10-Q 1 csq3fs.txt 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2003 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to _______________ Commission file number 1-7636 THE CATTLESALE COMPANY (Exact name of registrant as specified in its charter) Delaware 74-1605174 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 9901 IH10 West, Suite 800 San Antonio, Texas 78230-2292 (Address of principal executive office and zip code) (210) 558-2898 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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___. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act. Yes . No X. Applicable only to registrants involved in bankruptcy proceedings during the preceding five years: Indicate by check mark 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 of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No ___. As of September 30, 2003, 19,577,894 shares of The CattleSale Company Common Stock were outstanding. 1 THE CATTLESALE COMPANY AND SUBSIDIARIES INDEX Page Number Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets - September 30, 2003 and December 31, 2002 3 Consolidated Statements of Operations - Quarter and Nine Months Ended September 30, 2003 and 2002 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2003 and 2002 5 Notes to Consolidated Financial Statements 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 13 Item 4. Controls and Procedures 13 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 14 Signature 15 --------- Certifications 16 -------------- 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS The CattleSale Company and Subsidiaries

3 CONSOLIDATED STATEMENTS OF OPERATIONS The CattleSale Company and Subsidiaries (Unaudited)

4 CONSOLIDATED STATEMENTS OF CASH FLOWS The CattleSale Company and Subsidiaries (Unaudited)

5 THE CATTLESALE COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (In thousands, except per share data) (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by The CattleSale Company (the "Company") (formerly known as Dynacore Holdings Corporation) in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the information furnished reflects all adjustments which are necessary for a fair statement of the results of the interim periods presented. All adjustments made in the interim statements are of a normal recurring nature. It is recommended that these statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The results for the nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year. The results include those of the acquired subsidiaries (Note 3) from February 25, 2003 through September 30, 2003. 2. Summary of Significant Accounting Policies Applicable Subsequent to December 31, 2002 The Company, under contract with cattle sellers and approved buyers, brokers cattle throughout the United States. The purchase price typically is payable in three installments: A non-refundable consignment fee is paid by the seller at the time the consignment contract is made. This consignment fee is recognized as revenue when received; A non-refundable deposit of approximately $40 per head of cattle is paid by the buyer and immediately paid to the seller upon the consummation of the sales transaction. The Company defers any revenue recognition on the partial payment until the cattle is delivered; and The balance of the purchase price is due when the delivery of the cattle is made. The Company recognizes the revenue of the full sale at this point. The Company records revenue at the gross amount received from the buyers. The amounts paid to the sellers and commissions paid to the regional representatives are then recorded as costs of sales and selling costs, respectively. This is the policy of the previous management of the acquired subsidiaries who had determined that the following circumstances support this position: a. The Company enters into a separate contract with the seller and the buyer to purchase and sell the cattle, respectively. According to the terms of the contracts, the Company maintains the right to remove a sale from its web site at any time and reserves the right to refuse a bid at any time. b. The Company takes title to the cattle during the period in which the cattle are removed from the seller's property but before they are loaded onto the buyer's property. c. The Company has the risks and rewards of ownership, such as the risk of loss for collection, delivery, or returns. 6 The Company's management is currently reviewing the issue of whether to record revenue at the gross amount received, versus recording only the net retained as commission revenue, based on the Company's current method of operations and structuring of the transactions. Management does not believe that, given the volume of transactions, the results for the three and nine months ended September 30, 2003 as reported are misleading, should it be determined that recording the net amount received was more appropriate. Earnings per share is calculated on the assumption that accumulated undeclared dividends on the Preferred Stock will be paid in cash or common stock. It is possible that the Company could require the holders of the preferred stock to accept additional preferred stock with a fair value lower than the cash dividend. 