SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 000-31631
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PERMA-TUNE ELECTRONICS, INC.
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(Exact name of small business issuer as specified in its charter)
Texas 75-2510791
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
111 SOUTH BIRMINGHAM STEET, WYLIE, TEXAS 75098
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(Address of principal executive offices)
(972) 442-6774
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (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 XX No: __
--
As of November 14, 2002 2,322,700 shares of Common Stock of the issuer were
outstanding.
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
PERMA-TUNE ELECTRONICS, INC.
CONDENSED BALANCE SHEET
September 30, December 31,
2002 2001
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(Unaudited)
ASSETS
Current assets:
Cash $ 5,724 $ 811
Accounts receivable 29,011 16,367
Inventory 33,534 33,813
Other 529 160
---------------- -----------------
Total current assets 68,798 51,151
Property and equipment, net 3,963 6,486
---------------- -----------------
$ 72,761 $ 57,637
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Line of credit $ 22,800 $ 20,800
Accounts payable 47,382 39,055
Accrued expenses 5,829 5,744
Due to stockholders 40,000 40,000
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Total current liabilities 116,011 105,599
---------------- -----------------
Notes payable - stockholders 20,000 -
Stockholders' equity (deficit):
Common stock, no par value, 10,000,000 shares
authorized: 2,312,700 shares issued and outstanding: 263,945 263,945
Accumulated deficit (327,195) (311,907)
---------------- -----------------
Total stockholders' equity (deficit) (63,250) (47,962)
---------------- -----------------
$ 72,761 $ 57,637
================ =================
See accompanying notes to interim condensed
financial statements.
PERMA-TUNE ELECTRONICS, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
------------------ --------------- ----------------- ------------------
Net sales $ 88,424 $ 80,293 $ 215,525 $ 207,635
Cost of goods sold 31,597 18,868 82,419 71,200
------------------ --------------- ----------------- ------------------
Gross profit 56,827 61,425 133,106 136,435
Operating expenses:
General and administrative 26,531 28,293 92,480 116,319
Legal and professional 9,353 17,965 45,615 78,001
Research and development - 633 - 5,143
Depreciation 841 841 2,523 2,523
------------------ --------------- ----------------- ------------------
36,725 47,732 140,618 201,986
------------------ --------------- ----------------- ------------------
Income (loss) from operations 20,102 13,693 (7,512) (65,551)
Other income (expense):
Other - 3 - 5,009
Interest expense (3,696) (2,314) (7,776) (7,627)
------------------ --------------- ----------------- ------------------
(3,696) (2,311) (7,776) (2,618)
------------------ --------------- ----------------- ------------------
----------------- ------------------
------------------ --------------- ----------------- ------------------
Net income (loss) $ 16,406 $ 11,382 $ (15,288) $ (68,169)
================== =============== ================= ==================
Basic and diluted income (loss) per
common share $ 0.01 $ 0.005 $(0.01) $(0.03)
================== =============== ================= ==================
Weighted average shares outstanding 2,312,700 2,292,700 2,312,700 2,292,700
================== =============== ================= ==================
See accompanying notes to interim condensed
financial statements.
PERMA-TUNE ELECTRONIC, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
----------------------------------
2002 2001
----------------------------------
Cash flows from operating activities:
Net loss $ (15,288) $ (68,169)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,523 2,523
Changes in operating assets and liabilities
Accounts receivable (13,012) (14,663)
Inventory 279 (3,698)
Prepaid expenses - 3,414
Accounts payable and accrued expenses 8,411 37,021
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Net cash provided by (used in) operating activities (17,087) (43,572)
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Cash flows from investing activities:
--------------- ---------------
Capital expenditures - (244)
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Cash flows from financing activities:
Overdraft payable - 6,970
Proceeds from the sale of stock - 5,000
Proceeds from stockholder advances 20,000
Net change in line of credit 2,000 20,800
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Net cash provided by financing activities 22,000 32,770
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Net increase (decrease) in cash and cash equivalents 4,913 (11,046)
Cash and cash equivalents at beginning of period 811 11,046
--------------- ---------------
Cash and cash equivalents at end of period $ 5,724 $ -
=============== ===============
Cash paid for:
Interest $ 7,776 $ 5,313
See accompanying notes to interim condensed
financial statements.
