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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

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.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

This document consists of 19 pages

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In the opinion of management of Chyron Corporation (the "Company"), the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company as of March 31, 2005 and the consolidated results of its operations and its cash flows for the periods ended March 31, 2005 and 2004. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. In addition, management is required to make estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Also, during interim periods, certain costs and expenses are allocated among periods based on an estimate of time expired, benefit received, or other activity associated with the periods. Accordingly, actual results cou ld differ from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004. The December 31, 2004 figures included herein were derived from such audited consolidated financial statements.

Chyron Corporation and its wholly-owned subsidiaries ("Chyron" or the "Company") is a supplier of character generators ("CG") and graphics hardware and software related products to the television industry. The Company develops, manufactures, markets and supports hardware and software products that enhance the presentation of live and pre-recorded video, audio and other data. Chyron's products are used in broadcast production facilities worldwide for applications including news, sports, weather and election coverage. The Company's graphics products create, manipulate, store, playback and manage content including 2D/3D text, logos, graphics, animations and video stills/clips. In January 2005, Chyron introduced the ChyTV digital signage product line providing low-cost, easy to use graphics for digital signage applications.

Our future growth and success will depend to a significant degree on the continued growth of various markets that use our products. We operate in a rapidly changing environment and must remain responsive to changes as they occur. In the event that revenues are significantly below 2005 forecasted revenues we believe we have the ability to reduce or delay discretionary expenditures, including capital purchases, and reduce headcount, according to our contingency plan so that we will have sufficient cash resources. However, there can be no assurance that we

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will be able to adjust our costs in sufficient time to respond to revenue shortfalls, should that occur.

The long term success of the Company will be dependent on profitable operating results and the ability to raise additional capital should such additional capital be required. In the event the Company is unable to achieve expected goals of profitability or raise sufficient additional capital, if needed, we may have to scale back or eliminate certain parts of our operations.

In preparing contingency plans for a lower level of 2005 sales than we are currently forecasting, we have re-examined our cost structure and prepared a contingent restructuring plan that recommends, in the event it is necessary, to reduce and/or defer spending in staffing, travel, trade shows, professional fees (including for implementation of Sarbanes-Oxley Section 404), equipment, and bonuses, among other items. However, there can be no assurance we would be able to execute the plans in adequate time to provide a significant immediate or short-term benefit and if implemented, could have an adverse effect on our ability to conduct business.

We believe that cash on hand, net cash to be generated in the business, and availability under our line of credit, will be sufficient to meet our cash needs for the next twelve months if we are able to achieve our planned results of operations. However, there can be no assurance we will be able to achieve our plan. Furthermore, there can be no assurance that our bank will permit us to borrow under our line of credit if we fail to meet financial covenants and other requirements of the agreement. However, based on our current estimates, we believe we will be in compliance with such covenants and that such borrowings will be available to the Company.

For the three month period ending March 31, 2005 common stock equivalents of 9.9 million shares were not included in the computation of diluted net loss per common share because their effect would have been antidilutive.

The Company had an investment in equity securities of vizrt Ltd. that was sold in the first quarter of 2004 and resulted in a gain of $0.2 million which is included in other income.

Inventories, net is comprised of the following (in thousands):

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4. EQUITY BASED COMPENSATION

We account for our stock compensation plans in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and its related interpretations, which requires that compensation cost be recognized on the date of grant for stock options issued based on the difference, if any, between the fair market value of our stock and the exercise price. Under this intrinsic value method prescribed under APB 25 there was no compensation expense recognized for the three month periods ended March 31, 2005 and 2004. We have adopted the disclosure requirements of SFAS 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" which allows entities to continue to apply the provisions of APB 25 for transactions with employees and provides pro-forma earnings disclosures for employee stock grants as if the fair value b ased method of accounting in SFAS No. 123 had been applied to these stock grants. The following table illustrates the effect on net (loss) income and net (loss) income per common share if the fair value method had been applied (in thousands except per share amounts):

