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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 SEPTEMBER 30, 2002
or
/ / TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________to___________
Commission File Number: 001-14059
IOMED, INC.
(Exact name of registrant as specified in its charter)
UTAH 87-0441272
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2441 SOUTH 3850 WEST, SUITE A, SALT LAKE CITY, UTAH 84120
(Address of principal executive offices) (Zip Code)
(801) 975-1191
(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 /X/ Yes / / No.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. As of OCTOBER 31, 2002:
CLASSES OF COMMON STOCK NUMBER OF SHARES OUTSTANDING
--------------------------------- -----------------------------------
Common Stock, no par value 6,544,670
IOMED, INC.
------------
INDEX TO FORM 10-Q
Page
----
PART I -- FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets --
September 30, 2002 and June 30, 2002 (audited)..........................................3
Condensed Consolidated Statements of Operations --
Three months ended September 30, 2002 and 2001..........................................4
Condensed Consolidated Statements of Cash Flows --
Three months ended September 30, 2002 and 2001..........................................5
Notes to Condensed Consolidated Financial Statements....................................6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS...........................................................................8
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable
Item 4. CONTROL AND PROCEDURES.................................................................11
PART II - OTHER INFORMATION
Item 5. OTHER INFORMATION......................................................................12
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.......................................................12
Signature.......................................................................................13
Certification...................................................................................14
Page 2 of 14
IOMED, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, JUNE 30,
2002 2002
---------------- ------------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,812,000 $ 4,422,000
Accounts receivable, net 1,021,000 1,193,000
Inventories 789,000 881,000
Prepaid expenses 223,000 114,000
---------------- ------------------
Total current assets 6,845,000 6,610,000
Equipment and furniture, net 2,872,000 3,071,000
Restricted cash 2,180,000 2,279,000
Other assets 113,000 119,000
---------------- ------------------
TOTAL ASSETS $ 12,010,000 $ 12,079,000
================ ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 236,000 $ 309,000
Accrued liabilities 964,000 1,014,000
Current portion of long-term obligations 564,000 556,000
---------------- ------------------
Total current liabilities 1,764,000 1,879,000
Long-term obligations 2,409,000 2,569,000
Commitments and contingencies
Shareholders' equity
Common shares 34,646,000 34,646,000
Convertible preferred shares 6,881,000 6,881,000
Accumulated deficit (33,690,000) (33,896,000)
---------------- ------------------
Total shareholders' equity 7,837,000 7,631,000
---------------- ------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,010,000 $ 12,079,000
================ ==================
See accompanying notes.
Page 3 of 14
IOMED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------
2002 2001
------------ -----------
(unaudited)
Revenues:
Product sales $ 2,942,000 $ 2,493,000
Contract research revenue, royalties & license fees 51,000 393,000
------------ -----------
Total revenues 2,993,000 2,886,000
Operating costs and expenses:
Cost of products sold 1,069,000 902,000
Research and development 330,000 1,014,000
Selling, general and administrative 1,354,000 1,542,000
------------ -----------
Total costs and expenses 2,753,000 3,458,000
------------ -----------
Income (loss) from operations 240,000 (572,000)
Interest expense 62,000 75,000
Interest income and other, net 28,000 78,000
------------ -----------
Net income (loss) $ 206,000 $ (569,000)
============ ===========
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE $ 0.03 $ (0.09)
============ ===========
See accompanying notes.
Page 4 of 14
IOMED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
SEPTEMBER 30,
2002 2001
-------------- -----------
(unaudited)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 233,000 296,000
Other non-cash charges - 3,000
Changes in operating assets and liabilities:
Accounts receivable 172,000 (126,000)
Inventories 92,000 (179,000)
Prepaid expenses (109,000) (41,000)
Trade accounts payable (73,000) (700,000)
Other accrued liabilities (50,000) (917,000)
-------------- -----------
Net cash provided by (used in) operating activities 471,000 (2,233,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment and furniture (28,000) (23,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in restricted cash balance 99,000 92,000
Payments on long-term obligations (152,000) (157,000)
-------------- -----------
Net cash used in financing activities (53,000) (65,000)
-------------- -----------
Net increase (decrease) in cash and cash equivalents 390,000 (2,321,000)
Cash and cash equivalents at beginning of period 4,422,000 6,436,000
-------------- -----------
Cash and cash equivalents at end of period $ 4,812,000 $ 4,115,000
============== ===========
See accompanying notes.
