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
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
Commission file number 0-19721
THE CLASSICA GROUP, INC.
(Exact name of small business issuer as specified in its charter)
New York 13-3413467
(State or other jurisdiction of (IRS Employer identification no.)
incorporation or organization)
2400 Main Street, Suite #12, Sayreville,
New Jersey 08872 (Address of
principal executive offices)
(732) 727-7800 (Issuer's
telephone number)
----------------6-----------------
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
PROCEEDINGS 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
Number of shares outstanding of each of the issuer's classes of common
equity as of March 31, 2003
Title of Each Class Number of Shares Outstanding
Common Stock, $.001 par value per share 5,142,211
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (Unaudited)
March 31, 2003
ASSETS
-----------
Current Assets:
Cash $361,258
Accounts receivable 1,126
Inventories 328,007
Prepaid expenses 164,495
Assets relating to discontinued operation 84,416
-------------------
Total current assets 939,302
Property and equipment, net 627,859
Intangible assets, net 1,397,095
Other assets 136,142
-------------------
TOTAL ASSETS $3,100,398
===================
See notes to the consolidated financial statements (Unaudited).
2
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (Unaudited) (continued)
March 31, 2003
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------
LIABILITIES
---------------
Current Liabilities:
Accounts payable $ 174,889
Accrued expenses 61,157
Liabilities relating to discontinued operations 50,000
------------------
Total current liabilities 286,046
------------------
TOTAL LIABILITIES 286,046
------------------
STOCKHOLDERS' EQUITY
-------------------------------
Preferred stock
Class A participating convertible preferred shares,
$1 par value, stated at liquidation value, authorized
200 shares of which 16.5 shares are issued and outstanding. 397,898
Common stock
Par value $.001 - 25,000,000 shares authorized, 5,142,211
shares issued and outstanding 5,142
Additional paid-in-capital 5,756,166
Accumulated deficit (3,359,799)
Accumlated other comprehensive income 14,945
------------------
Total Stockholders' Equity 2,814,352
------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,100,398
==================
See notes to the consolidated financial statements (Unaudited).
3
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
For the three months ended
March 31,
2003 2002
-----------------------------
Revenue $ 5,736 $ 4,361
Cost of sales 18,588 0
-----------------------------
Gross profit (loss) (12,852) 4,361
Selling, general and administrative expenses 520,820 262,622
-----------------------------
Loss from continuing operatons (533,672) (258,261)
Income (loss) from discontinued operations (89,398) 103,659
-----------------------------
Net loss before other comprehensive income (623,070) (154,602)
Other comprehensive income:
Foreign currency translation,
net of tax effect of $-0- 1,093 0
-----------------------------
Comprehensive income $ (621,977) $ (154,602)
=============================
EARNINGS PER COMMON SHARE
BASIC & DILUTED
Loss from continuing operations $ (0.10) $ (0.10)
Income (loss) from discontinued operations (0.02) 0.04
-----------------------------
Net loss $ (0.12) $ (0.06)
=============================
Weighted average shares outstanding, basic and diluted 5,142,211 2,747,050
See notes to the consolidated financial statements (Unaudited).
4
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2003 and 2002
March 31,
--------------------------------
2003 2002
--------------------------------
Cash flows from operating activities:
Loss from continuing operations $ (533,672) $ (258,261)
Income(loss) from discontinued operations (89,398) 103,659
Foreign currency translation 1,093 0
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 44,075 79,553
(Increase) decrease in accounts receivable 13,307 (178,484)
Decrease in receivable from sale of
discontinued operation 426,819 0
(Increase) decrease in inventories (30,445) 68,251
(Increase) in prepaid expenses and other
assets (63,009) (24,022)
Increase in accounts payable
and accrued expenses 71,480 62,665
--------------------------------
Net cash used in operating activities (159,750) (146,639)
--------------------------------
Cash flows used in investing activities:
Purchase of fixed assets (173,924) (84,937)
Increase in other assets (12,719) (7,172)
Realization of assets relating to
discontinued oeration 313,025 0
Settlement of liabilities relating to
discontinued operastion (347,441) 0
--------------------------------
Net cash used in investing activities (221,059) (92,109)
--------------------------------
Cash flows from financing activities:
Repayment of long-term debt 0 (22,727)
Proceeds from Issuance of capital stock 0 280,000
--------------------------------
Net cash provided by financing activities 0 257,273
--------------------------------
Net increase (decrease) in cash (380,809) 18,525
Cash at beginning of period 742,067 100,997
--------------------------------
Cash at end of period $ 361,258 $ 119,522
================================
Supplemental disclosure of cash flows information:
Interest paid $ 45 $ 44,257
================================
See notes to the consolidated financial statements (Unaudited).