	Three Months Ended
	March 31,
	2005	2004
Net (loss) income	$   (276)	$  326
Total stock-based compensation (expense) income
determined under fair value based method,
net of related tax effects	(753)	14
Pro forma net (loss) income	$(1,029)	$  340
Earnings per share:
Basic - as reported	$(0.01)	$0.01
Basic - pro forma	(0.02)	0.01
Diluted - as reported	(0.01)	0.01
Diluted - pro forma	(0.02)	0.01

Pursuant to authorization received from the Board of Directors, on February 3, 2005 the Company accelerated the vesting of certain outstanding unvested stock options with an exercise price of greater than $0.47 per share. These options were originally scheduled to vest in equal increments at the end of each of the first, second and third years following their grant date. Options representing the right to purchase a total of 100,000 shares that were previously granted to non-employee Directors of the Board of Directors, and that would otherwise qualify for this acceleration, were excluded from the acceleration of vesting.

The Company accelerated these options in advance of the effective date of, and in anticipation of the detrimental earnings effect of, Statement of Financial Accounting Standards No. 123 "Share-Based Payment" ("SFAS 123R"), which was issued in December 2004. SFAS 123R will require that beginning January 1, 2006 (originally July 1, 2005), the Company record as compensation expense in its statement of operations the value of employee stock options. Until the Company commences accounting for stock options under SFAS 123R in 2006, it will continue its practice of accounting for stock options in accordance with the provisions of APB

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25. The Company's decision to accelerate the vesting of the options was due to its desire to avoid recording compensation expense for these options in its statement of operations in future years when these options were originally scheduled to vest. Assuming a January 1, 2006 effective date, the financial effect of this acceleration is to reduce compensation expense in the Company's pre-tax earnings by $0.29 million in 2006 and $0.15 million in 2007. This sums to $0.44 million of the $0.75 million shown in the table above. As a result of the acceleration of vesting, options to purchase 1,503,939 shares of the Company's common stock became immediately exercisable. The following table summarizes the accelerated stock options:

In late 2003 and early 2004, we closed on two exchange offers whereby previously outstanding Series A and B Debentures were exchanged for new Series C Subordinated Convertible Debentures ("Series C Debentures") and new Series D Subordinated Convertible Debentures ("Series D Debentures"). The Series C Debentures bear interest annually at 7%, payable in kind, and can be converted to common stock at a per share conversion price of $1.50. In March 2005, all holders of the Company's Series C Debentures agreed to an amendment that resulted in payment by the Company on March 31, 2005, of a total of $1.26 million, representing 50% of their principal and accrued interest balance on March 31, 2005. The amendment also provides an extension of the due date for the remainder of the principal of $1.26 million and accrued interest to April 30, 2006. All other original terms of the Series C Debentures remain the same. The Series D Debentures, which total $2.8 million, bear interest an nually at 8%, payable in kind, will mature December 31, 2006 and carry a per share conversion price of $0.65.

The Company has a $2.5 million working capital line of credit with a U.S. bank which runs through April 14, 2006. The Company has the ability to borrow on a revolving credit basis based on levels of eligible accounts receivable. At March 31, 2005 and December 31, 2004 available borrowings on this basis were $2.5 million and $1.6 million, respectively. Interest will

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be payable at prime +1.5%, where prime is a minimum 4%, and we will be required to maintain certain levels of tangible net worth and cash or availability of $0.5 million. At March 31, 2005 and throughout the term of our arrangement with our U.S. bank we have been in compliance with our financial covenants. Throughout 2004 and 2005, there was no outstanding indebtedness under this line of credit or with any financial institution.

The net periodic benefit cost for the three months ended March 31 was as follows (in thousands):

During the quarter ended March 31, 2005 we made contributions of $0.08 million to the Pension Plan. We expect to contribute $0.4 million over the next twelve months.

