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Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
Commission file number 0-22122
MICROS-TO-MAINFRAMES, INC.
(Exact name of registrant as specified in its charter)
New York 13-3354896
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
614 Corporate Way, Valley Cottage, NY 10989
(Address of principal executive offices) (Zip Code)
(845) 268-5000
(Registrant's telephone number including area code)
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 _
The number of shares outstanding of the Registrant's Common Stock,
par value $.001 per share, as of November 11 2002 was 4,736,052
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Shareholders
Micros-to-Mainframes, Inc.
We have reviewed the accompanying condensed consolidated balance
sheet of Micros-to-Mainframes, Inc. and Subsidiaries as of
September 30, 2002 and the related condensed consolidated
statements of operations for the three-month periods and the six-
month periods ended September 30, 2002 and 2001 and the condensed
consolidated statements of cash flows for the six-month periods
ended September 30, 2002 and 2001. These financial statements are
the responsibility of the Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the condensed financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying condensed
financial statements in order for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance
sheet as of March 31, 2002, and the related condensed
consolidated statements of income, cash flows, and changes in
stockholders' equity for the year ended (not presented herein);
and, in our report dated May 21, 2002, we expressed an
unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of March 31, 2002 is fairly stated,
in all material respects, in relation to the balance sheet from
which it has been derived.
GOLDSTEIN GOLUB KESSLER LLP
New York, New York
October 29, 2002
Part 1
Micros-to-Mainframes, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, March 31,
2002 2002
Unaudited
ASSETS
Current Assets:
Cash and cash equivalents $ 855,119 $ 1,217,790
Accounts receivable - trade, net of allowance
of $418,000 and $335,000, respectively 13,026,304 13,504,056
Inventories 1,607,783 1,863,370
Prepaid expenses and other current assets 900,529 1,314,006
Refundable income taxes 174,663 862,000
Deferred income taxes 155,000 155,000
---------------------------
Total current assets 16,719,399 18,916,222
Property and Equipment: 8,480,729 7,858,342
Less accumulated deprecation and amortization 4,555,109 3,797,562
---------------------------
3,925,620 4,060,780
Goodwill 3,228,729 3,228,729
Other Assets 179,327 180,495
----------------------------
Total Assets $24,053,075 $ 26,386,226
============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Secured notes payable $ 4,100,507 $ 5,235,837
Accounts payable and accrued expenses 5,047,602 4,919,342
Current portion of capital lease obligations 357,364 352,379
----------------------------
Total current liabilities 9,505,474 10,507,558
Capital Lease Obligations, net of current portion 297,300 484,943
Deferred Income Taxes 184,000 588,000
----------------------------
Total liabilities 9,986,773 11,580,501
Commitments and Contingencies
Shareholders' Equity:
Common stock - $.001 par value; authorized
10,000,000 shares, issued and outstanding
4,736,502 shares and and 4,957,569 shares,
respectively 4,737 4,958
Additional paid-in capital 15,343,201 15,685,456
Accumulated deficit (1,281,636) (884,689)
-----------------------------
Total shareholders' equity 14,066,302 14,805,725
-----------------------------
Total Liabilities and Shareholders' Equity $ 24,053,075 $ 26,386,226
==============================
See Notes to Condensed Consolidated Financial Statements
Micros-to-Mainframes, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three Month ended September 30
2002 2001
Unaduited
-------------------------------
Net revenue
Products $ 9,039,928 $ 12,953,780
Services and related product sales 5,593,963 4,636,853
------------------------------
14,633,891 17,590,633
Costs and expenses:
Cost of products sold 8,362,957 12,087,701
Cost of services provided and related
product sales 3,456,977 2,891,177
Selling, general and administrative expenses 2,683,413 2,387,212
-----------------------------
14,503,347 17,366,090
Other Income 25,859 8,712
Interest expense 76,226 119,431
----------------------------
Income before income taxes 80,177 113,824
Provision for income taxes 39,000 22,700
----------------------------
Net income $ 41,177 $ 91,124
=============================
Net income (loss) per common share:
Basic and diluted $ 0.01 $ 0.02
=============================
Weighted average number of common shares
outstanding:
Basic 4,713,593 5,059,158
---------------------------
Diluted 4,716,271 5,060,302
---------------------------
See notes to condensed consolidated financial statements