3. Acquisition Background From the time it emerged from bankruptcy in December 2000 through February 24, 2003, the Company had no significant revenue or cash producing activities and was actively seeking a merger or acquisition partner. Acquisition of Interests On February 25, 2003, the Company acquired all of the beneficial interests (the "Interests") in two limited liability companies owned by AEI Environmental, Inc. ("AEI"), CS Livestock Commissions Co. LLC and CS Auction Production Co. LLC (collectively, the "Subsidiaries"), pursuant to an Acquisition Agreement of even date therewith (the "Acquisition Agreement"). After the acquisition was consummated, the Company changed its name from "Dynacore Holdings Corporation" to "The CattleSale Company." The Company, through the Subsidiaries, is now in the business of providing auction trading services to producers of beef and dairy cattle, which is accessible by the internet at the website www.cattlesale.com. The cattlesale.com website was one of the first sites offering a neutral cattle trading exchange and providing information and cost efficiencies to the cattle industry for each stage of the production cycle. Management believes that the CattleSale products and services reduce transaction costs and improve information flow and market efficiencies in cattle production. The amount of consideration paid by the Company for the Interests in the Subsidiaries was determined by negotiation, based on a mutual assessment by the Company and AEI of the value of the Subsidiaries' business and the real value of the Company's Common Stock. Further, the acquisition was structured to avoid causing a negative impact on the Company's net operating loss carry-forward. The Company did not expend any cash in acquiring the Interests. Rather, the consideration for the Interests consisted of: o 1,323,000 shares of Series B Convertible Redeemable Preferred Stock (the "Series B Preferred Stock") having the principal terms described below under the heading "Preferred Stock;" and o 9,593,168 shares of Common Stock, which equaled forty-nine percent (49%) of the outstanding shares of Common Stock, on a fully-diluted basis, immediately subsequent to the closing. Dividend to Shareholders Upon the purchase of the Interests in the Subsidiaries, the Company declared a dividend payable to its Common Stockholders of record on February 24, 2003 (the "Record Holders"). The dividend was payable in .02503 of a share of Series A Convertible Redeemable Preferred Stock (the "Series A Preferred Stock") and .11287 of a share of Series B Preferred Stock per share of Common Stock. An aggregate of 250,000 shares of Series A Preferred Stock and 1,127,000 shares of Series B Preferred Stock were also issued (collectively, the "Dividend Shares"). The Series A Preferred Stock has the principal terms described below under the heading "Preferred Stock." The Dividend Shares were issued in escrow, as described below under the heading "Escrow of Dividend Shares." Additional paid-in-capital was reallocated to the Preferred Stock at an amount equal to the par value of the common shares into which the Preferred Stock would be convertible. 7 Escrow of Dividend Shares The Dividend Shares are being held in escrow by Asher B. Edelman, in the capacity of escrow agent for the benefit of the Record Holders, until such time as the Dividend Shares have been registered for sale under the Securities Act of 1933, as amended. The Company intends to file a registration statement with the Securities and Exchange Commission registering the Dividend Shares, and the shares issued to AEI at the closing, as soon as practicable; however, the Company cannot anticipate when such a registration will become effective and the Dividend Shares released from escrow. During the period the Dividend Shares are held in escrow, the escrow agent has the power to vote the Dividend Shares on any matter submitted to the vote of the Company's shareholders. Preferred Stock The rights and preference of the Series A Preferred Stock and the Series B Preferred Stock (collectively, the "Preferred Stock"), which each have a par value of $.01 per share, are as follows: Dividends. Dividends accrue and are cumulative from the date of issuance in an annual amount equal to 2.5% per year per share, based on the $10 per share liquidation preference, payable semi-annually, when, as and if declared by the Board of Directors. Dividends are payable in cash, shares of Preferred Stock (valued at $10 per share) or shares of Common Stock (valued, (x) if there is a market for the Common Stock, at the average price of a share of Common Stock during the last thirty (30) days of trading, or (y) if there is not a market for the Common Stock, at $1.38 per share), or any combination thereof. Conversion. Each share of Preferred Stock is convertible at any time at the option of the holder into 7.25 shares of Common Stock. Redemption. At any time after the earlier of: o a merger or consolidation effecting the sale in one or a series of related transactions of all or substantially all of the Company's assets or a sale of more than fifty percent (50%) of the Company's outstanding voting securities, or o the realization by the Company of aggregate net proceeds in excess of $10,000,000 in connection with the sale of Common Stock pursuant to a public offering registered under the Securities Act of 1933, as amended (a "Qualified Public Offering"), the Preferred Stock will be redeemed by the Company for cash in an amount equal to the liquidation preference of $10 per