U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark one)
__X__ Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 2002.
_____ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _________ to _________
Commission File Number 1-16165
AQUACELL TECHNOLOGIES, INC.
(Exact Name of Small Business Issuers as Specified in its Charter)
Delaware 33-0750453
(State of Incorporation) (IRS employer identification number)
10410 Trademark Street
Rancho Cucamonga, CA 91730
(Address of Principal Executive Offices)
(909) 987-0456
(Issuer's Telephone Number, Including Area Code)
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 _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of Securities under a plan confirmed
by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $.001 par value 8,701,224 shares issued and
outstanding as of February 10, 2003.
Transitional Small Business Disclosure Format (check one):
Yes _____ No __X__
AQUACELL TECHNOLOGIES, INC.
FORM 1O-QSB
FOR THE QUARTER ENDED DECEMBER 31, 2002
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
PAGE
Item 1 Financial Statements:
Condensed Consolidated Balance Sheet as of December 31,2002..... 1
Condensed Consolidated Statements of Operations for the
three and six month periods ended December 31, 2002 and 2001.... 2
Condensed Consolidated Statements of Cash Flow for the
six month periods ended December 31, 2002 and 2001.............. 3
Notes to Condensed Consolidated Financial Statements............ 4
Item 2 Managements Discussion and Analysis:............................ 7
Forward-Looking Statements...................................... 7
Overview........................................................ 7
Results of Operations........................................... 7
Liquidity and Capital Resources................................. 8
PART II- OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders............. 9
Item 6 Exhibits and Reports on Form 8-K................................ 9
Signature.............................................................. 9
i
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 2002
(Unaudited)
ASSETS
Current assets:
Cash........................................................ $ 2,000
Notes receivable, including accrued interest of $57,000..... 294,000
Accounts receivable, net of allowance of $4,000............. 449,000
Inventories................................................. 112,000
Prepaid expenses and other current assets................... 101,000
--------------
Total current assets .................................. 958,000
--------------
Property and equipment, net ..................................... 54,000
--------------
Other assets:
Goodwill.................................................... 1,114,000
Investments................................................. 274,000
Patents, net ............................................... 109,000
Security deposits .......................................... 14,000
--------------
Total other assets .................................... 1,511,000
--------------
$ 2,523,000
--------------
--------------
LIABILITIES
Current liabilities:
Accounts payable ........................................... $ 747,000
Accrued expenses ........................................... 330,000
Loans payable to finance company............................ 282,000
Customer deposits........................................... 32,000
Current portion of long-term debt........................... 4,000
Loans payable to related parties............................ 68,000
--------------
Total current liabilities 1,463,000
Loan-term debt, net of current portion........................... 5,000
--------------
Total liabilities...................................... 1,468,000
--------------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.00l;
10,000,000 shares authorized; no shares issued.............. -
Common stock, par value $.001;
40,000,000 shares authorized; 8,601,224 shares
issued and outstanding...................................... 9,000
Additional paid-in capital....................................... 12,833,000
Accumulated deficit.............................................. (11,250,000)
--------------
1,592,000
Unamortized deferred compensation................................ (537,000)
--------------
Total stockholders' equity............................. 1,055,000
--------------
$ 2,523,000
--------------
--------------
See notes to condensed consolidated financial statements.
1
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------- --------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenue:
Net sales........................... $ 204,000 $ 84,000 $ 1,134,000 $ 152,000
Rental income....................... 2,000 2,000 4,000 4,000
------------ ------------ ------------ ------------
206,000 86,000 1,138,000 156,000
Cost of sales......................... 139,000 35,000 604,000 63,000
------------ ------------ ------------ ------------
Gross profit.......................... 67,000 51,000 534,000 93,000
------------ ------------ ------------ ------------
Selling, general and
administrative expenses:
Salaries and wages................ 283,000 234,000 593,000 467,000
Legal, accounting and other
professional expenses........... 30,000 104,000 104,000 267,000
Stock based compensation.......... 55,000 260,000 100,000 450,000
Impairment loss on investment in
Corbett Water Technologies, Inc. - 1,226,000 - 1,226,000
Other............................... 245,000 273,000 522,000 517,000
------------ ------------ ------------ ------------
613,000 2,097,000 1,319,000 2,927,000
------------ ------------ ------------ ------------
Loss from operations before other
(expense) income.................... (546,000) (2,046,000) (785,000) (2,834,000)
------------ ------------ ------------ ------------
Other (expense) income:
Interest expense.................... (18,000) - (22,000) -
Interest income..................... 14,000 35,000 32,000 75,000
Other income........................ - 100,000 - 100,000
------------ ------------ ------------ ------------
(4,000) 135,000 10,000 175,000
------------ ------------ ------------ ------------
Net loss attributable to common
stockholders....................... $ (550,000) $(1,911,000) $ (775,000) $(2,659,000)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss per common share---
basic dilute....................... $ (0.06) $ (0.23) $ (0.09) $ (0.33)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average shares outstanding--
basic and diluted.................. 8,601,000 8,160,000 8,601,000 7,947,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
See notes to condensed consolidated financial statements.
