U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 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: 1-15087
I.D. SYSTEMS, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 22-3270799
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE UNIVERSITY PLAZA, HACKENSACK, NEW JERSEY 07601
(Address of principal executive offices) (Zip Code)
(201) 996-9000
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
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 issuer 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 issuer 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:
The number of shares outstanding of the Issuer's Common Stock, $0.01 par value,
as of the close of business on May 1, 2003 was 6,860,693.
INDEX
I.D. SYSTEMS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS. Page
----
Condensed Balance Sheets as of December 31, 2002
and March 31, 2003 (unaudited) 1
Condensed Statements of Operations (unaudited) -
for the three months ended March 31, 2002 and 2003 2
Condensed Statements of Cash Flows (unaudited) -
for the three months ended March 31, 2002 and 2003 3
Notes to Condensed Financial Statements 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6
ITEM 3. CONTROLS AND PROCEDURES 8
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES 10
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
I.D. SYSTEMS, INC.
CONDENSED BALANCE SHEETS
DECEMBER 31, 2002 MARCH 31, 2003
(UNAUDITED)
---------------- --------------------
ASSETS
Cash and cash equivalents $ 3,758,000 $ 2,919,000
Investments 3,031,000 3,592,000
Accounts receivable, net 1,114,000 1,260,000
Inventory 1,471,000 1,073,000
Investment in sales type leases 159,000 263,000
Interest receivable 73,000 97,000
Officer loan 10,000 10,000
Prepaid expenses and other current assets 147,000 70,000
---------------- --------------------
Total current assets 9,763,000 9,284,000
Investments 968,000 960,000
Fixed assets, net 679,000 683,000
Investment in sales type leases 522,000 918,000
Installment receivable - non-current portion 867,000 818,000
Officer loan 41,000 39,000
Deferred contract costs -- 63,000
Other assets 107,000 107,000
---------------- --------------------
$ 12,947,000 $ 12,872,000
=============== ===================
LIABILITIES
Accounts payable and accrued expenses $ 1,205,000 $ 516,000
Long term debt - current portion -- 182,000
Line of credit 137,000 137,000
Deferred revenue 26,000 26,000
Other current liabilities 100,000 100,000
---------------- --------------------
Total current liabilities 1,468,000 961,000
Long term debt -- 789,000
Deferred rent 66,000 71,000
---------------- --------------------
1,534,000 1,821,000
---------------- --------------------
STOCKHOLDERS' EQUITY
Preferred stock; authorized 5,000,000 shares, $.01
par value; none issued Common stock; authorized
15,000,000 shares, $.01 par value; issued and
outstanding 6,799,000 shares and 6,811,000 shares 68,000 68,000
Additional paid-in capital 22,042,000 22,065,000
Treasury stock; 40,000 shares at cost (113,000) (113,000)
Accumulated deficit (10,584,000) (10,969,000)
---------------- ---------------------
11,413,000 11,051,000
---------------- ---------------------
$ 12,947,000 $ 12,872,000
================ =====================
See accompanying notes
1
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2002 2003
-------------- ---------------
Revenues $ 831,000 $ 1,609,000
Cost of Revenues 375,000 755,000
-------------- ---------------
Gross Profit 456,000 854,000
Selling, general and administrative expenses 883,000 1,083,000
Research and development expenses 280,000 232,000
-------------- ---------------
Loss from operations (707,000) (461,000)
Interest income 51,000 86,000
Interest expense (1,000) (10,000)
-------------- ---------------
NET LOSS $ (657,000) $ (385,000)
============== ===============
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.10) $ (0.06)
============== ===============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-
BASIC AND DILUTED LOSS PER SHARE 6,444,000 6,804,000
============== ===============
See accompanying notes
2
I.D. SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2002 2003
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (657,000) $ (385,000)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization 44,000 13,000
Deferred rent expense 6,000 5,000
Bad debt expense -- 2,000
Deferred contract costs -- (63,000)
Changes in:
Accounts receivable (552,000) (148,000)
Inventory (314,000) 398,000
Prepaid expenses and other assets 8,000 77,000
Investment in sale type leases -- (500,000)
Installment receivable - non-current portion -- 49,000
Accounts payable and accrued expenses 274,000 (689,000)
--------------- --------------
Net cash used in operating activities (1,191,000) (1,241,000)
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (74,000) (17,000)
Purchases of investments (3,081,000) (1,165,000)
Increase in interest receivable (44,000) (24,000)
Maturities of investments 2,549,000 574,000
Amortization of (discount) premium on investments (6,000) 38,000
Officer loan -- 2,000
--------------- --------------
Net cash used in investing activities (656,000) (592,000)
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of lease obligations (3,000) --
Proceeds from term loan, net of repayment -- 971,000
Proceeds from exercise of stock options 153,000 23,000
Net proceeds from private placement 6,145,000 --
--------------- --------------
Net cash provided by financing activities 6,295,000 994,000
--------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH 4,448,000 (839,000)
EQUIVALENTS
Cash and cash equivalents - beginning of period 2,426,000 3,758,000
--------------- --------------
CASH AND CASH EQUIVALENTS - END OF $6,874,000 $2,919,000
PERIOD
=============== ==============
See accompanying notes
3
I.D. SYSTEMS, INC.
