U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2002
Commission file number: 0-28154
SMLX TECHNOLOGIES, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its Charter)
Colorado 84-1337509
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
855 SOUTH FEDERAL HIGHWAY, BOCA RATON, FL. 33432
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(561) 347-0761
---------------------------
(Issuer's telephone number)
Indicate by check mark whether the Issuer (1) has 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 [ ]
There were 13,683,109 shares of the Registrant's Common Stock outstanding as of
September 30, 2002.
1
INDEX
Page No.
Part I: Financial Information
Item 1. Financial Statements:
Unaudited Consolidated Balance Sheets - as of
September 30, 2002 and September 30, 2001 ..................... 3-4
Unaudited Consolidated Statements of Operations, Nine
Months and Three Months Ended September 30, 2002 and
September 30, 2001 ............................................ 5
Unaudited Consolidated Statement of Cash Flows, Nine
Months Ended September 30, 2002 and September 30, 2001 ........ 6
Notes to Consolidated Financial Statements..................... 7-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations .................. 11-12
Item 3. Controls and Procedures ................................... 12
Part II: Other Information
Item 1. Legal Proceedings......................................... 13
Item 2. Change in Securities...................................... 13
Item 3. Defaults Upon Senior Securities........................... 13
Item 4. Submission of Matters to a Vote
of Security Holders.......................................... 13
Item 5. Other Information......................................... 13
Item 6. Exhibits and Reports on Form 8-K.......................... 13-14
Signatures ............................................................. 15
Certifications ......................................................... 16-17
2
PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
9/30/2002 9/30/2001
------------------ -------------------
ASSETS
CURRENT ASSETS
Cash $ 11,483 $ 740
Accounts Receivable (Net of allowance for
uncollectible accounts of $-0- AND $-0- for
09/31/02 and 09/31/01, respectively)
2,773 1,527
Inventory 308,825 200,143
Inventory Valuation Allowance (146,580) -
Prepaid Expenses 31,447 35,007
------------------ -------------------
Total Current Assets 207,948 237,417
------------------ -------------------
Property, Plant and Equipment, at cost (Net of
accumulated depreciation and amortization of
$460,805 and $380,710 on 9/30/02 and
9/30/01, respectively)
212,817 289,911
OTHER ASSETS
Deposits 15,738 8,528
Other Intangible Assets, net -0- 231
Patents and Trademarks (Net of accumulated
amortization of $5,113 and $9,139 on 9/30/02
on 9/30/01, respectively)
155,946 129,373
Investment in Common Stock -0- 100,000
Other Assets - -
------------------ -------------------
Total Assets $ 592,449 $ 765,460
================== ===================
The accompanying notes are an integral part of these
consolidated financial statements.
3
SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
9/30/2002 9/30/2001
------------------- -------------------
LIABILITIES
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities $ 923,730 $ 639,708
Current Portion of Notes Payable 246,875 122,226
Customer Deposits -0- -0-
------------------ -------------------
Total Current Liabilities 1,170,605 761,934
------------------ -------------------
LONG-TERM DEBT
Notes Payable, Net of Current Portion 664,281 445,756
------------------ -------------------
STOCKHOLDERS' EQUITY
Common Stock (Par Value $.0001,
Authorized 100,000,000 Shares, Issued
and Outstanding 13,683,109 Shares on
9/30/02 and 12,004,648 on 9/30/01) 1,322 1,154
Preferred Stock (Par Value $.0001,
Authorized 10,000,000 Shares, No
Shares Issued and Outstanding) - -
Additional Paid-In Capital 2,463,209 2,438,207
Deficit Accumulated (3,706,968) (2,881,591)
------------------ -------------------
Total Stockholders' Equity (1,242,437) (442,230)
------------------ -------------------
Total Liabilities and Stockholders' Equity $ 592,449 $ 765,460
================== ===================
The accompanying notes are an integral part of these consolidated financial
statements.