2
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31,
--------------------------
2002 2001
------------ ------------
Cash flows from operating activities:
Net loss........................................... $ (775,000) $(2,659,000)
Adjustment to reconcile net loss to net cash
used in operating activities;
Impairment loss on investment in
Corbett Water Technologies, Inc.............. - 1,226,000
Stock based compensation....................... 100,000 459,000
Depreciation and amortization.................. 31,000 27,000
Changes in:
Accounts receivable.............................. (258,000) (31,000)
Accrued interest receivable...................... (32,000) 27,000
Prepaid expenses and other current assets........ 115,000 1,000
Inventories...................................... (10,000) (2,000)
Accounts payable................................. 29,000 222,000
Accrued expenses................................. 416,000 130,000
Customer deposits................................ 16,000 -
------------ ------------
Net cash used in operating activities.......... (368,000) (600,000)
------------ ------------
Cash flows from investing activities:
Notes issued for purchase of property and
equipment, net of payments..................... 9,000 -
Collections on notes receivable.................. - 317,000
Purchase of property and equipment............... (11,000) (4,000)
------------ ------------
Net cash provided by (used in) investing
activities................................... (2,000) 313,000
------------ ------------
Cash flows from financing activities:
Proceeds of loans from finance company........... 438,000 -
Payments on loans from finance company........... (156,000) -
Loans and advances from related parties, net..... 39,000 (4,000)
Net cash provided by (used in)
financing activities......................... 321,000 (4,000)
------------ ------------
Decrease in cash................................... $ (49,000) $ (291,000)
Cash, beginning of period.......................... 51,000 298,000
------------ ------------
Cash, end of period................................ $ 2,000 $ 7,000
------------ ------------
------------ ------------
Supplemental disclosure of cash flow information:
Cash paid for interest........................... $ 10,000 $ -
Supplemental schedule of non-cash investing
and financing activities:
Issuance of common stock in connection
with investment.............................. $ - $ 1,500,000
Issuance of common stock and warrants for
services to the company...................... $ 43,000 $ 525,000
Principal payments on notes receivable by
conversion of accrued officers salaries..... 284,000 $ -
Retirement of 82,422 shares of treasury stock.. $ 251,000 $ -
See notes to condensed consolidated financial statements.
3
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002 (Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements include
the accounts of the company and its wholly owned subsidiaries.
All significant intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. The results of
operations for the six months ended December 31, 2002 are not
necessarily indicative of the results to be expected for the full
year. For further information, refer to the Company's annual
report filed on Form 10-KSB for the year ended June 30, 2002.
NOTE B - NOTES RECEIVABLE
At December 31, 2002, the notes receivable consist of
$50,000 from a non-affiliated party and $552,000 from non-
director/employee stockholders and entities owned by them at an
annual interest rate of 8%. Notes totaling $1,750,000 maturing
August 16, 2001 were extended to September 16, 2001. At
September 16, 2001, the notes were restructured into twelve-month
installment notes collateralized by marketable securities with
the first installment due October 16, 2001.
Officers/stockholders of Aquacell, have personally guaranteed up
to $1,750,000 of the notes and have offered as collateral
designated assets and have paid $852,000 in principal and $32,000
in interest through contribution of salaries in the amount of
$633,000 and surrender of 82,422 shares of the Company's common
stock, valued at $251,000, at December 31, 2002. Such shares
were recorded as treasury stock and retired by the Company at
December 31, 2002. During December 2002 the
officers/stockholders contributed accrued salaries totaling
$131,000 as payment under the guaranty provisions of the notes
receivables. The Company has recorded an adjustment to reflect a
reduction in the estimated fair value of these notes of $365,000
at June 30, 2001. The balance of the notes are unsecured and
matured between March 2002 and October 2002. The note that
matured in October 2002 was extended for one year. Interest
receivable at December 31, 2002 amounted to $7,000 from a non-
affiliated party and $50,000 from non-director/employee
stockholders and entities owned by them.