Micros-to-Mainframes, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Six month ended September 30
2002 2001
Unaduited
-----------------------------
Net revenue
Products $ 19,100,460 $ 28,505,640
Services and related product sales 10,962,976 8,951,847
------------------------------
30,063,436 37,457,487
Costs and expenses:
Cost of products sold 17,822,410 26,540,182
Cost of services provided and related
product sales 7,036,385 5,359,808
Selling, general and administrative expenses 5,861,950 5,117,538
------------------------------
30,720,745 37,017,528
Other Income 33,276 26,105
Interest expense 154,914 241,652
------------------------------
Income (loss) before income taxes (778,947) 224,412
Provision (benefit) for income taxes (382,000) 42,600
------------------------------
Net income (loss) $ (396,947) $ 181,812
==============================
Net income (loss) per common share:
Basic and diluted $ (0.08) $ 0.04
==============================
Weighted average number of common shares
outstanding:
Basic 4,836,027 5,094,403
--------------------------
Diluted 4,836,027 5,095,686
--------------------------
See notes to condensed consolidated financial statements
Micros-to-Mainframes, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Six Months Ended
September 30,
2002 2001
------------------------
(Unaudited)
Cash flows from operating activities:
Net income (loss) $ (396,947) $ 181,812
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 757,547 475,168
(Decrease) increase deferred income taxes (404,000) 16,100
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 477,751 (431,873)
(Increase) decrease in inventory 255,587 (382,855)
(Increase) decrease in prepaid expenses and
other current assets 413,477 (73,523)
Decrease in refundable income tax 687,337
Increasee in other assets 1,168 91,275
Increase in accounts payable
and accrued expenses 116,260 582,035
---------------------------
Net cash provided by operating activities 1,908,180 458,139
---------------------------
Cash flows from investing activities:
Acquisition of property and equipment (622,387) (1,682,259)
----------------------------
Net cash used in investing activities (622,387) (1,682,259)
----------------------------
Cash flows from financing activities:
Repayment of secured notes payable (1,135,330) (520,000)
Retirement of common stock (342,476) (171,722)
Proceeds from capital lease equipment - 1,074,428
Payments on capital lease obligations (182,658) (108,241)
-----------------------------
Net cash provided by (used in) financing
activities (1,660,464) 274,465
-----------------------------
Net decrease in cash and cash equivalents (374,671) (949,655)
Cash and cash equivalents at the
beginning of period 1,217,790 1,205,874
-----------------------------
Cash and cash equivalents at the
end of period $ 843,119 $ 256,219
=============================
Supplemental disclosures of cash flow information:
Cash paid during the quarter for:
Interest $ 110,172 $ 228,892
Income taxes $ 23,067 $ 6,057
See notes to condensed consolidated financial statements
Micros-to-Mainframes, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
1. Description of Business and Basis Presentation
Micros-to-Mainframes, Inc. and its subsidiaries, MTM Advanced
Technology, Inc., PTI Corporation (formerly known as Pivot Technologies,
Inc.)("Pivot"), and Data.Com RESULTS, Inc. ("Data.Com") (collectively, the
"Company" or "MTM") serve as a single source provider of advanced technology
solutions, including design and consulting services, communication services
and products, internet/Intranet development services, and Network and
Security Managed Services. In addition, the Company delivers a total
processing solution by providing computer hardware and software sales,
systems design, installation, consulting, maintenance and integration of
microcomputer products, including the design and implementation of wide area
networks ("WAN's") and local area networks ("LANs"). The Company sells,
installs and services microcomputers, microcomputer software products,
supplies, accessories and custom designed microcomputer systems. MTM is an
authorized direct dealer and value added reseller. The Company also serves
as a systems integrator, by integrating into a single working system, for a
client, a group of hardware and software products from more than 40 major
computer vendors including Hewlett Packard/Compaq Computer Company, IBM
Corporation, Dell Computer Corporation, NEC Technologies, Inc., Seagate
Technology Inc., Citrix Systems, Inc., and Cisco Systems, Inc., Canon USA,
Inc., Novell, Inc., Microsoft Corporation, 3COM Corporation, Cubix
Corporation. The Company also serves as a Managed Service Provider (MSP)
providing automated remote network, system and security management solutions
and related consulting and engineering.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X.