share, plus accrued and unpaid dividends as of the redemption date; provided, however, that (i) the redemption of the Series B Preferred Stock will be subject to the rights and preferences of the Series A Preferred Stock, and (ii) not more than forty percent (40%) of the net offering proceeds of the Qualified Public Offering will be applied to the redemption of the Preferred Stock. Registration of Shares The Company intends to file a registration statement with the Securities and Exchange Commission registering the shares issued to AEI and the Dividend Shares as soon as practicable. Fair Market Values The following table summarizes the estimated fair values of the assets and liabilities of the Subsidiaries at the date of acquisition, adjusted for additional acquisition costs of $27. The Company does not anticipate any significant changes to the purchase price allocation. Date of As of Acquisition Adjustment Sept. 30, 2003 Current Assets $147 $147 Property, Plant & Equipment 130 130 Goodwill 679 27 706 -------------------------------------------------------------------------- Total Assets Acquired 956 27 983 Current Liabilities Assumed 171 171 Net Assets Acquired $785 27 $812 8 The total transaction value was $812 which included Common Stock valued at $96, Series B Preferred Stock valued at $566 and $150 of transaction costs. The combined value of the Common and Preferred Stock was based on the closing price of the Common Stock for several days before and after the announcement of the terms of the transaction as the Company's pre-merger shareholders were to receive a dividend of a proportionate amount of the Preferred Stock. This value was then adjusted to reflect (i) a dividend of Dynacore Patent Litigation Trust (the "Trust") units of beneficial interest (the "Trust units") to the Company's pre-merger shareholders, and (ii) that the Series A Preferred Stock received by the Company's pre-merger shareholders had liquidation preferences superior to those of the Series B Preferred Stock. The value allocated to the Trust units was based on the relative quoted price of the Company's Common Stock and the Trust units when market quotations for the Trust units were first available. The combined value of the Common and Preferred Stock was allocated to the Common Stock to the extent of its par value with the remainder allocated to the Preferred Stock because of the substantial liquidation preference of the Preferred Stock compared to the Common Stock. 4. Liquidity As of September 30, 2003, the Company had cash and cash equivalents of approximately $183. While the Company has a loan receivable from the Dynacore Patent Litigation Trust (the "Trust") of approximately $880 plus accrued interest of approximately $140, virtually the only source of recovery would be from net proceeds of the patent litigation (Note 5). It is unlikely that the Trust will receive such proceeds in the near future, if at all. The Company does not believe that it will have sufficient cash resources to satisfy its cash requirements for 2003 without an infusion of additional cash. While the Company is actively exploring various opportunities, there can be no assurance that additional capital will be available or that the Company will be able to fulfill its obligations. Subsequent to the end of the third quarter, in November 2003, the company received short term interim financing of $75. While the company is seeking additional "bridge" investments to fund its operations until more longer term capital investments are received, if at all, there can be no assurance that additional short term financing will be received. 5. Patent Litigation The Company believes that the patents it owned prior to their transfer to the Trust covered most products introduced by various suppliers to the networking industry and certain types of dual-speed technology introduced by various industry leaders and had asserted one or both of the patents in four suits brought in the United States District Court for the Eastern District of New York (the "Brooklyn Suits") and two suits brought in the United States District Court for the Southern District of New York (the "Manhattan Suits"). These actions were transferred to the Trust for prosecution on behalf of the owners of the Trust units. The Company is obligated to lend the Trust up to $1 million to pursue the patent litigation. As of September 30, 2003, the outstanding principal amount owed to the Company by the Trust was approximately $880 plus accrued interest of approximately $140. The Brooklyn Suits were dismissed on appeal on February 15, 2002. On August 19, 2002 and February 3, 2003, the Trust settled the Manhattan Suits against, respectively, Motorola, Inc. and Eastman Kodak Company. The remaining defendants in the Manhattan Suits received summary judgment in their favor on February 11, 2003. The Trust filed a timely appeal to reverse this ruling. If the judgment is not vacated, the Trust will be precluded from further pursuing these cases. 6. Commitments and Contingencies From time to time, the Company is a defendant in lawsuits generally incidental to its business. The Company is not currently aware of any such suit which, if decided adversely to the Company, would result in a material liability. 9 7. Non-Operating Income (Expense) (In thousands)