Notes to Condensed Financial Statements
March 31, 2003
NOTE A - BASIS OF REPORTING
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, such
statements include all adjustments (consisting only of normal recurring items)
which are considered necessary for a fair presentation of the financial position
of I.D. Systems, Inc. (the "Company") as of March 31, 2003, the results of its
operations for the three-month periods ended March 31, 2002 and 2003 and cash
flows for the three-month periods ended March 31, 2002 and 2003. The results of
operations for the three-month period ended March 31, 2003 are not necessarily
indicative of the operating results for the full year. It is suggested that
these financial statements be read in conjunction with the financial statements
and related disclosures for the year ended December 31, 2002 included in the
Company's Annual Report.
NOTE B - NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic income (loss) per share is based on the weighted average number of common
shares outstanding during each period. Diluted income (loss) per share reflects
the potential dilution assuming common shares were issued upon the exercise of
outstanding options and warrants and the proceeds thereof were used to purchase
outstanding common shares. For the three-month periods ended March 31, 2002 and
2003, the basic and diluted weighted average shares outstanding are the same
since the effect from the potential exercise of outstanding stock options would
have been anti-dilutive.
NOTE C - REVENUE RECOGNITION
The Company's revenues are derived from contracts with multiple element
arrangements, which include the Company's system, training and technical
support. Revenues are recognized as each element is earned based on the relative
fair value of each element and when there are no undelivered elements that are
essential to the functionality of the delivered elements. The Company's system
is typically implemented by the customer or a third party and, as a result,
revenue is recognized when title passes to the customer, which usually is upon
delivery of the system, provided all other revenue recognition criteria are met.
Training and technical support revenues are generally recognized at time of
performance.
The Company also enters into post-contract maintenance and support agreements.
Revenue is recognized over the service period and the cost of providing these
services is expensed as incurred.
The Company also derives revenues under leasing arrangements. Such arrangements
provide for monthly payments covering the system sale, maintenance and interest.
These arrangements meet the criteria to be accounted for as sales-type leases
pursuant to Statement of Financial Accounting Standards No. 13, "Accounting for
Leases". Accordingly, the system sale is recognized upon delivery of the system,
provided all other revenue recognition criteria are met. Upon the recognition of
revenue, an asset is established for the "investment in sales-type leases".
Maintenance revenue and interest income are recognized monthly over the lease
term. The Company recognized $552,000 of system sales during the quarter ended
4
March 31, 2003 pursuant to such arrangements. These arrangements provide for
sixty equal monthly payments and interest has been imputed at approximately 6%.
The Company recognized $1,536,000 of system sales in 2002 in connection with an
installment sale. The arrangement provided for a $470,000 upfront payment and
equal monthly payments of approximately $26,000 through November 2007, which
include principal, imputed interest at approximately 7% and approximately $5,000
of maintenance, which is recognized as revenue monthly. $188,000 of the system
sales is classified as accounts receivable and $818,000 is classified as
"installment receivable - noncurrent portion" at March 31, 2003 in the
accompanying financial statements.
NOTE D - STOCK-BASED COMPENSATION
The Company accounts for stock-based employee compensation under Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations. The Company has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure", which was
released in December 2002 as an amendment of SFAS No. 123. The following table
illustrates the effect on net income and earnings per share if the fair value
based method had been applied to all awards.