PERMA-TUNE ELECTRONICS, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
September 30, 2002
Note 1: Presentation
The condensed balance sheet of the Company as of September 30, 2002, the related
condensed statements of operations for the three and nine months ended September
30, 2002 and 2001 and the statements of cash flows for the nine months ended
September 30, 2002 and 2001 included in the condensed financial statements have
been prepared by the Company without audit. In the opinion of management, the
accompanying condensed financial statements include all adjustments (consisting
of normal, recurring adjustments) necessary to summarize fairly the Company's
financial position and results of operations. The results of operations for the
three and nine months ended September 30, 2002 are not necessarily indicative of
the results of operations for the full year or any other interim period. The
information included in this Form 10-QSB should be read in conjunction with
Management's Discussion and Analysis and Financial Statements and notes thereto
included in the Perma-Tune Electronics, Inc. December 31, 2001 Form 10-KSB.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
This report contains forward looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934. These forward looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or anticipated results, including those set forth under
"Factors that may affect future results" in this Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
report. The following discussion and analysis should be read in conjunction with
"Selected Financial Data" and the Company's financial statements and notes
thereto included elsewhere in this report.
OVERVIEW
Since its inception, the Company has focused on the production, research and
development of Porsche and Ferrari high performance ignition systems. The
Company's principal source of revenue has been from the Porsche repair parts
product line. In 1997 the Company began development of new product lines to
supply many repair and performance parts for a variety of cars and trucks.
The Company has introduced new products, has updated its web page and has
reduced its operating losses. The Company has reduced legal and accounting
costs, but still carries debt for services related to these items accrued in the
last 24 months. Significant progress has been made to reduce these obligations.
Management believes it is beginning to see the benefits of taking advantage of
the infrastructure improvements it has made (implementation of fully integrated
manufacturing/data base accounting software, the dedication of an officer to
finance/SEC compliance and marketing planning, and outsourcing of certain
manufacturing functions).
Since the Company has not yet raised money from its outstanding warrants, we
have focused on expanding our existing product lines to provide operating
capital. The Company has concentrated its efforts on streamlining and increasing
the production of its existing product lines in order to eliminate backorders
for Porsche products, and on introducing a new line of spark plug wire sets for
Porsche cars, and on introducing a new product line for late model Porsche cars.
NEW PRODUCTS / RECENT DEVELOPMENTS
In the 3rd quarter of 2002, the Company completed development and testing of its
Plasma Drive ignition system for the late model Porsche 993. Exhaust gas and
road testing was performed by Rennsport of Sealy, Texas. Installation of the
Perma-Tune Plasma Drive and Perma-Tune spark plug wire set was performed by
Perma-Tune personnel at the Rennsport facility. Gas analyzer tests were
performed downstream of the catalytic converter before and after installing the
Plasma Drives. These tests showed a decrease in hydrocarbon emissions from 24
parts per million (PPM) to 7 PPM and a decrease of nitrogen oxides from 2 PPM to
zero. After installation, road testing revealed faster throttle response,
smoother acceleration and improved overall performance.
As planned, the Company has created an Internet based product catalogue that
includes all of its older products, new products and kits. The site consists of
902 pages of information and was created by Company personnel. Customers have
been directed to the new Internet site by emails and by phone calls to the
buyers at the Company's wholesale distributors.
In the third quarter, the Company implemented design changes to a basic
component common to most of the product line that reduced manufacturing labor
costs. These design changes reduced machining time from 12 minutes per part to 4
minutes per part and sped assembly time by approximately 6%.
MARKETING STRATEGY
Until it is financially able to put a public relations firm on retainer, the
Company will continue its current marketing strategy of conducting sales
training missions to its wholesale distributors, continuing to improve and
expand its website (a major revision was posted in mid-May), and making low-cost
postcard mailings to alert distributors to new product offerings. The Company
now provides its warehouse distributors with compact disks containing
information on all of its product offerings in a format that distributors can
use to promote the Company's products in their advertising and catalogs.
