**UNITED
STATES**
 **SECURITIES
AND EXCHANGE COMMISSION**
 Washington,
D.C. 20549
 
 **FORM
10-QSB**
 
 [X]
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
 
 SECURITIES
EXCHANGE ACT OF 1934
 
 For the
quarterly period ended April 30 th ,
2005
 
 [ ]
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
 
 Commission
File Number 0-30323
  
 **COLLEGE
PARTNERSHIP, INC**
 (Exact
name of small business issuer as specified in its charter)
 
 **Nevada**
 (State or
other jurisdiction of incorporation or organization)
 
 **84-1416023**
 (IRS
Employer Identification Number)
 
 **333
South Allison Parkway, Suite 100, Lakewood, Colorado
80226-3115**
 (Address
of principal executive offices)
 
 **303
- 804 0155**
 (Issuer’s
telephone number)
 
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]
 
 The
number of shares of the registrant’s common stock, $0.001 par value per share,
outstanding as of June 13, 2005 was 43,285,533.
 
 Transitional
Small Business Disclosure Format (Check one): Yes [ ] No [X]
 
  **COLLEGE
PARTNERSHIP, INC.**
 
 **INDEX**
 
 
 PART
      I. FINANCIAL INFORMATIONItem
      1. Financial StatementsCondensed
      Consolidated Balance Sheet - April 30, 2005Condensed
      Consolidated Statements of Operations--Three and Nine Months Ended April
      30, 2005 and 2004.Condensed
      Consolidated Statements of Cash Flow—Three and Nine Months Ended April 30,
      2005 and 2004Notes
      to Condensed Consolidated Financial StatementsItem
      2. Management's Discussion and Analysis of Financial Condition and Results
      of OperationsItem
      3. Controls and ProceduresPART
      II. OTHER INFORMATIONItem
      1. Legal ProceedingsItem
      2. Unregistered Sales of Equity Securities and Use of
    ProceedsItem
      3. Defaults Upon Senior SecuritiesItem
      4. Submission of Matters to a Vote of Security HoldersItem
      5. Other InformationItem
      6. Exhibits, as required by Item 601 of Regulation S-B
 
  
  **PART
I—F1NANCIAL INFORMATION Item 1. Financial Statements.**
 **COLLEGE
      PARTNERSHIP, INC. AND SUBSIDIARIES****CONSOLIDATED
      BALANCE SHEET (Unaudited) April 30, 2005****ASSETS****CURRENT
      ASSETS:**Cash
    $
      28,856Accounts
      receivable, net of allowance for doubtful accounts of
    $468,205
    1,465,523Notes
      receivable- finance companies
    274,576Inventory
    94,789Deferred
      customer contract expenses
    438,438Other
      current assets
    275,162Total
      current assets
    2,577,344**LONG
      TERM ASSETS:**Noncurrent
      accounts receivable, net of allowance for doubtful accounts of
      $94,607
    367,826Property
      and equipment, net
    221,700Intangible
      and other assets, net
    1,536,118Goodwill,
      net
    3,221,671Other
      assets
    107,384Total
      Long Term Assets
    5,454,699Total
      Assets
    $8,032,043**LIABILITIES
      AND STOCKHOLERS' DEFICIT****CURRENT
      LIABILITIES:**Notes
      payable- finance companies
    $2,020,370Current
      maturities on long-term obligations
    1,037,609Current
      maturities of long-term obligations - related parties
    251,778Accounts
      payable
    3,022,455Accrued
      liabilities
    834,181Deferred
      revenue
    2,218,910Total
      Current Liabilities
    9,385,303**LONG-TERM
      LIABILITIES:**Deferred
      system lease obligation
    484,289Long-term
      obligations, less current maturities
    1,572,336Long-term
      obligations- related parties, less current maturities
    258,195Total
      Long- Term Liabilities
    2,314,820Total
      Liabilities
    11,700,123**COMMITMENTS
      AND CONTINGENCIES (Note 12)****STOCKHOLDERS'
      DEFICIT:**Preferred
      stock, $.001 par value, 10,000,000 shares authorized;200,000
      Series A issued and outstanding
    2002,200,000
      Series B Convertible issued and outstanding
    2,200Common
      stock, $.001 par value, 75,000,000 shares authorized;42,685,533
      issued and 36,885,533 shares outstanding
    36,887Additional
      paid-in capital
    7,784,936Shares
      issued for prepaid expenses - related party
    (81,889)Accumulated
      deficit
    (11,410,414)Total
      stockholders' deficit
    (3,668,080)Total
      liabilities and stockholders' deficit
    $8,032,043
  
 
 
  
 Excluded
from the 2005 Statement of Cash Flows are the following non-monetary
transactions: issuance of common stock to directors and employees for
compensation and other obligation ($155,340), and issuance of common stock in
settlement of loans ($223,810). We also acquired goodwill and other intangibles
in exchange for $2,200,000 preferred shares. The following non-monetary
transactions were recorded in the third fiscal quarter: Issuance of common stock
for investment banking and consulting fees ($145,450), Board of Directors’ fees
($4,250), compensation ($3,500), trade credits ($62,738), dividends ($3,333),
premium of fair market value over dividend payable ($444), and prepayment of
dividends ($8,889).
 
 
 
 ****
 **COLLEGE
PARTNERSHIP, INC.**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **For
the Three Months ended April 30, 2005 and 2004**
 **(Unaudited)**
 
 
 **NOTE
1—BASIS OF PRESENTATION**
 
 The
accompanying unaudited condensed consolidated financial statements (“the Interim
Financial Statements”) include the accounts of College Partnership, Inc. and its
wholly owned subsidiaries, collectively referred to as “College Partnership” or
the “Company”. All inter-company balances and transactions have been eliminated.
 