5
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 --ORGANIZATION AND BASIS OF PRESENTATION
The Classica Group, Inc. ("The Company") and its wholly owned
subsidiaries Classica Microwave Technologies, Inc. (United States) and CGTI
Classica Group Technologies Italia, S.r.l. ("Classica Italy") (collectively
"CMT") provide safe food solutions through its automated microwave processing
systems. In addition, CMT's technologically advanced design of post packaging
processing, extends refrigerated shelf life through pasteurization and permits
non-refrigerated shelf life through sterilization without the use of any
chemical additives. The system is designed to promote food safety while reducing
overall operating costs, inventory storage and delivery costs without
sacrificing productivity or food quality. Professor Giuseppe Ruozi, the key
developer of the process and one of the leading European experts in the field of
microwave technology as it applies to the food industry is under contract with
CMT as its Chief Technology Officer. The use of microwave technology in concert
with proprietary knowledge acquired over years of research and development by
Professor Ruozi gives CMT a strong position in the growing field of new and
innovative processing technologies for the food industry.
CMT expects to generate revenues in two different areas. First, the
company sells microwave based processing systems for pasteurization,
sterilization, sanitizing and drying of food products. Second, the company
intends to utilize its microwave application expertise to provide development
services to new and existing clients.
In October 2002, the Company sold its grated, shredded and dry cheese
processing and distributing business, and in December 2002, the Company sold its
Galbani(R) brand cheese and meat importing and distribution business, and
discontinued the operation of its Cucina Classica Italiana, Inc. subsidiary.
The unaudited consolidated financial statements included herein have
been prepared by the Company in accordance with the same accounting principles
followed in the presentation of the Company's annual financial statements for
the year ended December 31, 2002 pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments that are of a normal and recurring nature and are necessary to
fairly present the financial position, results of operations, and cash flows of
the Company have been made on a consistent basis. This report should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-KSB Annual Report for the year ended December 31, 2002.
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All material intercompany balances
are eliminated.
Income taxes for the interim period are based on the estimated
effective tax rate expected to be applicable for the full fiscal year. The
Company has recorded a full valuation allowance related to the deferred tax
asset at March 31, 2003.
NOTE 2 -PER SHARE DATA
The per share data has been calculated using the weighted average
number of Common Shares outstanding during each period presented on both a basic
and diluted basis in accordance with SFAS 128. Outstanding options and warrants
have been excluded from the computation due to their antidilutive effect.
6
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 3 - Property and equipment
Property and equipment are carried at cost, less accumulated
depreciation and amortization computed on a straight-line basis over the lesser
of the estimated useful lives of the assets (generally three to ten years for
furniture and equipment and the lease term for leasehold improvements).
Property and equipment consists of the following at March 31, 2003:
Furniture & equipment $ 656,527
Leasehold improvements 43,067
----------------
Total cost 699,594
Less accumulated depreciation
and amortization (71,735)
----------------
$ 627,859
================
NOTE 4 - Intangible Assets
Patents, recorded at cost, are amortized over their estimated useful
lives, approximating 15 years. Intangible assets are reviewed for impairment
whenever events or circumstances indicate impairment might exist or at least
annually. The Company assesses the recoverability of its assets in accordance
with SFAS No. 142 "Goodwill and Other Intangible Assets," comparing projected
undiscounted cash flows associated with those assets against their respective
carrying amounts. Impairment, if any, is based on the excess of the carrying
amount over the fair value of those assets. The Company determined that there is
no impairment of the assets at March 31, 2003.
