained Stockholders'
Paid In Earnings Equity
Capital (Deficit) (Impairment)
---------- --------- ------------
Balance,
January 1, 2002 $ 14,592,571 $(50,749,951) $(30,771,618)
Net income - 10,170,488 10,170,488
----------- ------------ -----------
Balance,
December 31, 2002 $ 14,592,571 $(40,579,463) $(20,601,130)
=========== =========== ===========
[2003 unaudited]
Net loss - (27,979) (27,979)
----------- ----------- -----------
Balance,
March 31, 2003 $ 14,592,571 $(40,607,442) $(20,629,109)
=========== =========== ===========
See notes to condensed financial statements.
See notes to the condensed financial statements.
Logistics Management Resources, Inc.
Condensed Statements of Cash Flows
Three Months Ended March 31,
2003 2002
[unaudited] [unaudited]
--------------------------------
Cash Flows From Operating Activities
Net Loss $ (27,979) $ (621,938)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities
Depreciation and amortization expense 636 443
Increase (Decrease) in Liabilities
Accrued expenses 528 --
Accrued interest 26,815 612,335
--------- ---------
Net Cash Used by Operating Activities -- ( 9,160)
--------- ---------
Cash Flows from Financing Activities
Net proceeds from related parties -- 9,160
--------- ---------
Net Cash Provided by Financing Activities -- 9,160
--------- ---------
Net Change in Cash -- --
Cash at beginning of period -- --
--------- ---------
Cash at end of period $ -- $ --
========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued interest reclassified to Convertible
Note due to related parties $ 26,815 $ --
========= ========
See notes to condensed financial statements.
Logistics Management Resources, Inc.
Notes to the Condensed Financial Statements
Note 1 - Basis of presentation
The interim financial statements included herein are presented in accordance
with United States generally accepted accounting principles and have been
prepared by the Registrant, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Registrant believes that
the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. The Registrant's operating
results for the three months ended March 31, 2003, and 2002 are not necessarily
indicative of the results that may be or were expected for the years ended
December 31, 2003, and 2002. It is suggested that these interim financial
statements be read in conjunction with the audited financial statements and
notes thereto of the Registrant included in its Form 10-KSB for the period ended
December 31, 2002.
Since November 2000, principally as a result of the Registrant's inability to
continue the operations of its failing freight transportation service, the
Registrant has not had any revenue from operations. During this period, the
Registrant has been primarily involved in resolving the affairs of its creditors
and other investors. In connection with the Registrant's settlement with GE
Credit Corp. in September 2002, the Registrant formally disposed of its
remaining interest in its former transportation unit, freeing the Registrant to
consider searching for a profitable privately owned company with which to seek a
business combination. Accordingly, and despite the fact that management does not
consider the Registrant to be a development stage company, it is possible that
the Registrant could be considered to be a blank check company. As defined in
Section 7(b) (3) of the Securities Act of 1933, as amended, a "blank check"
company is one that has no specific business plan or purpose or has indicated
that its business plan is to engage in a merger or an acquisition with an
unidentified company or companies and is issuing "penny stock" securities as
defined in Rule 3(a) (51) of the Securities Exchange Act of 1934, as amended, in
that connection. The Securities and Exchange Commission and many states have
enacted statutes, rules and regulations limiting the sale of securities of blank
check companies.
Note 2 - Income Taxes (Benefits)
At December 31, 2002, the Registrant had available approximately $23,000,000 of
net operating loss carryforwards, which expire between December 31, 2008 and
December 31, 2021, that may be used to reduce future taxable income.
Note 3 -Related Party Transactions
During September 2002, and as previously reported in the Registrant's From
10-KSB Annual Report of the fiscal year ended December 31, 2002, the Registrant
consolidated $856,916 previously owed to Brentwood Capital Corp. with an
additional $875,000 into a September 27, 2002, 6%, secured convertible
promissory note in the aggregate principal amount of $1,731,906 (the "Note").
The additional 875,000 was utilized by the Registrant to fund its September 27,
2002, settlement of the GE Capital Corporation litigation. Brentwood Capital
Corp., is a privately owned New York merchant banking corporation that by virtue
of the conversion rights to 183,936,812 shares under the Note may be deemed to
be a principal stockholder of the Registrant ("Brentwood"). The Note is payable
in 60 equal monthly installments of $33,287 together with 6% interest on the
first day of each month commencing December 2002, through November 2007. The
Convertible Note is secured by all of the Registrant's assets, and all or any
portion of the balance due under the Note may be converted into common shares at
any time prior to October 1, 2007, at $.01 per share.
At March 31, 2003, the Registrant was unable to make any of the scheduled
payments to Brentwood. Accordingly, and pursuant to a written amendment
agreement of even date: (i) the due date of the Note was extended one year to
October 1, 2008; (ii) the commencement of principal payments was deferred to
December 1, 2003; and (iii) Brentwood forgave the Registrant's obligation to pay
interest owed prior to September 27, 2002. The amendment agreement further
provided that: (i) all interest due and owing from September 27, 2002, through
September 27, 2003, shall be due and payable by the Registrant in one lump sum
on October 1, 2003; and (ii) all additional interest shall be due and payable
monthly, in arrears commencing on November 1, 2003. Accrued interest applicable
to the Note during the three months ended March 31, 2003, was $26,815.
