U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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: December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
Commission file No. 0-13167
TM CENTURY, INC.
(Name of small business issuer as specified in its charter)
Delaware 73-1220394
(State of incorporation) (IRS Employer Identification No.)
2002 Academy, Dallas, Texas 75234
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (972) 406-6800
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
--- ---
The number of issuer's shares of Common Stock outstanding as of December 31,
2002 was 2,481,193.
Transitional Small Business Disclosure Format (check one): Yes No X
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PART I. FINANCIAL INFORMATION FOR TM CENTURY, INC.
Item 1. Financial Statement and Notes
TM Century, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, 2002 (Unaudited) and September 30, 2002
ASSETS
December 31, 2002 September 30, 2002
------------------ ------------------
CURRENT ASSETS
Cash and cash equivalents $ 573,605 $ 459,649
Short-term investments 652,403 645,452
Accounts receivable
less allowance for doubtful accounts of $46,775 and $49,181, respectively 652,940 635,814
Inventories, net of allowance for obsolescence of $258,545 for both periods 380,672 369,779
Prepaid expenses 93,384 88,577
------------------ ------------------
TOTAL CURRENT ASSETS 2,353,004 2,199,271
PROPERTY AND EQUIPMENT 2,999,606 2,981,103
Less accumulated depreciation and amortization (2,594,742) (2,556,719)
------------------ ------------------
NET PROPERTY AND EQUIPMENT 404,864 424,384
PRODUCT DEVELOPMENT COSTS, net of accumulated amortization
of $540,492 and $502,474, respectively 403,298 403,455
COMEDY MATERIAL RIGHTS, net of accumulated amortization
of $99,200 and $93,000, respectively 24,800 31,000
OTHER ASSETS 7,374 7,560
------------------ ------------------
TOTAL ASSETS $ 3,193,340 $ 3,065,670
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of note payable $ 12,000 $ 12,000
Accounts payable 36,070 30,956
Accrued expenses 83,458 87,065
Deferred revenue 138,748 129,484
Customer deposits - current 59,645 59,645
------------------ ------------------
TOTAL CURRENT LIABILITIES 329,921 319,150
NOTE PAYABLE - less current portion -- 3,000
CUSTOMER DEPOSITS - non-current 111,209 107,170
------------------ ------------------
TOTAL LIABILITIES 441,130 429,320
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; authorized 7,500,000 shares; 29,705 29,705
2,970,481 shares issued; and 2,481,193 shares outstanding
Additional paid-in capital 2,275,272 2,275,272
Retained earnings 1,739,960 1,624,100
Treasury stock - at cost, 489,288 shares (1,292,727) (1,292,727)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 2,752,210 2,636,350
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,193,340 $ 3,065,670
================== ==================
See notes to interim consolidated financial statements.
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TM Century, Inc. and Subsidiaries
Consolidated Statements of Operations and Retained Earnings (Unaudited)
For The Three Months Ended December 31
2002 2001
----------- -----------
REVENUES $ 1,289,198 $ 1,247,417
Less Commissions 219,110 215,456
----------- -----------
NET REVENUES 1,070,088 1,031,961
COSTS AND EXPENSES
Production, Programming, and Technical Costs 329,722 412,576
General and Administrative 441,095 469,043
Selling Costs 152,966 227,861
Depreciation 38,023 36,539
----------- -----------
TOTAL COSTS AND EXPENSES 961,806 1,146,019
----------- -----------
OPERATING INCOME (LOSS) 108,282 (114,058)
OTHER INCOME
Interest income 7,578 11,035
----------- -----------
TOTAL OTHER INCOME 7,578 11,035
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 115,860 (103,023)
PROVISION FOR INCOME TAXES -- --
----------- -----------
NET INCOME (LOSS) $ 115,860 $ (103,023)
=========== ===========
RETAINED EARNINGS, BEGINNING OF PERIOD 1,624,100 1,680,644
----------- -----------
RETAINED EARNINGS, END OF PERIOD $ 1,739,960 $ 1,577,621
=========== ===========
BASIC NET INCOME (LOSS) PER COMMON SHARE $ 0.05 $ (0.04)
=========== ===========
DILUTED NET INCOME (LOSS) PER COMMON SHARE $ 0.05 $ (0.04)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,481,193 2,482,943
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING,
ASSUMING DILUTION 2,487,754 2,482,943
=========== ===========
See notes to interim consolidated financial statements.