The Company continues its expansion of its distribution network and now sells to
13 wholesale distributors who supply an unknown number of distributors and
retails. In the third quarter, the Company filled its first order for
Zuendsystem, a distributor of engine parts headquartered in Germany. Zuendsystem
specializes in high performance parts for a wide array of street and track
vehicles throughout Western Europe.
The Company is negotiating with FVD Worldwide, a large international mail order
distributor of Porsche parts, to add the new product lines and kits to the color
section of their new catalogue. FVD expects to release their new 2003 catalogue
in the fourth quarter of 2002.
The Company's short-term marketing strategy is to begin shipment of late-model
Porsche Plasma Injection systems that include the Plasma Drive, spark plug wires
and electrodes (spark plugs). Implementation of this strategy has continued in
the third quarter and the Company has begun shipping those new products.
The Company already has some of these products in inventory and is ready to
produce more. A distribution network for these parts has already been
established. The Company is working to expand distribution of these new
offerings domestically by adding new warehouse distributors to its network.
The Company has delayed development of the Honda product line to the 4th quarter
of 2002 and development of the Toyota product line to the 1st quarter of 2003.
The Company will focus on developing product for the `00, `01 and `02 model year
Hondas in the 4th quarter of 2002. Development of product for domestic makes of
vehicles is still scheduled for the 2nd quarter of 2003. The product lines
require that production tooling be made, for which funding is currently
unavailable. The Company may create new products for American V-8 engines based
on its Plasma Injection technology for the models of the V-8 that may not
require that production tooling be made. Most of the Company's distribution
network already includes Asian car parts. There is interest in the Perma-Tune
Toyota repair parts because there is currently no aftermarket supply available.
The Company knows of no aftermarket manufacturing companies making replacement
ignition modules for these automobiles.
All Perma-Tune ignition systems designed for street vehicles, except for the
recently introduced products for the Porsche 944, 964, 993 and Carrera, are
certified by California Air Resources Board Executive Order D-210. There was no
testing required to obtain this certification because, in compliance with CARB
regulations, the Company was able to state that its products do not alter the
ignition timing of the engine. Therefore, if the vehicle meets EPA standards
with its original ignition system, it will meet EPA standards with a Perma-Tune
ignition system installed on it. The Company anticipates that its newer products
will be certified as well, since they also do not alter the ignition timing of
the engine.
MANUFACTURING OVERVIEW
Management has prepared for rapid growth. The Company's manufacturing technique
is flexible because of its modular design and it can respond easily to customer
demand. Modules can be mass-produced and then assembled to meet changing
purchase orders. Production can be increased and new products introduced
readily. Currently the Company is operating at a small percentage of its
manufacturing capacity.
COMPARISON OF OPERATING RESULTS
Quarter Ended September 30, 2002 Compared to the Quarter Ended September 30,
2001
In the third quarter of 2002, the Company experienced a 9% sales increase as
gross sales increased from $80,293 in the third quarter of 2001 to $88,424 in
the third quarter of 2002.
Gross profit in the third quarter of 2002 was $56,827 compared to $61,425 in the
third quarter of 2001. As a percentage of sales, gross profit decreased in the
third quarter of 2002 to 64% from 77% in the third quarter of 2001. The Company
has begun sub-contracting some labor-intensive operations to increase its gross
profit margin and to allow for rapid growth. The Company believes it can further
improve its profit margin, as it has lined up additional sub-contractors to use
in this expense-reducing effort, and will begin outsourcing additional segments
of production once capital funding allows us to take advantage of the economies
of scale these opportunities offer the Company. The higher the quantity of parts
we can subcontract to outside vendors, the better price per piece the Company
will be able to negotiate with each vendor, lowering our cost of goods sold and
raising our profit margin. Circuitry which is currently hand-made in-house, can
be outsourced for robotic manufacture with an expected increase in accuracy and
reliability, but the Company will need to have the ability to make a large
quantity purchase commitment and cover up-front set-up costs to implement these
plans. In all cases, the Company will retain control over production of the
Perma-Tune product line and its trade secrets by manufacturing the key
components itself.