4
SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
9/30/2002 9/30/2001 9/30/2002 9/30/2001
OPERATING REVENUE
VECTOR TRANSDERMAL TECHNOLOGY $ -0- $ 600,000 $ -0- $ 150,000
VECTOR COSMECEUTICAL TECHNOLOGY -0- 75,000 -0- -0-
R3 SALES 286,779 -0- 80,879 -0-
AIRRBRATOR SALES 11,350 58,197 3,391 17,110
OTHER 47,984 -0-
---------------- ----------------- --------------- ----------------
TOTAL OPERATING REVENUES 298,129 781,181 84,270 167,110
COST OF GOODS SOLD 146,338 130,887 20,203 25,066
--------------- ----------------- --------------- ----------------
GROSS PROFIT 151,791 650,294 64,067 142,044
--------------- ----------------- --------------- ----------------
OPERATING EXPENSES
LEGAL FEES 182,170 362,850 82,155 102,460
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 416,227 439,628 172,422 129,067
--------------- ----------------- --------------- ----------------
TOTAL OPERATING EXPENSES 598,397 802,478 254,577 231,527
--------------- ----------------- --------------- ----------------
OPERATING PROFIT (LOSS) (446,606) (152,184) (190,510) (89,483)
--------------- ----------------- --------------- ----------------
OTHER INCOME 100,000 6,100 100,000 -0-
DEPRECIATION/AMORTIZATION 70,410 87,216 23,470 29,607
INTEREST EXPENSE 39,095 23,075 16,615 7,720
--------------- ----------------- --------------- ----------------
NET PROFIT (LOSS) $ (456,111) $ (256,375) $ (130,595) $ (126,810)
=============== ================= =============== ================
NET (LOSS) PER SHARE (0.033) (0.021) (0.010) (0.011)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 13,683,109 12,004,648 13,683,109 12,004,648
The accompanying notes are an integral part of these consolidated financial
statements.
5
SMLX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
9/30/2002 9/30/2001
---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Profit (Loss) $ (456,112) $ (256,375)
Adjustment to Reconcile Net Loss to
Net Cash Provided By (Used in)
Operating Activities:
Depreciation and Amortization 70,410 87,216
Changes in Operating Assets and Liabilities:
Accounts Receivable (2,429) 4,637
Inventory (71,140) (50,050)
Deposits (9,127) 2,334
Accounts Payable and Accrued Liabilities
274,144 378,595
Customer Deposits (100,000) (16,100)
Prepaid Expenses and Organization Expenses
(16,951) (17,089)
---------------- ----------------
Net Cash (Used In) Provided By Operating
Activities
(311,205) 133,168
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Fixed Assets -0- (36,662)
Add'l Paid In Equity 25,170 -0-
Patent Costs (11,821) (120)
---------------- ----------------
Net Cash Provided By (Used In) Investing
Activities 13,349 (36,782)
================ ================
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of Notes Payable (23,629) (104,445)
Proceeds from Notes Payable 325,000 -0-
---------------- ----------------
Net Cash Provided by (Used In)
Financing Activities 301,371 (104,445)
================ ================
Net Increase (Decrease) in Cash 3,515 (8,059)
Cash - Beginning of Period 7,968 8,799
---------------- ----------------
Cash - End of Period $ 11,483 $ 740
================ ================
The accompanying notes are an integral part of these consolidated financial
statements.
6
SMLX TECHNOLOGIES,INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of SMLX
Technologies, Inc. (the "Company") and its wholly-owned subsidiary, ARETHREE,
Inc., have been prepared in accordance with the instructions and requirements of
Form 10-QSB and, therefore, do not include all information and footnotes
necessary for a fair presentation of financial position, results of operations,
and cash flows in conformity with generally accepted accounting principles. In
the opinion of management, such financial statements reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the results of operations and financial position for the interim periods
presented. Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the full year. These
financial statements should be read in conjunction with the Company's annual
report on Form 10-KSB filed on April 15, 2002.