 These
Interim Financial Statements are expressed in US dollars and are based upon
accounting policies and methods of their application consistent with those used
and described in the Company’s annual consolidated financial statements. The
Condensed Consolidated Financial Statements do not include all of the financial
statement disclosures included in the annual financial statements prepared in
accordance with accounting principles generally accepted in the United States
(“US GAAP”) and therefore should be read in conjunction with the consolidated
financial statements and notes included in the Company’s Annual Report on Form
10-KSB for the fiscal year ended July 31, 2004.
 
 The
information furnished reflects all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods presented. Certain amounts for prior periods have been
reclassified to conform to the April 30, 2005 presentation. The operating
results for the three and nine months ended April 30, 2005 are not necessarily
indicative of the results expected for any succeeding quarter or the entire
fiscal year ending July 31, 2005.
  As
reflected in the accompanying consolidated financial statements, the Company has
losses, negative cash flows from operations and negative working capital. These
matters raise substantial doubt about the Company's ability to continue as a
going concern.
   In view
of the matters described in the preceding paragraph, recoverability of a major
portion of the recorded asset amounts shown in the accompanying consolidated
balance sheets is dependent upon continued operations of the Company, which, in
turn, is dependent upon the Company's ability to continue to raise capital and
generate positive cash flows from operations. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and classifications of
liabilities that might be necessary should the Company be unable to continue its
existence.
   
 
 Management
plans to take, or has taken, the following steps that it believes will be
sufficient to provide the Company with the ability to continue in existence.
From February 1, 2005, through April 30, 2005, the Company has converted
$215,771 in obligation to stock, and raised $310,000 through the issuance of
common stock. We anticipate raising additional equity funds of up to $440,000,
of which $250,000 will be used to redeem the note. The net of $190,000 will be
used to fund any capital shortfalls. Management has decreased expenses by
decreasing staff and office space. Management has streamlined its operation and
is increasing the size of the direct mail campaign, which are anticipated to
increase gross profit margins.
  
 **NOTE
2—ACCOUNTING POLICIES**
  *Recent
Accounting Pronouncements* - In
December 2004, the FASB issued SFAS No.123 (revised 2004), “Share-Based
Payment”. Statement 123(R) will provide investors and other users of financial
statements with more complete and neutral financial information by requiring
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. Statement 123(R) covers a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. Statement 123(R) replaces FASB Statement No. 123,
Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees. Statement 123, as originally issued in
1995, established as preferable a fair-value-based method of accounting for
share-based payment transactions with employees. However, that Statement
permitted entities the option of continuing to apply the guidance in Opinion 25,
as long as the footnotes to financial statements disclosed what net income would
have been had the preferable fair-value-based method been used. Public entities
(other than those filing as small business issuers) will be required to apply
Statement 123(R) as of the first interim or annual reporting period that begins
after June 15, 2005. College Partnership currently files as a small business
issuer. The company is currently evaluating the impact of this proposed standard
on its financial statements.
  In
November 2004, the FASB issued SFAS No. 151, “Inventory Costs-An Amendment of
ARB. No. 43, Chapter 4”. This Statement amends the guidance in ARB No. 43,
Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts
of idle facility expense, freight, handling costs, and wasted material
(spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that”... under
some circumstances, items such as idle facility expense, excessive spoilage,
double freight, and rehandling costs may be so abnormal as to require treatment
as current period charges...” This Statement requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of “so normal.” In addition, this Statement requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. The Company has evaluated the impact of
the adoption of SFAS No. 151 and does not believe the impact will be significant
to the Company’s overall results of operations or financial position.
 
 In
December 2004, the FASB issued SFAS No. 152, “Accounting for Real Estate
Time-Sharing Transactions - an amendment of FASB statements No. 66 and 67”. This
Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate, to
reference the financial accounting and reporting guidance for real estate
time-sharing transactions that is provided in AICPA Statement of Position (SOP)
04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement also
amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations
of Real Estate Projects, to state that the guidance for (a) incidental
operations and (b) costs incurred to sell real estate projects does not apply to
real estate time-sharing transactions. The accounting for those operations and
costs is subject to the guidance in SOP 04-2. The Company has evaluated the
impact of the adoption of SFAS No. 152 and does not believe the impact will be
significant to the Company’s overall results of operations or financial
position.
 
 
 
 The
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary assets -
an amendment of APB Opinion No. 29”. This Statement amends APB Opinion 29 to
eliminate the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of nonmonetary assets
that do not have commercial substance. A nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The Company has evaluated the impact
of the adoption of SFAS No. 153 and does not believe the impact will be
significant to the Company’s overall results of operations or financial
position.
 
 *Disclosures
about Segments of an Enterprise:* In
October 2004, the EITF reached a consensus on EITF Issue 04-10, “Applying
Paragraph 19 of FASB Statement No. 131, Disclosures about Segments of an
Enterprise and Related Information, in Determining Whether to Aggregate
Operating Segments That Do Not Meet the Quantitative Thresholds”. Paragraph 19
of FASB Statement No. 131, “Disclosures About Segments of an Enterprise and
Related Information”, indicates that operating segments that do not meet the
quantitative thresholds included in paragraph 18 of Statement 131 may be
combined with information about other operating segments that also do not meet
these quantitative thresholds to produce a reportable segment if they share a
majority of the aggregation criteria listed in paragraph 17 of Statement 131. A
question has arisen in practice regarding how the “similar economic
characteristics” criteria in paragraph 17 should be taken into consideration
when applying the guidance in paragraph 19. The Task Force reached a consensus
that the operating segments that do not meet the quantitative thresholds in
paragraph 18 of Statement 131 can be aggregated if (1) aggregation is consistent
with the objective and basic principles of Statement 131, (2) the segments have
similar economic characteristics, and (3) the segments share a majority of the
following aggregation criteria (those included in paragraph 17 of Statement
131): (a) the nature of the products and services, (b) the nature of the
production processes, (c) the type or class of customer for their products and
services, (d) the methods used to distribute their products or provide their
services, and (e) if applicable, the nature of the regulatory environment, for
example, banking, insurance, or public utilities. The Company’s activities meet
all requirements for aggregation into one reportable segment. Adoption of Issue
No. 04-10 did not have an impact on the Company’s disclosures about segments of
the enterprise.
 
