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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended _ March 31, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 000-25367
International Fuel Technology, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0357508
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7777 Bonhomme, Suite 1920, St. Louis, Missouri 63105
(Address of principal executive offices) (Zip Code)
(314) 727- 3333
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act).
Yes |_| No |X|
The aggregate market value of the voting and non-voting common stock held
by non-affiliates of the Registrant, based upon the average bid and asked price
of the common stock on May 9, 2003, as reported on the OTC Bulletin Board, was
$8,171,592.
Number of shares of common stock outstanding as of May 9, 2003: 77,824,687
FORM 10-Q
For The Quarterly Period Ended March 31, 2003
INDEX
Part I - FINANCIAL INFORMATION Page
Item 1- Financial Statements
Balance Sheets - March 31, 2003 and
December 31, 2002 3
Statements of Operations - Three Month
Period Ended March 31, 2003 and 2002 4
Statement of Stockholders' Equity - Three Months
Ended March 31, 2003 5
Statements of Cash Flows - Three Months Ended
March 31, 2003 and 2002 6
Notes to Financial Statements 7 - 8
Item 2- Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 11
Item 3 - Quantitative and Qualitative Disclosures
about Market Risk 11
Item 4 - Controls and Procedures 11
Part II - OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 6 - Exhibits and Reports on Form 8-K 12
2
INTERNATIONAL FUEL TECHNOLOGY, INC.
BALANCE SHEETS
March 31, December 31,
ASSETS 2003 2002
- -----------------------------------------------------------------------------------
(Unaudited)
Current Assets
Cash $ 62,112 $ 13,662
Accounts Receivable 3,338 3,338
Inventory 8,949 7,070
Prepaid Expenses 35,000 15,250
Notes Receivable 35,000 35,000
------------ ------------
Total current assets 144,399 74,320
------------ ------------
Property and Equipment
Machinery and equipment 26,881 26,881
Accumulated depreciation (14,402) (12,687)
------------ ------------
Total property and equipment 12,479 14,194
------------ ------------
Purchased Technology, Net of accumulated
amortization of $733,333 and $633,333 at
March 31, 2003 and December 31, 2002,
respectively 1,666,668 1,766,668
Goodwill 2,211,805 2,211,805
------------ ------------
Total assets $ 4,035,351 $ 4,066,987
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 170,377 $ 145,773
Accrued compensation 313,464 304,909
Other accrued expenses 115,000 115,000
Accrued interest 29,938 27,500
------------ ------------
Total current liabilities 628,779 593,182
Long-Term Liabilities
Notes payable to stockholder 162,500 162,500
------------ ------------
Total liabilities 791,279 755,682
------------ ------------
Commitments and Contingencies
Stockholders' Equity
Common stock, $.01 par value; authorized,
150,000,000, 77,524,689 shares issued and
outstanding at March 31,
2003 and December 31, 2002 775,247 775,247
Discount on common stock (819,923) (819,923)
Additional paid-in capital 37,553,285 37,403,979
Accumulated deficit (32,931,204) (32,147,998)
------------ ------------
4,577,405 5,211,305
Note Receivable - Stockholder (1,333,333) (1,900,000)
------------ ------------
Total stockholders' equity 3,244,072 3,311,305
------------ ------------
$ 4,035,351 $ 4,066,987
============ ============
See Notes to Financial Statements
3
INTERNATIONAL FUEL TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
Three Months Three Months
Ended March 31, Ended December 31,
2003 2002
- -------------------------------------------------------------------------------------------
(Unaudited)
Revenues $ 1,295 $ 5,323
Cost of Goods Sold 784 2,547
------------ -------------
Gross Profit 511 2,776
------------ -------------
Operating Expenses
Selling, general and administrative expenses 679,564 889,032
Depreciation and amortization 101,715 101,716
------------ -------------
Total operating expenses 781,279 990,748
------------ -------------
Net loss from operations (780,768) (987,972)
Interest income -- 13,374
Interest expense (2,438) (95,091)
------------ -------------
Total other expense, net (2,438) (81,717)
------------ -------------
Net loss $ (783,206) $ (1,069,689)
============ =============
Basic and diluted net loss $ (0.01) $ (0.02)
per common share ============ =============
Weighted average common shares outstanding 69,474,685 47,223,346
See Notes to Financial Statements
4
INTERNATIONAL FUEL TECHNOLOGY, INC.