NOTE 2 - BASIS OF PRESENTATION AND CONTINUED EXISTENCE
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Since inception, the Company has
experienced significant losses and has been dependent upon loans from
stockholders and other third parties, as well as sale of stock, in order to fund
operations to date.
In April 2001, and on September 24, 2001, SMLX terminated its license agreements
with Vector Medical Technologies, Inc. pursuant to which SMLX had licensed to
Vector certain of SMLX proprietary technology for our cosmeceutical products,
and transdermal drug delivery, respectively.
The Company, through its subsidiary ARETHREE, entered into an exclusive
distribution agreement with an unrelated company, effective January 1, 2002,
granting exclusive rights to sell certain intradermal cosmetics in Japan, Korea,
Taiwan, Hong Kong, China, Philippines, Malaysia, Thailand, Indonesia, Singapore,
Australia and New Zealand. This agreement and its amendment encompasses a period
of ten years commencing on January 1, 2002, subject to annual renewal
thereafter, and includes a minimum annual amount of products to be purchased by
this unrelated company stated in U.S. dollars. Purchase orders are to placed
sufficiently in advance for ARETHREE to meet the required delivery date.
In addition, the Company, through its subsidiary ARETHREE, in September 2002
entered into an exclusive license agreement with the same unrelated company.
This Agreement gives the licensee worldwide rights to our Transdermal Delivery
System (excluding ARETHREE's Intradermal cosmetic products). Licensee has paid a
$100,000 downpayment with an additional $100,000 due in December 2002 after it
has had the chance to examine the technology related to the license. In
addition, SMLX will receive a 4% sales royalty on any products marketed until
ARETHREE has received $5 million in total royalty payments at which time
ownership in the licensed technology will be assigned to the licensee but
ARETHREE will continue to receive a reduced royalty.
7
The Company, through its subsidiary ARETHREE, entered into a secured revolving
demand note with a related party, Robertson & Partners, LLC, during January
2002, collateralized by all of the assets of ARETHREE. The total available
principal under this note is up to $1 million and accrues interest at 10% per
annum. This debt was converted into Company Private Placement Debt (see below)on
September 1, 2002, and all interest was paid at conversion.
ARETHREE is in the process of offering a $1,000,000 Private Placement Debt
Offering at 12% interest, with Warrants attached, to purchase up to 5,000,000
shares of the Company's common stock for a period of three years. The proceeds
of this Offering will be used for ARETHREE working capital and to pay off a fine
and restitution to the U.S. Government. Robertson & Partners LLC has purchased
$325,000 worth of this Debt and Warrant Offering.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classifications of liabilities that may result from the possible inability
of the Company to continue as a going concern.
NOTE 3 - INVENTORY
Inventory, which consists of finished goods and raw materials, totals $162,245
as of September 30, 2002. Inventory reflects a valuation allowance of $146,580.
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following at September 30, 2002:
Leasehold Improvements $ 188,806
Office Furniture and Equipment 69,340
Lab Equipment 415,476
---------
Total Equipment 673,622
Less: Accumulated depreciation 460,805
---------
Total Property, Plant and Equipment $ 212,817
NOTE 5 - NOTES PAYABLE
Interest Expense for the period ended
September 30, 2002, amounted to: $ 39,095
NOTE 6 - REPORTABLE SEGMENTS
The company's operations are classified into two principal reportable segments,
SMLX Technologies and ARETHREE, Inc. SMLX's principal product and revenue is
from the airbrator technology. ARETHREE owns the cosmeceutical and transdermal
technologies. The following table presents summarized information by segment at
September 30, 2002 and for the nine months then ended.