  
 **
 *Net
Earnings (Loss) Per Share* - The
Company computes earnings (loss) per share in accordance with the requirements
of SFAS No. 128, “Earnings per Share.” SFAS No. 128 requires the disclosure of
basic earnings per share and diluted earnings per share. The basic earnings per
share amount is computed by dividing income available to common stockholders by
the weighted average number of common shares outstanding. The diluted earnings
per share amount is computed by dividing income available to common stockholders
by the weighted average number of common shares outstanding increased for
potentially dilutive common shares outstanding during the period. The dilutive
effect of stock options, warrants and their equivalents is calculated using the
treasury stock method.
 
  Net loss
attributable to common stockholders - basic and diluted is computed based on the
weighted average number of shares of common stock outstanding during the year.
Basic loss attributable to common stockholders and diluted loss attributable to
common stockholders - assuming dilution, are the same for the third quarter
ended April 30, 2005 because of the antidilutive effect of stock options and
awards when there is a net loss. As of April 30, 2005 the Company had
outstanding 4,795,000 options and warrants to purchase shares of its common
stock and there are 2,000,000 shares of common stock held in escrow as
collateral for a note payable that are not considered to be outstanding common
stock. In addition 1,500,000 shares of common stock are held in escrow for
committed equity investments by Kingsley Capital. These escrowed shares are not
considered to be outstanding common stock. The 2,200,000 Series B convertible
preferred shares can be converted into 2,200,000 common shares. These amounts
could potentially dilute basic earnings per share in the future.
 
  *Stock-Based
Compensation* - As
permitted under the SFAS No. 123, “Accounting for Stock-Based Compensation,” the
Company accounts for its stock-based compensation for options issued to its
employees and directors in accordance with the provisions of Accounting
Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to
Employees.” As such, compensation expense is recorded on the date of grant if
the current market price of the underlying stock exceeds the exercise price.
Certain pro forma net income and EPS disclosures for employee stock option
grants are included below as if the fair value method as defined in SFAS No. 123
had been applied. Transactions in equity instruments with non-employees for
goods or services are accounted for by the fair value method.
  
 
  Had the
Company determined compensation cost based on the fair value at the grant date
for its stock options under SFAS No. 123, the Company’s net loss would have
increased to the pro forma amounts as indicated below:
 
 **Three
      months ended**
    
    **Nine
      months ended****30-Apr-05**
    
    **30-Apr-04**
    
    **30-Apr-05**
    
    **30-Apr-04**Net
      Income (loss) as reported
    ($1,098,454)
    
    $108,649
    
    ($2,386,076)
    
    ($878,203)Current
      period expense calculated under APB 25
    -
    
    -
    
    -
    
    -Pro-forma
      compensation expense
    $0
    
    ($7,500)
    
    ($276,914)
    
    ($10,000)Pro-forma
      net loss
    ($1,098,454)
    
    $101,149
    
    ($2,662,990)
    
    ($888,203)Net
      Income (loss) per share - basic and diluted
    ($0.04)
    
    $0.00
    
    ($0.09)
    
    ($0.03)
 
 The above
pro forma disclosures are not necessarily representative of the effect on the
reported net income or loss for future periods because options vest over several
years and additional awards are generally made each year. During the third
fiscal quarter 2005 the Company granted no additional stock options. The per
share weighted average fair value of stock options granted during the three
months ended April 30, 2005 was not applicable.
 
 
 **NOTE
3— ACQUISITION**
 
 *Waldrop
Enterprises Inc.*
 
 On
December 16, 2004, College Partnership, Inc. entered into a Share Exchange
Agreement with Waldrop Enterprises Inc., for 100% ownership. On January 15,
2005, the transaction closed. Currently Waldrop Enterprises does business as
Vision Direct Marketing or “VDMI”.
 
 Terms of
the agreement consisted of a purchase price of $3,217,957 with an issuance of
2,200,000 Series B Convertible Preferred Shares (which management estimates to
have a fair value of approximately $2,200,000) and assumption of all
liabilities.
 
 The
purchase price for each Series B preferred share was $1.00, and the conversion
ratio for the Series B preferred shares to common shares is 1 to 1. The
cumulative dividend rate is 6%. The Series B preferred stockholders are entitled
to vote as common stock except where a separate class vote is required by law.
The Series B preferred shareholders may at anytime elect to convert their
preferred shares into common stock and the Company has the right to call the
Series B preferred shares after 5 years.
 
 Vision
Direct Marketing is a full-service direct marketing company that provides
marketing and call center services for clients with high-value products and
services. Vision Direct Marketing is the exclusive distributor for the Verbal
Advantage product line and owns a 39.9% interest in the company owning the
Verbal Advantage intellectual property with an option to purchase the remaining
interest. The call center capabilities and marketing expertise are the major
factors in the recognition of goodwill, and the distribution agreement is the
most important intangible asset acquired.
 
 
 
 The
results from operations of Vision Direct Marketing have been included in College
Partnership, Inc.’s consolidated results in the reported period ended April 30,
2005. The effective date of the consolidation was December 1, 2004.
 
 We have
engaged an independent appraisal firm who has provided us with a preliminary
report of valuation of the assets acquired and the consideration paid in the
Vision Direct Marketing acquisition, and which is subject to final review. Their
recommendations in their preliminary report have been included in the
accompanying financial statements. Any adjustment to these preliminary values
will be reported as a change in estimate. Specifically, the valuation of the
consideration and the fair market value of the exclusive distribution agreement
need further review.
 
