The fair value of options at the date of grant were estimated using the Black-Scholes option pricing model with the following assumptions:
Intangible assets consist primarily of acquired patented technology and trademarks. Intangible assets are amortized over their estimated useful lives which range from two to five years. The Company has no intangible assets with indefinite lives. The Company reviews intangible assets when indications of potential impairment exists, such as a significant reduction in cash flows associated with the assets. Intangible assets as of March 31, 2003 and 2002 are as follows:
Amortization of intangible assets was $80,000 and $88,000 for the quarter ended March 31, 2003 and 2002, respectively.
As of March 31, 2003, the estimated future amortization expense of intangible assets, in thousands, is as follows:
| 2003 | | 2004 | | 2005 | | 2006 | | 2007
and
thereafter |
$ | 238 | | | $ | 318 | | | $ | 318 | | | $ | 318 | | | $ | 513 |
(7) USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reporting periods. Actual results in the future could vary from the amounts derived from management's estimates and assumptions.
Part I
Item 1
(8) REVENUE RECOGNITION
The Company recognizes revenue from product sales at the time of shipment and when persuasive evidence of an arrangement exists, performance of the Company's obligation is complete, the price to the buyer is fixed or determinable, and collectibility is reasonably assured. In certain limited situations, customers have the right to return products. Such rights of return, have not precluded revenue recognition because the Company has a long history with such returns and accordingly provides a reserve.
(9) RECENT ACCOUNTING PRONOUNCEMENTS
In June, 2002, FASB issued SFAS No. 146, Accounting for Cost Associated with Exit or Disposal Activities. SFAS No. 146 nullifies previous guidance on accounting for costs associated with exit or disposal activities and requires a liability for these costs to be recognized and measured at its fair value in the period in which the liability is incurred. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. The Company did not exit or dispose of any activities during the first quarter of 2003.
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure. This Statement amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. This standard is effective for financial statements for fiscal years ending after December 15, 2002. The disclosure requirements of SFAS No. 148 have been implemented and are outlined in Note 4.
(10) SEGMENT INFORMATION
The Company has adopted the SFAS No. 131, Disclosures About Segments of an Enterprise and Related information. SFAS No. 131 requires financial and supplementary information to be disclosed on an annual and interim basis of each reportable segment of an enterprise. SFAS No. 131 also establishes standards for related disclosures about product and services, geographic areas and major customers. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief decision-making group, in making decisions how to allocate resources and assess performance. The Company's chief decision-maker is the chief executive officer.
Prior to January 1, 2002, the Company operated in a single segment. In 2002 the Company began to operate in two segments, Illumination and Optical Components.
The illumination segment develops and manufactures specialized illumination products for the inspection, machine vision, medical and military markets. Illumination products are sold both through distributors as well as directly to original equipment manufacturers (OEM's), the optical components segment develops and manufactures specialty optical fibers and phase masks used primarily in sensor, gyroscope and telecommunication equipment. Optical component products are sold primarily to original equipment manufacturers (OEM's).
The Company evaluates performance and allocates resources based on revenues and operating income (loss). The operating loss for each segment includes selling, research and development and expenses directly attributable to the segment. In addition, the operating loss includes amortization of acquired intangible assets, including any impairment of these assets and of goodwill. The Company's non-allocable overhead costs, which include corporate general and administrative expenses, are allocated between the segments based upon an estimate of costs associated with each segment. Segment assets include accounts receivable, inventory, machinery and equipment, goodwill and intangible assets directly associated with the product line segment.
Part I
Item 1
The Corporate assets include cash and cash equivalents, buildings and furniture and fixtures.
| | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended March 31, 2003 | | Quarter Ended March 31, 2002 |
| Illumination | | Optical Components | | Total | | Illumination | | Optical Components | | Total |
| Net sales | $ | 3,188 | | | $ | 396 | | | $ | 3,584 | | | $ | 2,597 | | | $ | 311 | | | $ | 2,908 | |
| Gross margin | | 1,057 | | | | (108 | ) | | | 949 | | | | 264 | | | | 60 | | | | 324 | |
| Operating loss | | (568 | ) | | | (1,457 | ) | | | (2,025 | ) | | | (1,858 | ) | | | (2,561 | ) | | | (4,419 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended March 31, 2003 | | Quarter Ended March 31, 2002 |
| Illumination | | Optical Components | | Corporate | | Total | | Illumination | | Optical Components | | Corporate | | Total |
| Total current assets | $ | 6,711 | | | $ | 536 | | | $ | 3,402 | | | $ | 10,649 | | | $ | 7,164 | | | $ | 400 | | | $ | 8,950 | | | $ | 16,514 | |
| Property, plant & equipment | | 790 | | | | 9,403 | | | | 13,139 | | | | 23,332 | | | | 818 | | | | 11,526 | | | | 13,127 | | | | 25,471 | |
| Intangible assets | | 1,705 | | | | - | | | | - | | | | 1,705 | | | | 2,285 | | | | - | | | | - | | | | 2,285 | |
| Goodwill | | 2,677 | | | | - | | | | - | | | | 2,677 | | | | 2,419 | | | | - | | | | - | | | | 2,419 | |
| Other assets | | 390 | | | | 60 | | | | 162 | | | | 612 | | | | 380 | | | | 45 | | | | 231 | | | | 656 | |
| $ | 12,273 | | | $ | 9,999 | | | $ | 16,703 | | | $ | 38,975 | | | $ | 13,066 | | | $ | 11,971 | | | $ | 22,308 | | | $ | 47,345 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Company's export sales are denominated in U.S. dollars. These sales are as follows:
| | | | | | | | | | |
| | | |
|
| Export sales by region (in thousands) | | | | | | | 2002 | | |
| United States | | $ | 2,140 | | | $ | 1,736 | | |
| Canada | | | 308 | | | | 250 | | |
| Europe | | | 792 | | | | 643 | | |
| Asia | | | 344 | | | | 279 | | |
| Total sales | | $ | 3,584 | | | $ | 2,908 | | |
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND OPERATING RESULTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. The company's actual results could differ materially from those set forth in the forward-looking statements. When the company use words such as "anticipate," "believe," "estimate," "expect," "intend," and other similar expressions, they generally identify forward-looking statements. Forward-looking statements include, for example, statements relating to acquisitions and related financial information, development activities, business strategy and prospects, future capital expenditures, sources and availability of capital, environmental and other regulations and competition. Investors should exercise caution in interpreting and relying on forward-looking statements since they involve known risks, uncertainties and other factors which are, in some cases, beyond the company's control and could materially affect our actual results, performance or achievements. Such factors include, without limitation: market conditions that could make it more difficult or expensive for the company to obtain the necessary capital to finance its research and development projects, operations, as well as its ability to refinance existing debt; the existence of other independent suppliers of optical fiber, who may have greater resources than the company; and the uncertainty that the company's significant investments in r&d will not result in products that achieve market acceptance. Additional such factors are discussed in the section entitled "certain factors affecting future operating results" on page 20 of the company's annual report on form 10-K for the fiscal year ended December 31, 2002.
Part I
Item 2
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached unaudited condensed consolidated financial statements and notes thereto and with our audited financial statements and notes thereto included in the company's annual report on form 10-k for the year ended December 31, 2002.
FISCAL QUARTERS ENDED MARCH 31, 2003 AND 2002
Net Sales
For the quarter ended March 31, net sales increased $0.7 million or 24% from $2.9 million in 2002 to $3.6 million in 2003. Illumination and specialty fiber revenues increased $1.0 million or 44% over the comparable period in 2002 which more than offest a modest decline in phase mask sales and the elimination of printer and recorder revenue resulting from the transfer of this product line to an outside distributor in the fourth quarter of 2002. Structured light laser sales from our Canadian subsidiary and initial shipments of recently announced major orders from our operation in Ireland (LEDs) and Singapore (advanced imaging systems) were the principal factors driving the illumination gain. For the first time, the Company realized meaningful specialty fiber sales to amplifier, sensor and gyroscope customers as compared to an absence of sales in the comparable quarter, as fibers were still largely under development.
Gross Profit
Gross margins improved from $0.3 million or 11% of sales in 2002 to $0.9 million or 26% of sales in 2003 as increased sales and lower manufacturing overhead contributed incremental profits of $0.4 million and $0.2 million, respectively.