NOTE C - INVENTORIES
Inventories consist of the following at December 31, 2002:
Raw materials......................... $ 80,000
Work in progress...................... 32,000
----------
$ 112,000
----------
----------
4
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002 (Unaudited)
NOTE D - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows at December
31, 2002:
Furniture and fixtures........................ $ 35,000
Equipment - office............................ 95,000
Machinery and equipment....................... 122,000
Rental units.................................. 9,000
Leasehold improvements........................ 10,000
Truck......................................... 11,000
282,000
Less accumulated depreciation................. 228,000
----------
$ 54,000
----------
----------
NOTE E - LOANS PAYABLE TO FINANCE COMPANY
On August 24, 2002 the Company entered into a credit
facility agreement to finance the receivables of its largest
customer, Corbett Water Technologies, Inc. The agreement is for
a one-year term, and calls for interest at the rate of 18 1/4%
per annum in addition to the payment of certain processing fees.
Payments are made directly to the lender by Corbett Water and the
financing is collateralized by the Company's accounts receivable
from Corbett Water Technologies, Inc. (See Note H.)
NOTE F - LOANS PAYABLE TO RELATED PARTIES
At December 31, 2002 the loans payable to related parties
consist of unsecured demand interest free loans of $68,000.
NOTE G - LONG TERM DEBT
At December 31, 2002 long-term debt consists of an
installment note, secured by a truck, payable in monthly payments
of $342 through February 2005. Maturities on the note are as
follows:
Twelve months ending December 31, 2003........... $ 4,000
December 31, 2004........... 4,000
December 31, 2005........... 1,000
-------
$ 9,000
-------
-------
NOTE H - EQUITY TRANSACTIONS
In connection with a one-year credit facility agreement
entered into in August 2002, the lender was granted warrants to
purchase 160,000 shares of common stock, at an exercise price of
$0.78 per share, whose total value is estimated at approximately
$43,000. The estimated value of the warrants is being amortized
to expense over one year. Amortization for the six months ended
December 31, 2002 was $18,000.
On December 4, 2002 stockholders approved the adoption of
the Company's 2002 Directors Stock Option Plan. The plan covers
an aggregate of 500,000 shares of the Company's common stock for
non-employee directors.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
When used in this Form 10-QSB and in future filings by the
Company with the Commission, statements identified by the words
"believe", "positioned", "estimate", "project", "target",
"continue", "will", "intend", "expect", "future", "anticipates",
and similar expressions express management's present belief,
expectations or intentions regarding the Company's future
performance within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to
place undue reliance on any such forward-looking statements, each
of which speaks only as of the date made. Such statements are
subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and
those presently anticipated or projected. The Company has no
obligations to publicly release the result of any revisions which
may be made to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring
after the date of such statements.
Overview
The following discussions and analysis should be read in
conjunction with the Company's condensed consolidated financial
statements and the notes presented following the condensed
consolidated financial statements. The discussion of results,
causes and trends should not be construed to imply any conclusion
that such results or trends will necessarily continue in the
future.
For the six months ended December 31, 2002 we increased
revenues by 629% to $1,138,000 while cutting our per share losses
by 73% and decreasing our selling, general and administrative
expenses by 55% to $1,319,000. This increase in revenues is
primarily attributable to the growing acceptance of our flagship
Purific Water Cooler in the marketplace. We believe that through
our marketing efforts that sales of Purific coolers will continue
to grow with an increase of sales in our other products and
emerging product lines.
During late September, Corbett Water Technologies, Inc., the
exclusive distributor of our Purific Water Cooler, made a
decision to restructure its business model, reduced its sales
staff and has not implemented a plan for national marketing, as
was the clear intent of our Distribution Agreement. We are
restructuring our exclusive relationship with Corbett to
allow us to implement a national marketing program.
Results of Operations
During the six months ended December 31, 2002 on a
consolidated basis, we increased revenues by 629% to $1,138,000
as compared to $156,000 for the similar period of the preceding
year. Net loss on a consolidated basis for the six months ended
December 31, 2002 was decreased by 71% to $775,000 or $0.09 per
share, as compared to $2,659,000 or $0.33 per share for the same
period of the prior year. The decrease in the loss is primarily
attributable to the increase in revenues, as well as a reduction
in selling, general and administrative expenses of $1,608,000 or
55%.
Operating expenses consisting of salaries and wages and
other selling, general and administrative expenses, exclusive of
depreciation and amortization of $31,000 were $1,084,000 for the
six months ended December 31, 2002 as compared to $957,000 for
the comparable six months of the prior year. In addition, legal,
accounting and other professional expenses for the six months
ended December 31, 2002 were $104,000 compared to $267,000 for
the six months ended December 31, 2001. This reduction was
partially attributable to a net reduction of $55,000 in accrued
consulting fees written off. Stock based compensation was
$100,000 for the six months ended December 31, 2002 as compared
to $450,000 for the same period of the prior year.
