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**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**___________________**FORM 10-QSB**___________________

 

**ý                                QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the quarterly period ended September 30, 2002

 

OR

 

** ̈                                TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the transition period from               to              

 

Commission file number 0-19041

 

**AMERICANBIOGENETIC SCIENCES, INC.**(Exact Name Of RegistrantAs Specified In Its Charter)
| Delaware |      |      |      | 11-2655906

(State of Incorporation)
            
(I.R.S. Employer Identification No.)

 
                      
115 East 57th Street, Suite 1118, New    York, NY
            
10022

(Address of Principal Executive Offices)
            
(ZIP Code)

 Registrant'sTelephone Number, Including Area Code: (212) 688-5688

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.  Yes  ̈  Nox

At September 30,2002, the Registrant had 41,949,909 shares of Class A Common Stock outstanding.

Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act). Yes   ̈ No x Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes x No  ̈

 

**TABLE OF CONTENTS**
ItemDescriptionPage
**PART I - FINANCIAL INFORMATION**
  
ITEM 1.
            
  FINANCIAL    STATEMENTS.
    3  
ITEM 2.
            
  MANAGEMENT'S    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
    3   
ITEM 3.
            
  CONTROLS AND PROCEDURES.
    4     
**PART II - OTHER    INFORMATION**
  
ITEM 1.
            
  LEGAL PROCEEDINGS.
    4  
ITEM 2.
            
  CHANGES IN SECURITIES.
    5   
ITEM 3.
            
  DEFAULT UPON    SENIOR SECURITIES.
    5   
ITEM 4.
            
  SUBMISSION OF    MATERS TO A VOTE OF SECURITY HOLDERS.
    5   
ITEM 5.
            
  OTHER INFORMATION.
    5   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.5****
**PART I - FINANCIAL INFORMATION**

ITEM1. FINANCIAL STATEMENTS****Backto Table of Contents

The Registrant's unaudited interim financial statementsare attached hereto. UnauditedInterim Financial Statements

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONBack to Table of Contents

Some of the statements contained in this quarterlyreport of American Biogenetic Sciences, Inc., a Delaware corporation discuss futureexpectations, contain projections of our plan of operation or financial condition or stateother forward-looking information. Forward-looking statements give our currentexpectations or forecasts of future events. You can identify these statements by the factthat they do not relate strictly to historical or current facts. They use of words such as"anticipate," "estimate," "expect," "project,""intend," "plan," "believe," and other words and terms ofsimilar meaning in connection with any discussion of future operating or financialperformance. From time to time, we also may provide forward-looking statements in othermaterials we release to the public.

General Background

AmericanBiogenetic Sciences, Inc., a Delaware corporation, is sometimes referred to herein as"we", "us", "our", "Company" and the"Registrant". The Registrant was formed in 1983 for the purpose ofresearching, developing and marketing cardiovascular and neurobiology products forcommercial development and distributing vaccines. The Registrant's products were designedfor in vitro and in vivo diagnostic procedures and therapeutic drugs, and its products hadbeen identified for use in the treatment of epilepsy, migraine and mania,neurodegenerative diseases, coronary artery diseases and cancer.  The Registrantcommenced selling its products during the last quarter of 1997 but did not generate anysufficient revenues from operations to fund its operating expenses. During the period fromits inception in 1983 through its fiscal year ended December 31, 2001, the Registrant'saccumulated net loss was $73,720,000. 

On September 19, 2002, the Registrant filed a voluntaryChapter 7 bankruptcy petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Courtfor the Eastern District of New York (case no. 02-86689). As a result of the Chapter 7 bankruptcy petition, theRegistrant's assets were transferred to a United States Trustee and the Registrantterminated its business operations. In connection with the Chapter 7petition, each officer of the Registrant either resigned or was terminated as an officerand employee and all of the directors resigned effective September 20, 2002. During 2003 and 2004, the Bankruptcy Trustee had disposedof substantially all of the assets of the Registrant and its subsidiaries. On November 4, 2005, the Bankruptcy Court approved an order authorizing a changein control and confirming that Park Avenue Group, Inc. is a good faith purchaser pursuantto 11 USC Section 363(m). The Court order further provided that the Company, subsequent tothe bankruptcy proceeding, is free and clear of all liens, claims and interests of othersand that the sale was free and clear of any and all other real or personal propertyinterests, including any assets or liabilities of the debtor and the debtor's interests inany subsidiaries. 