STATEMENTS OF STOCKHOLDERS'
EQUITY FOR THE THREE MONTHS ENDED
MARCH 31, 2003
(Unaudited)
Common Common Discount on
Stock Stock Common Additional Notes
Shares Amount Stock Paid-In Capital Receivable
- --------------------------------------------------------------------------------------------------------------------
Balance, January 1, 2003 77,524,689 $775,247 ($819,923) $37,403,979 ($1,900,000)
Payments received on notes receivable -- -- -- -- 566,667
Accrued stock based services -- -- -- 105,558 --
Consulting expense relating to stock
option grants -- -- -- 43,748 --
Net loss -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2003 77,524,689 $775,247 ($819,923) $37,553,285 ($1,333,333)
====================================================================================================================
Accumulated
Deficit Total
- --------------------------------------------------------------------------------
Balance, January 1, 2003 ($32,147,998) $ 3,311,305
Payments received on notes receivable -- 566,667
Accrued stock based services -- 105,558
Consulting expense relating to stock
option grants -- 43,748
Net loss (783,206) (783,206)
- --------------------------------------------------------------------------------
Balance, March 31, 2003 ($32,931,204) $ 3,244,072
================================================================================
See Notes to Financial Statements
5
INTERNATIONAL FUEL TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2003 2002
- ----------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net loss $(783,206) $(1,069,689)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation/Amortization 101,715 101,716
Non-cash stock compensation 149,306 547,211
Interest expense recognized - discount
and conversion of debt -- 85,641
Change in assets and liabilities:
Increase in prepaid expenses (19,750) --
Increase in accrued compensation 8,555 --
Increase in accounts receivable -- (5,323)
Increase in inventory (1,879) (4,058)
(Decrease)/Increase in accounts payable 24,604 (112,017)
Increase in other accrued expenses -- 11,874
Increase in accrued interest 2,438 2,438
--------- -----------
Net cash used in operating activities (518,217) (442,207)
--------- -----------
Cash Flows from Investing Activities:
Proceeds from repayments of notes receivable -- 14,441
--------- -----------
Net cash provided by investing activities -- 14,441
--------- -----------
Cash Flows from Financing Activities:
Proceeds from common stock issued -- 200,000
Proceeds from note receivable - stockholder 566,667 --
Proceeds from convertible debentures -- 245,000
--------- -----------
Net cash provided by financing activities 566,667 445,000
--------- -----------
Net increase in cash 48,450 17,234
Cash, beginning 13,662 33,168
--------- -----------
Cash, ending $ 62,112 $ 50,402
========= ===========
See Notes to Financial Statements
6
INTERNATIONAL FUEL TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The interim financial statements included herein have been prepared by
International Fuel Technology, Inc. ("IFT"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although IFT believes that the disclosures are
adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained therein. Interim results are not
necessarily indicative of results for a full year. It is suggested that
these financial statements be read in conjunction with the financial
statements and notes thereto included in IFT's annual report on Form 10-K
for the twelve month period ended December 31, 2002. IFT follows the same
accounting policies in preparation of interim reports.
Note 2 -- Ability to Continue as a Going Concern
IFT's financial statements are presented on the going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. IFT has incurred significant losses
since inception and has previously had limited funds with which to
operate. Management is in the process of executing a strategy based upon
developing pollution emission control technologies that also offer
enhanced engine performance with respect to greater fuel economy. IFT has
several technologies in the commercialization phase and in development,
and may seek to add other technologies through acquisitions. IFT has
received necessary regulatory and commercial acceptance for its products
currently in the commercialization phase. During the first quarter of
2002, IFT began selling its products directly to the commercial
marketplace. IFT expects to begin licensing its products and increasing
its direct sales to the marketplace, with IFT eventually generating a
level of revenues sufficient to meet IFT's working capital requirements.
