UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number: 0-27840
CELL ROBOTICS INTERNATIONAL, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
Colorado 84-1153295
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification number
2715 Broadbent Parkway N.E., Albuquerque, New Mexico 87107
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (505) 343-1131
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 [ ]
As of August 14, 2003, 20,500,835 shares of Common Stock of the Registrant were
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets at June 30, 2003
(unaudited) and December 31, 2002
Consolidated Condensed Statements of Operations for the
Three Months ended June 30, 2003 and June 30, 2002
(unaudited)
Consolidated Condensed Statements of Operations for the
Six Months ended June 30, 2003 and June 30, 2002
(unaudited)
Consolidated Condensed Statements of Cash Flows for the
Six Months ended June 30, 2003 and June 30, 2002
(unaudited)
Notes to Unaudited Consolidated Condensed Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim unaudited consolidated condensed financial statements contained in
this report have been prepared by Cell Robotics International, Inc. (the
"Company") and, in the opinion of management, reflect all material adjustments
which are necessary for a fair presentation of the financial position, results
of operations and cash flows for the interim periods presented. Such adjustments
consisted only of normal recurring items. Certain information and footnote
disclosures made in the Company's annual report on Form 10-KSB for the year
ended December 31, 2002, have been condensed or omitted for the interim
statements. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 2002.
CELL ROBOTICS INTERNATIONAL, INC.
AND SUBSIDIARY
Consolidated Condensed Balance Sheets
June 30, 2003 December 31, 2002
------------- -----------------
(UNAUDITED)
Asset
Current assets:
Cash and cash equivalents ....................... $ 59,340 $ 299,083
Accounts receivable, net of allowance for
doubtful accounts of $4,991 in 2003
and 2002 ..................................... 90,340 500,636
Other receivables .............................. 260,000
Inventory ....................................... 539,284
708,821
Other ........................................... 53,205 48,246
------------ ------------
Total current assets ........................ 911,706 1,647,249
Property and equipment, net ..................... 280,010 274,589
Other assets, net ............................... 49,097 60,782
------------ ------------
Total assets ....................... $ 1,240,813 $ 1,982,620
============ ============
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Notes payable - related parties ................. $ 129,063 $ 180,402
Notes payable .................................. 208,527 --
Accounts payable ................................ 847,471 619,679
Royalties payable ............................... 159,378 152,400
Payroll related liabilities ..................... 309,171 169,123
Other current liabilities ....................... 59,019 71,125
------------ ------------
Total liabilities .................. 1,712,629 1,192,729
------------ ------------
Stockholders' equity (deficit):
Common stock, $.004 par value. Authorized
50,000,000 shares, 20,249,302 and
18,406,025 shares issued and outstanding at
June 30, 2003 and December 31, 2002,
respectively ................................ 80,997 73,624
Additional paid-in capital ...................... 30,517,132 29,816,590
Accumulated deficit ............................. (31,069,945) (29,100,323)
------------ ------------
Total stockholders' equity (deficit) (471,816) 789,891
------------ ------------
$ 1,240,813 $ 1,982,620
============ ============
See accompanying notes to unaudited consolidated condensed financial statements
CELL ROBOTICS INTERNATIONAL, INC.
AND SUBSIDIARY
Consolidated Condensed Statements of Operations
UNAUDITED
Three Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Product sales .................................. $ 139,918 $ 104,130
------------ ------------
Total revenues ......................... 139,918 104,130
------------ ------------
Product cost of goods sold ..................... 250,118 160,994
------------ ------------
Total cost of goods sold ............... 250,118 160,994
------------ ------------
Gross loss ..................................... (110,200) (56,864)
------------ ------------
Operating expenses:
General and administrative ................ 297,255 182,348
Marketing & sales ......................... 324,447 167,339
Research and development .................. 189,411 91,810
------------ ------------
Total operating expenses ............... 811,113 441,497
------------ ------------
Loss from operations ........................... (921,313) (498,361)
------------ ------------
Other income (expense):
Other income .............................. 10,000 7,607
Interest expense .......................... (10,631) (34,976)
------------ ------------
Total other expense .................... (631) (27,369)
------------ ------------
Net loss ............................... $ (921,944) $ (525,730)
============ ============
Weighted average common shares
outstanding, basic and diluted ............ 19,888,507 10,615,737
============ ============
Net loss per common share, basic and diluted .. $ (0.05) $ (0.05)
============ ============
See accompanying notes to unaudited consolidated condensed financial statements
CELL ROBOTICS INTERNATIONAL, INC.
AND SUBSIDIARY
Consolidated Condensed Statements of Operations
UNAUDITED
Six Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Product sales .................................. $ 300,218 $ 499,053
------------ ------------
Total revenues ........................ 300,218 499,053
------------ ------------
Product cost of goods sold ..................... 576,828 476,795
------------ ------------
Total cost of goods sold ............... 576,828 476,795
------------ ------------
Gross (loss) profit ............................ (276,610) 22,258
------------ ------------
Operating expenses:
General and administrative ................ 632,591 367,171
Marketing & sales ......................... 703,842 342,320
Research and development .................. 352,965 202,604
------------ ------------
Total operating expenses ............... 1,689,398 912,095
------------ ------------
Loss from operations ........................... (1,966,008) (889,837)
------------ ------------
Other income (expense):
Other income .............................. 10,000 27,923
Interest expense .......................... (13,614) (95,130)
------------ ------------
Total other expense .................... (3,614) (67,207)
------------ ------------
Net loss ............................... $ (1,969,622) $ (957,044)
============ ============
Weighted average common shares
outstanding, basic and diluted ............ 19,236,155 10,439,181
============ ============
Net loss per common share, basic and diluted .. $ (0.10) $ (0.09)
============ ============
See accompanying notes to unaudited consolidated condensed financial statements
CELL ROBOTICS INTERNATIONAL, INC.