Change in Control following Bankruptcy

The material terms of the transactionconfirmed by the Bankruptcy Court authorized Park Avenue Group to appoint new members tothe Registrant's board of directors and management, and the authority to change theRegistrant's articles of incorporation with respect to the capital stock of the Company.On November 29, 2005, the Registrant's board of directors approved an amendment to theRegistrant's articles of incorporation to (i) increase the number of authorized shares ofcapital stock to 910,000,000 shares, including 900,000,000 shares of common stock, parvalue $0.0001, and 10,000,000 shares of preferred stock, par value $0.0001. On November 8,2005, Park Avenue Group appointed Richard Rubin to the board of directors of the Registrant, which thenappointed Mr. Rubin to be chief executive officer and chief financial officer of theRegistrant.

New BusinessObjectives of the Registrant

Asa result of the Chapter 7 bankruptcy proceeding, the Registrant has no present operationsand has determined to direct its efforts and limited resources to pursue potential newbusiness opportunities. The Registrant does not intend to limit itself to a particularindustry and has not established any particular criteria upon which it shall consider andproceed with a business opportunity.

Following the Registrant's fiscal year ended December31, 2001, its common stock has been subject to quotation on the pink sheets. There iscurrently only a limited trading market in the Registrant's shares. There can be noassurance that there will be an active trading market for our common stock. In the eventthat an active trading market commences, there can be no assurance as to the market priceof our shares of common stock, whether any trading market will provide liquidity toinvestors, or whether any trading market will be sustained.

Registrant'sexecutive officer/director intends to devote such time as he deems necessary to carry outthe Registrant's affairs. The exact length of time required for the pursuit of any newpotential business opportunities is uncertain. No assurance can be made that theRegistrant will be successful in its efforts. We cannot project the amount of time thatour executive officer/director will actually devote to the Registrant's plan of operation.

Plan of Operation

We have no present operations orrevenues and our current activities are related to seeking new business opportunities,including seeking an acquisition or merger with an operating company. If our managementseeks to acquire another business or pursue a new business opportunity, it would havesubstantial flexibility in identifying and selecting a prospective business. Registrantwould not be obligated nor does management intend to seek pre-approval from ourshareholders. Under the laws of the State of Delaware, the consent of holders of amajority of the issued and outstanding shares, acting without a shareholders meeting, canapprove an acquisition.

The Registrant is entirely dependent onthe judgment of its executive officer/director in connection with pursuing a new businessopportunity or a selection process for a target operating company. In evaluating aprospective new business opportunity or an operating company, he would consider, amongother factors, the following: (i) costs associated with effecting a transaction; (ii)equity interest in and opportunity to control the prospective candidate; (iii) growthpotential of the target business; (iv) experience and skill of management and availabilityof additional personnel; (v) necessary capital requirements; (vi) the prospectivecandidate's competitive position; (vii) stage of development of the business opportunity;(viii) the market acceptance of the business, its products or services; (ix) theavailability of audited financial statements of the potential business opportunity; and(x) the regulatory environment that may be applicable to any prospective businessopportunity. 

The foregoing criteria are not intendedto be exhaustive and there may be other criteria that management may deem relevant. Inconnection with an evaluation of a prospective or potential business opportunity,management may be expected to conduct a due diligence review.

Liquidity and Capital Resources

We will use our limited personnel andfinancial resources in connection with seeking new business opportunities, includingseeking an acquisition or merger with an operating company. It may be expected thatentering into a new business opportunity or business combination will involve the issuanceof a substantial number of restricted shares of common stock. If such additionalrestricted shares of common stock are issued, our shareholders will experience a dilutionin their ownership interest in the Registrant. If a substantial number of restrictedshares are issued in connection with a business combination, a change in control may beexpected to occur. 

Inconnection with our plan to seek new business opportunities and/or effecting a businesscombination, we may determine to seek to raise funds from the sale of restricted stock ordebt securities.We have no agreements to issue any debt or equity securities and cannotpredict whether equity or debt financing will become available at terms acceptable to us,if at all.