6
Liquidity and Capital Resources
During the six months ended December 31, 2002 we financed
our operations primarily from the collections of receivables in
the normal course of business and the financing of certain
receivables due from Corbett Water Technologies. A net increase
in loans from officers and others amounted to $39,000 during the
period.
Cash used by operations during the six months ended December
31, 2002 amounted to $368,000. Net loss of $775,000 was reduced
by non-cash stock based compensation in the amount of $100,000
and depreciation and amortization of $31,000. Cash used by
operations was further increased by an increase in accounts
receivable in the amount of $258,000 and decreased by accounts
payable and accrued expenses in the amount of $445,000. Net loss
was further decreased by net changes in accrued interest
receivable, prepaid expenses, customer deposits, and inventories
amounting to $89,000.
During January 2003, the Company borrowed $100,000 from an
unrelated party at 18% interest for a period of ninety days. As
consideration for the availability of short term financing the
Company granted the Lender 100,000 shares of its restricted
common stock.
We have granted warrants, subsequent to our initial public
offering in connection with consulting, marketing, and financing
agreements that may generate additional capital of up to
approximately $5,500,000 if exercised.
Cash used in investing activities during six months ended
December 31, 2002 represented expenditures for property and
equipment in the amount of $11,000 decreased by notes issued for
the purchase of equipment in the amount of $9,000.
The principal payments of $284,000, which consisted of
accrued officers' salaries, reduced the balance on the $1,750,000
installment notes receivable to $460,000 at December 31, 2002.
Management believes that the collections on notes
receivable, and cash flows expected to be generated from future
operations will be sufficient to meet presently anticipated needs
for working capital and capital expenditures through at least the
next 12 months; however, there can be no assurance in that
regard. The Company presently has no material commitments for
future capital expenditures.
7
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the period covered by this Report on Form 10-QSB the
Company held its annual meeting of stockholders on December 4,
2002 and the following matters were submitted to a vote of
security holders through the solicitation of proxies:
(a) A matter voted upon at the meeting was the election of
two Company directors, to wit, Karen B. Laustsen and
Dr. William DiTuro. The Company's three other
directors, namely James C. Witham, Glenn A.
Bergenfield, and Gary S. Woff continued in office after
the meeting. In addition, the appointment of Wolinetz,
Lafazan & Company, PC as the Company's independent
auditors and the adoption of the Company's 2002
Directors Stock Option Plan were other matters voted
upon at the meeting.
(b) The election of Ms. Laustsen and Dr. DiTuro as
directors was voted upon at the meeting. Each of the
nominees received 6,411,753 votes in favor of election
and no votes abstained. Wolinetz, Lafazan & Company, PC
was elected as the Company's independent auditors
receiving 6,378,252 votes and 10,232 votes abstained.
The 2002 Directors Stock Option Plan was voted upon at
the meeting and was passed receiving 4,307,149 votes
and 115,250 abstained. There were no broker non-votes
recorded.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
SIGNATURE
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.
AquaCell Technologies, Inc.
------------------------------
Registrant
Date: February 14, 2003 /s/ Gary S. Wolff
------------------------------
Gary S. Wolff
Chief Financial Officer
8
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AquaCell
Technologies, Inc. (the "Company") on Form 10-QSB for the second
fiscal quarter ended December 31, 2002 as filed with the
Securities and Exchange Commission (the "Report"), each of the
undersigned, in the capacities and on the dates indicated below,
hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. the Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
2. the information contained in the Report fairly
presents, in all material respects, the financial
condition and result of operations of the Company.
Date: February 14, 2003 /s/ James C. Witham
-------------------------------
Name: James C. Witham
Title: Chief Executive Officer
Date: February 14, 2003 /s/ Gary S. Wolff
-------------------------------
Name: Gary S. Wolff
Title: Chief Financial Officer
9
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, James C. Witham, Chief Executive Officer of AquaCell
Technologies, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
AquaCell Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officer 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 we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days of 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 of the Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Date: February 14, 2003 /s/ James C. Witham
-------------------------------
Name: James C. Witham
Title: Chief Executive Officer
10
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Gary S. Wolff, Chief Financial Officer of AquaCell
Technologies, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
AquaCell Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officer 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 we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days of 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 of the Evaluation
Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Date: February 14, 2003 /s/ Gary S. Wolff
-------------------------------
Name: Gary S. Wolff
Title: Chief Financial Officer
11