While management cannot make any assurance as to the accuracy of our
projections of future capital needs, it is anticipated that a total of
$1,000,000 over the remainder of the 2003 fiscal year will be necessary in
order to enable us to meet our capital needs. Management believes the
proceeds from its financing from R.C. Holding (see below) will be used as
follows: $75,000 for commercial fleet testing programs, $175,000 for
professional fees and advertising $600,000 for salary expenses and
$150,000 working capital for administrative and other capital needs,
including investigation of future acquisitions, if any.
On August 15, 2002 IFT secured $2.5 million in new capital from the sale
of restricted common stock to R.C. Holding Company. The new capital
consisted of a cash payment of $500,000 and guaranteed notes to be paid in
three installments of $666,667 due in January 2003, June 2003 and January
2004. As of December 2002, IFT received $100,000 in proceeds in advance on
the first installment from repayment of the notes receivable. In January
2003, IFT received the remaining $566,667 of the first installment. In
April 2003, IFT received $400,000 in advance on the next installment.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
possible inability of IFT to continue as a going concern.
Note 3 - Accounting for Stock-Based Compensation
IFT applies the intrinsic value method under APB Opinion 25 and related
interpretations in accounting for employee stock options, which represents
the excess of market price of the stock over the exercise price on the
measurement date.
7
INTERNATIONAL FUEL TECHNOLOGY, INC.
IFT has elected to continue to utilize the accounting provisions of APB25
for stock options and is required to provide pro forma disclosures of net
loss and loss per share had IFT adopted the fair value method under SFAS
No. 123.
The weighted-average, grant date fair value of stock options granted to
employees during the period and the weighted-average significant
assumptions used to determine those fair values, using a modified
Black-Scholes option pricing model, and the pro forma effect on earnings
of the fair value accounting for stock options under Statement of
Financial Accounting Standards No. 123, are as follows:
Significant assumptions (weighted average)
Weigthed average fair value per options granted $ 0.50
Risk-free interest rate at grant date 2.21%
Expected stock price volatility 1.5
Expected dividend payout 0
Expected option life (years) 4
Net loss
As Reported ($783,206)
Deduct total stock-based employee compensation expense
determined under the fair value based method ($29,936)
---------
Proforma ($813,142)
=========
Net loss per share
As Reported ($0.01)
Proforma ($0.01)
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements and Associated Risks
This Quarterly Report on Form 10-Q contains forward-looking statements made
pursuant to the safe harbor provisions of the Securities Litigation Reform Act
of 1995. These forward looking statements are based largely on IFT's
expectations and are subject to a number of risks and uncertainties, many of
which are beyond IFT's control, including, but not limited to, economic,
competitive and other factors affecting IFT's operations, markets, products and
services, expansion strategies and other factors discussed elsewhere in this
report and the documents filed by IFT with the Securities and Exchange
Commission. Actual results could differ materially from these forward-looking
statements. In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this report will in fact prove
accurate. IFT does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
Overview
IFT has developed a family of fuel blends that have been created through the use
of proprietary fuel additives. IFT is now in the process of patenting the fuel
additives and resulting fuel blends as part of its efforts to commercialize
these fuel blends. The individual fuel blends incorporating the IFT additive
formulations include base fuel with additive only, base fuel with kerosene, base
fuel with biodiesel, base fuel with ethanol, and base fuel with an urea/water
solution. IFT seeks to commercialize these fuel blends on a global basis through
the use of strategic partnerships with a variety of targeted companies including
fuel refiners, distributors of fuel additives, OEM's, and other companies.
Three Months Ended March 31, 2003 compared to the Three Months Ended March 31,
2002
Total operating expenses were $781,279 for the three months ended March 31,
2003, as compared to the operating expenses of $990,748 for the three month
period ended March 31, 2002. This represents a $209,469 decrease from the prior
period. Decreased operating expenses in the current period compared to the prior
period are a result of a decrease of selling, general and administrative
expenses in 2002, as described below.