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
months ended September 30, 2002 are not necessarily indicative of the
results that may be expected for the year ending March 31, 2003. For
further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form
10-K (Commission file number 0-22122) for the fiscal year ended March
31, 2002.
INVENTORIES
Inventories, comprised principally of computer hardware and
software, are stated at the lower of cost or market using the first-
in, first-out (FIFO) method.
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis of financial condition and
results of operations of the Company should be read in conjunction
with the condensed consolidated financial statements and notes
thereto included elsewhere in this Quarterly Report on Form 10-Q and
with the Company's Annual Report on Form 10-K. This discussion and
analysis contains certain forward-looking statements within the
meaning of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, which are not
historical facts, and involve risks and uncertainties that could
cause actual results to differ materially from the results
anticipated in those forward-looking statements. These risks and
uncertainties include, but are not limited to, those set forth
below, those set forth in the Company's Annual Report on Form 10-K
for the year ended March 31, 2002, and those set forth in the
Company's other filings from time to time with the Securities and
Exchange Commission.
The following table sets forth, for the periods indicated, certain items in
the Company's Consolidated Statements of Operations expressed as a percentage
of that period's net revenues.
Percentage of Net Revenue
Six Months ended Three Months ended
September 30, September 30,
2002 2001 2002 2001
Product sales............... 63.53% 76.10% 61.77% 73.54%
Services and related
product sales . . . .. . . 36.47 23.90 38.23 26.36
Net sales ................... 100.00 100.00 100.00 100.00
Cost of product sales (as a
% of product sales)...... 93.31 93.11 92.51 93.31
Cost of services provided and
related product sales
(as a % of services and
related product sales).. . 64.18 59.87 61.80 62.35
Total direct costs (as a % of
net revenues)....... 82.69 85.16 80.77 85.15
Selling, general and
administrative expenses. 19.50 13.66 18.34 13.57
(Loss) Income before
Income taxes. ...... . . (2.60) 0.60 0.55 0.72
Net (Loss) Income............ (1.32) 0.49 0.28 0.59
The Six Months Ended September 30, 2002, as compared to the Six Months Ended
September 30, 2001.
Revenue. The Company had net revenues of approximately $30,063,000 for the Six
Months Ended September 30, 2002(the "2003 Period"), as compared to
approximately $37,457,000 for the Six Months Ended September 30, 2001 (the
"2002 Period"). The Company had net revenues of approximately $14,634,000 for
the Three Months Ended September 30, 2002 ("Second Quarter 2003"), as compared
to approximately $17,591,000 for the Three Months Ended September 30, 2001
("Second Quarter 2002"). Services and related product sales include sales of
the Pivot automated remote network management system and high-end service
related product sales. The decreases in net revenues of approximately 20% for
the 2003 Period and 17% for the Second Quarter 2003 were attributable to
decreases in product sales of $9,405,000 for the 2003 Period and $3,914,000 for
the Second Quarter 2003, offset by the increase in service and related product
sales of approximately $2,011,000 for the 2003 Period and approximately
$957,000 for the Second Quarter 2003. The revenue related to the service and
consulting business was approximately $10,963,000 for the 2003 Period and
approximately $5,594,000 for the Second Quarter 2003, as compared to
approximately $8,952,000 for the 2002 Period and approximately $4,637,000 for
the Second Quarter 2002. These figures represent a decrease in revenue of
approximately 33% and 30% for products sales, and an increase of approximately
22% and 17% for service and related product sales for the 2003 Period and the
Second Quarter 2003, respectively. Many companies reduced their capital
expenditures due to the economic slow down. The Company's strategy is to secure
higher margin sales and not pursue sales with low margins, while increasing its
service revenue.
Gross Profit. Cost of products sold includes the direct costs of products
sold and freight expenses, offset by rebates from manufacturers. As a
percentage of product sales, the cost of products sold increased slightly
by 0.2% in the 2003 Period and 0.8% in the Second Quarter 2003. The cost
of services and related product sales ("Services") includes the personnel
costs associated with providing technical services, together with the
products and parts related to the service contract. The cost of services
provided increased by 4% for the 2003 Period and decreased slightly
by 0.4% in the Second Quarter 2003. The increase in the cost of services
resulted from competitive pressures and the slowdown in the industry.