AND SUBSIDIARY
Consolidated Condensed Statements of Cash Flows
UNAUDITED
Six Months Ended
June 30, 2003 June 30, 2002
----------- -----------
Cash flows from operating activities:
- ------------------------------------
Net loss .......................................... $(1,969,622) $ (957,044)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization ..................... 66,200 73,340
Beneficial conversion charge ...................... 6,833 19,883
Common stock issued for services .................. 358,146 --
Options and warrants issued for services .......... 82,936 61,781
Changes in operating assets and liabilities:
Decrease in accounts receivable .............. 670,296 236,227
(Increase) decrease in inventory ............. (169,537) 167,369
Increase in other assets ..................... (4,959) (57,435)
Increase (decrease) in current liabilities ... 362,712 (239,857)
----------- -----------
Net cash used in operating activities ... (596,995) (695,736)
----------- -----------
Cash flows from investing activities:
- ------------------------------------
Net cash used in investing activities -
Purchase of property and equipment ...... (59,936) (7,367)
----------- -----------
Cash flows from financing activities:
- ------------------------------------
Proceeds from exercise of options ................. -- 2,932
Proceeds from issuance of common stock ............ 260,000 519,713
Repayment of notes payable ........................ (44,344) (203,828)
Proceeds from notes payable ....................... 201,532 378,747
----------- -----------
Net cash provided by financing activities 417,188 697,564
----------- -----------
Net decrease in cash and cash equivalents: ............. (239,743) (5,539)
Cash and cash equivalents:
Beginning of period ..................... 299,083 5,633
----------- -----------
End of period ........................... $ 59,340 $ 94
=========== ===========
Supplemental information:
-----------
Interest paid ..................................... $ 5,386 $ 8,545
=========== ===========
See accompanying notes to unaudited consolidated condensed financial statements
CELL ROBOTICS INTERNATIONAL, INC.
AND SUBSIDIARY
Notes to Unaudited Consolidated Condensed Financial Statements
June 30, 2003
1. Presentation of Unaudited Consolidated Financial Statements
These unaudited consolidated condensed financial statements have been prepared
in accordance with the rules of the Securities and Exchange Commission. Certain
information and footnotes normally included in financial statements prepared in
conformity with accounting principles generally accepted in the United States of
America (GAAP) have been condensed or omitted pursuant to such rules and
regulations. The results of operations for interim periods are not necessarily
indicative of results which may be expected for any other interim period or for
the year ending December 31, 2003.
2. Capital Resources
Since inception, the Company has incurred operating losses and other equity
charges which have resulted in an accumulated deficit of $31,069,945 at June 30,
2003 and operations using net cash of $596,995 in the first half of 2003.
The Company's ability to improve cash flow and ultimately achieve profitability
will depend on its ability to significantly increase sales. Accordingly, the
Company is manufacturing and marketing the Lasette, a sophisticated laser-based
medical device, that leverages the Company's existing base of technology. The
Company believes the markets for this product are broader than that of the
scientific research instruments market and, as such, offer a greater opportunity
to significantly increased sales. In addition, the Company is pursuing
development and marketing partners for some of its new medical products. If
obtained, the Company believes these partnerships may enhance the Company's
ability to rapidly ramp-up its marketing and distribution strategy, and possibly
offset the products' development costs.
Although the Company has begun manufacturing and marketing the Lasette and the
Company continues to market its scientific research instrument line, it does not
anticipate achieving profitable operations until after 2003. As a result, the
Company expects that additional operating funds will be required under its
September 2002 promissory note or under alternative financing sources and that
its accumulated deficit will increase in the foreseeable future.
This Form 10-QSB should be read in conjunction with the Form 10-KSB which
includes the Company's audited consolidated financial statements for the year
ended December 31, 2002. There is substantial doubt that the Company will be
able to continue as a going concern. No adjustments have been made to the
accompanying financial statements to reflect the potential impact of this
uncertainity.
3. Issuance of Equity Securities
On February 20, 2003, the Company entered into a stock purchase agreement with
RR&L, an investment partnership. In connection with this agreement, the Company
issued 375,000 shares of its common stock and received, in gross proceeds,
$150,000. Additionally the investor was issued warrants to purchase 112,500
shares of the Company's common stock at a price of $0.55 per share. The warrants
expire on June 11, 2008.
On February 24, 2003, the Company entered into a stock purchase agreement with
Mr. Valentin Bagarella, a private investor. In connection with this agreement,
the Company issued 250,000 shares of its common stock and received, in gross
proceeds, $100,000. Additionally Mr. Bagarella was issued warrants to purchase
50,000 shares of the Company's common stock at a price of $0.58 per share. The
warrants expire on February 25, 2008.
On April 7, 2003, the Company entered into a stock purchase agreement with Mr.
Eutimio Sena, a Director and as of June 17, 2003 the Company's President and
Chief Executive Officer. In connection with this agreement, the Company issued
543,150 shares of its common stock in payment for $151,725 fees owed to Mr.
Sena. Additionally Mr. Sena was issued warrants to purchase 135,788 shares of
the Company's common stock at a price of $0.60 per share. The warrants expire on
April 7, 2008.
On June 5, 2003, the Company entered into a stock purchase agreement with Mr.
Haydock Miller, a private investor. In connection with this agreement, the
Company issued 28,572 shares of its common stock and received, in gross
proceeds, $10,000. Additionally Mr. Miller was issued warrants to purchase 5,750
shares of the Company's common stock at a price of $0.60 per share. The warrants
expire on June 5, 2008.