8. Accounts Receivable As of September 30, 2003, the Company had trade receivables of approximately $21. In addition, the Company has a receivable from Vugate, Inc., the buyer of its videoconferencing business (MINX), consisting of a note with a remaining face value of $210 that is payable only from certain Vugate cash flows. This note is carried on the balance sheet at $172, which represents the present value of the estimated payments at a discount rate of 12.5% per annum. Of this amount, as of September 30, 2003, $120 is classified as a current accounts receivable while $52 is classified as a long term other asset. The Company calculates imputed interest income at 12.5% per annum on the adjusted balance on a prospective basis. While the Company currently believes that the receivable is fully collectible, it is reasonably possible that the note will be collected at a slower or faster rate than estimated or that a portion of the note will turn out to be uncollectible. An additional $5 is receivable from other parties. As of September 30, 2003, the Company had a $880 receivable from the Trust plus $140 of accrued interest. Included in this receivable is $85, which the Company has billed the Trust for the nine month period ended September 30, 2003, representing reimbursement of certain general and administrative expenses incurred by the Company in providing administrative and financial support to the Trust for these periods. The collection of the receivable is solely dependent upon the success or favorable settlement of the Patent Litigation. In view of the summary judgment granted to the defendants in the Patent Litigation on February 11, 2003, an allowance for the full amount of the receivable was recorded as of September 30, 2003. The Company has not recorded the accrued interest as income. 9. Accrued Expenses (In thousands) Sept. 30, 2003 Dec. 31, 2002 -------------------------------------------------------------------------------- Salaries, commissions, and other benefits $67 $50 Accrued professional fees 125 136 Other 8 21 ----------------------------------------------- -------------------------------- $200 $207 ================================================================================ 10. Pro Forma Financial Information (Unaudited) The accompanying unaudited condensed pro forma statement of operations of the Company for the nine month period ended September 30, 2003 gives effect to the acquisition of the Interests as if it had occurred on January 1, 2003. The pro forma financial information is not necessarily indicative of the operating results that would have occurred had the acquisition of the Interests been consummated as of January 1, 2003, nor is the information necessarily indicative of future operating results. 10 The CattleSale Company and Subsidiaries Pro Forma Statement of Operations For the nine months ended September 30, 2003 ($'s in 000's)

Notes to the Pro Forma Statement of Operations (1) Reflects the actual results of the Interests for the period January 1, 2003 through February 24, 2003. (2) Reflects amortization expense on the fair value of the Interests' fixed assets acquired for the period January 1, 2003 through February 24, 2003. (3) Assumes 19,577,894 shares of common stock were outstanding for the entire period of January 1, 2003 through June 30, 2003. (4) Assumes 2,700,000 shares of preferred stock were outstanding for the entire period of January 1, 2003 through June 30, 2003. 11 11. Issuance of Stock Warrants On July 1, 2003, the Company entered into an agreement with a public relations firm to provide corporate communications and public relations services for the Company to better, more fully and more effectively deal and communicate with its shareholders and the investment banking community. As part of the agreement, among other things, the Company issued fully vested warrants for 400,000 shares of the Company's common stock at an exercise price of $.20 per share. The warrants expire on July 1, 2007. During the third quarter, the Company recorded an expense of $55 related to the issuance of the warrants. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (for the three and nine months ended September 30, 2003 and 2002) ($ in thousands) Results of Operations For the quarter and nine month period ended September 30, 2003, the Company reported a net loss of $420 and $1,350, an operating loss of $586 and $1,531, recorded revenue of $378 and $898, yielding a gross profit of $12 and $22, and a gross profit margin of approximately 3.1% and 2.4%, respectively. For the same periods, the Company reported non-operating income of approximately $166 and $181, respectively, which included unclaimed bankruptcy checks of approximately $160. For the quarter and nine month period ended September 30, 2002, the Company reported a net loss of $716 and $3,190, respectively. For the same periods, the Company reported an operating loss of $619 and $1,808, respectively. Non-operating income (expense) for the quarter and nine month period ended September 30, 2002, was approximately $(97) and $(394), respectively, and consisted of interest income of $24 and $38, respectively, imputed interest of $15 and $43, respectively, and foreign currency transaction gains/(losses) of $28 and $(269), respectively, primarily related to the liability for the pension benefits and other post employment obligations for all employees of the Company's German subsidiary who did not transfer to the buyer of the Company's European operations in June 2000 