Selling, general and administrative expenses for the three months ended March
31, 2003 were $679,564, as compared to the selling, general and administrative
expenses of $889,032 for the three month period ended March 31, 2002. This
represents a decrease of $209,468 from the prior period. This decrease can be
attributed to the reduction of officer stock awards and payroll to directors.
Amortization and depreciation expenses for the three months ended March 31, 2003
were $101,715, as compared to $101,716 for the corresponding period in 2002.
Interest expense was $2,438 for the three months ended March 31, 2003, as
compared to the interest expense of $95,091 for the three month period ended
March 31, 2002. The decrease is primarily attributable to the conversions of
debt into equity in 2002.
The net loss for the three months ended March 31, 2003 was $783,206 as compared
to the net loss of $1,069,689 for the three months ended March 31, 2002. This
represents a $286,483 decrease from the prior period, primarily due to a
reduction of officer stock awards and payroll to directors. The basic and
dilutive net loss per common share for the three months ended March 31, 2003 was
$.01 as compared to the basic and dilutive net loss per common share of $.02 for
the three months ended March 31, 2002.
9
Critical Accounting Policies
Valuation of long-lived and intangible assets and goodwill. IFT assesses the
impairment of identifiable intangibles, long-lived assets and related goodwill
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Factors IFT considers important which could trigger an
impairment review include the following:
o Significant underperformance relative to expected historical or projected
future operating results;
o Significant changes in the manner of IFT's use of the acquired assets or
the strategy for IFT's overall business;
o Significant negative industry or economic trends;
o Significant decline in IFT's stock price for a sustained period; and
o IFT's market capitalization relative to net book value.
When IFT determines that the carrying value of intangibles, long-lived assets
and related goodwill may not be recoverable based upon the existence of one or
more of the above indicators of impairment, IFT measures any impairment based on
the quoted market price of IFT's common stock.
In 2002, SFAS No. 142, "Goodwill and Other Intangible Assets" became effective
and as a result, IFT ceased to amortize approximately $2.2 million of goodwill.
IFT recorded approximately $238,000 of amortization on these amounts during 2001
and would have recorded approximately $408,000 of amortization during 2002. The
provisions of SFAS 142 also required the completion of transitional impairment
test within 12 months of adoption, with any impairment treated as a cumulative
effect of change in accounting principle. During the second quarter of 2002, IFT
completed the transitional impairment test, which did not result in impairment
of recorded goodwill.
IFT adopted an annual goodwill impairment test date as of the beginning of the
fourth quarter of 2002. Following this approach, the business was evaluated
using the quoted market price of the common stock, which indicated that the fair
value of the business exceeded its carrying value. As a result, no impairment of
goodwill was recorded.
Deferred Income Taxes. Deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities. IFT's
deferred tax asset consisted principally of net operating loss carryforwards.
IFT 's deferred tax asset has been reduced by a valuation allowance to the
extent such benefits are not expected to be fully utilized.
Liquidity and Capital Resources
A critical component of management's operating plan impacting the continued
existence of IFT is the ability to obtain additional capital through additional
debt and/or equity financing. Management does not anticipate that IFT will
generate a positive internal cash flow until such time as IFT can generate
revenues from license fees from its products, which may take the next few years
to realize. If IFT cannot obtain the necessary capital to pursue its business
plan, IFT may have to cease or significantly curtail its operations. This would
materially impact its ability to continue as a going concern. The independent
auditor's reports included with the financial statements filed in IFT's 2002
Annual Report on Form 10-K, filed with the Securities and Exchange Commission on
April 1, 2003 indicates that there is a substantial doubt that IFT can continue
as a going concern.
A significant portion of IFT's operating loss relates to charges for non-cash
operating expenses such as amortization and depreciation, employee stock-based
compensation and consulting services fees paid in IFT's common stock. IFT has
offset its capital needs primarily through the issuance of common stock to its
employees and consultants as compensation for services rendered. In addition,
for the three months ended March 31, 2003, IFT has raised $566,667 in cash from
a note receivable relating to the issuance of restricted common stock as
described herein.