Thereare no limitations in our articles of incorporation on our ability to borrow funds orraise funds through the issuance of restricted common stock to effect a businesscombination. Our limited resources and lack of operating history may make it difficult todo borrow funds or raise capital. Our inability to borrow funds or raise funds through theissuance of restricted common stock required to effect or facilitate a businesscombination may have a material adverse effect on our financial condition and futureprospects, including the ability to complete a business combination. To the extent thatdebt financing ultimately proves to be available, any borrowing will subject us to variousrisks traditionally associated with indebtedness, including the risks of interest ratefluctuations and insufficiency of cash flow to pay principal and interest, including debtof an acquired business. 

ITEM 3.CONTROLS AND PROCEDURES****Backto Table of Contents

Evaluation of disclosure controls andprocedures. Our new management was appointed inNovember 2005. As of December 31, 2005, the Company's chief executive officer/chieffinancial officer conducted an evaluation regarding the effectiveness of the Company'sdisclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) underthe  Exchange Act. Based upon the evaluation of these controls and procedures, ourchief executive officer/chief financial officer concluded that our disclosure controls andprocedures were effective as of the date of filing this quarterly report.

Changes in internal controls. During the period from the date of the Bankruptcy Court Order throughDecember 31, 2005, during which this quarterly report was prepared, no changes occurred inour internal control over financial reporting that materially affected, or is reasonablylikely to materially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

ITEM 1. LEGALPROCEEDINGS****  Back toTable of Contents

The Registrant's officers and directorsare not aware of any threatened or pending litigation to which the Registrant is a partyor which any of its property is the subject and which would have any material, adverseeffect on the Registrant.

ITEM 2. CHANGESIN SECURITIESBack to Table ofContents

None.

ITEM3. DEFAULTS UPON SENIOR SECURITIES****Back to Table of Contents

None.

ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSBack to Table of Contents

None.

ITEM5. OTHER INFORMATION****Backto Table of Contents

The Registrant reports in this quarterly report on Form10-QSB a change in certifying accountants. In connection with the Registrant's receipt onAugust 5, 2002 of a letter from the Securities and Exchange Commission ("SEC")that the SEC has been advised by Arthur Andersen LLP, the Registrant's independent publicaccountants, that Andersen is unable to perform future audit services for the Registrantand, as a result, Andersen's relationship with the Registrant was effectively terminated.This was reported in the Registrant's Forms 8-K and 8-K/A filed on August 9, 2002 andAugust 15, 2002, respectively. 

(a)(1) Previous Independent Accountant

(i) The Registrant reports a change in    certifying accountants, which involved the inability of Arthur Andersen LLP to perform    audit services for the Registrant, as represented in the SEC's letter to the Registrant    dated August 5, 2002. 
(ii) Arthur Andersen LLP's reports on    the financial statements of the Company for the fiscal years ended December 31, 2001 and    December 31, 2000 did not contain an adverse opinion or disclaimer of opinion, and were    not modified as to uncertainty, audit scope, or accounting principles, except as described    below.

For the years ended December 31, 2001 and 2000, Arthur    Andersen LLP rendered reports dated February 22, 2002 and March 23, 2001, respectively,    which contained a paragraph raising substantial doubt about the Company's ability to    continue as a going concern.

In connection with the audits of the Company's financial    statements for the years ended December 31, 2002 and 2001, there were no disagreements    with Arthur Andersen LLP on any matter of accounting principles or practices, financial    statement disclosure, or auditing scope or procedure which, if not resolved to Arthur    Andersen LLP’s satisfaction, would have caused them to make reference to the subject    matter in connection with their report on the Company’s consolidated financial    statements for such years; and there were no reportable events as defined in Item    304(a)(1)(v) of Regulation S-K.
(iii) The decision to change    accountants was recommended and approved by the new board of directors of the Registrant    on January 9, 2006. 
(a)(2) Engagement of New Independent Accountant.