General and Administrative (G & A) expenses were $26,531 and $28,293 in the
third quarters of 2002 and 2001, respectively. As a percentage of sales, G & A
expenses decreased to 30% from 35%. The figures for both 2002 and 2001 are
unusually high by percentage. The major components of this atypical result are
extra salaries and wages (with related payroll taxes) for Company personnel to
carry out research and development work, and the internal costs associated with
being a fully reporting company. These expenses have been reigned in by changing
to a more cost-effective accounting firm, as well as having in-house personnel
author and edit SEC filings for review by the Company's attorney.
Interest expenses increased from $2,314 in the third quarter of 2001 to $3,696
in the second quarter of 2002. This increase reflects carrying costs on
remaining balances for reporting costs associated with CPA fees carried forward.
Research and development expenses were $663 in the third quarter of 2001 and $0
in the third quarter of 2002. This decrease in R&D expenditures was due to the
deliberate curtailment of expenditures to increase the Company's profitability.
Since the Company incurred net losses for both the third quarter 2001 and 2002,
there was no income tax liability for either quarter.
Nine Months Ended September 30, 2002 Compared to the Nine Months Ended September
30, 2001
In the first nine months of 2002, the Company experienced a sales increase as
gross sales increased from $207,635 in the first nine months of 2001 to $215,525
in the first nine months of 2002.
Gross profit in the first nine months of 2002 was $133,106 compared to $136,435
in the first nine months of 2001. As a percentage of sales, gross profit
decreased in the first nine months of 2002 to 62% from 66% in the first nine
months of 2001.
General and Administrative (G & A) expenses were $92,480 and $116,319 in the
first nine months of 2002 and 2001, respectively. As a percentage of sales, G &
A expenses decreased to 43% from 56%. The figures for both 2002 and 2001 are
unusually high by percentage. The major components of this atypical result are
extra salaries and wages (with related payroll taxes) for Company personnel to
carry out research and development work, and the internal costs associated with
being a fully reporting company. These expenses have been reigned in by changing
to a more cost-effective accounting firm, as well as having in-house personnel
author and edit SEC filings for review by the Company's attorney.
Interest expenses increased slightly from $7,627 in the first nine months of
2001 to $7,776 in the first nine months of 2002.
Research and development expenses were $5,143 in the first nine months of 2001
and $0 in the first nine months of 2002. This decrease in R&D expenditures was
due to the deliberate curtailment of expenditures to increase the Company's
profitability.
Since the Company incurred net losses for both the first nine months of 2001 and
2002, there was no income tax liability for either quarter. The Company has a
net operating loss carry-forward available in the amount of $327,195 to be
offset against future income through years ended December 31, 2011 through 2021.
The majority of this net operating loss carry-forward, $286,250, has occurred in
the last five years. This was the direct result of increased R&D expenses for
developing new products as well as the costs associated with the public offering
that would fund the mass production of all product lines.
As of September 30, 2002, the Company's accumulated losses were $327,195.
LIQUIDITY AND CAPITAL RESOURCES
For the quarter ended September 30, 2002 the Company has not generated positive
cash flow from its own operations due to the preliminary nature of such
operations, ongoing investment in research and development, and expenditures to
build the appropriate infrastructure to support its expected growth.
Consequently, the Company has been dependent on private placements of its equity
securities and debt financing to fund its cash requirements, as well as revenues
provided by the normal operations of Perma-Tune.
On March 20, 2002 the Company entered into a $25,000 line of credit with The
American National Bank of Texas in Wylie that is collateralized by the Company's
accounts receivable, inventory and equipment, with an initial interest rate of
7.75%. Interest is variable, based on the Prime Rate plus 3%. Accrued interest
is payable monthly, and the maturity date is March 20, 2003. For the period
ended September 30, 2002, the principal balance owed on this line of credit was
$22,800, with an interest rate of 7.75%.
On June 28, 2002 the Company entered into a $20,000 loan with Lonnie Lenarduzzi
and Linda Decker, President and CFO, respectively, of the Company. The loan is
unsecured, and has an initial interest rate of 10%. The maturity date is June
28, 2004. For the period ended September 30, 2002, the principal balance owed on
this loan was $20,000, with an interest rate of 10%.