 The
customer list valued at $80,000 was assigned a useful life of 2 years. The
employment agreements valued at $67,500 were assigned a useful life of 5 years.
The fair market value of the exclusive license agreement is estimated at
$270,000 with a 6 year useful life.
 
 **NOTE
4—CONTINGENCY**
 The
former owner of a wholly owned subsidiary has brought legal action against the
Company seeking payment of outstanding notes payable. These notes payable are
fully recorded in the Company's condensed consolidated financial statements. The
Company has filed a counter claim disputing the former owner's claim due to
misrepresentations in the sale of the subsidiary to the Company. The former
owner took action to assume responsibility for this subsidiaries operations and
accounting records as of October 3, 2003. Effective as of the beginning of the
second quarter of fiscal 2004, the Company has discontinued consolidating the
results of this subsidiary.
 
 The
Company's notes payable to the former owner of $226,000 are included in the
current portion of long-term obligations. The Company's net investment in this
subsidiary at April 30, 2005, exclusive of these notes, approximates $25,000.
The resolution of the dispute with the former owner is not expected to have a
material adverse effect on the Company.
 
 **NOTE
5 —SUBSEQUENT EVENTS**
 
 None.
 
 
 
 ****
 **Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.**
 
 **FORWARD-LOOKING
STATEMENTS**
 
 This
report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements include statements regarding, among other things, (a) our
expectations about product development activities, (b) our growth
strategies, (c) anticipated trends in our industry, (d) our future
financing plans, and (e) our anticipated needs for working capital.
Forward-looking statements, which involve assumptions and describe our future
plans, strategies, and expectations, are generally identifiable by use of the
words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,”
“intend,” or “project” or the negative of these words or other variations on
these words or comparable terminology. This information may involve known and
unknown risks, uncertainties, and other factors that may cause our actual
results, performance, or achievements to be materially different from the future
results, performance, or achievements expressed or implied by any
forward-looking statements. These statements may be found under “Management's
Discussion and Analysis of Financial Condition and Results of Operations” and
“Business,” in the Form 10-KSB that accompanies this prospectus as well as
in this prospectus generally. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under “Risk Factors”
and matters described in this prospectus generally. In light of these risks and
uncertainties, the events anticipated in the forward-looking statements may not
occur.
 
 **OUR
BUSINESS**
 
 We are a
consumer education and full-service college planning and preparation company,
offering students and their families resources and services to help them
discover and achieve their career and educational goals. Our objective is to
provide educational resources that will help families reduce college costs, save
time, decrease family stress, and identify the best colleges for the student.
Specifically, we provide information services to high school students to assist
in career planning, college course selection, college selection, college
entrance testing, study skills, and searches for merit awards and financial aid.
These deliverables consist of printed materials, video cassettes, and test
preparation, college major and career assessment software and databases accessed
through CD-ROM or the Internet.
 
 Approximately
70% of our services are currently sold as a bundled package referred to as the
College Action Plan, or “CAP”. We market these services through scheduled
seminar workshops held throughout the United States, through direct sales
representatives and through our website. We believe our proprietary databases,
instructional materials and services are among the finest in the industry and
are economically priced. Our customers, typically the parents of high school
students, purchase the College Action Plan either by making a cash or credit
card payment or by installment note. Our CAP services fill an important
need for secondary students and their parents. In most communities, these
services are not adequately-provided either in the secondary schools or by other
industry participants who generally only specialize in a portion of the services
we provide.
  
 
 The
Verbal Advantage product line, which was acquired with the acquisition of VDMI,
is comprised of audio programs that assist our customers to improve their
vocabulary, grammar, communication, and negotiation skills. The Verbal Advantage
products are promoted via local and national radio and print advertising and are
sold through our call center and website.
 
 Our third
business line is Student Athlete Promotion, or SAP, in which we provide a
service that promotes students for athletic scholarships to prospective colleges
and universities. We provide this service through our national network of local
scouts that work with the student athletes and their parents. Our SAP business
accounts for less than 2% of our business volume.
 
 We
initially went public in January 1998 and changed our name to College
Partnership, Inc. in May 2003. Our executive offices are located in Lakewood,
Colorado, sales and marketing services and reservation services are performed in
Aliso Viejo, CA office and student coaching is located in the Dallas, Texas
metropolitan area. As of April 30, 2005 we had approximately 79 employees.
In addition, we contract with approximately 85 sales representatives located
throughout the United States.
 
 **Results
of Operations**
 
 **Comparison
of Results of Operations for the Three and Nine Month Periods Ended April 30,
2005 and 2004.**
 
 *Revenues*
 
 Our total
revenues decreased by $1,273,029 (or 25%) from $4,953,257 in the three months
ended April 30, 2004, to $3,680,228 for the three months ended April 30, 2005.
For the nine month period revenues decreased 21% from $14,608,186 in the period
ended April 30, 2004, to $11,498,317 for the period ended April 30, 2005.
 
 Revenues
were impacted in our third fiscal 2005 quarter by a negative revenue trend which
started in December 2004 and which is attributable to a sharply reduced mail
volume for the direct mail campaigns for our CAP services. Revenues were
positively impacted by our Waldrop Enterprises Inc. (“VDMI”) acquisition, which
results have been consolidated as of December 1, 2004. VDMI added $1,254,794 to
our revenues during the third quarter.
 
 We have
taken immediate measures to correct the negative impact from the reduced CAP
mail volumes; we have transitioned to a new mail house vendor, increased the
number of weekend workshop seminars and we have and continue to contract new
mailing lists for our campaigns. We also tested the effectiveness of radio
advertisement to enhance seminar attendance. We continue to test and implement
initiatives to increase CAP generated revenues. These initiatives include the
implementation of the Community Representative Program, an active call back
program, in-school advertising and a company sponsored college scholarship.
Furthermore, we are testing the sale of individual CAP components and the sale
of smaller bundles of these components.
 
