U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 27, 2003
----------------
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from.................to..................
Commission file number........................................
Jupiter Marine International Holdings, Inc.
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(Exact name of small business issuer as specified in its charter)
Florida 65-0794113
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3391 S. E. 14th Avenue, Port Everglades, FL 33316
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(Address of principal executive offices)
954-523-8985
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if changed since
last report)
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 [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of June 30, 2003:
6,681,408 shares of Common Stock; 315,000 Series A Preferred Shares; 401,000
Series B Preferred Shares; and
848,757 Series C Preferred Shares.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
Page
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Part I. Financial Information 3
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Item 1. Consolidated Financial Statements 3
Balance Sheets as of January 27, 2003 and July 27, 2002 3-4
Statements of Operations for the three months and six months
ended January 27, 2003 and January 26, 2002 5
Statements of Cash Flows for the six months ended January 27, 2003
and January 26, 2002 6
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
Item 3. Controls and Procedures 11
Part II. Other Information 12
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Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
2
PART I FINANCIAL INFORMATION
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Item 1. Consolidated Financial Statements
Jupiter Marine International Holdings, Inc
Consolidated Balance Sheets
January 27, July 27,
2003 2002
(unaudited) (audited)
-------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 223,435 $ 139,072
Accounts receivable, net 38,985 35,760
Inventory 1,141,104 1,016,490
Prepaid expenses 53,625 2,209
-------------------------------------
Total current assets 1,457,149 1,193,531
Property and equipment:
Boat molds 1,458,951 1,421,802
Machinery and equipment 178,833 170,043
Leasehold improvements 251,851 249,898
Office equipment 54,277 52,514
-------------------------------------
1,943,912 1,894,257
Less accumulated depreciation and amortization 1,248,125 1,064,246
Property and equipment, net 695,787 830,011
Other assets 46,229 48,194
-------------------------------------
Total assets $ 2,199,165 $ 2,071,736
=====================================
See accompanying notes to consolidated financial statements
3
Jupiter Marine International Holdings, Inc
Consolidated Balance Sheets
January 27, July 27,
2003 2002
(unaudited) (audited)
-------------------------------------
Liabilities and Shareholder's Equity
Current liabilities:
Accounts payable $ 635,724 $ 616,039
Accrued expenses 229,082 351,853
Customer deposits 87,254 206,355
Warranty reserve 97,628 97,997
Capital lease obligation 4,113 4,113
Current portion of long-term debt 375,000 375,000
-------------------------------------
Total current liabilities 1,428,801 1,651,357
-------------------------------------
Long-term liabilities:
Accrued interest payable 104,961 88,959
Capital lease obligation 5,916 8,056
Long-term debt shareholder 350,000 350,000
-------------------------------------
460,877 447,015
-------------------------------------
Total liabilities 1,889,678 2,098,372
Stockholders' equity:
Convertible preferred stock, $0.01 par value, 5,000,000
shares authorized ($1,568,277 aggregate liquidation preference)
Series A, 315,000 shares issued and outstanding 315 315
Series B, 401,000 shares issued and outstanding 401 401
Series C, 848,757 and 852,277 shares issued and outstanding 849 852
Common stock, $0.01 par value, 50,000,000 shares
authorized, 6,681,408 and 4,340,170 issued and outstanding 6,682 4,341
Additional paid-in capital 2,635,267 2,418,366
Accumulated deficit (2,334,027) (2,450,911)
-------------------------------------
Total stockholder's equity 309,487 (26,636)
-------------------------------------
Total liabilities and stockholder's equity $ 2,199,165 $ 2,071,736
=====================================
See accompanying notes to consolidated financial statements
4
Jupiter Marine International Holdings, Inc
Consolidated Statements of Operations
Unaudited
Three Months Ended Six Months Ended
January 27, January 26, January 27, January 26,
2003 2002 2003 2002
------------------------------ ------------------------------
Net Sales $ 2,152,361 $ 1,239,183 $ 4,298,288 $ 3,164,564
Cost of Sales 1,696,416 1,191,008 3,343,306 2,647,038