On December 8, 1997, the Company issued an offering circular for 125,000 units
priced at $2.00 per unit. Each unit entitled the investor to one share of common
stock and three stock purchase warrants. Each warrant entitled the holder to
purchase one share of stock for $2.00. The warrants expire on December 31, 2003.
At December 31, 2001, there are 348,000 warrants outstanding.
Proceeds from the exercise of warrants are planned to fund production tooling
and start up costs of the Honda and Toyota products lines. The Company plans to
manufacture the required tooling estimated at $35,000 in materials and 560 man
hours. There may be other costs associated with attaining the California Air
Resources Board certification for the Honda, Toyota and Porsche 964 and 993
product lines.
As of September 30, 2002 the Company's cash reserves totaled $5,724 and total
current assets were $68,798. For the remainder of 2002 and into 2003, the
Company has no long-term commitments but expects to incur additional costs for
research and development. It also expects to expand its sales and marketing
effort. These efforts could significantly increase demand for the Company's
products beyond the Company's current production capacity. While the Company
believes it can increase its production capacity to meet sales demand,
significant additional capital could be required to meet expansion requirements.
Inventory at September 30, 2002 was $33,534. Inventory at September 30, 2001 was
$33,813.
The Company presently has an outstanding loan payable on demand to Terry Taylor,
a stockholder. Principal balance as of September 30, 2002 is $40,000. The loan
bears interest at a rate of 10%. Interest is payable quarterly. The loan is
secured by inventory.
The Company's working capital ratio improved to 0.59 in the third quarter of
2002, compared with 0.48 at September 30, 2001. The Company will retire accounts
payable from income generated by normal operations. It has agreements with its
former accounting firm to pay them as funding becomes available.
The Company's inventory turnover ratios were 2.46 and 2.11 for third quarter
2002 and 2001, respectively.
The Company's accounts receivable ratios were 36 days and 21 days for the third
quarters of 2002 and 2001, respectively. The Company continues to manage its
accounts receivable very effectively, collecting monies due within the terms
offered to its customers.
The Company is taking steps to raise equity capital. There can be no assurance
that any new capital would be available to the Company or that adequate funds
for the Company's operations, whether from the Company's revenues, financial
markets, or other arrangements will be available when needed or on terms
satisfactory to the Company. The Company has no commitments from officers,
directors or affiliates to provide funding. The failure of the Company to obtain
adequate additional financing may require the Company to delay, curtail or scale
back some or all of its research and development programs, sales and marketing
efforts, and manufacturing operations. Any additional financing may involve
dilution to the Company's then-existing shareholders.
Without additional capital funding, the Company believes it can operate at its
current level of liquidity for twenty-four to thirty-six months. However, it
hopes to obtain short-term funding until operations are ramped up, creating the
profitability that will improve its liquidity position.
Item 3. Evaluation of Disclosure Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Our chief
executive officer and our chief financial officer, after evaluating the
effectiveness of the Company's "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a
date (the "Evaluation Date") within 90 days before the filing date of this
quarterly report, have concluded that as of the Evaluation Date, our disclosure
controls and procedures were adequate and designed to ensure that material
information relating to us and our consolidated subsidiaries would be made known
to them by others within those entities.
(b) Changes in internal controls. There were no significant changes in
our internal controls or to our knowledge, in other factors that could
significantly affect our disclosure controls and procedures subsequent to the
Evaluation Date.
OTHER INFORMATION
ITEM 1: Legal Proceedings
None.
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit No. Description
- ----------- -----------
99.1 Certification Pursuant to 18.U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
b) Reports on Form 8-K: None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PERMA-TUNE ELECTRONICS, INC.
Date: November 14, 2002
By:/s/ Linda Decker
------------------
Linda Decker
Chief Financial Officer
CERTIFICATIONS
I, Lonnie Lenarduzzi, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Perma-Tune
Electronics, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure 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 officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer 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.
Dated: November 13, 2002
By: /s/ Lonnie Lenarduzzi
Lonnie Lenarduzzi
Chief Executive Officer
CERTIFICATIONS
I, Linda Decker, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Perma-Tune
Electronics, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure 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 officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer 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.
Dated: November 13, 2002
By: /s/ Linda Decker
Linda Decker
Chief Financial Officer