 
 
 **
 *Cost
of revenues*
 
 Cost of
revenues decreased 4% from $3,229,092 in the three months ended April 30, 2004,
to $3,082,676 in the three months ended April 30, 2005. For the nine month
period Cost of revenue decreased 22% from $10,877,885 to $8,451,039. The
decrease is the net result of a cut back in the mail volume and a 20% average
cost reduction in our direct mail campaign, and the consolidation of VDMI.
VDMI’s cost of revenues for the third quarter was $1,197,529.
 
 *Gross
Profit*
 
 Gross
profit decreased 65% from $1,724,165 in the three months ended April 30, 2004,
to $597,552 in the three months ended April 30, 2005. For the nine month period
ended April 30, 2005, Gross profit decreased 18% from $3,730,301 to $3,047,278.
 
 **Gross
      Profit margin**2004
    
    2005Third
      quarter
    35%
    
    16%First
      nine months
    26%
    
    27%
 
 The third
quarter Gross profit margin decrease reflects a decrease in gross margin for our
VDMI division from 26% to 4% and a 1 percent point decrease in gross margin for
the CPI division to 22%.
 
 *Operating
cost*
 
 Operating
costs increased 43% from $335,373 in the three months ended April 30, 2004, to
$480,774 in the three months ended April 30, 2005. For the nine month period the
Operating costs decreased 1% from $1,382,893 to $1,361,820. The VDMI
consolidation added $174,570 to the third quarter 2005 operating
cost.
 
 *General
and administrative*
 
 General
and administrative expenses increased 35% from $644,817 in the three months
ended April 30, 2004, to $870,176 in the three months ended April 30, 2005. For
the nine month period ended April 30, 2005, General and administrative expenses
increased 47% from $1,766,432 to $2,599,119.
 
 *Depreciation
and amortization*
 
 Depreciation
and amortization expenses increased 35% from $72,209 in the three months ended
April 30, 2004 to $97,476 in the three months ended April 30, 2005. For the nine
month period Depreciation and amortization expenses increased 6% from $225,831
to $238,399. The change reflects the net impact of our assets being close to
being fully amortized, minimal asset additions, and the added depreciation and
amortization from the VDMI acquisition.
 
 
 **
 *Bad
debt expense*
 
 Bad debt
expense decreased 23%, from $532,898 in the three months ended April 30, 2004,
to $408,499 in the three months ended April 30, 2005. The
decrease reflects the net impact of lower revenues and the result of a
collection campaign, which improved the quality of our portfolio. We offer four,
sixteen and thirty nine month terms on our CAP services to customers. In the
first two quarters of 2004 we offered four and twelve month credit terms, which
were substantially shorter than what we currently offer. Credit acceptance is
not based on a credit check because we want to make our CAP services available
to as many customers as possible. This policy can be justified by the relatively
low incremental cost per unit. Bad debt expense increased marginally from 11% of
revenues to 11.1% for the three month period and from 9% to 12% for the nine
month period ended April 30, 2005.
 
 Bad debt
expense decreased 3%, from $1,379,094 in the nine months ended April 30, 2004,
to $1,332,115 in the nine months ended April 30, 2005.
 
 The cost
of bad debt is a material expense for us. We have increased our collection
efforts in the third quarter to reduce the rising default rate, and we will
continue to implement tactics that will manage this cost without negatively
impacting the contribution margin. The collection campaign restored a number of
past due accounts into good status, which contributed to the reduction in the
allowance for doubtful accounts
 
 *Gain
on unused contracts*
 
 The gain
on unused contracts increased 92% from $189,868 in the three months ended April
30, 2004, to $366,144 in the three months ended April 30, 2005. The gain on
unused contracts increased 145% from $251,144 in the first nine months of fiscal
2004, to $616,043 in the nine months ended April 30, 2005. Certain services are
provided at the option of the customer. Historically, 32% of our customers never
requested these services. We recognize in income the deferred revenue (net of
the related deferred expense) associated with these unused contracts over a
period of time beginning the second half of the student’s senior year, when most
applications are finalized and the need for our services diminish. Certain
contracts, which were entered into shortly before graduation, are considered to
be fully used not earlier than 6 months after signing of the contract.
 
 *Loss
on sale of customer contracts*
 
 Loss on
sale of customer contracts decreased by 48% from $229,426 to $118,823 in the
three months ended April 30, 2005, and increased 87% from $229,426 to $429,109
in the nine months ended April 30, 2005. We started selling customer credit
contracts to third parties in February 2004; the third quarter of fiscal 2004.
These non-recourse sales occur at a discount versus the book value, which
results in the loss. The non-recourse sale of customer contracts reduced our
Accounts receivables balance by $1,219,285.
 
 In
addition to the principal we assign all customer interest to the buying finance
company. The effective cost of capital on this financing arrangement ranges from
22% to 25% depending on the duration of the customer contract.
 
 *Interest
income (expense), net*
 
 Net
interest income decreased from $12,339 in the three months ended April 30, 2004,
to a Net interest expense of $50,402 in the three months ended April 30, 2005.
Net interest income decreased from $133,028 in the nine months ended April 30,
2004, to a Net interest expense of $46,835 in the nine months ended April 30,
2005. The decrease results from the interest expense on the convertible note
payable and from an accelerated sale of accounts receivable, thus collecting
less interest income from our customers.
  
 
 **
 *Income
tax provision*
 
 Since we
recorded substantial losses in prior periods no income tax provisions were
recorded for the three months ended April 30, 2005.
 
 *Dividends
on preferred stock*
 
 Dividends
on preferred stock were $36,000 for the three month period and $42,000 for the
nine month period ended April 30, 2005.
 
 *Net
loss attributable to common stockholders*
 
 Net loss
attributable to common stockholders amounted to $1,098,454 in the three months
ended April 30, 2005, or ($0.04) per common share, compared to a net profit of
$108,649, or $0.00 per common share for the three months ended April 30, 2004.
Net loss attributable to common stockholders amounted to $2,386,076 in the nine
months ended April 30, 2005, or ($0.08) per common share, compared to a net loss
of $878,203, or ($0.03) per common share for the nine months ended April 30,
2004.
 