Note 4 - Per Share Results
The common share equivalents associated with the Registrant's convertible
debentures, and Preferred Stock issued and outstanding were not included in
computing per share results as 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 resolve the affairs of its
creditors and other investors; or to locate and thereafter negotiate and
consummate a business combination with a profitable privately owned company.
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.
Three Month Periods Ended September 30, 2003 and 2002:
Revenue - The Registrant had no revenues during the three months ended March 31,
2003 ("1Q3") and the three months ended March 31, 2002 ("1Q2") as a direct
result of the Registrant's discontinuance, in November 2000, of the operation of
its failing freight transportation services business. The Registrant continues
working through the restructure of its debt and the mitigation of outstanding
litigation.
Operating Expenses - Operating expenses for 1Q3 and 1Q2 did not include direct
costs also as a direct result of the Registrant's discontinuance, in November
2000, of the operations of its failing freight transportation business. The
balance of operating expenses for 1Q3 were $27,979 compared to $621,938 for 1Q2,
a reduction of $593,959 or 95.5%. This decrease was principally attributable to
the cessation, since June 30, 2002, of interest accruals on the Registrant's
pre-existing debt in default and in litigation. As the Registrant's principal
activities since the discontinuance of its freight transportation services
business were focused on resolving the claims of its previous creditors and the
maintenance of its reporting requirements and good standing, the Registrant's
general and administrative expenses have been reduced accordingly.
Income (Loss) before Discontinued Operations - As a result of the foregoing,
operating loss before discontinued operations for 1Q3 was ($27,979) compared to
($621,938) for 1Q2.
Discontinued Operations - There were no adjustments to the Registrant's estimate
of its loss from discontinued operations during 1Q3 or 1Q2.
Net Income (Loss) - Accordingly, the Registrant experienced a net loss of
($27,979) for 1Q3 compared to a net loss of $(621,938) for 1Q2, resulting in per
share results of $0.00 and $0.01, respectively.
Liquidity and Capital Resources.
The Registrant does not have any capital resources. Consistent with the
discontinuance its failing freight transportation services business in November
2000, and its subsequent disposition in connection with arranging the funding of
the GE Credit Corp. settlement in September 2002, the Registrant's principal
activity has been centered in resolving the claims of its former creditors so it
may consider a business combination. In this connection, Midwest Merger
Management, LLC ("Midwest"), a private investment entity, which through its
ownership of common and preferred shares may be deemed to own and control 19.5%
of the Registrant, and Brentwood Capital Corp. ("Brentwood"), a private merchant
bank and holder of a Convertible Note with conversion rights at March 31, 2003
to 183,936,812 shares or 72.6% of the Registrant's voting securities, have
agreed to provide Registrant with reasonable legal, accounting and
administrative resources to resolve its affairs and conduct its search for a
business combination candidate. Accordingly, the Registrant is entirely
dependent upon: (i) Midwest providing the Registrant with certain advisory
services in connection with the resolution of its affairs on favorable terms;
(ii) the willingness of Brentwood to provide the Registrant with certain office
and administrative facilities and to fund virtually all of the Registrant's
settlements with its creditors; and (iii) the Registrant's successful business
combination with a profitable operating company. There can be no assurances that
Midwest will be successful in resolving all or substantially all of Registrant's
affairs, that Brentwood will fund any further settlements, or that the combined
efforts of Midwest and Brentwood will lead to a successful business combination.
ITEM 3. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
The Registrant maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Registrant files or
submits under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures performed within 90 days of the
filing date of this report, the Chief Executive and Chief Financial officers of
the Registrant concluded that the Registrant's disclosure controls and
procedures were adequate.
(b) Changes in Internal Controls
The Registrant made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation of those controls by the Chief Executive and Chief Financial
officers.
PART II - OTHER INFORMATION
ITEM 3. LEGAL PROCEEDINGS
The Registrant is a party to the following threatened or pending litigation
matters:
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. The Parties
have restructured their settlement agreement to provide for the satisfaction of
the entire judgment amount in consideration of two (2) payments of $82,500 on or
before March 28 and April 28, 2003 and the delivery to plaintiff of an
assignment of receivables by Translogistics. The Registrant reasonably believes
that it will be able to comply with these terms in a timely fashion so as to
procure a satisfaction of the judgment on or before May 15, 2003.
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. ("PTG") and Timely Transportation, Inc.
("Timely") as primary obligors. PTG and Timely are entities with which we were
engaged in merger negotiations in 2000. Southtrust received a judgment in the
approximate amount of $2.8 million against the Registrant, but has not taken any
actions to collect the judgment to date.
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.
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 approximate sum of $200,000. The Registrant asserts that there
is no third-party liability and intends to vigorously defend this litigation.
Freightliner of Savannah 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 Company 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.
Rice v. the Registrant was filed in the United States District Court for the
Southern District of Florida seeking to recover the sum of $275,000 against the
Registrant pursuant to a promissory note dated July 29, 2001. The Registrant has
joined issue and the case is currently in discovery.