Intangible assets consist of the following at March 31, 2003:
Patents $ 1,552,328
Accumulated amortization (155,233)
--------------
Intangible assets, net $ 1,397,095
==============
For the years ending December 31, 2003 through 2007 the patents will be
amortized at the rate of $103,489 per annum for a total amortization for the
five year period of $517,245.
7
THE CLASSICA GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 5 - Discontinued Operations
On October 18, 2002, the Company sold assets comprised of manufacturing
equipment, certain inventory and related packaging materials and supplies,
customer lists, goodwill, trademark and rights to its lease of the distribution
facility and other rights relating to the grated, shredded and dry cheese
processing and distributing business of its Cucina Classica Italiana, Inc.
subsidiary.
On December 30, 2002, the Company sold assets comprised of a customer
list, goodwill, right to use a license and distribution agreement with a
supplier, certain inventory and related packaging materials and supplies a
portfolio of import licenses for dairy products, and an assumption of a
liability to its distributor relating to the Galbani(R) brand cheese and meat
importing and distribution business of its Cucina Classica Italiana, Inc.
subsidiary and discontinued the operations of that subsidiary effective December
31, 2002.
Operating results of Cucina Classica Italiana, Inc. for the three
months ended March 31, 2002 are included in income from discontinued operations
shown separately in the accompanying financial statements.
Revenues of Cucina Classica Italiana, Inc. for the three months ended
March 31, 2002 were $1,771,878. This amount is not included in Revenues in the
accompanying financial statements.
The operations of the Company's Deli King, Inc. ("Deli King") mobile
catering subsidiary ceased on March 9, 2001, and as of December 31, 2001, all of
the assets of Deli King, Inc. had been disposed of or were deemed to be
worthless. Deli King had no operations during the quarter ended March 31, 2002.
However, during the quarter Deli King, Inc. filed for liquidation under Chapter
VII of the U.S. Bankruptcy Act in the U.S. Bankruptcy Court for the District of
New Jersey and the case has been concluded. Management believes that there are
no material present or future liabilities on the part of the Company for matters
relating to Deli King, Inc.
8
Item 2. Management's Discussion and Analysis
Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the Consolidated Unaudited
Financial Statements and related notes, which are contained herein.
Results of Operations for the Three Months Ended March 31, 2003 and 2002
Net Revenues. Net revenues for the three months ended March 31, 2003
were $ 5,736 compared with $ 4,361 in 2002, an increase of $1,375, or 31.5%.
This increase is insignificant as the revenues in both years represent only
incidental amounts related to the start-up of our microwave technology
subsidiary.
Gross Profit. We generated gross operating loss of ($12,852) or
(224.1%) of net revenues for 2003 versus gross profit of $4,361 for 2002. This
decrease is insignificant as the revenues in both years represent only
incidental amounts related to the start-up of our microwave technology
subsidiary. The cost of sales amounts reported in 2003 represent some fixed
manufacturing- related expenses of our Italian operation as well as the direct
costs related to the testing services performed in the quarter.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $520,820 in 2003 versus $262,622 for 2002. This
represents an increase of $258,198, all of which represents start-up costs of
our microwave technology subsidiary. The infrastructure that is currently in
place in 2003 was not completed during the first quarter of 2002.
There were non-recurring moving and start-up expenses of approximately $36,200
that were incurred relating to the move from Lakewood to Sayreville.
Loss from Continuing Operations. Loss from continuing operations for
2003 was $533,672 versus $258,261 for 2002. These amounts represent start-up
costs of our microwave technologies subsidiary.
Income Taxes. We reported no provision for Federal income taxes for the
three month periods ended March 31, 2003 and 2002, as we had net losses for both
years.
9
Liquidity and Capital Resources
The Company's sources of capital include, but are not limited to, the
issuance of public or private debt, bank borrowings, capital leases and the
issuance of equity securities.