 *Liquidity
and Capital Resources*
 
 Available
cash decreased 87%, from $218,207 on January 31, 2005, to $28,856 on April 30,
2005. Working capital (current assets less current liabilities) decreased 5%
from a $6,490,887 deficit on January 31, 2005, to a $6,807,961 deficit on April
30, 2005. Stockholders' equity declined from a deficit of $3,162,568 at January
31, 2005, to a deficit of $3,668,081 at April 30, 2005, as the net result of the
net loss for the three-month period ended April 30, 2005, and issuance of common
stock.
 
 As
reflected in our Consolidated Statement of Cash Flows, operating activities used
$1,189,317 net cash in the nine months ended April 30, 2005, compared to
$398,446 used in the same period a year earlier.
 
 Net cash
provided by investing activities was $6,015 in the nine months ended April 30,
2005, compared to $13,535 used in the same period in fiscal 2004.
 
  
 
 Net cash
provided by financing activities was $948,887 the nine months ended April 30,
2005, compared to $38,890 provided in the same period in 2004.
 
 During
the quarter ended April 30, 2005, we issued 1,778,472 common shares as payment
for existing liabilities to third parties, related parties, and officers and
directors in the amount of $265,648.
 
 Our
primary sources of liquidity and capital resources historically have been
principally financing of contract receivables and cash generated from other
financing and operating activities. Cash used for payment of operating costs has
offset these sources of cash flows. A portion of the costs and operating
deficits incurred for the three months ended April 30, 2005 were funded by
financing of our customer contract receivables, deferral of a portion of certain
executive compensation and extended terms provided by our vendors and debt
holders.
 
 These
losses were caused by lower revenues resulting principally from a decline in the
level of workshop attendance due to, we believe, a significant reduction in the
volume of ineffective direct mail campaign in an attempt to reduce inefficient
marketing costs, use of ineffective direct mail marketing lists and an increase
in both competitive and non- competitive direct mail volumes as a result of the
FTC Do Not Call act that has created excessive "noise" in the direct mail arena.
In addition, we cut back what we believed were the statistically less productive
mail target groups and workshops. This additional cut back in the second fiscal
quarter appeared counter productive.
 
 The
impact of these decisions has continued into the third fiscal quarter ending
April 30, 2005. As a result the Company has contracted with an alternate direct
mail vendor to manage its direct mail campaigns, acquired new target customer
lists, and implemented alternate marketing methods designed to improve workshop
attendance. We believe that we have identified the issues and that we began to
implement corrective actions. We have, or are in process of increasing the size
of our direct mail campaigns, identifying new seminar markets and we are
contracting with new mailing list providers. These changes are in the process of
being implemented and the impacts should start to be realized in the fourth
fiscal quarter of the year. We also reduced the workforce, renegotiated our
office leases, and will continue to integrate and consolidate our activities
with VDMI.
 
 The
Company needs to find sources of capital to fund these losses and its alternate
marketing programs. In addition to continued cooperation with certain important
vendors and note holders, the Company’s founders committed in December 2004 to
invest up to $1 million of capital. To date founders have converted $250,000 in
obligations to stock and advanced $250,000 in the form of the abovementioned
related party loan, and paid $310,000 for new shares. Founders expect to invest
up to an additional $440,000 from proceeds from the sale of certain assets held
by them, of which $250,000 is anticipated to be used to replace the cash
advancement from the related party. In addition, other parties have converted,
in the period ended April 2005, $265,648 in obligations to stock.
   
 
 We
estimate that a minimum of another $500,000 in capital, for a total of
approximately $700,000, is required by the end of July to get us through this
period of expected losses. We are in discussions with a number of capital
sources and expect to obtain sufficient funding over the next few months to meet
our obligations and fund our alternative marketing programs.
 
 Although
no assurance can be given that we will be successful in this regard, or that the
founders will be successful in liquidating the assets they own. If the Company
is unable to raise such additional financing, it would have a materially adverse
effect upon the Company's ability to implement its business plan and may cause
the Company to curtail or scale back its current operations, and raise
substantial doubt about the Company’s ability to continue as a going
concern.
 
 In view
of the matters described in the preceding paragraph recoverability of a major
portion of the recorded asset amounts shown in the accompanying consolidated
balance sheets is dependent upon our continued operations, which, in turn, is
dependent upon our ability to continue to raise capital and generate positive
cash flows from operations.
 
 The
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classifications of liabilities that might be necessary should we be unable to
continue our existence.
 
 
 
 ****
 **Factors
Affecting Our Business and Prospects**
 
 Revenues
and operating results may not be comparable to future periods. A substantial
portion of the costs relating to the generation of revenues is recognized as an
operating cost when incurred and therefore has had the effect of increasing
operating costs before the related revenues were recognized. Accordingly,
operating results of each quarter are not necessarily indicative of future or
past quarters as the number of new contracts signed does not coincide with the
number of contracts under which product was delivered. In addition, management
believes that our business is somewhat seasonal with average customer contract
signings declining in the period beginning at Thanksgiving and ending at the New
Year's Holiday and during the summer school vacation period.
 
 There can
be no assurance that we will continue to grow at historical rates or at all. Our
ability to generate increased revenue and achieve profitability will depend upon
our ability to increase sales through development and/or acquisition of new
products and services, expanding the number of sales representatives, and
further developing our direct marketing campaigns to increase attendance at our
workshops. Expansion and development of existing and additional marketing and
distribution channels depends, in large part, upon our ability to secure
additional financing, technology, expertise and staff.
 