4. Notes Payable
In January 2001, certain members of the Company's board of directors or
affiliates of members or former members of the Company's board of directors
agreed to make term loan advances to the Company pursuant to the terms of a loan
agreement. The loans are evidenced by unsecured promissory notes, bear interest
at the rate of ten percent per annum and were due on January 31, 2002. As of
June 30, 2003, the remaining principal balance of loans outstanding under the
loan agreement was approximately $47,000 which can be demanded at any time.
On March 29, 2002, the Company signed a non-revolving line of credit documented
as a promissory note in the face amount of $2,000,000 payable to a director, Mr.
Oton Tisch. The promissory note was amended and restated on September 17, 2002.
Under this promissory note, Mr. Tisch may make one or more advances to the
Company at times and in amounts, as determined by Mr. Tisch in his discretion,
up to an aggregate principal sum of $1,488,500 (the "Loan A Facility").
Additionally, Mr. Tisch must make requested advances under this note up to an
aggregate principal sum of $511,500 so long as he remains satisfied in his
reasonable credit judgment with the Company's capital raising activities (the
"Loan B Facility"). Therefore, Mr. Tisch has no obligation or commitment to make
any loans under the Loan A Facility and must make advances under the Loan B
Facility only to the extent he is satisfied with the Company's capital raising
activities in his reasonable credit judgment. This note bears interest at 8% per
annum and is presently secured by all of the Company's assets. As of June 30,
2003, the remaining principal balance outstanding under the note was
approximately $135,000, all of which was outstanding under the Loan B Facility.
No amounts borrowed under the Loan A Facility or the Loan B Facility may be
reborrowed after being repaid by the Company. As of June 30, 2003, the remaining
amount available at Mr. Tisch's sole discretion under the Loan A Facility is
$1,000,000. As of June 30, 2003, the remaining amount available under the Loan B
Facility is approximately $348,000. All principal and interest outstanding under
the note are due on April 1, 2004.
Private investors that are not affiliated with the Company have advanced the
Company principal sums of $27,000, $75,000, $20,000 and $35,000, on October 3,
2002, June 16, 2003, May 20, 2003 and June 6, 2003, respectively. The notes are
due on demand and bear interest at rates between 3% and 10%. The last two notes
mentioned above permit the payee of the notes to convert the outstanding balance
of the notes into the Company's common stock at a rate of $0.30 per share. The
Company recorded a beneficial conversion charge during the quarter ended June
30, 2003 of $6,833 in connection with these two notes.
5. Earnings Per Share
Basic loss per share is computed on the basis of the weighted-average number of
common shares outstanding during the quarter. Diluted loss per share, which is
computed on the basis of the weighted average number of common shares and all
potentially dilutive common shares outstanding during the quarter, is the same
as basic loss per share for the periods ended June 30, 2003 and 2002, as all
potentially dilutive securities were anti-dilutive.
Options to purchase 3,717,536 and 2,915,702 shares of Common Stock were
outstanding at June 30, 2003 and 2002, respectively. Warrants to purchase
2,099,562 and 1,942,649 shares of Common Stock were outstanding at June 30, 2003
and 2002, respectively. These were not included in the computation of diluted
loss per share as the assumed exercise of the options would have been
anti-dilutive.
The Company applies APB Opinion 25, Accounting for Stock Issued to Employees,
and related Interpretations in accounting for its plans. The following table
illustrates the effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of FASB Statement 123, Accounting
for Stock-Based Compensation, to its stock-based employee plans.
Quarter ended
June 30,
------------------------
2003 2002
Net loss, as reported ......................... $(921,944) $(525,730)
Add: Stock-based employee compensation
expense included in reported net
income, net of related tax effects .......... -- --
Deduct: Total stock-based
employee compensation
expense determined under fair
value based method for awards granted,
modified, or settled, net of related
tax effects ................................. (35,261) (58,677)
--------- ---------
Pro forma net loss ............................ $(957,205) $(584,407)
========= =========
Loss per share, basic and diluted:
As reported ................................. $ (0.05) $ (0.05)
Pro forma ................................... $ (0.05) $ (0.06)
Six Months ended
June 30,
----------------------------
2003 2002
Net loss, as reported ..................... $(1,969,622) $ (957,044)
Add: Stock-based employee compensation
expense included in reported net
income, net of related tax effects ...... -- --
Deduct: Total stock-based
employee compensation
expense determined under fair
value based method for awards granted,
modified, or settled, net of related
tax effects ............................. (70,522) (117,354)
----------- -----------
Pro forma net loss ........................ $(2,040,144) $(1,074,398)
=========== ===========
Loss per share, basic and diluted:
As reported ............................. $ (0.10) $ (0.09)
Pro forma ............................... $ (0.11) $ (0.10)
6. Operating Segments
The Company has two operating segments: scientific research instruments and
laser-based medical devices. The scientific research instruments segment
produces research instruments for sale to universities, research institutes, and
distributors. The laser-based medical devices segment produces the Lasette for
consumer and clinical markets for sale to, individual consumers and to
hospitals, nursing homes and blood banks through distributors.
The accounting policies of the segments are the same as those described in the
summary of significant accounting policies in the Company's Annual Report on
Form 10-KSB. The Company evaluates segment performance based on profit or loss
from operations prior to the consideration of unallocated corporate general and
administration costs. The Company does not have intersegment sales or transfers.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business utilizes different technologies and marketing strategies.