On December 13, 2002, we completed a private placement of 1,030,000
shares of our common stock and 200,000 shares issuable upon the exercise of
warrants, from which we received gross proceeds of $1,030,000. The warrants are
dated December 13, 2002 and expire on December 12, 2005. The exercise price is
$1.00 per share. The shares of common stock issued in the transaction and those
issuable upon exercise of the warrants are subject to a registration rights
agreement. In accordance therewith, we filed a registration statement on Form
SB-2 with the Securities and Exchange Commission on January 22, 2003. We are
using the proceeds from this private placement to fund the growth of our
microwave technology business.
At March 31, 2003, the Company had a net worth of $2,814,352 compared
to $2,350,841 at March 31, 2002.
The Company has limited requirements for capital expenditures in the
immediate future, except for the start-up of the CMT subsidiary for which the
Company may undertake an additional private placement.
The Company utilizes capital leases for the acquisition of operating
assets at its subsidiaries when appropriate. At March 31, 2003 the Company had
no capital leases.
Management believes that the Company has sufficient working capital to
meet the needs of its current level of operations, with the exception of the
requirements of CMT.
Seasonality
The Company's businesses are not subject to the effects of seasonality.
10
Plan of Operation
More than 200 installations of microwave heat processing systems and
technology have been undertaken in Europe and Japan. All but two of those
installations were undertaken by OMAC, the Company from which we purchased the
technology, patents and laboratory in Italy, and other entities. We have only
delivered two systems, one of which is in Switzerland and the other in Italy.
The system installed in Italy was developed for the rapid drying of candy coated
fruit. This system has undergone minor changes at the installation site, and the
Company believes it is now fully functional; however, the Company may be taking
the system back to be later sold to another customer. Our systems and the
technology are not well known outside Europe and Japan. Our plan is to continue
to promote and market our systems in Europe and Japan, and to penetrate other
markets. Our goal is to generate revenues from the sale of microwave heat
processing systems and the sale of technical services.
In order to facilitate sales of our microwave systems, we have
undertaken a major campaign of communications and education among future users,
governmental regulatory agencies and food industry professionals. We are seeking
to introduce our company, our systems, and the benefits of our systems to
potential users, so that we can obtain a high level of recognition and
acceptance of our systems. Simultaneously with the communications and education
campaign, we have begun to use both a direct sales force and an independent
agent with regional offices and representation throughout the United States. In
addition, we have relationships with a network of agents worldwide who will
identify market and sell our equipment to customers.
In addition to selling our microwave systems, we intend to provide
technical services to customers. We have two laboratories, one at our
Sayreville, New Jersey location, and one in our Italy location. Our Sayreville
location is also equipped with a full commercial kitchen. We have provided
potential clients with access to our laboratories in the USA and Italy so that
we can work with them to develop and customize new microwave heat processing
applications. Some of the technical services are, and will continue to be,
provided free of charge as part of our marketing efforts. Other more
comprehensive research and development services are marketed and will be offered
to customers for fees.
We hope to market our company and our capabilities to food and
pharmaceutical manufacturers through many means, including through partnerships
with engineering and design companies, and with manufacturers of complementary
equipment. We believe that such partnerships would be beneficial to both our
company and to our potential partner by enabling us to avoid duplication of
marketing, and research and development costs, and by expanding the field of
potential customers to whom our products would become known.
We are a member of ten relevant trade associations through which we
promote recognition of microwave technology in general and of our unique systems
in particular. Members of our staff have made presentations at various trade
association meetings and seminars to acquaint the members with our unique
systems.
11
At the present time the design and construction of systems is carried
out in Italy by our subsidiary CGTI and third parties. We are evaluating
additional manufacturing capabilities in the USA, so as to be prepared for
domestic construction of our systems as our sales volumes increase.
Anticipated Future Growth
CMT has a unique patented and proprietary expertise in microwave
processing applications. While the technology has been in use in Europe and in
Japan, with more than 200 successful installations, it is virtually unknown
beyond those markets.
CMT plans to penetrate these new markets and generate revenues from 2
distinct sources:
>> Sales of Microwave heat processing systems.
>> Sales of Technical Services.