 It is
highly unlikely that we will be profitable in our fiscal 2005 and that we will
generate sufficient cash from operations. The negative factors which contributed
to our decrease revenues have continued into the fourth quarter of 2005. We
believe that we have identified the issues and are taking corrective actions.
However, if we continue to experience losses, it will have a negative impact on
our ability to fund our aggressive marketing program and could curtail not only
our initiatives required to improve our performance, but also future planned
operations, and growth.
 
 The
market in which we operate is fragmented and has a low barrier to entry. New
competitors can enter our market, with potentially innovative or more appealing
products. Any inability to compete successfully against new entrants or against
existing competitors in the education and full service college preparation
industry can undermine our position as market leader.
 
 There can
be no assurance that we will continue to attract the current number of potential
customers to our workshops. Our workshops are currently our main sales channel.
Customers are invited to these workshops with direct mail invitations. There's
no guarantee that our mailing lists continue to target the right markets, at the
right time, with effective invitation letters. In addition, we convert a certain
percentage of the workshop attendance to actual customers. Any inability to
maintain or improve our pull rate to the workshops, or to maintain or improve
our conversion rate at the workshops will have are direct and negative impact on
our sales levels.
 
 We target
consumer markets. Any adverse change in general economic conditions and more
specifically any adverse changes in consumer confidence, unemployment rates,
discretionary income levels, interest rates, or stock market levels can impact
the affordability of our services.
 
 Adverse
weather and other conditions can negatively impact our ability to attract
customers to workshops. Hurricanes, snowstorms, flu or other health related
epidemics, and terrorist threats and attacks are conditions which can reduce our
workshop attendance.
 
 We depend
on a limited number of specialized third-party service and product providers.
This dependence increases our business risk.
 
 We may be
subject to future investigations by State Attorney Offices if consumers file
complaints. At this time, we are aware of no such investigations or material
complaints that would lead to an investigation. We thoroughly investigate any
complaints and have only had one unresolved complaint out of approximately
30,000 sales in the last two fiscal years.
 
 ****
 
 ****
 **Related
Transactions**
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to John Grace
as a director’s fee owed by College Partnership, and on March 29, 2005, the
Company issued 1,250,000 shares of common stock to John Grace for
cash.
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to Janice
Jones as a director’s fee owed by College Partnership, and on March 29, 2005,
the Company issued 1,250,000 shares of common stock to Janice Jones for
cash.
 
 On March
29, 2005, the Company issued 5,000,000 shares of common stock to Kingsley
Capital pursurant to a 2004 deal between Kingsley and College Partnership. The
common shares are kept by the company in an Escrow account until Kingsley has
remitted the cash for their investments. Accordingly, on April 30, 2005,
approximately 3,500,000 common shares were released out of Escrow to Kingsley.
The common shares that remained in Escrow on April 30, 2005, have been included
in the Issued share calculation, and have been excluded from the Outstanding
share calculation.
 
 On March
3, 2005, the Company issued 298,751 shares of common stock to Kingsley Capital
in settlement of trade credits purchased in July 2004, and valued at $62,738.
 
 On
February 28, 2005, and on March 29, 2005, the Company issued 29,500 shares of
common stock to Richard Murray as director’s fee owed by College
Partnership.
 
 On
February 28, 2005, the Company issued 4,500 shares of common stock to Rick
Newton as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to Vernon
Alden as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 500 shares of common stock to William
Waldrop as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 25,000 shares of common stock to Anna D.
Martin as compensation.
 
 On
February 28, 2005, the Company issued 11,111 shares of common stock to Wade
Mezey in exchange for preferred dividend payment. On March 29, 2005, the Company
issued 111,110 shares of common stock to Wade Mezey in settlement of preferred
dividend payments, and as prepayment of future preferred dividends.
   
 ****
 **Item
3. Controls and Procedures.**
 
 As of
July 31, 2004, we carried out an evaluation, under the supervision and with the
participation of our President and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Our disclosure controls and procedures are designed with the
objective of ensuring that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's (SEC) rules and forms. Based on this evaluation, we have
concluded that as of the Evaluation Date, our disclosure controls and procedures
are effective to ensure that information required to be disclosed in the reports
that we file under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms
and are also effective to ensure that information required to be disclosed in
the reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, to allow timely decisions regarding required disclosures.
 
 Management
has identified certain weaknesses which were attributable to a lack of
appropriate accounting staff, and management information systems to support our
timely reconciliation and review of accounts, resulting in a delay in the
filings with the Securities and Exchange Commission. We have recognized these
weaknesses in our internal controls, which we believed to have occurred as a
result of a substantial growth in our revenues, and the consolidation of
accounting functions in Colorado. In response to this recognition, we have hired
new support staff, both temporary and permanent, and have implemented changes in
our management information systems to improve the timeliness of our closing
process. We have completed making modifications to our current accounting
system. This will allow us to have a timely close in the foreseeable future. In
the meantime however, we recognize that we need to significantly upgrade our
system and we have begun defining our requirements.
 
 The
current fiscal quarter, however, experienced turn over in our accounting staff
just prior to the close of the quarter.  These changes have caused us
certain delays in the ability to report the current fiscal quarter’s financial
reports in a timely manner.  These changes, however, neither materially
affected nor are reasonably likely to materially affect  our
internal control over financial reporting or the accuracy to the
material information required to be included in our periodic SEC
filing s. 
Additionally, these have been corrected with the hiring of additional staff
within the financial department.
 
 The
officers have concluded that there are no
changes in our internal controls or in other factors that could materially affect or is
reasonably likely to materially affect  our
internal control over financial reporting and that our
disclosure controls and concluded that our procedures are effective to ensure
that management would be alerted to material information required to be included
in our periodic SEC filing s.
 
 Our
internal control over financial reporting is designed with the objective of
providing reasonable assurance regarding the reliability of our financial
reporting and preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. It should be noted
that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events.
 