IFT has not made significant cash investments in property and equipment or in
the acquisition of companies or technologies.
10
The cash used in operating activities was $518,217 for the three months ended
March 31, 2003 as compared to cash used in operating activities of $442,207 for
the three months ended March 31, 2002. Cash used in operations for the three
months ended March 31, 2003 increased primarily because less stock was issued
for services and compensation in the first quarter of 2003. Instead, more cash
was issued for services and compensation. The cash provided by investing
activities was $0 for the three months ended March 31, 2003 as compared to
$14,441 provided by investing activities for the three months ended March 31,
2002, because there were no proceeds from repayments of notes receivable. The
cash provided by financing activities was $566,667 for the three months ended
March 31, 2003 as compared to $445,000 provided by financing activities for the
three months ended March 31, 2002. Cash provided by financing activities for the
three months ended March 31, 2003 related to proceeds from a note receivable
issued relating to the sale of restricted common stock to R.C. Holding Company
on August 15, 2002. Net cash increased by $48,450 for the three months ended
March 31, 2003 as compared to net cash increasing by $17,234 for the three
months ended March 31, 2002.
Working capital at March 31, 2003 was ($484,380) as compared to ($518,862) at
December 31, 2002.
On August 15, 2002 IFT secured $2.5 million in new capital from the sale of
restricted common Stock to R.C. Holding Company. The new capital consisted of a
cash payment of $500,000 and guaranteed notes to be paid in three installments
of $666,667 due in January 2003, June 2003 and January 2004. As of March 31,
2003, IFT has received $666,667 for the first installment. In April 2003, IFT
received $400,000 in advance on the next installment.
While management cannot make any assurance as to the accuracy of our projections
of future capital needs, it is anticipated that a total of approximately $1
million over the remainder of the 2003 fiscal year will be necessary in order to
enable us to meet our current capital needs. These cash requirements will be met
through the arrangement with R.C. Holding Company. Management believes that the
proceeds from this financing will be used as follows: $75,000 for commercial
fleet testing programs, $175,000 for professional fees and advertising, $600,000
for salary expenses and $150,000 working capital for administrative and other
capital needs, including investigation of future acquisitions, if any.
Subsequent Events
None
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, operations of IFT may be exposed to
fluctuations in interest rates. These fluctuations can vary the cost of
financing, investing and operating transactions. IFT has debt totaling 21% of
total liabilities at fixed rates of interest and fluctuations in the interest
rate could have a material impact on the underlying fair value.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on their
evaluations as of a date within 90 days of the filing of this
report, our principal executive officer and principal financial
officer, with the participation of our full management team, have
concluded that our disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15(d)-14(c) under the Securities Exchange Act)
are effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Securities Exchange
Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC.
(b) Changes in controls. There were no significant changes in our
internal controls or in other factors that could significantly
affect these internal controls subsequent to the date of their most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is party to legal proceedings in the normal course of business.
Based on evaluation of these matters and discussions with counsel, management
believes that liabilities arising from these matters will not have a material
adverse effect on the results of operations or financial position of the
Company.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
Exhibit 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
All other items of this report are inapplicable.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
INTERNATIONAL FUEL TECHNOLOGY, INC.
(Registrant)
By: /s/ Jonathan R. Burst Date: May 15, 2003
----------------------------------
Jonathan R. Burst
Chief Executive Officer
By: /s/ Michael F. Obertop Date May 15, 2003
----------------------------------
Michael F. Obertop
Chief Financial Officer
13
CERTIFICATION
I, Jonathan R. Burst, certify that:
1. I have reviewed this quarterly report on Form 10-Q of International
Fuel Technology, 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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent 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 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: May 15, 2003
By: /s/ Jonathan R. Burst
---------------------------------
Jonathan R. Burst
Chief Executive Officer
14
CERTIFICATION
I, Michael F. Obertop, certify that:
1. I have reviewed this quarterly report on Form 10-Q of International
Fuel Technology, 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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent 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 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: May 15, 2003
By: /s/ Michael F. Obertop
---------------------------------
Michael F. Obertop
Chief Financial Officer
15