Prologis 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.
John Quackenbush sued the Registrant in Jefferson Circuit Court, Jefferson
County, Kentucky, in August 2002, seeking $50,000 in principal, interest and
collection costs resulting from the Registrant's failure to repay a promissory
note. The Registrant has interposed an answer denying the principal allegations
of the complaint. The suit is in the discovery stage. The financial statements
of the Registrant reflect an estimated liability of $4,601,504 and $16,960,504
with respect to the above claims at December 31, 2002 and 2001, respectively.
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., 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's 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: 10 (d) Amendment to Loan Agreement
15. Letter on Unaudited Interim Financial Information
(b) Reports: None.
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 and
Financial Officer, and Director
CERTIFICATIONS
I, Danny L. Pixler, the Registrant's Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB 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. 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 I 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 me 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 my conclusions about the effectiveness of the disclosure controls and
procedures based on my evaluation as of the Evaluation Date;
5. I have disclosed, based on my 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. 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 my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 29, 2003
/s/ Danny L. Pixler
-----------------------
Chief Executive and Financial Officer
CERTIFICATIONS
I, Danny L. Pixler, the Registrant's Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB 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. 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 I 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 me 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 my conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;
5. I have disclosed, based on my 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. 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 my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 29, 2003
/s/ Danny L. Pixler
------------------------
Chief Executive and Financial Officer
EXHIBIT 10(d)
Logistics Management Resources, Inc.
--------------------------------------------------------------------------------
10602 Timberwood Circle,
Suite 9
Louisville, Kentucky 40223
(502) 339-4000
March 31, 2003
Mr. Peter T. Arbes, President
Brentwood Capital Corp.
477 Madison Avenue
12th Floor
New York, NY 10022
Re: Amendment to Promissory Note
Dear Mr. Arbes:
This will serve to confirm our prior conversations and negotiations
concerning the parameters of a first amendment to the One Million, Seven Hundred
Thirty-One Thousand Nine Hundred Five and 70/100 ($1,731,905.70) Dollar
promissory note dated September 27, 2002 (the "Note") between Brentwood Capital
Corp. as holder ("Brentwood") and Logistics Management Resources, Inc. ("LMRI"),
as maker. In this regard, and in consideration of the mutual benefit derived
herefrom, the receipt and adequacy of which is hereby jointly and severally
acknowledged and accepted, Brentwood and LMRI hereby agree as follows:
1. Amendment. Paragraph 1 of the Note is hereby amended to read in its
entirety as follows:
"1. Payment. Payments due under the Note shall be made as follows:
A. Principal. The full principal amount of this Note shall be due
and payable at the offices of the Holder on October 1, 2008 (the "Due
Date"). The principal and interest due on this Note shall be payable
in 60 equal installments of Thirty Three Thousand, Two Hundred
Eighty-Seven and 41/100 ($33,287.41) Dollars on the first day of each
month commencing on December 1, 2003, and terminating on November 1,
2008. In the event that any monthly installment shall not be paid when
due, and shall remain unpaid for a period of five (5) business days or
more, then a late charge of two (2%) percent shall be due and owing
for each month or any portion thereof that such payment shall remain
unpaid; and
B. Interest. Solely in consideration for LMRI's tendering to
Brentwood of the Additional Consideration set forth in Section 4 of
the Note, Brentwood hereby forgives LMRI's obligation to pay all
interest due and owing prior
Mr. Peter T. Arbes, President
March 31, 2003
Page 2
_______________________
to September 27, 2002. Provided that Brentwood shall acknowledge the same on a
monthly basis, all interest due and owing from September 27, 2002, through
September 27, 2003, shall be due and payable by LMRI in one lump sum on October
1, 2003. Commencing on November 1, 2003, interest on the unpaid principal of
this Note at the rate of Six (6%) percent per annum shall be due and payable
monthly, in arrears. In the event that LMRI is unable to make any such monthly
interest payments, its obligation to pay interest shall nevertheless continue to
accrue."
2. Confirmation of Agreement. Except as herein modified, Brentwood and
the Maker hereby reconfirm the validity and enforceability of the
Note.
If the foregoing correctly sets forth our agreement and understanding,
please indicate your acceptance by signing the enclosed copy of this letter
agreement in the space marked "Agreed to and Accepted" and returning the signed
document to me via facsimile.
Very truly yours,
Logistics Management Resources, Inc.
By: /s/ Danny L. Pixler
--------------------
Danny L. Pixler, Chief Executive
Officer
AGREED TO AND ACCEPTED:
Brentwood Capital Corp.
By: /s/ Peter T. Arbes
----------------------
Peter T. Arbes, President
Exhibit 15
To the Board of Directors and Stockholders of
Logistics Management Resources, Inc.
We have reviewed the accompanying condensed balance sheet of Logistics
Management Resources, Inc. as of March 31, 2003, and the related condensed
statements of operations, condensed statement of shareholders' equity
(impairment), and condensed statements of cash flows for the three months ended
March 31, 2003 and 2002. 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, 2003, 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
April 29, 2003