8
SMLX TECHNOLOGIES ARETHREE, INC. TOTAL
External Revenue 11,350 286,779 298,129
Cost of Goods Sold 6,808 139,530 146,338
--------------------- -------------------- -----------------
Gross Profit 4,542 147,249 151,791
Operating Expenses 519,632 78,765 598,397
--------------------- -------------------- -----------------
Operating Profit(Loss) (515,090) 68,484 (446,606)
Other Income -0- 100,000 100,000
Interest Expense 23,276 15,819 39,095
Depreciation Expense 70,410 -0- 70,410
--------------------- -------------------- -----------------
Net Income (Loss) from
Continuing Operations (608,776) 152,665 (456,111)
===================== ==================== =================
Fixed Assets net of Depreciation
212,817 -0- 212,817
Inventory net of Valuation Allowance
39,503 122,742 162,245
The operating results of ARETHREE are regularly reviewed by the Company's chief
operating officers to make decisions about ARETHREE's performance and the use of
resources. 99% of ARETHREE'S revenue was derived from a single customer.
NOTE 7 - INCOME TAXES
To date the Company has incurred tax operating losses and therefore has
generated no income tax liabilities. As of September 30, 2002, the Company has
generated net tax operating loss carry forwards of approximately ($3,212,000)
which are available to offset future taxable income, if any. These loss
carry-forwards expire beginning in 2010. As utilization of such an operating
loss for tax purposes is not assured, the deferred tax asset has been fully
reserved through the recording of 100% valuation allowance.
The components of the net deferred tax asset are as follows at September 30,
2002:
Deferred Tax Assets:
Net Operating Loss Carry forward 1,092,000
Valuation Allowance (1,092,000)
----------
- 0 -
NOTE 8 - LEGAL PROCEEDINGS
C&O Trading Corp. v. Analyte Diagnostics, Inc., SMLX Technologies of Florida,
Inc. f/k/a Simplex Medical Systems, Inc., Giant Export Management Corp.
(arbitration proceeding). The case was settled for $82,500 to be paid in monthly
installments of $6,875 per month. Through December 31, 2001, the Company paid
$20,625 under the settlement. The Company ceased making payments and under the
settlement a judgment in the amount of $138,743.68 plus interest was entered
against SMLX in favor of C&O. The $20,625 already paid to C&O and all
restitution amounts paid by the Company to the government and received by C&O in
9
connection with United States v. SMLX Technologies, Inc., detailed below, will
be credited to SMLX and will reduce the corresponding amount owed to C&O in
respect of this proceeding.
United States v. SMLX Technologies, Inc., Case No. 00-6328-Cr-Ferguson (Southern
District Court of Florida). During 2000, the government of the United States of
America filed a complaint concerning a former product of the Company, The
Simplex Rapid HIV Test Kit, and whether the Kits were manufactured in accordance
with good manufacturing practices and received FDA approval and clearances. The
Company, in cooperation with the government, agreed to enter a guilty plea to an
FDA violation in the sale of the Kits. The Company was sentenced on April 30,
2001 to a fine of $150,000 and restitution of $197,500 and a probationary period
of 5 years. The settlement requires monthly payments of $10,000 to the U.S.
Clerk of Court related to these amounts. The only payment in 2002 to the U.S.
Clerk of Court was paid on October 31, 2002. The judgment states that the
probation officer may on the basis of the corporation's financial status, and
with the Court approval, adjust the schedule of payments to reduce or accelerate
payments of restitution and fines. Formal approval has been received to
temporarily suspend the monthly payments currently due under the agreement on a
month-to-month basis as determined by the Court. Additionally, the Company is
required to obtain permission from the probation officer to incur additional
debt. During 2002, the Company borrowed funds from a related party. Formal
approval from the probation officer has been received.
The amounts paid to C&O in connection with the case C&O Trading Corp. v. Analyte
Diagnostics, Inc., SMLX Technologies of Florida, Inc. f/k/a Simplex Medical
Systems, Inc., Giant Export Management Corp. (arbitration proceeding) as
discussed above, will offset restitution due to C&O.