Operating Segments
Three months ended:
June 30, 2003
Scientific Laser-Based
Research Medical Devices
Instruments Corporate Total
----------------- ---------------- ---------------- ---------------
Revenues from customers 138,515 1,403 - 139,918
Loss from operations (41,565) (582,493) (297,255) (921,313)
June 30, 2002
Scientific Laser-Based
Research Medical Devices
Instruments Corporate Total
----------------- ---------------- ---------------- ---------------
Revenues from customers 73,986 30,144 - 104,130
Loss from operations (106,442) (209,571) (182,348) (498,361)
Six months ended: June 30, 2003
Scientific Laser-Based
Research Medical Devices
Instruments Corporate Total
----------------- ---------------- ---------------- ---------------
Revenues from customers 193,000 107,218 - 300,218
Loss from operations (116,307) (1,217,110) (632,591) (1,966,008)
June 30, 2002
Scientific Laser-Based
Research Medical Devices
Instruments Corporate Total
----------------- ---------------- ---------------- ---------------
Revenues from customers 251,570 247,483 - 499,053
Loss from operations (179,203) (343,464) (367,170) (889,837)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
report.
Liquidity and Capital Resources
Cash used in operations for the six-month periods ended June 30, 2003 and 2002
and the year ended December 31, 2002 was $596,995, $695,736 and $1,831,591,
respectively.
Net cash provided by financing activities for the six-month periods ended June
30, 2003 and 2002 and for the year ended December 31, 2002 was $417,188,
$697,564 and $2,136,508, respectively.
Total assets decreased to $1,240,813 at June 30, 2003 from $1,982,620 at
December 31, 2002, a decrease of $741,807, or 37%. This change in total assets
is primarily attributed to the following:
o Our current assets decreased $735,543, or 45%, as of June 30, 2003 compared
to our current assets as of December 31, 2002. This decrease was primarily
the result of a decrease in receivables, as described below.
o Cash decreased $239,743, from $299,083 at December 31, 2002 to $59,340 at
June 30, 2003. The decrease in cash was primarily attributed our
operational needs during the six-month period ended June 30, 2003.
o Accounts receivable decreased $410,296 from $500,636 at December 31, 2002
to $90,340 at June 30, 2003 and other receivables decreased to zero at June
30, 2003 from $260,000 at December 31, 2002. The decrease in accounts
receivable was primarily attributed to fewer sales in the second quarter of
2003 when compared with the fourth quarter of 2002. Our decline in sales
was primarily due to our lack of capital to invest in sales and marketing
activities. The other receivables balance at December 31, 2002 represented
amounts due by an investor in connection with a December 2002 private
placement transaction. The balance of the other receivables was collected
in January and February of 2003.
o Inventory increased by $169,537, or 31%, to $708,821 at June 30, 2003 from
$539,284 at December 31, 2002. The increase in inventory was partially
responsible for the increase in accounts payable of approximately $230,000
from December 31, 2002 to June 30, 2003. We have increased our payment
cycle of accounts payable to manage our cash flow in light of our limited
cash resources.
Our current ratio at June 30, 2003 was .53 compared to 1.38 at December 31,
2002. Our total current liabilities increased $519,900 from $1,192,729 at
December 31, 2002 to $1,712,629 at June 30, 2003. Our working capital decreased
from $454,520 at December 31, 2002 to a deficit of $800,923 at June 30, 2003.
The decrease in working capital was primarily due to our operating losses that
we experienced in the six-month period ended June 30, 2003.
In October 2001, we were notified by the Center for Medicare and Medicaid
Services, or CMS, that a Healthcare Common Procedure Coding System, or HCPCS,
code had been assigned to our Lasette. In January 2002, CMS published the
allowable for our Lasette that was associated with the newly issued HCPCS code.
Generally, Medicare reimburses 80% of the published allowable. In March 2002, we
were notified by CMS that they have not established a medical criteria for our
Lasette and as a result CMS will only reimburse approximately $17 for the price
of the Lasette, a minimal portion of its cost. Whether we can obtain a higher
reimbursement rate for the Lasette will depend on the establishment of a
favorable medical policy for the Lasette, which is largely outside our control.
We are working to provide input into CMS's establishment of an appropriate
medical policy so that a higher reimbursement rate may be set. However, we can
provide no assurance as to whether a medical policy favorable to us will be
established by CMS, or when, if ever, an adequate reimbursement rate for the
Lasette will be set or the eventual amount of reimbursement.
Our ability to improve cash flow and ultimately achieve profitability will
depend on our ability to significantly increase sales. Accordingly, we are
manufacturing and marketing the Lasette, a sophisticated laser-based medical
device, that leverages our existing base of technology. We believe the markets
for this product are broader than that of the scientific research instruments
market and, as such, offer a greater opportunity to significantly increased
sales. In addition, we are pursuing development and marketing partners for some
of our new medical products. If obtained, we believe these partnerships may
enhance our ability to rapidly ramp-up our marketing and distribution strategy,
and possibly offset the products' development costs. Although we have begun
manufacturing and marketing the Lasette and we continue to market our scientific
research instrument line, we do not anticipate achieving profitable operations
until after 2003. As a result, as described in more detail below, we expect that
additional operating funds will be required under our September 17, 2002 amended
and restated promissory note or under alternative financing sources and that our
accumulated deficit will increase in the foreseeable future.