------------------------------ ------------------------------
Gross Profit 455,945 48,175 954,982 517,526
Operating Expenses:
Selling, general & administrative 252,163 292,040 522,291 556,794
Depreciation & amortization 91,939 72,591 183,879 142,664
------------------------------ ------------------------------
Total Operating Expenses 344,102 364,631 706,170 699,458
------------------------------ ------------------------------
Other income/(expense)
Interest expense (25,722) (10,185) (41,432) (18,976)
Other -- (112) 140
------------------------------ ------------------------------
Total other income/(expense) (25,722) (10,185) (41,544) (18,836)
Net income/(loss) 86,121 (326,641) 207,268 (200,768)
Dividends on preferred stock (27,111) (25,090) (54,222) (58,269)
Interest on Triton stock (36,162) (36,162)
Net income (loss) applicable to
common shareholders $ 22,848 $ (351,731) $ 116,884 $ (259,037)
============================== ==============================
Net (loss) income per common share - Basic $ 0.00 $ (0.08) $ 0.02 $ (0.06)
Weighted number of common shares outstanding 6,676,715 4,169,400 5,521,492 4,169,400
============================== ==============================
See accompanying notes to consolidated financial statements
5
Jupiter Marine International Holdings, Inc
Consolidated Statements of Cash Flows
(unaudited)
Six Months Ended
January 27, January 26,
2003 2002
-----------------------------------
Operating Activities:
Net income $ 207,268 $ (200,768)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 183,879 142,664
Forgiveness of management fee due related party 78,333
Issuance of stock in lieu of services 522
Decrease (increase) in:
Accounts receivable (3,225) (2,946)
Inventory (124,614) (78,744)
Prepaid expenses (51,416) 22,796
Other assets 1,965 (5,675)
Increase (decrease) in:
Accounts payable 19,685 315,715
Accrued expenses (122,771) 6,446
Customer deposits (119,101) (427,128)
Warranty reserve (369) 1,186
Accrued interest payable 16,002 17,502
-----------------------------------
Net cash provided by operating activities 86,158 (208,952)
-----------------------------------
Investing Activities:
Purchase of property and equipment (49,655) (98,312)
Net cash used in investing activities (49,655) (98,312)
-----------------------------------
Financing activities:
Proceeds from issuance of debt 250,000
Payments on capital lease obligations (2,140)
Net proceeds from issuance of stock 50,000
-----------------------------------
Net cash provided by (used in) financing activities: 47,860 250,000
-----------------------------------
Net increase (decrease) in cash 84,363 (57,264)
Cash - Beginning of the period 139,072 73,068
-----------------------------------
Cash - End of the period $ 223,435 $ 15,804
===================================
See accompanying notes to consolidated financial statements
6
Jupiter Marine International Holdings, Inc.
Notes to Consolidated Financial Statements
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB and Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
accruals considered necessary for a fair presentation have been included.
Operating results for the three and six month periods ended January 27, 2003,
are not necessarily indicative of the results that may be expected for the year
ending July 26, 2003. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on form 10-KSB for the year ended July 27, 2002.
In order to maintain consistency and comparability between periods
presented certain amounts have been reclassified from the previously reported
financial statements in order to conform to the financial statement presentation
of the current period.
The consolidated financial statements include Jupiter Marine
International Holdings, Inc. and its wholly-owned subsidiaries, Jupiter Marine
International, Inc. and Phoenix Yacht Corporation. All inter-company balances
and transactions have been eliminated.
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Jupiter Marine International Holdings, Inc (JMIH), a Florida
corporation, was incorporated on May 19, 1998. On May 26, 1998, JMIH acquired
all of the outstanding shares of common stock of Jupiter Marine International,
Inc. (JMI), a boat manufacturing company, which was incorporated under the laws
of the State of Florida on November 7, 1997. On February 17, 2000 JMIH purchased
certain of the assets of Phoenix Marine International, Inc. consisting of some
molds for inboard powered sportfishing boats. JMIH formed a new wholly owned
subsidiary, Phoenix Yacht Corporation (Phoenix) to hold these assets. JMIH, JMI
and Phoenix will sometimes be collectively referred to as the "Company". The
Company's principal offices and manufacturing facilities are located in Port
Everglades, Florida. The Company's Web site address is www.jupitermarine.com.