On January 9, 2006, the Registrant's board of directorsrecommended and approved the engagement of Michael F. Cronin, CPA, Rochester, New York, asits independent accountant to audit the Registrant's financial statements for its fiscalyears ended December 31, 2002 and 2003.

(a)(3) The Registrant has not provided Arthur AndersenLLP with a copy of the disclosures it is making in response to this Item nor has theRegistrant requested Arthur Andersen LLP to furnish a letter addressed to the Commissionstating whether it agrees with the statements made by the Registrant in (a)(1)(i) and (ii)above and, if not, stating the respects in which Arthur Andersen LLP does not agree. TheRegistrant was advised by Arthur Andersen LLP in August 2002 that it was no longer issuingletters to companies for whom it was proving audit services, such as the Registrant,either concurring or disagreeing with the statements of the nature made herein by theRegistrant. 

ITEM6. EXHIBITS AND REPORTS ON FORM 8-K****Back to Table of Contents

(a) The following documents are filed as exhibits tothis report on Form 10-QSB or incorporated by reference herein. Any document incorporatedby reference is identified by a parenthetical reference to the SEC filing that includedsuch document.

Exhibit    No.Description31.1Certification of Chief    Executive Officer and CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1Certification of Chief    Executive Officer and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to    Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K during the quarter covered by this report:

The Registrant filed a Form 8-K on August 9,2002 and a Form 8-K/A on August 15, 2002 with Item 4 disclosure regarding the inability ofArthur Andersen LLP, its independent accountant,  to perform future audit servicesfor the Registrant. The Registrant filed a Form 8-K on September 30, 2002 with Items 3, 5and 7 disclosure regarding the Chapter 7 bankruptcy filing and the resignation ortermination of all officers and employees and the resignation of all directors of theRegistrant.

SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacities and on the dateindicated.
/s/    Richard Rubin    Richard Rubin       *CEO, CFO and Chairman**   Dated: February 14, 2006** *
**Financial Statements for the three-and nine month periods ended September 30,2002**
**American Biogenetic Sciences, Inc.**Balance SheetsBack to Table of Contents     **  ****Successor    Company****Predecessor    Company****September    30, 2002****December    31, 2001**** **(Unaudited)  
ASSETSCurrent Assets:   Cash$0$672,000   Accounts    receivable025,000   Inventory0330,000   Prepaid expenses012,000           Total current assets01,039,000     Assets from    discontinued operations held for sale:   Equipment, net095,000   Patents, net01,975,000   Other assets082,000             Total Assets$0$3,191,000  
LIABILITIES    AND STOCKHOLDERS' EQUITYCurrent Liabilities:   Accounts    payable-trade$0$639,000   Capitalized lease    obligations016,000            Total current liabilities0655,000  Capitalized lease obligations057,000  Stockholders' Equity:Common stock, 153,000,000    shares authorized, $0.001 par value;         44,949,909 shares issued and outstanding at September 30, 2002, and        44,425,909 shares issued and outstanding at December 31, 200144,95044,426   Additional paid-in    capital(44,950)76,233,574   Deferred stock    compensation0(69,000)   Accumulated    deficit0(73,720,000)     Total    Stockholders' Equity02,479,000            Total Liabilities and Stockholders' Equity$0$3,191,000     See    Notes to Unaudited Interim Financial Statements.**American    Biogenetic Sciences, Inc.**Statement of Operations  
**Three    Months Ended September 30,**
**Nine    Months Ended September 30,**
(Unaudited)
(Unaudited)Successor CompanyPredecessor CompanySuccessor CompanyPredecessor Company2002200120022001  Revenue$0$933,000$0$933,000  Costs and Expenses:   Cost of goods sold0314,0000314,000   General and administrative04,562,00004,562,000   Other0320,0000320,000   Interest027,000027,000Total costs and expenses05,233,00005,233,000  Loss from continuing operations before income    taxes,  extraordinary gain and discontinued    operations0(4,290,000)0(4,290,000)Extraordinary gain from extinguishment of debt0000Loss from continuing operations before    discontinued operations0(4,290,000)0(4,290,000)  Discontinued operations:   Gain (loss) from    discontinued operations (net of taxes)417,8000(1,099,200)0   Gain (loss) on disposal of assets    used in discontinued operations248,2000(1,472,800)0Income (loss) from discontinued operations666,0000(2,572,000)0  Net Income (loss)$666,000$(4,290,000)$(2,572,000)$(4,290,000)  Preferred stock dividends$0$(891,000)$0$(891,000)Net loss available to common shareholders$666,000$(5,181,000)$(2,572,000)$(5,181,000)Basic and diluted per shares amounts:   Continued operations$0.00$(0.12)$0.00$(0.12)   Extraordinary $0.00$0.00$0.00$0.00   Discontinued operations$0.01$0.00$(0.06)$0.00Basic and diluted net loss$0.01$(0.12)$(0.06)$(0.12)  Weighted average shares outstanding (basic and    diluted)44,949,90944,286,00044,818,90944,286,000  See Notes to Unaudited Interim    Financial Statements.**American Biogenetic Sciences, Inc.**Statements of Cash Flows
**Nine Months Ended September 30,**(Unaudited)**Successor Company****Predecessor Company**  **2002****2001**     Cash    flows used by operating activities$(722,000)(3,314,000)  Cash flow from investing    activities:   Purchase of    equipment & patents0(304,000)   Proceeds from sale of business01,232,000     Cash    used in investing activities0928,000   Cash flows from financing activities:   Proceeds from the    issuance of common and preferred stock02,069,000   Payments on    capital leases and notes(10,000)(205,000)   Proceed from    notes payable60,000130,000   Repayment of notes payable0(130,000)     Net    cash provided by financing activities50,0001,864,000       Change in cash(672,000)(522,000)Cash - beginning of period672,0001,194,000Cash - end of period$0$672,000  See Notes to    Unaudited Interim Financial Statements.**AMERICAN BIOGENETIC SCIENCES, INC.NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