Commitments - As of June 30, 2003, our outstanding indebtedness for borrowed
money included the following:
o In January 2001, certain members of our board of directors and
affiliates of members or former members of our board of
directors agreed to make term loan advances to us in an aggregate amount
of $1,000,000 pursuant to the terms of a loan agreement with us. The
loans are evidenced by unsecured promissory notes, bear interest at the
rate of ten percent per annum and were due on January 31, 2002. As of
June 30, 2003, the remaining principal balance of loans outstanding under
the loan agreement was approximately $47,000, which can be demanded at
any time. In connection with the January 2001 loan commitment,
each lender was issued a warrant in proportion to the amount of the loan
made by that lender. The warrants allow the lenders to purchase an
aggregate of 150,000 shares of our common stock. The warrants may be
exercised until January 31, 2004, at a price equal to $1.125 per share
of our common stock.
o On March 29, 2002, we signed a non-revolving line of credit documented
as a promissory note in the face amount of $2,000,000 payable to one of
our directors, Mr. Oton Tisch. The promissory note was amended and
restated on September 17, 2002. Under this promissory note, Mr. Tisch
may make one or more advances to us at times and in amounts, as
determined by Mr. Tisch in his discretion, up to an aggregate principal
sum of $1,488,500 (the "Loan A Facility"). Additionally, Mr. Tisch must
make requested advances under this note up to an aggregate principal sum
of $511,500 so long as he remains satisfied in his reasonable credit
judgment with our capital raising activities (the "Loan B Facility").
Therefore, Mr. Tisch has no obligation or commitment to make any loans
under the Loan A Facility and must make advances under the Loan B
Facility only to the extent he is satisfied with our capital raising
activities in his reasonable credit judgment. This note bears interest
at 8% per annum and is presently secured by all our assets. As of June
30, 2003, the remaining principal balance outstanding under the note was
approximately $135,000, all of which was outstanding under the Loan B
Facility. No amounts borrowed under the Loan A Facility or the Loan B
Facility may be reborrowed after being repaid by us. As of June 30,
2003, the remaining amount available at Mr. Tisch's sole discretion under
the Loan A Facility is $1,000,000. As of June 30, 2003, the remaining
amount available under the Loan B Facility is approximately $348,000.
All principal and interest outstanding under the note are due on April 1,
2004.
o Private investors that are not affiliated with the company have advanced
us the principal sums of $27,000, $75,000, $20,000 and $35,000, on
October 3, 2002, June 16, 2003, May 20, 2003 and June 6, 2003,
respectively. The notes are due on demand and bear interest at rates
between 3% and 10%. The last two notes mentioned above permit the payee
of the notes to convert the outstanding balance of the notes into the
Company's common stock at a rate of $0.30 per share. The Company recorded
a beneficial conversion charge during the quarter ended June 30, 2003 of
$6,833 in connection with these two notes.
Capital Sources - Our operating cash flows continue to be provided by ongoing
sales of the Lasette and the Cell Robotics Workstation. During the first six
months of 2003 and during 2002, sales of our products generated revenues of
approximately $300,000 and $1,584,000, respectively. In July 2002, we received a
commitment from California Caltech, Inc., our distributor that sells the Lasette
in China, to order additional Lasettes. This commitment provides for sales of
2,000 Lasettes, and for approximately 15 million corresponding disposables by
May 2004. Although the distributor has committed to purchase the above Lasettes
and related disposables, we have no control over the timing or the amount of any
order within the relevant periods discussed above. Also given our cash position
we may have to revert to using production loan facilities, that are very
expensive, or we cannot make any assurances that we will have the capital
resources necessary to purchase the raw materials needed to manufacture the
products required by our customer. Further, the risks associated with these
international activities includes, but are not limited to, the compliance by our
distributor with its commitments. Although the distributor has been complaint
and we are not aware of any reason that the distributor will not fulfill its
commitment, we cannot assure you that it will remain in compliance with its
agreement with us.
We are currently developing a modified version of the Lasette, called the Infant
Lasette, designed specifically for neonatal/pediatric heelstick applications. On
September 30, 2002, we commenced our clinical trials of the Infant Lasette.
After completing the requisite tests in the clinical trial, we will submit the
Infant Lasette for FDA clearance. We anticipate that we will be able to make our
submission to the FDA in the third quarter of 2003. We further anticipate that
the FDA clearance will take at least three months following this submission.
However, FDA clearance will be delayed if the FDA requests additional
information based on the initial or subsequent submissions. Although there can
be no assurances, if we are able to correct our liquidity issues, we expect that
we will be ready to sell the Infant Lasette in the fourth quarter of 2003.
We expect that our open back orders will also produce additional revenues based
on disposable shields associated with these products. Approximately $516,000 of
the purchase orders for the Lasette is required to be delivered in 2003.
Although our goal is to ship the remaining Lasette units covered by our open
purchase orders during 2003, all units are not required to be delivered until
May 2004.
As discussed above, on September 17, 2002, we entered into an amended and
restated promissory note payable to Mr. Tisch. Under this promissory note, Mr.
Tisch may, in his discretion, make one or more advances to us under the Loan A
Facility. Additionally, Mr. Tisch must make requested advances under this note
under the Loan B Facility so long as he remains satisfied, in his reasonable
credit judgment, with our capital raising activities. As of June 30, 2003, the
remaining amount available at Mr. Tisch's sole discretion under the Loan A
Facility is $1,000,000. As of June 30, 2003, the remaining amount available
under the Loan B Facility is approximately $348,000.
In addition to the above sources, we have and will continue to actively pursue
negotiated transactions to raise capital through the issuance of debt, equity
and convertible debt instruments, or through the exchange of existing
instruments through transactions that could provide us with additional capital.
Adequacy of Capital - Since our inception, to provide working capital for our
product development and marketing activities, we have relied principally upon
the proceeds of both debt and equity financings. We have not been able to
generate sufficient cash from operations and, as a consequence, we must seek
additional financing to fund ongoing operations.