John Faro v. Simplex Medical Systems, Inc., Nicholas Levandoski, Henry B. Schur,
John Trafton, Debra Ross. Case No. 98-19091 CA (04) (Circuit Court, Miami-Dade
County). A third amended complaint was filed, and an answer and affirmative
defense to the complaint was filed in response. Complaint alleges breach of
share transfer agreement for failure to timely transfer shares of Simplex,
securities fraud, breach of consulting agreement, civil theft (only against
Schur, Trafton, and Ross) and tortuous interference (only against Schur,
Trafton, and Ross).
Superior Wholesale Products, Inc. v. Simplex Medical Systems, Inc., Case No.
98-17352 CA (03) (Circuit Court, Miami-Dade County). The plaintiff filed a
complaint alleging breach of contract and interference with business
relationships, seeking $2.5 million in damages. The Company denies the
allegations of the complaint and filed a counter-claim for interference with
business relationships and for defamation. The Company intends to vigorously
defend against the action. The case is pending.
SMLX Technologies, Inc. v. H.E. Khundkar Khalid Ahmed Hossain, and Helvestar
S.A. Case No.00-01429 (09) (Circuit Court, Broward County). Suit by the Company
against the defendants for fraud, misrepresentation, and breach of fiduciary
duty based on defendant Hossain's representations as authorized agent of
Helvestar. The suit alleged that the defendants induced SMLX, through
misrepresentations, to enter into various agreements that constituted a joint
venture. The Company sought damages and confirmation that the joint venture was
null and void. The defendant company counter-claimed alleging breach of
fiduciary duty. On July 11, 2002, the trial court entered an order striking the
defendants'
10
pleadings and the counterclaim filed by Helvestar against SMLX for the
defendants' numerous failures to respond to discovery requests. A default final
judgment was entered in favor of SMLX on all claims.
Levey, Airan, Brownstein, Shevin, Friedman, Roen & Kelso, LLP V. SMLX
Technologies, Inc. Case No. 00-23254 CA 09 (Circuit Court, Miami Dade County).
Suit by the plaintiff law firm for alleged unpaid legal fees of $221,249. The
Company denies the claim and has filed a counterclaim against the law firm. The
case is pending.
Vector Medical Technologies, Inc. V. SMLX Technologies Inc., et al., Case No. CA
02-01381 AJ. The case was recently filed against the Company and the Company has
answered the complaint. In its complaint, Vector seeks specific performance, and
its claims include a claim for damages in excess of $3.6 million. Vector alleges
that the Company breached an exclusive license and purchase agreement. The
Company denies the allegations. The Company intends to vigorously defend the
suit and to assert claims for damages against Vector.
Reuben Hertz V. SMLX (arbitration proceeding) (served July 31, 2002). In his
demand for arbitration, Hertz claims SMLX breached an agreement signed in 1995
by improperly using trade secrets belonging to him. SMLX intends to vigorously
defend the case and, believes that Hertz claims are time-barred.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS.
This report on Form 10-QSB contains forward-looking statements that involve
a number of risks and uncertainties. While these statements represent the
Company's current judgment as to the future direction of the business, such
risks and uncertainties could cause actual results to differ materially from any
future performance suggested herein. Certain factors that could cause results to
differ materially from those projected in the forward-looking statements include
timing of orders and shipments, market acceptance of products, ability to
increase level of production, impact of government requisitions, availability of
capital to finance growth and general economic conditions.
The following should be read in conjunction with the attached Financial
Statements and Notes thereto of the Company.
RESULTS OF OPERATIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS NINE
MONTHS ENDED SEPTEMBER 30, 2001
During the nine months ended September 30, 2002, the Company had $298,129
in revenue compared to $781,181 in revenue during the corresponding period in
2001. The decrease in revenue resulted from the failure of Vector Medical to
make payments on the cosmeceutical license from April 2001 forward and the
transdermal license from September 2001 forward. The grace period expired on
September 24, 2001. This gave us a decrease in revenue of $483,052 for the nine
months ending September 30, 2002.
Operating expenses for the nine months ended September 30, 2002, were
approximately $204,081 less then the corresponding prior year period.