Operating Expenses
Operating expenses decreased $1.8 million or 37% from $4.7 million in the first quarter of 2002 to $2.9 million in the first quarter of 2003. Research and development expenses declined $0.9 million or 50% due to reduced salaries, development costs and joint venture expenditures. The Company's focus on only those product development projects, which would positively impact near-term revenue, resulted in a 43% reduction in research and development headcount. Lower salaries and commissions combined with tighter marketing expenditures resulted in a $0.3 million or 25% decline in selling expenditures. General and administrative expenses were reduced $0.6 million or 34% due to lower salaries, travel and professional fees. Overall, the cost realignment programs implemented in the second half of 2002 eliminated 77 positions, reducing total headcount from 255 to 178, as of the quarter ended 2002 and 2003, respectively.
Interest Expense
Interest expense was $184,000 in the first quarter of fiscal 2003 compared to $85,000 in 2002 due to both higher interest rates and a higher level of borrowing.
Net Income (Loss)
Net loss for the three months ended March 31, 2003 decreased $2.4 million or 53% to $2.1 million compared to a net loss of $4.5 million for the same period in 2002.
Part I
Item 2
Provision (Benefit) for Income Taxes
The Company recorded a tax benefit of $150,000 as a result of a refund received from taxes paid on its Canadian subsidiary for the year ended December 31, 2000. The Company's historical operating losses raise doubt as to the realizability of the deferred tax assets. As a result, management has provided a valuation allowance for the net deferred tax assets that may not be realized.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2003, the Company was not in compliance with several provisions of its loan agreements and the loans have been classified as current liabilities.
Based upon its current forecast for 2003, the Company is pursuing various options to raise additional funds to finance operations through the end of 2003. The Company can give no assurances to the timing or terms of such arrangements, assuming it is able to consummate one or more of these options. If the Company is unable to raise sufficient funds through these options by the end of the second quarter of 2003, it will need to implement further cost reduction strategies, and the Company may not have adequate capital to sustain its current operations. Financing options in process and under consideration include: a new Canadian bank revolving credit facility that would refinance the existing Toronto Dominion facility, a Canadian government development loan, sale of real estate and/or a private placement of equity/debt securities. The Company expects to close several of these financing options by the end of the second quarter of 2003.
For the quarter ended March 31, 2003, unrestricted cash and cash equivalents decreased $2.4 million. Cash used in operating activities was $2.4 million in the first quarter of fiscal 2003 which primarily resulted from an operating loss of $2.1 million coupled with a $1.0 million decrease in working capital, excluding cash and debt, partially offset by a $0.7 million increase in depreciation and amortization.
Cash used in financing activities was $0.2 million as $1.0 million in proceeds from the TJJ Corporation Term Note was offset by repayments to Merrill Lynch and TD Bank of $0.9 million and $0.3 million, respectively.
Investing activities provided $0.3 million as proceeds from a land sale in Montreal offset nominal capital expenditures.
TJJ Corporation
On December 27, 2002, the Company entered into a Term Note agreement with TJJ Corporation. The Term Note is a $5 million, three-year note due December 26, 2005, secured by the Company's Salem headquarters and bears an interest rate of 8.5%. The note allows the Company to initially draw down $4,000,000 subject to a 2% commitment fee. The Company had the option to draw down the additional $1,000,000 subject to a 1.25% commitment fee in increments of $250,000 which was exercised in full in March 2003. In addition, the Company issued warrants to purchase 250,000 shares of the Company's common stock. The warrants can be exercised over a five-year period and each warrant can be exchanged for one share of common stock at a purchase price of $1.35 per share. As of March 31, 2003, $5,000,000 was outstanding under the Term Note Agreement. The Term Note was issued together with the warrants. The aggregate purchase price of the Term Note and the warrants ($5,000,000) was allocated between the Term Note and the warrants based upon their relative fair market values. The purchase price assigned to the Term Note and warrants was $4,753,256 and $246,744 respectively. The difference between the face amount of the Term Note, and the aggregate purchase price allocated to the Term Note $4,753,256 was recorded as debt discount, and is being amortized over the life of the Term Note. As of March 31, 2003, $5,000,000 was outstanding under the Term Note and the Company was not in compliance with the covenants of the Term Note due to cross default provisions related to the Toronto Dominion Bank credit facility.