As of June 30, 2003, our net working capital was a deficit of $800,923 and our
total cash and cash equivalents was $59,340. We expect to experience operating
losses and negative cash flow for the foreseeable future. Therefore, we do not
have sufficient cash to sustain those operating losses without additional
financing. We presently need financing to repay our current indebtedness,
including payment of our notes in the aggregate principal amount of
approximately $339,000 of which approximately $204,000 is currently due. In
addition to debt service requirements, we will require cash to fund our
operations. Based on our current operations, we estimate that our cash needs of
at least approximately $200,000 each month for the foreseeable future and will
be a total of approximately $1,200,000 from June 30 through December 31, 2003.
Our operating requirements depend upon several factors, including the rate of
market acceptance of our products, particularly the Lasette, our level of
expenditures for manufacturing, marketing and selling our products, costs
associated with our staffing and other factors. We have been funding our
operating requirements with proceeds from small private placements of our equity
securities and indebtedness for borrowed money, particularly with financings
with Mr. Oton Tisch, one of our directors, and with sales of our products.
However, historically, these sources of capital have only been adequate to meet
our short-term needs. We need immediate financing to fund both our short-term
and long-term needs. Mr. Tisch's obligation to fund our Company under his
September 2002 note is discretionary in the case of the Loan A facility and is
limited and subject to, in the case of the Loan B facility and may not be
available at all if Mr. Tisch determines that he is not satisfied with our
capital raising activities. Consequently we cannot ensure that Mr. Tisch will
make any further advances under this note. Therefore, we intend to continue to
seek to raise equity or debt financing. Although we have had discussions with
potential investors, we have not been able to obtain sufficient long-term
financing on acceptable terms as of the date of this report. No assurance can be
given that we will be able to obtain any additional financing on favorable
terms, if at all. If our operating requirements vary materially from those
currently planned, we may require more financing than currently anticipated.
Borrowing money may involve pledging some or all of our assets. Raising
additional funds by issuing common stock or other types of equity securities may
further dilute our existing shareholders. If we cannot obtain additional
financing in a timely manner, we will not be able to continue our operations. In
addition, the reports we received from our independent auditors covering our
fiscal years ended December 31, 2002 and 2001 financial statements contain an
explanatory paragraph that states that our recurring losses and negative cash
flows from operations raise substantial doubt about our ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of that uncertainty.
To date, we have generated only limited revenues from the sale of our products
and have been unable to profitably market our products. We incurred net losses
applicable to common shareholders of $1,969,622 and $3,007,246 for the six-month
period ended June 30, 2003 and the year ended December 31, 2002, respectively.
Revenues from the sale of our products were $300,218 and $1,584,359 for the
six-month period ended June 30, 2003 and for the year ended December 31, 2002,
respectively. We expect to experience operating losses and negative cash flow
for the foreseeable future. We do not have sufficient cash to sustain continuing
operating losses without additional financing. Even if we are able to obtain
additional financing to allow us to continue operations and repay indebtedness,
we must generate significant revenues to fund anticipated manufacturing and
marketing costs and to achieve and maintain profitability. We cannot assure you
that we will ever generate sufficient revenues to achieve profitability, which
will have a negative impact on the price of our common stock. If we do achieve
profitability, we cannot assure you that we will be able to sustain or increase
profitability in the future.
Results of Operations - Three months ended June 30, 2003 compared to the three
months ended June 30, 2002
Revenues from our product sales increased 35% to $139,918 for the quarter ended
June 30, 2003 from $104,130 for the quarter ended June 30, 2002. Sales of our
laser-based medical devices during the quarter ended June 30, 2003 were $1,403,
a decrease of 95% from sales of $30,144 in the comparable quarter of 2002. The
decrease in sales was primarily due to a lack of financial resources available
to promote our products. Sales of our scientific research instruments during the
quarter ended June 30, 2003 were $138,490, an increase of $64,504, or 87% over
sales of $73,986 in the comparable quarter of 2002. The increase in sales of our
scientific research instruments should have been larger. The primarily reason
for the insignificant sales was a lack of financial resources available to
promote our products.
Our gross margin declined to a negative margin of 79% for the quarter ended June
30, 2003 from a negative margin of 55% for the quarter ended June 30, 2002. The
low sales in the two quarters ended June 30, 2003 and June 30, 2002 and a lack
of efficiencies in the production of our products primarily contributed to the
negative gross margins.
Operating expenses increased $369,616 from $441,497 for the quarter ended June
30, 2002 to $811,113 for the quarter ended June 30, 2003. General and
administrative expenses increased $114,907, or 63%, from $182,348 in the second
quarter of 2002 to $297,255 in the second quarter of 2003. The increase was
primarily attributable to two items. First, we recorded non-cash charges to
recognize the value of stock provided to consultants of approximately $45,000.
Second, our salaries were approximately $45,000 higher in the second quarter of
2003 when compared to the second quarter of 2002. The increase in salaries
resulted from our hiring of a new President in July of 2002 and retaining our
former president as a part-time employee and consultant. Additionally, our
salaries were higher in 2003 because we had an executive assistant in the second
quarter of 2003 but not in the second quarter of 2002. Our sales and marketing
expenses increased $157,108, or 94%, from $167,339 in the second quarter of 2002
to $324,447 in the second quarter of 2003. The increase was primarily due to
fees charged for sales consultants of approximately $175,000 in the second
quarter of 2003. No comparable expenses were incurred in the second quarter of
2002. Our research and development expenses increased $97,601, or 106%, from
$91,810 in the second quarter of 2002 to $189,411 in the second quarter of 2003.
The increase in our research and development expenses occurred primarily as a
result of work performed on our new product, the Infant Lasette, that will be
used for heel-stick applications.
During the three months ended June 30, 2003 interest expense decreased to
$10,631 from $34,976 during the quarter ended June 30, 2002. The decrease in
interest expense occurred because we had a lower average outstanding balance of
debt in the second quarter of 2003 when compared with the same period in 2002.