THREE MONTHS ENDED MARCH 31,
----------------------------
2002 2003
--------- -------
Reported net loss $ (657,000) $ (385,000)
Stock-based employee compensation expense included in
reported net loss, net of related tax effects 0 0
Stock-based employee compensation determined under the
fair value based method, net of related tax effects (137,000) (140,000)
-------------- --------------
Pro forma net loss $ (794,000) $ (525,000)
============== ==============
Loss per share (basic and diluted):
As reported $(0.10) $(0.06)
============== ==============
Pro forma $(0.12) $(0.08)
============== ==============
NOTE E - LONG TERM DEBT
In January 2003, the Company closed on a five-year term loan for $1,000,000 with
a financial institution. Interest at the 30 day LIBOR plus 1.75% and principal
are payable monthly. To hedge the loan's floating interest expense, the Company
entered into an interest rate swap contemporaneously with the closing of the
loan and fixed the rate of interest at 5.28% for the five year term. The loan is
secured by all the assets of the Company.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the financial condition and results of
operations of I.D. Systems should be read in conjunction with I.D. Systems'
financial statements and notes thereto appearing elsewhere herein.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve a number of risks
and uncertainties. The following are among the factors that could cause actual
results to differ materially from the forward-looking statements: business
conditions and growth in the wireless tracking industries, general economic
conditions, lower than expected customer orders or variations in customer order
patterns, competitive factors including increased competition, changes in
product and service mix, and resource constraints encountered in developing new
products. The forward-looking statements contained in this MD&A regarding
industry trends, product development and liquidity and future business
activities should be considered in light of these factors.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
information expressed as a percentage of revenue:
THREE MONTHS ENDED
MARCH 31,
2002 2003
--------------- -----------
Revenues 100.0 % 100.0 %
Cost of Revenues 45.1 46.9
----------- ----------
Gross Profit 54.9 53.1
Selling, general and administrative expenses 106.3 67.3
Research and development expenses 33.7 14.4
------------- ----------
Loss from operations (85.1) (28.6)
Net interest income 5.9 4.7
------------- ----------
NET LOSS (79.2) (23.9)
============= ==========
6
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THREE MONTHS ENDED MARCH 31, 2002
REVENUES. Revenues were $1,609,000 in the three months ended March 31, 2003
compared to $831,000 in the three months ended March 31, 2002. The increase in
revenues in the quarter ended March 31, 2003 is attributable to increased sales
of the Company's Wireless Asset Net system for tracking and managing fleets of
industrial equipment. The Company's customer base now includes Archer Daniels
Midland, DaimlerChrysler, Deere & Co., Federal Aviation Administration, Ford
Motor Company, Golub Corporation, Hallmark Cards, Target Corporation, Toyota
Motor Company, the U.S. Navy and the U.S. Postal Service among others.
COST OF REVENUES. Cost of revenues were $755,000 in the three months ended March
31, 2003 compared to $375,000 in the three months ended March 31, 2002. As a
percentage of revenues, cost of revenues were 46.9% in the three months ended
March 31, 2003 as compared to 45.1% in the three months ended March 31, 2002.
Gross profit was $854,000 in the three months ended March 31, 2003 compared to
$456,000 in the three months ended March 31, 2002. As a percentage of revenues,
gross profit decreased to 53.1% in the three months ended March 31, 2003 from
54.9% in the three months ended March 31, 2002.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $1,083,000 in the three months ended March 31, 2003
compared to $883,000 in the three months ended March 31, 2002. This increase was
primarily attributable to an increase in sales and marketing, payroll expenses
and an increase in insurance premiums for the Company's director and officer
liability policy. As a percentage of revenues, selling, general and
administrative expenses decreased to 67.3% in the three months ended March 31,
2003 from 106.3% in the three months ended March 31, 2002.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
$232,000 in the three months ended March 31, 2003 compared to $280,000 in the
three months ended March 31, 2002. This decrease was attributable to the
completion of the Company's "universal system" of hardware and software for
tracking and managing fleets of industrial vehicles. The Company's research and
development efforts during the quarter ended March 31, 2003 were devoted
primarily to product enhancements. As a percentage of revenues, research and
development expenses decreased to 14.4% in the three months ended March 31, 2003
from 33.7% in the three months ended March 31, 2002.