The details of the Company's geographic sales are as follows (in thousands):

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, an amendment of ARB No. 43, Chapter 4, Inventory Costs (SFAS No. 151). This accounting standard, which is effective for annual periods beginning after June 15, 2005, requires that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. The adoption of SFAS No. 151 is not expected to have a material effect on the Company's financial position or results of operations.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets," an amendment of APB Opinion No. 29, "Accounting for Nonmonetary Transactions." SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets and redefines the scope of transactions that should be measured based on the fair value of the assets exchanged. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in 2006. We do not believe the adoption of SFAS No. 153 will have a material effect on the Company's financial position or results of operations.

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In December 2004, the FASB issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes APB No. 25, FAS No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated fair value of the award and is required to be recognized as compensation expense over the vesting period. FAS No 123R would have been effective for the Company on July 1, 2005. However, in April 2005, the Securities and Exchange Commission delayed its effective date for financials filed with the SEC, and as a result the Company plans to adopt FAS No. 123R in the first quarter of 2006.

Pursuant to authorization received from the Board of Directors, on February 3, 2005, the Company accelerated the vesting of certain outstanding unvested stock options with an exercise price of greater than $0.47 per share. The Company accelerated these options in advance of the original July 1, 2005 effective date of, and in anticipation of the detrimental earnings effect of SFAS 123R. The Company's decision to accelerate the vesting of the options was due to its desire to avoid recording compensation expense for these options in its statement of operations in future years when these options were originally scheduled to vest. Note 4 to the Company's consolidated financial statements presents the pro forma net income (loss) the Company would have recognized had compensation costs for the Company's incentive compensation plans been determined consistent with FAS No. 123. Also included in Note 4 is the financial effect of the Q1 2005 acceleration of such options.

Therefore, based on grants that are currently outstanding and the elimination of the expense related to the accelerated vesting, the Company does not believe that the adoption of this standard will have a material impact on its financial position or results of operations. However, depending on the amount of options granted in the future, and their estimated value, both of which are unknown at this time, the adoption of this standard in the first quarter of 2006 could have a material impact on the Company's results of operations and financial position.

            CONDITION AND RESULTS OF OPERATIONS

From time to time, including in this Quarterly Report on Form 10-Q, we may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, changes in the industry, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. In order to comply with the terms of the safe harbor, we note that a variety of factors could cause our actual results to differ from the anticipated results or other expectations expressed in our forward-looking statements.

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The risks and uncertainties that may affect the operations, performance, development and results of our business include, without limitation, the following: product concentration in a mature market, dependence on the emerging digital market and the industry's transition to DTV and HDTV, consumer acceptance of DTV and HDTV, resistance within the broadcast or cable industry to implement DTV and HDTV technology, use and improvement of the Internet, new technologies that could render certain Chyron products to be obsolete, a highly competitive environment, competitors with significantly greater financial resources, new product introductions by competitors, seasonality, fluctuations in quarterly operating results, ability to maintain adequate levels of working capital, viability of the OTC Bulletin Board as a trading platform, and expansion into new markets. Additional factors affecting future results, and which are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2004, include:

• We cannot assure you that we will reach continued profitability because we have a history of losses.
• Our future operating results are likely to fluctuate and therefore may fail to meet expectations, which could cause our stock price to decline.
• If we fail to successfully develop, introduce and sell new products, we may be unable to compete effectively in the future.
• If we are unable to keep up with rapid change in our industry, our business will not grow.
• We expend substantial resources in developing and selling our products, and we may be unable to generate significant revenue as a result of these efforts.
• Our customers may cancel or change their product plans after we have expended substantial time and resources in the design of their products.
• If the digital video market does not grow, we will be unable to increase our revenues.
• If the introduction of our new digital signage products does not produce as expected, then there will be a negative impact on revenue and earnings.
• We will be unable to compete effectively if we fail to anticipate product opportunities based upon emerging technologies and standards and fail to develop products that incorporate these technologies and standards.
• We may not successfully develop strategic relationships that may be important to our business.
• We operate in a highly competitive environment and industry and we may lack resources needed to capture increased market share.
• We may encounter periods of industry-wide surface mount components shortage, resulting in pricing pressure and a risk that we could be unable to fulfill our customers' requirements.
• We depend upon one supplier for the software license of our Aprisa product.
• We depend on a limited number of suppliers of surface mount components.
• If we fail to adequately forecast demand for our products, we may incur product shortages or excess product.
• Problems in manufacturing our products, especially our new products, may increase the costs of our manufacturing process.
• We may be unable to grow our business if the markets in which we sell our products do not grow.
• Our business will suffer if our systems fail or become unavailable.