at the time of the Sale. Also included was a loss of $0 and $42, respectively, for the quarter and nine month period ended September 30, 2002, representing the equity in loss of a limited partnership. Additionally, a loss of $164 for both the quarter and nine months ended September 30, 2002, respectively, was included representing the equity in loss of a patent litigation trust. Financial Condition During the first nine months of 2003, the Company's cash and cash equivalents decreased approximately $1,053 as a result of the payment of current operating expenses for the first nine months of 2003 and transaction costs of approximately $150 associated with the acquisition described in Note 3 to the Company's consolidated financial statements. As of September 30, 2003, the Company had cash and cash equivalents of approximately $183. While the Company has a loan receivable from the Dynacore Patent Litigation Trust (the "Trust") of approximately $880 plus accrued interest of approximately $140, virtually the only source of recovery would be from net proceeds of certain patent litigation which the Trust most likely will not receive in the near future, if at all. Subsequent to the end of the third quarter, in November 2003, the company received short term interim financing of $75. While the company is seeking additional "bridge" investments to fund its operations until more longer term capital investments are received, if at all, there can be no assurance that additional short term financing will be received. The Company does not believe that it will have sufficient cash resources to satisfy its cash requirements for 2003 without an infusion of additional cash. While the Company is actively exploring various opportunities, there can be no assurance that additional capital will be available or that the Company will be able to fulfill its obligations. 12 Cautionary Statement Regarding Risks and Uncertainties This Quarterly Report on Form 10-Q contains "forward-looking statements" about the business, financial condition and prospects of the Company which are intended to be covered by the safe harbors created by Section 27A of the Securities Act of 1993, as amended and Section 21E of the Securities Exchange Act of 1934. All statements that are not historical facts, including statements about management's beliefs or expectations, are forward looking statements. When used in this Quarterly Report on Form 10-Q, the words "believes," "estimates," "plans," "expects," "will," "may," "intends" and "anticipates," and similar expressions as they relate to the Company or its management, are intended to identify forward-looking statements. The Company's actual results could differ materially from those indicated by the forward looking statements because of various risks and uncertainties, including, without limitation, changes in competition, economic conditions, new product development, changes in tax and other governmental rules and regulations applicable to the Company and other risks indicated in the Company's filings with the Securities and Exchange Commission and normal business uncertainty. These risks and uncertainties are beyond the ability of the Company to control, and in many cases, the Company cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. While management believes that its assumptions are reasonable at the time forward looking statements were made, it is impossible to predict the actual outcome of numerous factors, and, therefore, undue reliance should not be placed on such statements. Forward looking statements speak only as of the date they are made and the Company does not undertake the obligation to update such statements in light of new information or future events that involve inherent risks and uncertainties. Item 3. Quantitative and Qualitative Disclosures About Market Risk None. Item 4. Controls and Procedures (a) Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including David S. Geiman and Phillip P. Krumb, the Company's chief executive officer and chief financial officer, respectively, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, Messrs. Geiman and Krumb concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic filings with the Securities and Exchange Commission. (b) There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date the Company carried out this evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 99.1 Certification of the Chief Executive Officer and Chief Financial Officer 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 filed during the quarter ended September 30, 2003 There were no reports on Form 8-K filed during the quarter which ended September 30, 2003. 14 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE CATTLESALE COMPANY (Registrant) DATE: November 14, 2003 /s/ Phillip P. Krumb Phillip P. Krumb Chief Financial Officer (Chief Accounting Officer) 15 Exhibit 99.1 CERTIFICATION I, David S. Geiman, Company, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The CattleSale Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2003 /s/ David S. Geiman Name: David S. Geiman Title: Chief Executive Officer 16 Exhibit 99.1 CERTIFICATION I, Phillip P. Krumb, Company, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The CattleSale Company; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2003 /s/ Phillip P. Krumb Name: Phillip P. Krumb Title: Chief Financial Officer

CATTLESALE CO 10-Q