11
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS THREE
MONTHS ENDED SEPTEMBER 30, 2001
During the three months ended September 30, 2002, the Company had $84,270
in revenue compared to $167,110 in revenue during the corresponding period in
2001. The decrease in revenue resulted from the failure of Vector Medical to
make payments on the cosmeceutical license from April 2001 forward and the
transdermal license from September 2001 forward. The grace period expired on
September 24, 2001. This gave us a decrease in revenue of $82,840 for the three
months ending September 30, 2002.
Operating expenses for the three months ended September 30, 2002, were
approximately $23,050 more then the corresponding prior year period.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2002, the Company had working capital of approximately
$(962,657) compared to approximately $(524,517) at September 30, 2001. The
decrease is primarily due to lower net income for the nine months.
As of September 30, 2002, the Company had no material commitments for
capital expenditures.
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Based on their evaluation as of a date within 90 days of the filing date of
this Quarterly Report on Form 10-QSB, the Company's chief executive officer and
chief financial officer have concluded the Company's disclosure controls and
procedures (as defined in Rules 13a-14 (c) and 15d-14 (c) under the Securities
Exchange Act of 1934 (the "Exchange Act")) are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.
CHANGES IN INTERNAL CONTROLS
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings:
Refer to Part I: Financial Information, Item 1:Financial Statements, Note
8: Legal Proceedings, pages 9 - 11.
Item 2. Changes in Securities:
Pursuant to Section 4 (2) of the Securities Act of 1933, as amended, the
Company made the following non-public issuances of common stock:
(a) On June 14,2002, the Company issued 459,615 shares of common stock to
the Company's President and Chairman, Mr. Kenneth H. Robertson, in
lieu of accrued but unpaid salary otherwise due to him from the
Company for the year 2001. The price per share of such stock was
$0.10.
(b) On June 28,2002, the Company issued an additional 470,000 shares of
common stock to Mr. Robertson in lieu of accrued but unpaid salary
otherwise due to him from the Company for the first six months of
2002. The price per share of such common stock was $0.05.
(c) On June 14,2002, the Company issued 378,846 shares of common stock to
the Company's Vice President and General Counsel, Mr. Gerald M.
Wochna, in lieu of accrued but unpaid salary otherwise due to him from
the Company for the year 2001. The price per share of such common
stock was $0.10.
(d) On June 28,2002, the Company issued an additional 370,000 shares of
common stock to Mr. Wochna in lieu of accrued but unpaid salary
otherwise due to him from the Company for the first six months of
2002. The price per share of such common stock was $0.05.
Item 3. Defaults Upon Senior Securities:
None.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: None.
13
(b) Reports on Form 8-K:
On September 23, 2002, the Company filed a Current Report on Form 8-K
announcing that its subsidiary ARETHREE had entered into an exclusive license
agreement with an unrelated company for certain intradermal and transdermal
technology.
14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SMLX TECHNOLOGIES, INC.
Date: November 25, 2002 /s/ Kenneth H. Robertson
---------------------------------
Kenneth H. Robertson, President
Date: November 25, 2002 /s/ Joel Marcus
---------------------------------
Joel Marcus, Chief Financial
Officer
15
CERTIFICATIONS
I, Kenneth H. Robertson, Chief Executive Officer of SMLX Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of SMLX Technologies,
Inc.;
2. Based on 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 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
functions): a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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: November 25, 2002 /s/ Kenneth H. Robertson
-------------------------------
Name: Kenneth H. Robertson
Title: Chief Executive Officer
16
CERTIFICATIONS
I, Joel Marcus, Chief Financial Officer of SMLX Technologies, Inc., certify
that:
1. I have reviewed this quarterly report on Form 10-QSB of SMLX Technologies,
Inc.;
2. Based on 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 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
functions): a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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: November 25, 2002 /s/ Joel Marcus
-------------------------------
Name: Joel Marcus
Title: Chief Financial Officer
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