As we anticipated, there was an industry wide decrease in procurement
and projects for IT services.
Selling, general and administrative expenses ("SG&A") were approximately
$5,862,000 in the 2003 Period as compared to approximately $5,118,000 in
the 2002 Period and approximately $2,683,000 for the Second Quarter 2003
compared to approximately $2,387,000 for the Second Quarter 2002. This
represented an increase of approximately 15% for SG&A during the 2003
Period as compared to the 2002 Period and an increase of approximately 12%
during the Second Quarter 2003 as compared to the Second Quarter 2002. As a
percentage of net revenue, SG&A increased to 19.50% for the 2003 Period
from 13.66% for the 2002 Period and to 18.34% for the Second Quarter 2003
from 13.57% for the Second Quarter 2002. These increases were due to an
increase in payroll, payroll taxes, employee benefits and other employee
expenses and depreciation expenses during the 2003 Period and the Second
Quarter 2003.
Other income increased to approximately $33,000 in the 2003 Period as
compared to approximately $26,000 in the 2002 Period and approximately
$26,000 in the Second Quarter 2003 as compared to approximately $9,000 in the
Second Quarter 2002. The increase was due to the interest received from the
prior year's tax refund due from the government. Interest expenses
decreased to approximately $155,000 in the 2003 Period from approximately
$242,000 in the 2002 Period and to approximately $76,000 in the Second
Quarter 2003 from approximately $119,000 in the Second Quarter 2002, due to
the lower bank interest borrowing rates in the 2003 Period and Second Quarter
2003.
The effective income tax rate was approximately 49% in the 2003 Period and
the Second Quarter 2003.
As a result of the foregoing, the Company had a net loss of approximately
$397,000 in the 2003 Period compared to net income of approximately
$182,000 in the 2002 Period, and net income of approximately $41,000 for
the Second Quarter 2003 as compared to net income of approximately $91,000
for the Second Quarter 2002. The basic and diluted loss per share was
$0.08 in the 2003 Period, as compared to net income per share of $0.04 for
the 2002 Period, and the basic and diluted net income per share was $0.01
for the Second Quarter 2003 as compared to $0.02 in the Second Quarter
2002.
Recently Issued Accounting Standard
As of April 1, 2001, the Company has adopted the Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets.
SFAS No. 142 eliminates the amortization of goodwill and certain other
intangible assets. It also requires the Company to complete a test for
impairment of these assets annually, as well as a transitional goodwill
impairment test within six months from the date of adoption. The Company has
completed this impairment test, and has found no impairment.
LIQUIDITY AND CAPITAL RESOURCES
The Company measures its liquidity in a number of ways, including the
following:
September 30, March 31,
2002 2002
(Dollars in thousands,
except current ratio data)
Cash and cash equivalents............... $ 855 $ 1,218
Working capital ......................... $ 7,236 $ 8,408
Current ratio .......................... 1.76:1 1.80:1
Secured notes payable .................. $ 4,101 $ 5,236
Working capital lines available.......... $ 9,778 $ 9,035
The Company had working capital of approximately $7,236,000 as of
September 30, 2002, a decrease of approximately $1,145,000 from March 31,
2002.
During the 2003 Period, the Company had net cash provided by operating
activities of approximately $1,920,000, consisting primarily of an increase
in accounts payable and accrued expenses of $106,000,a decrease in accounts
receivable of approximately $478,000, a decrease in inventory of
approximately $256,000, a decrease in prepaid expenses and other current
assets of approximately $413,000, and a decrease in refundable income tax of
$687,000, which were offset by a decrease in deferred tax of approximately
$382,000 and an operating net loss of approximately $397,000.
The Company had cash used in investing activities of approximately
$622,000 consisting of the acquisition of property and equipment of
approximately $85,000, and approximately $537,000 from costs incurred in the
development of computer software.
The Company had net cash used in financing activities of approximately
$1,660,000, by payment of capital lease obligations of approximately
$183,000, the repayment to its bank of $1,135,000 and the repurchase of its
common stock of approximately $342,000.
As a result of the foregoing, the Company had a net decrease in cash of
approximately $363,000.