1. Basis of Presentation

American Biogenetic Sciences, Inc. (the "Company","We" or "ABS") was incorporated in Delaware on September 1, 1983.Prior to filing for bankruptcy under chapter 7, the Company engaged in the research,development and production of bio-pharmaceutical products. 

The Financial Statements presented herein have been prepared by us inaccordance with the accounting policies described in our December 31, 2001 Annual Reporton Form 10-KSB and should be read in conjunction with the Notes to Consolidated FinancialStatements which appear in that report.

The preparation of these financial statements in conformity withaccounting principles generally accepted in the United States requires us to makeestimates and judgments that affect the reported amounts of assets, liabilities, revenuesand expenses, and related disclosure of contingent assets and liabilities. On an on goingbasis, we evaluate our estimates, including those related intangible assets, income taxes,insurance obligations and contingencies and litigation. We base our estimates onhistorical experience and on various other assumptions that are believed to be reasonableunder the circumstances, the results of which form the basis for making judgments aboutthe carrying values of assets and liabilities that are not readily apparent from otherresources. Actual results may differ from these estimates under different assumptions orconditions.

In the opinion of management, the information furnished in this Form10-QSB reflects all adjustments necessary for a fair statement of the financial positionand results of operations and cash flows as of and for the three-month and nine-monthperiods ended September 30, 2002 and 2001. All such adjustments are of a normal recurringnature. The Consolidated Financial Statements have been prepared in accordance with theinstructions to Form 10-QSB and therefore do not include some information and notesnecessary to conform with annual reporting requirements.
**"Fresh Start" Accounting: On September 19, 2002 all ofthe Company’s assets were transferred to the chapter 7 trustee in settlement of alloutstanding corporate obligations. We adopted "fresh-start" accounting as ofSeptember 20, 2002 in accordance with procedures specified by AICPA Statement of Position("SOP") No. 90-7, "Financial Reporting by Entities in Reorganization underthe Bankruptcy Code."

All results for periods subsequent to September 19, 2002 are referredto as those of the "Successor Company". The results of operations and cash flowsas presented on the 2002 financial statements reflect the predecessor company. Thesuccessor company had no transactions between September 19 and the end of the reportingperiod, December 31, 2002. 