3
TM Century, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For The Three Months Ended December 31
2002 2001
--------- ---------
OPERATING ACTIVITIES
Net income (loss) $ 115,860 $(103,023)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization of property and equipment 38,023 36,539
Amortization of product development costs and comedy material rights 44,219 43,590
Provision for doubtful accounts 3,750 4,500
Increase (decrease) from changes in operating assets and liabilities:
Accounts receivable (20,877) 34,323
Inventories (10,893) (5,867)
Product development costs (37,861) (41,787)
Prepaid expenses (4,807) (27,781)
Other assets 186 --
Accounts payable and accrued expenses 1,507 8,168
Deferred revenue 9,264 (21,122)
Customer deposits 4,039 5,854
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 142,410 (66,606)
INVESTING ACTIVITIES
Purchase of short-term investments (6,951) (10,245)
Purchases of property and equipment (18,503) (13,589)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (25,454) (23,834)
FINANCING ACTIVITIES
Principal payments on note payable (3,000) (6,556)
Acquisition of treasury stock -- (1,500)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (3,000) (8,056)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 113,956 (98,496)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 459,649 464,631
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 573,605 $ 366,135
========= =========
See notes to interim consolidated financial statements.
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TM CENTURY INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
1. BASIS OF PRESENTATION
The interim consolidated financial statements of TM Century, Inc. (the
"Company") at December 31, 2002, and for the three months ended December 31,
2002 and 2001, are unaudited, and include all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation. The September 30, 2002 balance sheets were derived from the
balance sheet included in the Company's audited consolidated financial
statements as filed on Form 10-KSB for the year ended September 30, 2002.
The accompanying unaudited interim consolidated financial statements are for
interim periods and do not include all disclosures normally provided in annual
consolidated financial statements, and should be read in conjunction with the
Company's audited consolidated financial statements. The accompanying unaudited
interim consolidated financial statements for the three months ended December
31, 2002 are not necessarily indicative of the results which can be expected for
the entire fiscal year.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of certain assets, liabilities,
revenues, and expenses. Actual results may differ from such estimates.
3. INCOME TAXES
The Company provides for income taxes under the asset and liability approach.
This method requires that deferred tax assets and liabilities be recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
No tax expense has been recorded for the period ended December 31, 2002 due to
the net operating loss carryforward from prior periods.
4. TREASURY STOCK
On October 29, 2001 the Board of Directors, by resolution, authorized the
Company to purchase up to 100,000 shares of its common stock on the open market
or through privately negotiated transactions, from time to time, dependent upon
market conditions, from November 1, 2001 through October 31, 2003. As of
December 31, 2002 the Company has made purchases of 2,000 shares at an average
price of $.75 per share, with 2,481,193 shares outstanding. These purchases were
funded by cash reserves of the Company. Future purchases are expected to be
funded from operations or cash reserves of the Company.
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5. STOCK OPTIONS
On October 1, 2002 the Company entered into a three year agreement to renew the
employment of R. David Graupner as President and Chief Executive Officer. The
agreement grants Mr. Graupner 250,000 stock options at $ .34 per share, which
vest at a rate of 40% upon grant and 20% per year thereafter through the term of
the agreement.
6. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share are calculated on the weighted average number of
common shares outstanding during each period. Diluted earnings per share include
common stock equivalents, if dilutive.
The following table provides a reconciliation between basic and diluted earnings
(loss) per share:
Three Months Ended
December 31
-------------------------
2002 2001
----------- -----------
Net Income (Loss) $ 115,860 $ (103,023)
Weighted Average Number of Shares Outstanding
Basic 2,481,193 2,482,943
Dilutive effect of common stock equivalents 6,561 0
----------- -----------
Diluted 2,487,754 2,482,943
Earnings (Loss) Per Share:
Basic Net Income (Loss) $ .05 $ (.04)
=========== ===========
Diluted Net Income (Loss) $ .05 $ (.04)
=========== ===========
7. NEW ACCOUNTING PRONOUNCEMENTS
In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which amends SFAS 123, "Accounting for
Stock-Based Compensation." SFAS 148 provides alternative methods of transition
for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the disclosure
requirements of SFAS 123 to require more prominent and more frequent disclosures
in financial statements about the effects of stock-based compensation. SFAS 148
is effective for fiscal years ending after December 15, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-Looking Statements
- --------------------------
This Quarterly Report contains forward-looking statements about the business,
financial condition and prospects of the Company that reflect assumptions made
by management and management's beliefs based on information currently available
to it. The Company can give no assurance that the expectations indicated by such
forward-looking statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, the Company's actual results may differ
materially from those indicated by the forward-looking statements.
The key factors that are not within the Company's control and that may have a
direct bearing on operating results include, but are not limited to, continued
maturation of the domestic and international markets for compact disc
6
technology; acceptance by the customers of the Company's existing and any new
products and formats; the development by competitors of products using improved
or alternative technologies and the potential obsolescence of technologies used
by the Company; the continued availability of software, hardware and other
products obtained by the Company from third parties; dependence on distributors,
particularly in the international market; the retention of employees; the
success of the Company's current and future efforts to reduce operating
expenses; the effectiveness of new marketing strategies; and general economic
conditions including, but not limited to, terrorist attacks on the United States
and the effect on the economy in general and on the Company's revenue base in
particular. Additionally, the Company may not have the ability to develop new
products cost-effectively. There may be other risks and uncertainties that
management is not able to predict.