The decrease in our outstanding debt mainly resulted from the November 2002
conversion of debt of approximately $1.4 million of debt owed to Mr. Tisch, one
of our directors, to equity.
Results of Operations - Six months ended June 30, 2003 compared to the six
months ended June 30, 2002
Sales of products for the six-month period ended June 30, 2003 decreased
$198,835, or 40%, to $300,218 from $499,053 in the same period of 2002. The
decrease occurred in the first quarter of 2003 and was explained in our report
for that quarter. Basically the decrease in sales occurred because of a lack of
financial resources available to promote our products.
Our gross margin on product sales decreased from 4% for the six-month period
ended June 30, 2002 to a negative margin of 92% for the six-month period ended
June 30, 2003. A lack of efficiencies in the production of our products
contributed to the decline in gross margin. These inefficiencies were primarily
due to low volume of sales that occurred during the first six months of 2003.
Operating expenses increased $777,303 or 85% from $912,095 for the six-month
period ended June 30, 2002 to $1,689,398 for the period ended June 30, 2003.
General and administrative expenses increased $265,420, or 72%, from $367,171 in
the first half of 2002 to $632,591 in the first half of 2003. The increase was
primarily attributable to three items. First, we recorded non-cash charges to
recognize the value stock provided to consultants and the value of options
granted to a business consultant totaling approximately $91,000. Second, our
salaries were approximately $94,000 higher in the first half of 2003 when
compared to the first half of 2002. The increase in salaries resulted from our
hiring of a new President in July of 2002 and retaining our former president as
a part-time employee and consultant. Additionally, our salaries were higher in
2003 because we had an executive assistant in the first half of 2003 but not in
the first half of 2002. Third, in the first half of 2003 we experienced an
increase of approximately $30,000 for professional legal and accounting fees,
which was primarily attributed to additional costs associated with the filing of
our registration statements. We did not have comparable filings in the first
half of 2002. Our sales and marketing expenses increased $361,522, or 106%, from
$342,320 in the first half of 2002 to $703,842 in the first half of 2003. The
increase was primarily due to fees charged for sales consultants of
approximately $363,000 in the first half of 2003. No comparable expenses were
incurred in the first half of 2002. Our research and development expenses
increased $150,361, or 74%, from $202,604 in the first half of 2002 to $352,965
in the first half of 2003. The increase in our research and development expenses
occurred primarily as a result of work performed on our two new products, the
UltraLight Laser, that is useful in aesthetic or skin rejuvenation applications,
and the Infant Lasette, that will be used for heel-stick applications.
Other income decreased in the six-month period ended June 30, 2003 to $10,000
from $27,923 in the six-month period ended June 30, 2002. The decrease was
primarily due to the Company receiving more in royalty payments in 2002 than in
2003. The royalty payments were in connection with the IVF workstation
technology that the Company sold in 2000. During the six-months period ended
June 30, 2003 interest expense decreased to $13,614 from $95,130 during the
six-month period ended June 30, 2002. The decrease in interest expense occurred
because we had a lower average outstanding balance of debt in the six-month
period ended June 30, 2003 when compared with the same period in 2002. The
decrease in our outstanding debt mainly resulted from the November 2002
conversion of debt of approximately $1.4 million of debt owed to Mr. Tisch, one
of our directors, to equity.
Critical Accounting Policies and Estimates
High-quality financial statements require rigorous application of high-quality
accounting policies. Our policies are discussed in the Company's annual report
on Form 10-KSB for the year ended December 31, 2002, and are considered by
management to be critical to an understanding of our financial statements
because their application places the most significant demands on management's
judgment, with financial reporting results relying on estimation about the
effect of matters that are inherently uncertain. We review the accounting
policies we use in reporting our financial results on a regular basis. As part
of such review, we assess how changes in our business processes and products may
affect how we account for transactions. For the six-month period ended June 30,
2003, we have not changed our critical accounting policies or practices,
however, we are evaluating how improvements in processes and other changes in
our scientific research instruments may impact revenue recognition policies in
the future.
In connection with the sale of our scientific research instruments and at the
customer's request, we may be requested to install the Cell Robotics
Workstation, provide training services or both. Prior to certain management
changes occurring in 2002, the production of our scientific research instruments
involved significant customization including modifications required for specific
customer applications. These units often required our scientist to complete
complex configurations and customization during installation. In connection with
the management change in 2002, we have focused our efforts on producing a
scientific research instrument that is standardized and does not involve
significant customization during installation. We are now offering a more
standard product to our customers and we have begun to evaluate how this change
in our product and the related reduced complexity of installation and training
may impact how we recognize revenue for our scientific research instruments.
Safe harbor for Forward-looking statements
This Report contains forward-looking statements. These statements relate to
future events or our future financial performance. In some cases,
forward-looking statements can be identified by terminology, for instance the
terms "may," "will," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential" or "continue," the negative of these terms or
other comparable terminology. These forward-looking statements include, but are
not limited to, statements regarding the following:
o anticipated operating results and sources of future revenue;
o growth;
o adequacy of the Company's financial resources;
o development of new products and markets;
o obtaining and maintaining regulatory approval and changes in
regulations;
o competitive pressures;
o commercial acceptance of new products;
o changing economic conditions;
o expectations regarding competition from other companies; and
o the Company's ability to manufacture and distribute its products.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. These forward-looking statements
are based largely on our current expectations and are subject to a number of
risks and uncertainties. Actual results will differ and could differ materially
from these forward-looking statements. The factors that could cause actual
results to differ materially from those in the forward-looking statements
include the following: (i) industry conditions and competition, (ii) reforms in
the health care industry or limitations imposed on third party reimbursement of
health care costs, (iii) the rate of market acceptance of the Company's
products, particularly the Lasette, (iv) operational risks and insurance, (v)
risks associated with operating in foreign jurisdictions, (vi) product
liabilities which may arise in the future which are not covered by insurance or
indemnity, (vii) the impact of current and future laws and government
regulation, as well as repeal or modification of same, affecting the medical
device industry and the Company's operations in particular, (viii) the ability
to retain key personnel, (ix) renegotiation, nullification, or breach of
contracts with distributors, suppliers or other parties, (x) the relationship
with the Company's suppliers, particularly its supplier of crystals used in our
Ebrium: YAG lasers and (xi) the risks described elsewhere, herein and from time
to time in the Company's other reports to and filings with the Securities and
Exchange Commission. In light of these risks and uncertainties, there can be no
assurance that the matters referred to in the forward-looking statements
contained in this Report will in fact occur. The Company does not intend to
update any of the forward-looking statements after the date of this Report.