Page 5 of 14
IOMED, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
IOMED, Inc., a Utah corporation (the "Company"), is a leader in the
development, manufacture and sale of active drug transport systems
primarily used to treat acute local inflammation in the sports and
occupational medicine and physical therapy markets. The Company is seeking
opportunities to market or develop new products designed to improve the
quality and efficiency of medical care in its served markets. In addition,
the Company is seeking collaborative opportunities to develop its
non-invasive drug transport technology to satisfy substantial unmet medical
needs. The Company has proprietary technology in various stages of research
and product development for the treatment of acute local inflammation and
for the treatment of ophthalmic disease.
BASIS OF PRESENTATION
In the opinion of management, the accompanying condensed consolidated
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of the Company as of September 30,
2002, and the results of its operations and cash flows for the interim
periods ended September 30, 2002 and 2001. The operating results for the
interim periods are not necessarily indicative of the results for a full
year. Certain information and footnote disclosures normally included in
financial statements in accordance with accounting principles generally
accepted in the United States have been condensed or omitted. Therefore,
these statements should be read in conjunction with the Company's audited
consolidated financial statements for the year ended June 30, 2002,
included in the Company's Annual Report on Form 10-K, dated September 27,
2002.
EARNINGS (LOSS) PER SHARE
For all periods presented, basic and diluted earnings (loss) per share
are computed in accordance with Statement of Financial Accounting Standards
(SFAS) No. 128 - EARNINGS PER SHARE.
Net income (loss) as presented in the condensed consolidated
statements of operations represents the numerator used in computing both
basic and diluted earnings (loss) per share and the following table sets
forth the computation of the weighted average shares representing the
denominator used in determining basic and diluted earnings (loss) per
share:
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------
2002 2001
-------- -----------
(IN THOUSANDS)
Denominator for basic earnings (loss) per share -
weighted average shares outstanding..................... 6,545 6,545
Dilutive securities: preferred stock and certain stock
options................................................. 895 --
-------- -----------
Denominator for diluted earnings (loss) per share --
adjusted weighted average shares outstanding and
assumed conversions..................................... 7,440 6,545
======== ===========
Page 6 of 14
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
At September 30, 2002, the following potentially dilutive securities
were outstanding but were not included in the computation of diluted loss
per share due to their anti-dilutive effect: options to purchase
approximately 1,604,000 common shares at a weighted average exercise price
of $2.73 per share; warrants to purchase 233,542 common shares at a
weighted average price of $10.27 per share; and 893,801 convertible Series
D preferred shares convertible on a share-for-share basis into common
stock.
REVENUE RECOGNITION
Revenues on product sales are recognized when there is persuasive
evidence that an arms length transfer has occurred, generally upon
shipment, when title has passed, and the price is fixed or determinable.
The Company recognizes revenue from contract research based upon
performance of its obligations, making qualifying expenditures and delivery
of reports and data. Revenues from royalty and license agreements are based
on third-party sales and are recognized in the quarter in which payment is
either received or may be reasonably estimated.
LONG LIVED ASSETS
The carrying amounts of long-lived assets, and the related
amortization periods, are reviewed for impairment whenever events occur or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable within the estimated useful life. When the Company
determines the existence of impairment indicators, the impairment loss is
measured based on the excess of carrying value over the estimated fair
value of the impaired asset. The carrying value of the underlying asset is
reduced, with the reduction charged to expense, so that the carrying amount
is equal to fair value.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. Inventories consisted of
the following at March 31, 2002 and June 30, 2001:
SEPTEMBER 30, JUNE 30,
2002 2002
---------------- ----------------
Raw materials............................ $ 476,000 $ 562,000
Work-in-progress......................... 48,000 26,000
Finished goods........................... 265,000 293,000
---------------- ----------------
$ 789,000 $ 881,000
================ ================
3. RESTRICTED CASH
The Company maintains an interest bearing money market account with a
lending bank, $2,180,000 of which is being held as a compensating balance
as of September 30, 2002 under a long-term obligation and is restricted as
to withdrawal. Included in cash and cash equivalents as of September 30,
2002 is $381,000 restricted to secure the current portion of the long-term
obligation. The restricted cash balance requirement decreases over the life
of the obligation as payments are made.
4. COMMITMENTS
The Company has entered into agreements with various lending institutions
to provide financing for the Company's investments in capital equipment and
facilities modifications and consolidation. As of September 30, 2002, the
Company had approximately $2,973,000 outstanding under these agreements,
$2,409,000 of which was classified as long-term obligations.