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• In order to become profitable, we will need to offset the general pattern of declines and fluctuations in the prices of our products
• We depend upon third party dealers to market and sell our products and they may discontinue sale of our products, fail to give our products priority or be unable to successfully market, sell and support our products.
• Problems associated with international business operations could subject us to risks from financial, operational and political situations, and affect our ability to manufacture and sell our products.
• We may be unable to accurately predict quarterly results which could adversely affect the trading price of our stock.
• We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain key personnel.
• We may not be able to protect our proprietary technology and may be sued for infringing on the rights of others.
• We may not be able to successfully implement our contingency plan upon a decline in revenues.
• We are uncertain of our ability to obtain additional financing or refinance existing obligations for our future needs, and liquidity issues have and may continue to increase our cost of capital.
• The TV broadcast industry has historically expected substantial marketing expenses.
• We sell hardware and software service agreements to our customers that may become onerous because of product problems or the age of our products.
• Our warranties on products may prove insufficient and could cause us unexpected costs.
• If a new law or regulation is created pertaining to the telecommunications and television industries it could cause our customers to suffer and impede our ability to increase profits.
• Our principal stockholders have significant voting power and may vote for actions that may not be in the best interests of all our stockholders.
• We have not issued dividends on our common stock for over thirteen years and do not anticipate doing so in the foreseeable future.
• The price of our common stock may be volatile.
• An increase in the number of shares of our common stock outstanding could reduce the price of our common stock.
• We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate your ability to sell your shares for a premium in a change of control transaction.
• It may be difficult to sell your shares and the value of your investment may be reduced because our common stock has experienced low trading volumes on the OTC Bulletin Board and currently lacks public market research analyst coverage.

This discussion should be read in conjunction with the Consolidated Financial Statements including the Notes thereto.

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Revenues for the quarter ended March 31, 2005 were $6.0 million, an increase of $0.2 million, or 3% from the $5.8 million reported for the first quarter of 2004. Revenues in the U.S. were $5.0 million in the first quarter of 2005 as compared to $4.6 million in the first quarter of 2004. International revenues were $1.0 million in the first quarter of 2005 as compared to $1.2 million in the first quarter of 2004. Domestic revenues have increased primarily from the sales of Duet HyperX systems which can be configured as HD, SD or a combination of both, offering a highly flexible and scalable migration path to high definition broadcasting. Also contributing to this growth is the continued acceptance of Duet LEX by major sports programmers.

Gross margins for the first quarter of 2005 were 59% compared to 61% in the comparable quarter in 2004. The decline in margins was due primarily to product mix and higher discounts on certain product lines.

Selling, general and administrative (SG&A) expenses increased by $0.6 million, to $3.0 million in the quarter ended March 31, 2005, compared to $2.4 million in the first quarter of 2004. The primary expense items contributing to the increase were SG&A expenses attributable to the rollout of the ChyTV digital signage product line of $0.3 million, severance costs of $0.1 million, professional services for Sarbanes-Oxley compliance and other consulting of $0.1 million, and increased employee benefit costs of $0.1 million.

Research and development (R&D) costs of $0.7 million in the first quarter of 2005 decreased by $0.2 million compared to the $0.9 million incurred in the first quarter of 2004. Reductions in 2005 spending are a result of lower project materials of $0.1 million and reduced costs of personnel and use of consultants of $0.1 million.