In accordance with SOP No. 90-7, the reorganized value of the Companywas allocated to the Company's assets based on procedures specified by SFAS No. 141,"Business Combinations". Each liability existing at the plan sale date, otherthan deferred taxes, was stated at the present value of the amounts to be paid atappropriate market rates. It was determined that the Company's reorganization valuecomputed immediately before September 20, 2002 was $0. We adopted "fresh-start"accounting because holders of existing voting shares immediately before filing andconfirmation of the sale received less than 50% of the voting shares of the emergingentity and its reorganization value is less than its post-petition liabilities and allowedclaims. 

The accounts of the former subsidiaries were not included in the saleand have not been carried forward. **2. Bankruptcy Proceedings

On September 19, 2002, the Registrant filed a voluntary Chapter 7petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Eastern District ofNew York (case no. 02-86689). On November 4, 2005, the Bankruptcy Court approved an Orderconfirming the sale of debtor's interest in personal property to Park Avenue Group Inc.The material terms of the transaction confirmed by Bankruptcy Court authorized Park AvenueGroup to appoint new members to the Registrant's board of directors and authorized thenewly-appointed board of directors to amend the Article of Incorporation with respect tothe capital stock of the Company.

The accounts of the former subsidiaries were not included in the saleand have not been carried forward. 
**Resultant Change in Control: In connection with the Orderconfirming the sale of debtor's interest in certain intangible personal property to ParkAvenue Group Inc. approved by the U.S. Bankruptcy Court Eastern District of New York onNovember 4, 2005, the Court authorized a change in control pursuant to which Richard Rubinbecame our sole director on November 29, 2005, and was appointed CEO by the new board ofdirectors on November 29, 2005. The Court order further provided that the sale was freeand clear of liens, claims and interests of others and that the sale was free and clear ofany and all other real or personal property interests, including any interests inABS’s subsidiaries.. 

3. **Earnings/Loss Per Share**
Basic earnings per share is computed by dividing income available tocommon shareholders (the numerator) by the weighted-average number of common sharesoutstanding (the denominator) for the period. Diluted earnings per share assume that anydilutive convertible securities outstanding were converted, with related preferred stockdividend requirements and outstanding common shares adjusted accordingly. It also assumesthat outstanding common shares were increased by shares issuable upon exercise of thosestock options for which market price exceeds the exercise price, less shares which couldhave been purchased by us with the related proceeds. In periods of losses, diluted lossper share is computed on the same basis as basic loss per share as the inclusion of anyother potential shares outstanding would be anti-dilutive.

4. **New Accounting Standards**
In June 2002, the FASB issued SFAS No. 146, "Accounting for CostsAssociated with Exit or Disposal Activities." SFAS No.146 addresses financialaccounting and reporting for costs associated with exit or disposal activities andnullifies EITF Issue No. 94-3, "Liability Recognition for Certain EmployeeTermination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurredin a Restructuring)." The principal difference between Season No.146 and EITF 94-3relates to the recognition of a liability for a cost associated with an exit or disposalactivity. SFAS No. 146 requires that a liability be recognized for those costs only whenthe liability is incurred. A commitment to an exit or disposal plan no longer will be asufficient basis for recording a liability for those activities. The provisions of SFASNo. 146 are effective for exit or disposal activities initiated after December 31, 2002.Accordingly, the Company adopted the provisions of SFAS No. 146 effective January 1, 2003.The implementation of SFAS No. 146 did not have a material impact on the earnings orfinancial position of the Company.

In November 2002, the FASB issued Interpretation No. 45,"Guarantor's Accounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requiresthe guarantor to recognize a liability for the non-contingent component of a guarantee;that is, the obligation to stand ready to perform in the event that specified triggeringevents or conditions occur. The initial measurement of this liability is the fair value ofthe guarantee at its inception. The recognition of the liability is required even if it isnot probable that payments will be required under the guarantee or if the guarantee wasissued with a premium payment or as part of a transaction with multiple elements. FIN 45also requires additional disclosures related to guarantees. The recognition measurementprovisions of FIN45 are effective for all guarantees entered into or modified afterDecember 31, 2002. FIN 45 also requires additional disclosures related to guarantees ininterim and annual financial statements. Accordingly, we adopted the provisions of FIN 45,effective January 1,2003. The implementation of FIN 45 did not have an impact on ourearnings or financial position.******** |
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