The Company designs, manufactures and markets a diverse mix of high
quality sportfishing boats under the Jupiter brand name. The outboard product
line currently consists of four outboard center console models:
31' Open Center Console
31' Cuddy Cabin
27' Open Center Console
27' Center Console-berth model
The inboard models include a completely redesigned Flybridge
Convertible as well as a 38' Flybridge Convertible. These models were initially
marketed under the Phoenix name. However, effective February 2002 the Company
markets its products only under the Jupiter name.
Management's discussion and analysis contains various "forward-looking
statements" within the meaning of the Securities and Exchange Act of 1934. Such
statements consist of any statement other than a recitation of historical fact
and can be identified by the use of forward-looking terminology such as "may,"
"expect," "anticipate," "estimate" or "continue" or use of negative or other
variations or comparable terminology.
The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those contained in the forward-looking statements, that these forward-looking
statements are necessarily speculative, and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward-looking statements.
8
Net Sales
The Company's net sales increased by $913,178 (or 73.7%) to $2,152,361
for the second quarter ended January 27, 2003 as compared to $1,239,183 for the
second quarter ended January 26, 2002. For the six months ended January 27, 2003
sales were $4,298,288 compared to $3,164,564 for same period of last fiscal
year, an increase of $1,133,724 (or 35.8%). The second quarter of last year was
the quarter most severely effected by the aftermath of September 11. We have
regained our lost momentum and are moving ahead. Demand for our products has
continued to increase as our reputation for building high quality very seaworthy
boats has grown. Additionally, we made significant improvements to our existing
models that make them even more attractive to the end user. Very favorable
boating magazine articles written about our products have also enhanced our
reputation and have contributed to increased sales.
A completely redesigned 31' Cuddy Cabin model was introduced at the
February 2003 Miami International Boat Show to positive reviews. While this new
model is still an excellent fishing boat it now has more amenities that are more
suited to the recreational/ cruising enthusiast. For example, seating capacity
has been increased, more storage has been added, the cabin is more functional,
forward deck access has improved and the overall profile is more attractive.
Management feels that this new model and the ones to come in the near future
will allow us reach an entirely new segment of the boating market.
Cost of Sales and Gross Profit
Cost of sales for the quarter ended January 27, 2003 was $1,696,416
resulting in $455,945 of gross profit or 21.2% of net sales. For the quarter
ended January 26, 2002 cost of sales was $1,191,008 and gross profit was only
$48,175. For the six months ended January 27, 2003 gross profit was $954,982 or
22.2% of net sales. For the same six months of last year gross margin was
$517,526 or 16.4% of net sales. Gross profit percentage has returned to a more
normal level as the need to discount product to induce sales has been all but
eliminated. Manufacturing efficiencies have also improved, as the production
flow has been more consistent.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $252,163, or 11.7% of
net sales, for the quarter ended January 27, 2003 as compared to $292,040, or
23.6% of net sales, for the quarter ended January 26,2002, a decrease of $39,877
(13.6%). For the six months ended January 27, 2003 operating expenses were
$522,291, or12.2% of net sales. For the same six months of last year operating
expenses were $556,794, 17.6% of net sales, a decrease of $34,503 (6.2%).
Expenditures have been kept to budgetary limits and no new employees were added
during fiscal year 2003.
Interest expense increased during the second quarter and for the six
months as compared to last year because of interest on new borrowings.
9
Liquidity and Capital Resources
The Company, from its inception, has experienced poor cash flow and met
its cash requirements by borrowings and by issuing, through private placements,
its common and preferred stock. The Company anticipates that funds received from
these sources and cash generated from operations should be sufficient to satisfy
the Company's contemplated cash requirements for at least the next twelve
months. After such time, the Company anticipates that cash generated from
operations will be sufficient to fund its operations, although there can be no
assurances that this will be the case.