Part I
Item 2
Merrill Lynch Financial Services
On May 19, 2001, the Company entered into a credit agreement with Merrill Lynch Financial Services, Inc. providing total borrowing availability up to $6,000,000. Initial proceeds were used to pay off the credit agreement between the Company and Wells Fargo Business Credit, Inc. The initial credit facility with Merrill Lynch consists of a line of credit of up to $2,500,000 and a reducing revolver in the amount of $3,500,000. On April 24, 2002, the Company entered into an amendment of the credit agreement, which increased the borrowing availability up to $7,000,000 by increasing the line of credit to $3,500,000 and maintaining the reducing revolver at $3,500,000.
On December 27, 2002, the Company entered into a second amendment of the credit agreement, which decreased the borrowing availability to $6,000,000 by decreasing the line of credit to $2,500,000 as of July 31, 2003 and maintaining the reducing revolver at $3,500,000. The line of credit is subject to review and renewal as of July 31, 2003. As of March 31, 2003, $2,749,994 was outstanding under the reducing revolver and $2,666,667 was outstanding under the line of credit. The outstanding principal balance of all advances under this credit facility bears interest at 2.5% over the one month LIBOR rate. As of March 31, 2003 the interest rate was approximately 3.8%.
The Company's obligations under this credit facility are secured by substantially all the Company's Salem assets, excluding real property, plus a pledge of restricted cash in the amount of $2,000,000. In addition, the Company is required to maintain a $7.8 million tangible net worth. The Company was not in compliance with all provisions of the credit agreement due to cross default provisions related to the Toronto Dominion Bank credit facility. The reducing revolver is a seven-year loan with monthly principal and interest payments.
Toronto Dominion BankOn December 5, 2000, StockerYale Canada amended its credit agreement with Toronto Dominion Bank. The credit agreement provides for (a) a $3,500,000 CDN operating line of credit of which $1,000,000 CDN must be offset by credit balances; (b) two mortgage loans for $2,020,000 CDN and (c) four term notes totaling up to $1,049,000 CDN. The line of credit bore interest at 1% over Toronto Dominion's prime rate, and required monthly payments of interest only, and was payable on demand.
In November 2002, Toronto Dominion Bank reduced the line of credit $1,500,000 CDN to $2,000,000 CDN and increased the interest rate from 1% over Toronto Dominion's prime rate to 3% over Toronto Dominion's prime rate for both short and long-term obligations. As of March 31, 2003, $1,035,166 CDN ($704,017 US) was outstanding under the line of credit and approximately $964,833 CDN ($656,183 US) was available for additional borrowings. The mortgage requires monthly principal payments of $10,797 CDN (approximately $7,200 US) and $1,111 CDN (approximately $698 US) plus interest at prime rate plus 3.0%. As of March 31, 2003, the outstanding balance on the mortgage loans was $1,535,517 CDN ($1,044,305 US). The four term loans require monthly principle payments of approximately $36,125 CDN ($22,694 US) plus interest at the prime rate plus 3.0%. As of March 31, 2003, the outstanding aggregate balance on the term loans was $544,832 CDN ($370,540 US). As of March 31, 2003, the Company was not in compliance with the debt covenants and the bank demanded payment by April 30, 2003. As of May 14, 2003, based upon the offer of a credit facility from National Bank of Canada and the Company's commitment to close this facility and repay all of Toronto Dominion Bank's outstanding loans, Toronto Dominion Bank extended full repayment until May 31, 2003.
CRITICAL ACCOUNTING POLICIES, COMMITMENTS AND CERTAIN OTHER MATTERS
The Company considered the disclosure requirements of FR-60 regarding critical accounting policies and FR-61 regarding liquidity and capital resources, certain trading activities and related party/certain other disclosures, and concluded that nothing materially changed during the quarter that would warrant further disclosure under these releases.