NET INTEREST INCOME AND EXPENSE. Interest income was $86,000 in the three months
ended March 31, 2003 as compared to $51,000 in the three months ended March 31,
2002. This increase is attributable to interest income earned in connection with
sales type lease arrangements. The Company invests in investment grade
commercial paper and corporate bonds, which are classified as held to maturity.
Interest expense was $10,000 in the three months ended March 31, 2003 as
compared to $1,000 in the three months ended March 31, 2002. This increase is
attributable to the Company's working capital line of credit and its five-year
term loan.
NET LOSS. Net loss was $385,000 in the three months ended March 31, 2003 as
compared to net loss of $657,000 in the three-month period ended March 31, 2002.
This was due primarily to the reasons described above.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2003, the Company had $7,471,000 of cash, cash equivalents and
investments and $8,323,000 of working capital as compared to $7,757,000 and
$8,295,000, respectively, at December 31, 2002.
7
Net cash used in operating activities for the three months ended March 31, 2003
was $1,241,000 as compared to net cash used in operating activities of
$1,191,000 for the three months ended March 31, 2002. Net cash used in operating
activities in the three months ended March 31, 2003 was due to a net loss of
$385,000, an increase in accounts receivable of $148,000, an increase in
investment in sales type leases of $500,000 and a decrease in accounts payable
and accrued expenses of $689,000, offset by a decrease in inventory of $398,000.
Net cash used in operating activities in the three months ended March 31, 2002
was due to a net loss of $657,000, an increase in accounts receivable of
$552,000 and an increase in inventory of $314,000, offset by a decrease in
accounts payable and accrued expenses of $274,000.
Net cash used in investing activities for the three months ended March 31, 2003
was $592,000 as compared to net cash used in investing activities for the three
months ended March 31, 2002 of $656,000. Net cash used in investing activities
in the three months ended March 31, 2003 was primarily from purchases of
investments of $1,165,000 partially offset by maturities of investments of
$574,000. Net cash used in investing activities in the three months ended March
31, 2002 was for the purchases of investments of $3,081,000 and the purchases of
fixed assets of $74,000, offset by maturities of investments of $2,549,000.
Net cash provided by financing activities for the three months ended March 31,
2003 was $994,000 as compared to net cash provided by financing activities of
$6,295,000 for the three months ended March 31, 2002. Net cash provided by
financing activities in the three months ended March 31, 2003 was from the
proceeds, net of repayment of $971,000, received in connection with obtaining a
five-year term loan. Net cash provided by financing activities in the three
months ended March 31, 2002 was from the proceeds of $6,145,000 received in
connection with the sale of 821,250 shares of common stock and $153,000 received
from proceeds from exercise of stock options.
The Company believes it has sufficient cash, cash equivalents and investments
for the next twelve months of operations.
The Company believes its operations have not been and, in the foreseeable
future, will not be materially adversely affected by inflation or changing
prices.
RECENTLY ISSUED FINANCIAL STANDARDS
The Company believes that recently issued financial standards will not have a
significant impact on our results of operations, financial position or cash
flows.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures:
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in the reports
filed under the Exchange Act is accumulated and communicated to management,
including the Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
Within the 90 days prior to the filing of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation
of the Company's disclosure controls and procedures. Based upon and as of
8
the date of that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be
disclosed in the reports the Company files and submits under the Exchange
Act is recorded, processed, summarized and reported as and when required.
(b) Changes in Internal Controls:
There were no significant changes in the Company's internal controls or in
other factors that could have significantly affected those controls
subsequent to the date of the Company's most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99 Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended March
31, 2003.
9
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
I.D. Systems, Inc.
Dated: May 10, 2003 By: /s/ Jeffrey M. Jagid
-----------------------------------
Jeffrey M. Jagid
Chief Executive Officer
(Principal Executive Officer)
Dated: May 10, 2003 By: /s/ Ned Mavrommatis
-----------------------------------
Ned Mavrommatis
Chief Financial Officer
(Principal Financial Officer)
10
CERTIFICATIONS
I, Jeffrey M. Jagid, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of I.D. Systems, 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 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 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 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 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 officers 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: May 10, 2003 By: /s/ Jeffrey Jagid
-----------------------
Jeffrey M. Jagid
Chairman and Chief Executive Officer
11
I, Ned Mavrommatis, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of I.D. Systems, 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 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 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 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 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 officers 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: May 10, 2003 By: /s/ Ned Mavrommatis
-----------------------
Ned Mavrommatis
Chief Financial Officer
12