The Company entered into two credit agreements with two banks on its
major credit facility. One of these agreements is a $16,000,000 financing
facility. This credit facility is comprised of a floor plan agreement and a
revolving receivable financing facility, and is secured by the Company's
assets (other than inventories and accounts receivable directly financed by
other floor planners which have liens thereon). The other financing agreement
is a $1,300,000 floor plan agreement and is secured by the Company's assets
(other than inventories and accounts receivable directly financed by other
floor planners who have liens thereon). The floor-plan agreements generally
allow the Company to borrow for a period of 30 days interest free. Interest
is charged to the Company only after the due date. In addition, the
agreements provide for minimum amounts of tangible net worth and specified
financial ratios. The borrowing interest rate on the revolving receivables
financing loan is a per annum rate of one half of one percentage point (0.5%)
below the base rate. The base rate is the prime rate as listed in The Wall
Street Journal. The Company's borrowing rate was 4.25% as of September 30,
2002.
The Company's total outstanding debt under the revolving receivable
financing facility was $4,100,507 and $5,235,837 at September 30, 2002 and
March 31, 2002, respectively. The Company is charged a facility management
fee of $40,000 per annum for this financing facility.
The Company's current ratio decreased to 1.76:1 at September 30, 2002
from 1.80:1 at March 31, 2002.
On May 9, 2001, the Company's Board of Directors approved a stock
repurchase program which authorized the Company at its discretion to purchase
up to a total of 250,000 shares of its common stock, not to exceed
$250,000,from time-to-time as market and business conditions warrant. In June
14, 2002, the Board of Directors amended the program to authorize the Company
to purchase up to a total of an additional 250,000 shares. During the six
months ended September 30, 2002, the Company repurchased 220,867 shares under
the program for $342,560. As of September 30, 2002, the Company has purchased
a total of 399,067 shares for $589,538 since May 9, 2001.
On October 25, 2002, the Board of Directors authorized the Company to
purchase up to an additional of $300,000 of it common stock. The repurchase
program will remain in effect until the first Board of Directors meeting
following the close of Company's 2003 fiscal year, unless earlier terminated by
the Board. The Company is authorized to repurchase common stock from time to
time in open market transactions as permitted under applicable rules and
regulations. The extent to which the Company repurchases its stock and the
timing of such purchases will depend upon market conditions and other corporate
considerations to be evaluated by the Board of Directors.The repurchase
program does not obligate the Company to repurchase any specific number
of shares, and repurchases pursuant to the program may be suspended
or resumed at any time or from time to time without further notice
or announcement.
Our sources of liquidity include, but are not limited to, funds
from operations and funds available under the two aforementioned
credit facilities. Our capital requirements depend on a variety of
factors, including but not limited to, the rate of increase or
decrease in our existing business base; the success, timing, and
amounts of investment required to bring new products on-line; revenue
growth or decline; and potential acquisitions. We believe that we have
the financial resources to meet our future business requirements
through the next twelve months.
Application of Critical Accounting Policies
The Company recorded goodwill as a result of the acquisition of PTI
Corporation (formerly known as PIVOT Technologies, Inc.), a subsidiary of
Micros to Mainframes. The Company determined the fair value of PTI
Corporation's operations through a discounted cash flow method. This
analysis was based on a projection of future sales and earnings for a
discrete period of five years plus an assumed average growth rate for all
years beyond the initial projected period.
We develop our budgets based on recent sales data for existing products,
planned timing of new product launches, and customer commitments related to
existing and newly developed products. In estimating future sales and
growth rates, we used our internal budgets and make comparisons to other
competitors.
We believe that the accounting estimate related to goodwill impairment
is a "critical accounting estimate" because: (1) it is highly susceptible
to change from period to period since it requires Company management to
make assumptions about future sales, cost of sales, and growth rates over the
next five years of the subsidiary; and (2) the impact that recognizing an
impairment would have on the assets reported on our balance sheet, as well
as our net income, would be material. Management's assumptions about future
sales prices, future sales volumes, and growth rates require significant
judgment because actual sales prices and volumes have fluctuated in the
past and are expected to continue to do so. If Management's assumptions
change, then the Company could be required to recognize an impairment loss,
equal to the difference between the fair value of the goodwill and the
reported amount of the goodwill. Management has discussed the development
and selection of this critical accounting estimate with the Audit Committee
and the Company's independent auditors relating to it in Management's
discussion and analysis.