Part I
Item 3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
FOREIGN CURRENCY EXCHANGE RISK
Management has determined that all of the Company's foreign subsidiaries operate primarily in local currencies that represent the functional currencies of the subsidiaries. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date, while income and expense accounts are translated at average exchange rates during the year. As such, the Company's operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries, as a result of the Company's transactions in these foreign markets. The Company does not operate a hedging program to mitigate the effect of a significant rapid change in the value of the Canadian Dollar or Euro as compared to the U.S. dollar. If such a change did occur, the Company would have to take into account a currency exchange gain or loss in the amount of the change in the U.S. dollar denominated balance of the amounts outstanding at the time of such change. While the Company does not believe such a gain or loss is likely, and would not likely be material, there can be no assurance that such a loss would not have an adverse material effect on the Company's results of operations or financial condition.
INTEREST RATE RISK
The Company is exposed to market risk from changes in interest rates, which may adversely affect its financial position, results of operations and cash flows. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposures through its regular operating and financing activities. The Company is exposed to interest rate risk primarily through its borrowings under its $2.5 million credit line and $3.5 million Reducing Revolver with Merrill Lynch with an interest rate at 2.5% over the one month LIBOR and its $2.0 million CDN line of credit with Toronto Dominion bank with an interest rate at 3% over Toronto Dominion's prime rate. As of December 30, 2002 the fair market value of the Company's outstanding debt approximates its carrying value due to the short-term maturities and variable interest rates. A 1% change in interest rates could increase or decrease interest expense by approximately $90,000 on an annual basis.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
As required by new Rule 13a-15 under the Securities Exchange Act of 1934, 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 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 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 by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. In connection with the new rules, we currently are in the process of further reviewing and documenting our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.
(b) Changes in internal controls
None
Part II
Item 1
Item 1. LEGAL PROCEEDINGS
At times the company may be involved in disputes and/or litigation with respect to its products and operations in its normal course of business. The company does not believe that the ultimate impact of the resolution of such matters would have a material adverse effect on the company's financial condition or results of operations. The company is not currently involved in any legal proceedings.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS, LISTS AND REPORTS ON FORM 8-K
(a) The following is a complete list of exhibits filed as part of this Form 10-Q:
Exhibit Number Description
99.1 CEO Certification
99.2 CFO Certification
(b) Reports on Form 8-K
1) On March 10, 2003 the Company filed a current report on Form 8-K covering the fourth quarter and fiscal year ended December 31, 2002 financial results.
2) On April 25, 2003 the Company filed a current report on Form 8-K covering a press release for the financial results of the first quarter of 2003 ending March 31, 2003.
Part II
Item 6
SIGNATURES
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, thereto duly authorized.
| StockerYale, Inc. | |
| | |
| | |
| May 15, 2003 | /s/ Mark W. Blodgett |
| | Mark W. Blodgett, |
| | Chairman and Chief Executive Officer |
| | |
| May 15, 2003 | /s/ Francis J. O'Brien |
| | Francis J. O'Brien, |
| | Chief Financial Officer and Treasurer |
| | |
Part II
Item 6
CERTIFICATION
I, Mark W. Blodgett, certify that:
1. I have reviewed this quarterly report on Form 10-Q of StockerYale, 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, 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;
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 15, 2003 | /s/ Mark W. Blodgett |
| Mark W. Blodgett |
| | Chairman and Chief Executive Officer |
Part II
Item 6
CERTIFICATION
I, Francis J. O'Brien, certify that:
1. I have reviewed this quarterly report on Form 10-Q of StockerYale, 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, 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;
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 15, 2003 | /s/ Francis J. O'Brien |
| Francis J. O'Brien |
| | Chief Financial Officer |
Part II
Item 6
EXHIBIT 99.1
The undersigned officer of StockerYale, Inc. (the "Company") hereby certifies that the Company's quarterly report on Form 10-Q for the quarterly period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| Date: May 15, 2003 | Name: | /s/ Mark W. Blodgett | |
| | | Mark W. Blodgett |
| | | |
| | Title: | Chairman and Chief Executive Officer |
EXHIBIT 99.2
The undersigned officer of StockerYale, Inc. (the "Company") hereby certifies that the Company's quarterly report on Form 10-Q for the quarterly period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| Date: May 15, 2003 | Name: | /s/ Francis J. O'Brien | |
| | | Francis J. O'Brien |
| | | |
| | Title: | Chief Financial Officer and Treasurer |