During November 2001 the Company negotiated a $250,000 revolving line
of credit with a financial institution which expired November 2002. The line of
credit was subsequently extended through November 2003 and increased to
$500,000. The note on the line of credit bears interest at the financial
institution's index rate plus 2%. The note is collateralized by all of the
Company's assets and is personally guaranteed by Carl Herndon.
Inventories increased by $124,614 at January 27, 2003 compared to July
27, 2002 in an effort to support increased sales. Expenditure for property and
equipment was only $49,655, primarily for new molds. However, in order to
maintain sales and attract new buyers the Company will be spending more on new
molds in the future. Prepaid expenses increased as compared to last year simply
because of the timing of boat show related expenditures. Accrued expenses
decreased by $122,771primarily from the forgiveness of accrued management fees
as more fully discussed below. Customer deposits decreased during the six months
ended January 27, 2003 because deposits were not required on the boats that were
on order. The transaction was exempt from registration under Section 4(2) of the
Securities Act. The securities were issued with legends restricting their
transferability absent registration or applicable exemptions.
During November 2002, five employees, including two executives,
exercised their options to purchase 500,000 shares of the Company's stock at
$.10 per share.
On November 21, 2002, the Company's President and the Company's Chief
Financial Officer purchased a note payable by the Company to Triton Holdings
International Corp. (Triton) in the amount of $350,000, plus accrued interest.
Pursuant to the term of the note, the Company's President and Chief Financial
Officer were issued an aggregate of 1,808,098 shares of the Company's common
stock, valued at a fair value of $36,162, which would have otherwise been issued
to Triton and 500,000 shares of the Company's common stock held by Triton. The
term of the note was extended to February 14, 2004. These executives also
assumed the Management Agreement with Triton and subsequently cancelled the
Agreement and forgave $78,333 of accrued fees.
The number and level of employees at January 27, 2003 should be
adequate to fulfill the production schedule.
10
Item 3. Controls and Procedures
Evaluation of disclosure controls and procedures
- ------------------------------------------------
Within the 90 days prior to the filing date of this report, the Company
carried out an evaluation of the effectiveness of the design and operation of
its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
This evaluation was done under the supervision and with the participation of the
Company's Principal Executive Officer and Principal Accounting Officer. Based
upon that evaluation, they concluded that the Company's disclosure controls and
procedures are effective in gathering, analyzing and disclosing information
needed to satisfy the Company's disclosure obligations under the Exchange Act.
Changes in internal controls
- ----------------------------
There were no significant changes in the Company's internal controls or
in other factors that could significantly affect those controls since the most
recent evaluation of such controls.
11
PART II OTHER INFORMATION
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Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
On November 21, 2002, the Company's President and the Company's Chief
Financial Officer purchased a note payable by the Company to Triton Holdings
International Corp. in the amount of $350,000, plus accrued interest. Pursuant
to the terms of the note, the Company's President and Chief Financial Officer
were issued an aggregate of 1,808,098 shares, valued at a fair value of $36,162,
of the Company's common stock which would have otherwise been issued to Triton.
The transaction was exempt from registration under Section 4(2) of the
Securities Act. The securities were issued with legends restricting their
transferability absent registration or applicable exemptions.
During November 2002, five employees, including two executive officers,
exercised their options to purchase 500,000 shares of the Company's stock at
$.10 per share. The transaction was exempt from registration under Section 4(2)
of the Securities Act. The securities were issued with legends restricting their
transferability absent registration or applicable exemptions.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
As disclosed above under Item 2, on November 21, 2002 Triton sold a
$350,000 Promissory Note previously issued by the Company to Carl Herndon and
Lawrence Tierney. The Note was only sold to Messrs. Herndon and Tierney after
the Company was unable to satisfy payment of the Note, despite seeking financing
from unrelated third parties on the same or similar terms. In connection with
the purchase of the Note, Herndon and Tierney have extended the term of the Note
through February 14, 2004. Further, and pursuant to the terms of the Note,
Herndon and Tierney received an aggregate of 1,808,098 shares of the Company's
common stock which would otherwise have been issued to Triton pursuant to the
Note and 500,000 shares of the Company common stock held by Triton.