When used in this Quarterly Report, words such as "believes," "expects,"
"intends," "plans," "anticipates," "estimates" and similar expressions are
intended to identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.
OVERVIEW
TM Century, Inc. (the "Company") is engaged primarily in the creation,
production, marketing, and worldwide distribution of music libraries, production
libraries, comedy services, station identification and commercials for broadcast
multimedia use.
TM Century's clients include radio and television stations; radio, television,
satellite and Internet networks; web sites and portals; the American Forces
Radio Network; advertising agencies; post production studios; cable facilities;
and a wide variety of commercial businesses.
LIQUIDITY AND CAPITAL RESOURCES
The Company relies upon current sales of music libraries and jingles sold with
terms of cash upon delivery for operating liquidity. Liquidity is also provided
by cash receipts from customers under contracts for production libraries and
weekly music service contracts having terms of one month to three years. The
Company is obligated to provide music updates throughout the contract terms for
both production library and weekly music service contracts. Sales of music
libraries, jingles, and the payments under production library and weekly music
service contracts will provide, in the opinion of management, adequate liquidity
to meet operating requirements at least through the next twelve month period.
The Company reported net income of approximately $116,000 in the first fiscal
quarter of 2003, compared to a loss of approximately $103,000 for the same
period in 2002. The Company had operating cash flows of approximately $142,000
for the first fiscal quarter of 2003, primarily due to the net income for the
period, supplemented by increases in deferred revenue and customer deposits. In
the same fiscal period of 2002 the Company used approximately $67,000 to fund
operations due to the loss for the period of approximately $103,000, partially
offset by changes in operating assets and liabilities including the collection
of $34,000 of accounts receivable balances. Approximately $19,000 was spent for
the purchase of property and equipment associated with upgrades of computer and
digital recording hardware in the first quarter of 2003. Purchases of property
and equipment for the same period in fiscal 2002 totaled approximately $14,000
and included costs related to the upgrade of production equipment. Expenditures
for product development for the quarter were approximately $38,000 and $42,000
for fiscal 2003 and 2002, respectively. Funds for operating needs, new product
development and capital expenditures for the period were provided from
operations of the Company. The Company's expenditures for property, equipment,
and development of new products are discretionary. Product development
expenditures are expected to be approximately $170,000 in fiscal 2003.
Management anticipates that cash flows from operations and cash reserves will be
sufficient to meet these capital requirements at least through the next twelve
months. The Company has no other significant commitments for capital
expenditures in fiscal 2003.
7
RESULTS OF CONTINUING OPERATIONS
Comparison of the Three-Month Periods Ended December 31, 2002 and 2001
- ----------------------------------------------------------------------
The Company experienced net income of approximately $116,000 in the first fiscal
quarter of 2003, compared to a net loss of $103,000 in the same period of 2002.
Revenues increased approximately $42,000, or 3.4% in the three-month period
ended December 31, 2002 as compared to the same period for the previous year.
Total operating costs decreased from $1,150,000 in the first quarter of fiscal
2002 to $960,000 in 2003.
The majority of the Company's clients are businesses that depend on advertising
sales for their revenue. The serious recession in advertising expenditures in
fiscal 2002 caused most, if not all, of these businesses to curtail or postpone
spending, especially in non-essential products such as those marketed by the
Company. Positive growth trends for advertising were experienced in the fourth
fiscal quarter of 2002 and continued into the first fiscal quarter of 2003. This
trend is expected to result in increased spending on products such as those
marketed by the Company in the near future, although the positive impact cannot
be determined with any certainty.
Revenue generated from cash sales and publisher's royalties in the quarter ended
December 31, 2002 decreased $34,000, or 4.2% when compared to the same period in
2001. Barter revenue for the quarter increased $76,000, or 17.6%, which reflects
the gradual recovery of advertising rates for barter service. Barter revenues
are derived from obtaining airtime from radio stations in exchange for products
and marketing such airtime to advertisers.
As the compact disc music library market matures, sales of compact discs are
generated primarily from changes in music formats or sales of new music
libraries rather than from conversions to compact disc music library technology.
The market for compact disc music libraries to broadcast customers has reached a
substantial level of maturity in the United States, which is the market from
which the Company derives most of its music library revenues. However, the
advent of computer-based music storage has opened a new market to the Company;
delivering music in a form (.wav file format and MPEG format) which is more
conducive, convenient and cost efficient for operators to load onto their
computer-based broadcast systems. A decline in revenues from music library sales
may result in a proportionately greater decline in operating income because
music libraries provide higher margins than the Company's other products.