Interest expense in the first quarter of 2005 approximated $0.07 million as compared to $0.15 million in the first quarter of 2004. This is a direct result of the combination of lower borrowings and lower interest rates on the underlying debt instruments. In the fourth quarter of 2003 and first quarter of 2004 we closed on two exchange offers which resulted in the retirement of approximately $6 million of Series A and B debentures, with the balance exchanged for Series C and D debentures which carry a lower rate of interest. The combination of these factors reduced interest expense by $0.08 million.

The components of other income (expense), net are as follows (in thousands):

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In the first quarter of 2004, we sold our remaining investment in equity securities of vizrt Ltd. and realized a gain of $0.2 million.

At March 31, 2005, we had cash on hand of $1.2 million and working capital of $3.7 million.

During the three months ended March 31, 2005, net cash of $0.4 million was used by operations and $1.26 million was used to retire a portion of our Series C Debentures. The utilization of cash from operations was driven by the net loss in the quarter, an increase in receivables from sales that were realized late in the quarter, and therefore not yet collectable, delays in collection of several customer receivables and partially offset by $0.7 million from the increase in accounts payable and accrued expenses.

In March 2005, we amended the Series C Debentures such that half of the principal and accrued interest at March 31, 2005, became due and payable on that date and the remaining half of the principal, plus accrued interest through April 30, 2006, becomes due and payable on that date. As per the amended Series C Debenture terms, on March 31, 2005, $1.26 million was paid to holders and the remaining principal of $1.26 million, plus accrued interest, will be due on April 30, 2006. The Series D Debentures, which total $2.8 million, and bear interest annually at 8%, payable in kind, will mature December 31, 2006.

The Company received $0.4 million in May 2005 which represents the final payment of the proceeds from the sale of Pro-Bel.

The Company has a $2.5 million working capital line of credit with a U.S. bank which runs through April 14, 2006. The Company has the ability to borrow on a revolving credit basis based on levels of eligible accounts receivable. At March 31, 2005 and December 31, 2004 available borrowings on this basis were $2.5 million and $1.6 million, respectively. Interest will be payable at prime +1.5%, where prime is a minimum 4%, and we will be required to maintain certain levels of tangible net worth and cash or availability of $0.5 million. At March 31, 2005 and throughout the term of our arrangement with our U.S. bank we have been in compliance with our financial covenants. Throughout 2004 and 2005, there was no outstanding indebtedness under this line of credit or with any financial institution.

We provide graphics products to the broadcast industry for use in digital television. Our future growth and success will depend to a significant degree on the continued growth of various markets that use our products. We operate in a rapidly changing environment and must remain responsive to changes as they occur. In the event that revenues are significantly below 2005 forecasted revenues we believe we have the ability to reduce or delay discretionary expenditures, including capital purchases, and reduce headcount, according to our contingency plan so that we will have sufficient cash resources. However, there can be no assurance that we will be able to adjust our costs in sufficient time to respond to revenue shortfalls, should that occur.

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The long term success of the Company will be dependent on profitable operating results and the ability to raise additional capital. In the event the Company is unable to achieve expected goals of profitability or raise sufficient additional capital, we may have to scale back or eliminate certain parts of our operations.

In preparing contingency plans for a lower level of 2005 sales than we are currently forecasting, we have re-examined our cost structure and prepared a contingent restructuring plan that recommends, in the event it is necessary, to reduce and/or defer spending in staffing, travel, trade shows, professional fees (including for implementation of Sarbanes-Oxley Section 404), equipment, and bonuses, among other items. However, there can be no assurance we would be able to execute the plans in adequate time to provide a significant immediate or short-term benefit and if implemented, could have an adverse effect on our ability to conduct business.