Herndon and Tierney paid Triton $400,000 (the "Purchase Price") payable
in the amount of $150,000 cash and a Secured Promissory Note in the principal
12
amount of $250,000. The Secured Promissory Note is secured by a first mortgage
on real estate owned by Mr. Herndon and leased to the Company.
In consideration for delivery of the Purchase Price, Triton transferred
and assigned to Herndon (1) all right, title and interest under the Security
Agreement by and between the Company and Triton; (2) and all right, title and
interest under the Management Agreement. Mr. Herndon has cancelled the
Management Agreement and forgiven all outstanding fees and obligations due under
the Management Agreement.
Item 6. Exhibits and Reports on Form 8-K
Exhibits required by Item 601 of Requlation S-B
The following exhibits are filed as part of this report:
(a) Exhibits:
16.1 Letter from former Auditor (previously filed on Form 8-K
dated August 14, 2002)
99.1 Certification of Principal Executive Officer
99.2 Certification of Principal Accounting Officer
(b) Reports on Form 8-K
On November 26, 2002 the Company filed a Current Report on Form 8-K to
disclose that on November 21, 2002 Triton Holdings International Corp.,
("Triton") the holder of a $350,000 secured promissory note due on January 14,
2003 (the "Senior Note") issued by the Company sold the Senior Note to Carl
Herndon and Lawrence Tierney, whom are officers and directors of the Company.
The Senior Note was only sold to Messrs. Herndon and Tierney after the Company
was unable to satisfy payment of the Senior Note, despite seeking financing from
unrelated third parties on the same or similar terms. In connection with the
purchase of the Senior Note, Herndon and Tierney have extended the term of the
Senior Note through February 14, 2004. Further, and pursuant to the terms of the
Senior Note, Herndon and Tierney received an aggregate of 1,808,098 shares of
the Company's common stock which would otherwise have been issued to Triton
pursuant to the Senior Note and 500,000 shares of the Company common stock held
by Triton.
Herndon and Tierney paid Triton $400,000 (the "Purchase Price") payable
in the amount of $150,000 cash and a Secured Promissory Note in the principal
amount of $250,000. The Secured Promissory Note is secured by a first mortgage
on real estate owned by Mr. Herndon and leased to the Company.
In consideration for delivery of the Purchase Price, Triton transferred
and assigned to Herndon (1) all right, title and interest under a Security
Agreement dated as of January 14, 1999, by and between the Company and Triton;
(2) and all right, title and interest under the Management Agreement dated
January 14, 1999, by and between the Company and Triton. Mr. Herndon has
cancelled the Management Agreement and forgiven all outstanding fees and
obligations due under the Management Agreement.
13
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
Date: July 17, 2003 By: /s/Carl Herndon
-----------------------------------------
Carl Herndon, Director, Chief Executive
Officer (Principal Executive Officer) and
President
Date: July 17, 2003 By: /s/Lawrence Tierney
-----------------------------------------
Lawrence Tierney, Director, Chief
Financial Officer (Principal Accounting
Officer)
14
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Carl Herndon, the Principal Executive Officer of Jupiter Marine
International Holdings, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-QSB of Jupiter
Marine International Holdings, 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-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 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) 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 as of a date within 90 days prior to the filing
date of this Quarterly Report (the "Evaluation Date"); and
d) 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 the Registrant's board of directors (or persons performing the
equivalent function):
15
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's ability
to record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weakness in
internal 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.
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.
DATE: July 17, 2003 /s/ Carl Herndon
-----------------------------------------
Carl Herndon, Principal Executive Officer
16
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lawrence Tierney, the Principal Accounting Officer of Jupiter Marine
International Holdings, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-QSB of Jupiter
Marine International Holdings, 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-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 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) 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 as of a date within 90 days prior to the filing
date of this Quarterly Report (the "Evaluation Date"); and
d) 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 the Registrant's board of directors (or persons performing the
equivalent function):
17
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's ability
to record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weakness in
internal 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.
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.
DATE: July 17, 2003 /s/ Lawrence Tierney
----------------------------------------------
Lawrence Tierney, Principal Accounting Officer
18