However, management believes that revenues from weekly music services will
either remain relatively unchanged or continue to grow by introducing new music
libraries to the market. Management believes the international markets have not
reached maturity for compact disc technology. Renewals and new sales growth are
subject to customer acceptance of the new products.
Commissions as a percentage of revenues decreased to 17.0% of revenue in fiscal
2003 from 17.3% of revenue in fiscal 2002. This decrease is due to changes in
the revenue structure where a greater percentage of international revenue was
derived from direct sales rather than through third-party representatives.
Production, programming and technical costs decreased 20.1% to $330,000 in the
first fiscal quarter of 2003 from $413,000 in 2002. The first quarter of fiscal
2002 reflected an increase in custom jingle production compared to the same
period in fiscal 2003. Since production costs for custom jingles are higher than
those for syndicated jingles, the effect on related expenses was noticeable in
comparison. The Company also saw a decrease in shipping costs as more cost
efficient packaging and carrier selection were implemented across all product
lines.
General and administrative costs decreased $28,000, or 5.92%. A decrease of
approximately $37,000 in facilities expenses occurred due to the negotiation of
a new office lease, which reduced monthly rent and the responsibility for
certain building maintenance costs. That decrease was offset by an increase in
professional fees for services provided by marketing consultants and legal fees
related to compliance with more stringent audit and reporting requirements.
8
Selling costs reflected a decrease of $75,000, or 32.9% for fiscal 2003 over
2002. The Company took advantage of the loss of sales personnel through
attrition by restructuring the compensation plans for new hires to reduce fixed
costs and provide more efficient coverage of the market.
Depreciation and amortization expense increased $1,500, or 4.1%, primarily as a
result of purchases to replace outdated equipment.
NEW ACCOUNTING PRONOUNCEMENTS
In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which amends SFAS 123, "Accounting for
Stock-Based Compensation." SFAS 148 provides alternative methods of transition
for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the disclosure
requirements of SFAS 123 to require more prominent and more frequent disclosures
in financial statements about the effects of stock-based compensation. SFAS 148
is effective for fiscal years ending after December 15, 2002.
ITEM 3. CONTROLS AND PROCEDURES
Based on their evaluation, as of a date within 90 days of the filing date of
this Form 10-QSB, the Company's Chief Executive Officer and Chief Financial
Officer have concluded that the Company's disclosure controls and procedures (as
defined in Rule 13a-14 (c) and 15d-14 (c) under the Securities Exchange Act of
1934, as amended) are effective. There have been no significant changes in
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.
[The remainder of this page is intentionally left blank.]
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PART II. OTHER INFORMATION
Item 1. Legal proceedings - Not applicable.
Item 2. Changes in securities - Not applicable.
Item 3. Defaults upon senior securities - Not applicable.
Item 4. Submission of matters to a vote of security holders - None
Item 5. Other information
An agreement was approved effective October 1, 2002 to renew the employment of
R. David Graupner, President and CEO since May 1999. The agreement provides for
a base salary of $180,000 per year through September 30, 2005 and performance
based bonuses to be determined annually. The agreement also grants Mr. Graupner
250,000 stock options at $ .34 per share, which vest at a rate of 40% upon grant
and 20% per year thereafter through the term of the agreement.
After approval by the Board of Directors, the Company executed a Memorandum of
Understanding to document the agreement regarding the ownership interest in the
new product or products to be developed by the entity known as Sold-Rite.
Initial ownership interest in Sold-Rite shall be as follows:
42.5% TM Century, Inc.
42.5% R. David Graupner
15.0% Michael Cope
It was agreed that any patents that may be issued as a result of this project
shall be assigned to TM Century.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Material Contracts:
10.1 Employment Agreement between TM Century, Inc. and R. David
Graupner dated October 1, 2002.
10.2 Memorandum of Understanding of Agreement between TM Century,
Inc., R. David Graupner and Michael Cope regarding Sold-Rite
Holdings, LLC dated December 9, 2002.
Other:
99.1 Certification by R. David Graupner, Chief Executive Officer,
pursuant to 18 USC Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification by Teri R.S. James, Chief Financial Officer,
pursuant to 18 USC Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K - None
10
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: February 12, 2003
TM CENTURY, INC.
BY: /s/Teri R.S. James
------------------------------
Teri R.S. James
Chief Financial Officer
(Principal Accounting Officer)
BY: /s/R. David Graupner
-------------------------------
R. David Graupner
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATIONS
I, R. David Graupner, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of TM Century, Inc. a
Delaware Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the consolidated 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
Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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: February 12, 2003
/s/R. David Graupner, Chief Executive Officer
- ---------------------------------------------
Principal Executive Officer
11
I, Teri R.S. James, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of TM Century, Inc. a
Delaware Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the consolidated 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
Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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: February 12, 2003
/s/Teri R.S. James, Chief Financial Officer
- -------------------------------------------
Principal Financial Officer
12