Item 4. Controls and Procedures
Within the 90 days prior to the filing of this report, the Company's
management, including the Company's Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design of the
Company's disclosure controls and procedures, as defined in Rule 13a-
14(c) under the Securities Exchange Act of 1934 (the "Exchange Act").
Based on the evaluation, the Chief Executive Officer and the Chief
Financial Officer concluded the Company's disclosure controls and
procedures were effective, in all material respects, to ensure that
the information required to be disclosed in the reports the Company
files and submits under the Exchange Act is recorded, processed,
summarized and reported as and when required.
There have been no significant changes (including corrective actions
with regard to significant deficiencies and material weakness) in the
Company's internal controls or in other factors subsequent to the date
the Company carried out its evaluation that could significantly affect
these controls.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders held on
November 8, 2002, the following proposals were adopted by the vote
specified below:
For Withheld
Election Authority
1. Election of Directors:
Howard A Pavony 3,945,353 546,072
Steven H Rothman 3,945,353 546,072
William Lerner 3,945,353 546,072
Arnold J Wasserman 4,043,453 448,972
Alvin E. Nashman 4,043,453 448,972
James W Davis 4,043,453 448,972
2. Approval of 2002 Long-Term Performance Plan
For Against Abstain Broker Non-votes
1,835,728 524,697 5,825 2,126,175
Item 5. Other Information
The Company has received notification from NASDAQ that its common stock has
failed to maintain a minimum market value of public float of $5,000,000
as required by the NASDAQ National Market under Marketplace Rule
4450(a)(2). Accordingly, the Company's securities are scheduled to be
delisted from the National Market as of November 20, 2002.
The Company has filed an application to transfer to the NASDAQ SmallCap
Market.
SIGNATURES
Pursuant to 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.
MICROS-TO-MAINFRAMES, INC.
Date : November 12, 2002 By: /s/ Howard A. Pavony
Howard A. Pavony
Chief Executive Officer,
President and Director
(Principal Executive Officer)
Date : November 12, 2002 By: /s/ Steven H. Rothman
Steven H. Rothman
Chief Financial Officer
Chairman of the Board
of Directors
Date : November 12, 2002 By: /s/ Frank T. Wong
Frank T. Wong
Vice President - Finance
Principal Financial and
Accounting Officer) and
Secretary
CERTIFICATION
I, Steve H. Rothman, Chief Financial Officer of Micros-to-Mainframes,
Inc. certify, pursuant to 18 U.S.C. SECTION 1350, as enacted by SECTION 906
of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2002 (the "Periodic Report") which this statement accompanies
fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934; and
(2) information contained in the Periodic Report fairly presents, in
all material respects, the financial condition and results of operations of
Micros --to- Mainframes, Inc.
Dated: November 12, 2002
s/s Steven H. Rothman
---------------------
Steven H. Rothman
Chief Financial Officer
CERTIFICATION
I, Howard Pavony, Chief Executive Officer of Micros-To-Mainframes, Inc.,
certify, pursuant to 18 U.S.C. SECTION 1350, as enacted by SECTION 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2002 (the "Periodic Report") which this statement accompanies
fully complies with the requirements of Section 13(a)of the Securities
Exchange Act of 1934; and
(2) information contained in the Periodic Report fairly presents, in
all material respects, the financial condition and results of operations of
Micros-to-Mainframes, Inc.
Dated: November 12, 2002
s/s Howard Pavony
-------------------
Howard Pavony
Chief Executive Officer
CERTIFICATION
I, Howard Pavony, President and CEO of Micros to Mainframes, Inc,
certify that:
1. I have reviewed the quarterly report on Form 10-Q of Micros-To-
Mainframes, 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 have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether 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: November 12, 2002 s/s Howard Pavony President and CEO
CERTIFICATION
I, Steve H Rothman, Chief Financial Officer of Micros to Mainframes, Inc,
certify that:
1. I have reviewed the quarterly report on Form 10-Q of Micros-To-
Mainframes, 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 have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether 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: November 12, 2002 s/s Steve H. Rothman CFO