We believe that cash on hand, net cash to be generated in the business, and availability under our line of credit, will be sufficient to meet our cash needs for the next twelve months if we are able to achieve our planned results of operations. However, there can be no assurance we will be able to achieve our plan. Furthermore, there can be no assurance that our bank will permit us to borrow under our line of credit if we fail to meet financial covenants and other requirements of the agreement. However, based on our current estimates, we believe we will be in compliance with such covenants and that such borrowings will be available to the Company.

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, an amendment of ARB No. 43, Chapter 4, Inventory Costs (SFAS No. 151). This accounting standard, which is effective for annual periods beginning after June 15, 2005, requires that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. The adoption of SFAS No. 151 is not expected to have a material effect on the Company's financial position or results of operations.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets," an amendment of APB Opinion No. 29, "Accounting for Nonmonetary Transactions." SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets and redefines the scope of transactions that should be measured based on the fair value of the assets exchanged. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in 2006. We do not believe the adoption of SFAS No. 153 will have a material effect on the Company's financial position or results of operations.

In December 2004, the FASB issued FAS No. 123R, "Share-Based Payment." FAS No. 123R supercedes APB No. 25, FAS No. 123, as amended by FAS No. 148, and related interpretations. Under FAS No. 123R, compensation cost is measured at the grant date based on the estimated fair value of the award and is required to be recognized as compensation expense over the vesting period. FAS No. 123R would have been effective for the Company on July 1, 2005. However, in April 2005, the Securities and Exchange Commission delayed its effective

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date for financials filed with the SEC and as a result the Company plans to adopt FAS No. 123R in the first quarter of 2006.

Pursuant to authorization received from the Board of Directors, on February 3, 2005, the Company accelerated the vesting of certain outstanding unvested stock options with an exercise price of greater than $0.47 per share. The Company accelerated these options in advance of the original July 1, 2005 effective date, and in anticipation of the detrimental earnings effect of SFAS 123R. The Company's decision to accelerate the vesting of the options was due to its desire to avoid recording compensation expense for these options in its statement of operations in future years when these options were originally scheduled to vest. Note 4 to the Company's consolidated financial statements presents the pro forma net income (loss) the Company would have recognized had compensation costs for the Company's incentive compensation plans been determined consistent with FAS No. 123. Also included in Note 4 is the financial effect of the Q1 2005 acceleration of such options.

Therefore, based on grants that are currently outstanding and the elimination of the expense related to the accelerated vesting, the Company does not believe that the adoption of this standard will have a material impact on its financial position or results of operations. However, depending on the amount of options granted in the future, and their estimated value, both of which are unknown at this time, the adoption of this standard in the first quarter of 2006 could have a material impact on the Company's results of operations and financial position.

            MARKET RISK

We are exposed to foreign currency and exchange risk in the normal course of business related to investments in our foreign subsidiaries and sales to foreign customers. For the three months ended March 31, 2005 and 2004, sales to foreign customers were 17% and 21% of total sales, respectively. All sales generated outside of the U.S. are denominated in British Pounds Sterling, Euros and U.S. Dollars.

The net impact on earnings of foreign exchange transactions was a loss of $0.03 million in the three month period ended March 31, 2005 and a gain of $0.04 in the three month period ended March 31, 2004. We record translation gain or loss as a separate component of other comprehensive income or loss in shareholders' equity (deficit).

Additionally, we are potentially exposed to interest rate risk with respect to any bank debt which would carry a variable interest rate. Rates that affect the variable interest on this debt include the Prime Rate. Throughout 2004 and 2005, there was no outstanding indebtedness with variable interest rates. We have evaluated the foreign currency exchange risk and interest rate risk and believe that our exposure to these risks are not material to our near-term financial position, earnings, or cash flows.

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Item 4. CONTROLS AND PROCEDURES

As of March 31, 2005, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2005. There have been no significant changes in the Company's internal control over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

The Company from time to time is involved in routine legal matters incidental to its business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

(a)  Exhibits:

Exhibit No.	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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