 
 
 
 
 
 **PART
II—OTHER INFORMATION**
 
 **Item
1. Legal Proceedings.**
 
 During
fiscal 2004, the former owner and then senior manager of a wholly owned
subsidiary of our company brought legal action against us seeking payment of
outstanding notes payable.  These notes payable are fully recorded in our
consolidated financial statements. We filed a counter claim that, among other
things, disputes the former owner’s claim due on the basis of misrepresentations
made in connection with our purchase of that entity and seeks to reverse the
original transaction.  As of October 2003, the former owner also took
certain actions that denied us the ability to control that entity’s operations
or access its accounting records, and effectively re-assumed ownership of the
entity. Accordingly, we have discontinued consolidating the results of
operations of this entity beginning with the date we lost control. Our notes
payable to the former owner amount to $226,000 and are included in the current
portion of long-term obligations. Our net investment in this subsidiary at
October 31, 2004, exclusive of these notes, approximates $25,000 and is included
in Other Assets in the accompanying financial statements. A negative resolution
of the dispute is not expected to have a material adverse effect on our
operations.
  During
the fourth quarter of fiscal 2005, we filed a lawsuit against Duncan Capital
(a/k/a Bridges & Pipes and DCOFI).  The lawsuit involves
non-performance on the part of Duncan with regard to investment banking
activities which Bridges & Pipes and DCOFI received compensation for and
involves a note of $500,000 that becomes due June 15, 2005 payable to Bridges
& Pipes and DCOFI.  We are claiming that Duncan failed to perform on
their obligations for which they received compensation. The notes payable are
fully recorded in our consolidated financial statements. A negative resolution
of the dispute is not expected to have a material adverse effect on our
operations.
  In
addition to the above, we are involved in claims, legal actions, regulatory
inquiries and interpretations arising in the ordinary course of our business,
the resolution of which is not expected to have a material effect on our
financial position or results of operations.
  We may be
subject to future investigations by State Attorney Offices if consumers file
complaints.  At this time, we are aware of no such investigations or
material complaints that would lead to an investigation.  We thoroughly
investigate any complaints and have only had one unresolved complaint out of
approximately 30,000 sales in the last two fiscal years.
  
 **Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds**
 
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to John Grace
as a director’s fee owed by College Partnership, and on March 29, 2005, the
Company issued 1,250,000 shares of common stock to John Grace for
cash.
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to Janice
Jones as a director’s fee owed by College Partnership, and on March 29, 2005,
the Company issued 1,250,000 shares of common stock to Janice Jones for
cash.
 
 On March
29, 2005, the Company issued 5,000,000 shares of common stock to Kingsley
Capital. The common shares are kept by the company in an Escrow account until
Kingsley has remitted the cash for their investments. Accordingly, on April 30,
2005, 3,500,000 common shares were released out of Escrow to Kingsley. The
common shares that remained in Escrow on April 30, 2005, have been included in
the Issued share calculation, and have been excluded from the Outstanding share
calculation.
 
 On March
3, 2005, the Company issued 298,751 shares of common stock to Kingsley Capital
in settlement of barter credits purchased in July 2004, and valued at $62,738.
 
 On
February 28, 2005, and on March 29, 2005, the Company issued 29,500 shares of
common stock to Richard Murray as director’s fee owed by College
Partnership.
 
 On
February 28, 2005, the Company issued 4,500 shares of common stock to Rick
Newton as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 1,000 shares of common stock to Vernon
Alden as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 500 shares of common stock to William
Waldrop as director’s fee owed by College Partnership.
 
 On
February 28, 2005, the Company issued 25,000 shares of common stock to Anna D.
Martin as compensation.
 
 On
February 28, 2005, the Company issued 11,111 shares of common stock to Wade
Mezey in exchange for preferred dividend payment. On March 29, 2005, the Company
issued 111,110 shares of common stock to Wade Mezey in settlement of preferred
dividend payments, and as prepayment of future preferred dividends.
 
 On March
29, 2005, the Company issued 490,000 shares of common stock to Quanstar in
exchange for consulting fees owed by College Partnership.
 
 On April
18, 2005, the Company issued 5,000 shares of common stock to Vsource in exchange
for consulting fees owed by College Partnership.
 
 On April
18, 2005, the Company issued 100,000 shares of common stock to Lion Partners in
exchange for investment banking fees owed by College Partnership.
 
 On April
18, 2005, the Company issued 100,000 shares of common stock to Joann Srebnik in
exchange for investment banking fees owed by College Partnership to Lion
Partners.
 
 On April
29, 2005, the Company issued 500,000 shares of common stock to Ascendiant in
exchange for consulting fees owed by College Partnership.
 
 On April
29, 2005, the Company issued 100,000 shares of common stock to Aurelius
Consulting in exchange for consulting fees owed by College
Partnership.
  
 
 
 **Item
3. Defaults Upon Senior Securities**
 
 None
 
 **Item
4. Submission of Matters to a Vote of Security Holders**
 
 None
 
 **Item
5. Other Information**
 
 Our
independent auditor, Stonefield Josephson has not yet completed their review of
this report.
 
 **Item
6. Exhibits and Reports on Form 8K**
 
 a.
Exhibits (to be filed with Amendment)
 
 31.1  President
Certification pursuant to 18 USC, Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
 31.2  Chief
Accounting Officer Certification pursuant to 18 USC, Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed
herewith.
 32.1  President
Certification pursuant to 18 USC, Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. Filed herewith.
 32.2  Chief
Accouting Officer Certification pursuant to 18 USC, Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed
herewith.
 
 b.
Reports on Form 8K
 
  
 
 ****
 **SIGNATURES**
 
 In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 
 College
Partnership, Inc.
 /s/
William H. Waldrop
 
 Date June
19, 2005
 William
H. Waldrop
 President
and Chief Operating Officer (Principal Executive Officer)
 
 /s/ Wade
Mezey
 Date June
19, 2005
 J. Wade
Mezey
 Interim
Chief Accounting Officer