ITEM 3. CONTROLS AND PROCEDURES
Based upon an evaluation completed within 90 days prior to the filing of this
quarterly report with the SEC, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective for gathering and disclosing information on a timely
basis as required for reports filed under the Securities and Exchange Act of
1934. There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of this evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
The Company's disclosure controls and procedures and internal controls provide
reasonable, but not absolute, assurance that all deficiencies in design or
operation of these control systems, or all instances of errors or fraud, will be
prevented or detected. These control systems are designed to provide reasonable
assurance of achieving the goals of these systems in light of the Company's
resources and nature of the Company's business operations. These control systems
remain subject to risks of human error and the risk that controls can be
circumvented for wrongful purposes by one or more individuals in management or
non-management positions.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Change in Securities and Use of Proceeds
On February 20, 2003, we issued 375,000 shares of our Common
Stock in a private placement transaction with an investor,
which resulted in gross proceeds to the Company of $150,000.
Additionally, the investor was issued warrants to purchase
112,500 shares of the Company's Common Stock at a price of
$0.55 per share. The warrants expire in 2008. The proceeds
were used for working capital in the Company's day-to-day
operations.
On February 24, 2003, we issued 250,000 shares of our Common
Stock in a private placement transaction with an investor,
which resulted in gross proceeds to the Company of $100,000.
Additionally, the investor was issued warrants to purchase
50,000 shares of the Company's Common Stock at a price of
$0.58 per share. The warrants expire in 2008. The proceeds
were used for working capital in the Company's day-to-day
operations.
On April 7, 2003, we issued 543,150 shares of our Common Stock
in a private placement transaction with Mr. Eutimio Sena, one
of our directors. The shares were issued as payment of amounts
owing to Mr. Sena of $151,725. Additionally, Mr. Sena was
issued warrants to purchase 135,788 shares of the Company's
Common Stock at a price of $0.60 per share. The warrants
expire in 2008.
On June 5, 2003, we issued 28,572 shares of our Common Stock
in a private placement transaction with an investor, which
resulted in gross proceeds to the Company of $10,000.
Additionally, the investor was issued warrants to purchase
5,750 shares of the Company's Common Stock at a price of $0.60
per share. The warrants expire in 2008. The proceeds were used
for working capital in the Company's day-to-day operations.
Item 3. Default 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
Exhibits:
31.1 Certificate of the Chief Executive Officer of Cell
Robotics International, Inc. pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31.2 Certificate of the Chief Financial Officer of Cell
Robotics International, Inc. pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
32.1 Certificate of the Chief Executive Officer of Cell
Robotics International, Inc. pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2 Certificate of the Chief Financial Officer of Cell
Robotics International, Inc. pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
Reports on Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this quarterly report to be signed on its behalf
by the undersigned, thereunto duly authorized.
CELL ROBOTICS INTERNATIONAL, INC.
Dated: August 14, 2003 By: Eutimio L. Sena
---------------------------------
Eutimio L. Sena, President, Chief
Executive Officer and Director
Dated: August 14, 2003 By: Paul Johnson
---------------------------------
Paul C. Johnson, Chief Financial
Officer, Director and Secretary
EXHIBIT 31.1
CERTIFICATION BY CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Eutimio Sena, Chief
Executive Officer of Cell Robotics International, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Cell Robotics
International, Inc.;
2. Based on my knowledge, this 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report.
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Presented in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; 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 over financial reporting.
Date: August 14, 2003 Eutimio L. Sena
-----------------------
Eutimio L. Sena
Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION BY CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Paul C. Johnson, Chief Financial Officer of Cell Robotics International,
Inc., certify that:
1 I have reviewed this quarterly report on Form 10-QSB of Cell Robotics
International, Inc.;
2 Based on my knowledge, this 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
report;
3 Based on my knowledge, the financial statements, and other financial
information included in this 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 report.
4 The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Presented in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5 The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; 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 over financial reporting.
Date: August 14, 2003 Paul Johnson
-----------------------
Paul Johnson
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cell Robotics International, Inc.
(the "Company") on Form 10-QSB for the period ending June 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Eutimio L. Sena, Chief Executive Officer of the Company, certify, to the best of
my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, based upon a review of the
Report, that:
(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
.
Eutimio L. Sena
-----------------------
Eutimio L. Sena
Chief Executive Officer
Cell Robotics International, Inc.
August 14, 2003
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cell Robotics International, Inc.
(the "Company") on Form 10-QSB for the period ending June 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Paul Johnson, Chief Financial Officer of the Company, certify, to the best of my
knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, based upon a review of the
Report, that:
(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
Paul Johnson
---------------------------------
Paul Johnson
Chief Financial Officer
Cell Robotics International, Inc.
August 14, 2003