In order to facilitate sales of the company's Microwave systems, a
major campaign of communications and education will be undertaken among future
users, government regulatory agencies and food industry professionals -
globally.
The objectives of this campaign are:
>> To introduce the company and the benefits of its systems to the universe of
future potential users >> To gain for these technologies a high level of
recognition and acceptance.
Concurrent with the communications and education campaign, the company
will establish its direct sales force in the USA, and a network of exclusive
agents worldwide to identify, negotiate and sell its equipment to clients on a
global basis.
The second revenue channel is from Technical Services. The company will
provide potential clients with access to its laboratories in the USA and Italy,
for the purpose of developing and customizing new processing applications. While
some of these services are provided free of charge as part of the marketing
efforts, other more comprehensive research and development services will be
marketed and offered to clients for fees.
The company uses its laboratories and technical staff to continuously
improve current systems, and develop next generation systems.
Beyond the efforts to sell systems to food manufacturers, the company
will market itself and its capabilities through partnerships with engineering
design companies, and with manufacturers of complimentary equipment, to provide
future clients with "Total Delivered Solutions".
12
Forward Looking Statements
The matters discussed in this Item 2 may contain forward-looking statements that
involve risk and uncertainties. The forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially due to a variety of factors,
including without limitation the presence of competitors with broader product
lines and greater financial resources; intellectual property rights and
litigation, needs of liquidity; and the other risks detailed from time to time
in the Company's reports filed with the Securities and Exchange Commission.
13
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
The Company's principal executive officer and its principal financial officer,
based on their evaluation of the Company's disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14(c)) as of a date within 90 days prior
to the filing of this Quarterly Report on Form 10-QSB, have concluded that the
Company's disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition in Exchange Act rules..
(b) Changes in internal controls.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect the Company's internal controls
subsequent to the date of their evaluation.
14
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits:
(99.1) Certification of Chief Executive Officer pursuant to
Section 906 of Sarbanes-Oxley Act of 2002.
Filed herewith.
(99.2) Certification of Chief Financial Officer pursuant to
Section 906 of Sarbanes-Oxley Act of 2002.
Filed herewith.
(b) Reports on Form 8-K:
Form 8K/A - Filed May 8, 2003
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Related to the sale of the Company's cheese business.
ITEM 5. OTHER EVENTS
Related to the December 13, 2002 private placement
for $1,030,000.
15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf the
undersigned thereunto duly authorized
THE CLASSICA GROUP, INC.
(Registrant)
Date: May 20, 2003 By: /s/ Scott G. Halperin
---------------------
Scott G. Halperin
Chairman
Chief Executive Officer
Date: May 20, 2003 By: /s/ Bernard F. Lillis, Jr.
--------------------------
Bernard F. Lillis, Jr.
Chief Financial Officer
Chief Administrative Officer
Treasurer
16
THE CLASSICA GROUP, INC.
CERTIFICATION PURSUANT TO
RULE 13-A-14 OF THE SECURITIES ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Scott G. Halperin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of The Classica Group,
Inc.; 2. Based upon my knowledge, this quarterly report does not contain any
untrue statement of 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 period 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 the
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 officer and I
have disclosed, based upon our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors:
(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 weakness in internal control; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control; and 6. The registrant's other certifying officer and I have indicated
in this quarterly report whether there are 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 20, 2003
/s/ Scott G. Halperin
Scott G. Halperin
Chief Executive Officer
17
THE CLASSICA GROUP, INC.
CERTIFICATION PURSUANT TO
RULE 13-A-14 OF THE SECURITIES ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Bernard F. Lillis, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of The Classica Group,
Inc.; 2. Based upon my knowledge, this quarterly report does not contain any
untrue statement of 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 period 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 the
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 officer and I
have disclosed, based upon our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors:
(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 weakness in internal control; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control; and 6. The registrant's other certifying officer and I have indicated
in this quarterly report whether there are 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 20, 2003
/s/ Bernard F. Lillis, Jr.
Bernard F. Lillis, Jr.
Chief Financial Officer
18