Page 7 of 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO INCLUDED
ELSEWHERE IN THIS REPORT. THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING
STATEMENTS, WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS OF OPERATIONS COULD DIFFER
SIGNIFICANTLY FROM THOSE ANTICIPATED IN SUCH FORWARD-LOOKING STATEMENTS AS A
RESULT OF NUMEROUS FACTORS INCLUDING THOSE DISCUSSED HEREIN. ADDITIONAL RISKS
AND UNCERTAINTIES ARE DESCRIBED IN THE COMPANY'S MOST RECENT ANNUAL REPORT ON
FORM 10-K FOR ITS FISCAL YEAR ENDED JUNE 30, 2002. THIS DISCUSSION SHOULD BE
READ IN CONJUNCTION WITH SUCH REPORT, COPIES OF WHICH ARE AVAILABLE UPON
REQUEST.
OVERVIEW
The Company is a leader in the development, manufacture and sale of active
drug transport systems used to treat local inflammation in the sports and
occupational medicine and physical therapy markets. The Company's current
product line is based on proprietary iontophoretic drug delivery technology. The
majority of the Company's revenues have been generated through the sale of the
Phoresor system and related products that employ its proprietary technology. The
Company is seeking opportunities to market or develop new products designed to
improve the quality and efficiency of medical care it its served markets. In
addition, the Company is seeking collaborative opportunities to develop its
non-invasive drug transport technology to satisfy substantial unmet medical
needs. The Company has proprietary technologies in various stages of research
and product development for the treatment of acute local inflammation and for
the treatment of ophthalmic disease. Since its inception, the Company has
generally incurred operating losses as a result of costs associated with
internally funded research and development activities. As of September 30, 2002,
the Company's accumulated deficit was approximately $33.7 million. The Company's
ability to sustain profitability will depend on its ability to achieve market
acceptance and successfully expand sales of its existing products and
successfully complete the development of, receive regulatory approvals for, and
successfully manufacture and market its products under development, as to which
there can be no assurance.
The Company's results of operations may vary significantly from quarter to
quarter and depend on the signing of new product development agreements, the
timing of contract research revenues, product sales levels and costs associated
with manufacturing processes, as well as other factors. The amount of revenue in
any given period is not necessarily indicative of future revenue.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
REVENUES. Product sales increased 18% to $2,942,000 in the three months
ended September 30, 2002, from $2,493,000 in the three months ended September
30, 2001. The increase is attributable in part to the return of the Company's
sales orders to normal levels following a shortage of an anti-inflammatory drug
often used in its products, which had negatively impacted sales orders in the
first quarter of the prior year.
Contract research revenues, royalties and license fees decreased to $51,000
in the three months ended September 30, 2002, from $393,000 in the three months
ended September 30, 2001. The decrease reflects prior year's recognition of
$350,000 in contract research revenue resulting from a one-time payment for work
performed under the collaborative agreement with Santen Pharmaceuticals Co.,
LTD.
COSTS OF PRODUCTS SOLD. Costs of products sold increased to $1,069,000 in
the three months ended September 30, 2002, from $902,000 in the three months
ended September 30, 2001. Gross margin on product sales was 64% in both the
current quarter and the prior period quarter.
Page 8 of 14
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenditures
decreased 67% to $330,000 for the three months ended September 30, 2002, from
$1,014,000 reported for the three months ended September 30, 2001. The decrease
reflects cost reduction measures the Company instituted last fiscal year. The
Company's research and development expenditures in the current period reflects
its continued investment in product development programs, including a focused
effort on new products for its commercial business in the sports and
occupational medicine and physical therapy markets.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased 12% to $1,354,000 in the three months ended
September 30, 2002 from $1,542,000 in the three months ended September 30, 2001.
This decrease reflects cost reduction measures the Company instituted last
fiscal year.
OTHER COSTS AND EXPENSES. Interest expense (net of interest income) was
$34,000 during the current period compared to interest income (net of interest
expense) of $3,000 during the prior year period. Amounts in both periods reflect
interest earnings on invested cash balances less interest expense on long-term
obligations. The decrease is due to lower interest rates on lower invested cash
balances.
INCOME TAXES. The Company has substantial net operating loss carryforwards
which, under the current "change of ownership" rules of the Internal Revenue
Code of 1986, as amended, may be subject to substantial annual limitation. No
income tax expense was recognized on the Company's pre-tax income for the three
months ended September 30, 2002, which reflects management's estimate of the
Company's fiscal 2003 tax position. In addition, no income tax benefit was
recognized for the three months ended September 30, 2001.
NET INCOME (LOSS). The Company recognized net income of $206,000 or $0.03
per share, during the three months ended September 30, 2002 compared to a net
loss of $569,000 or $0.09 per share, during the three months ended September 30,
2001. The Company expects to report net income for the fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 2003, and consistent with the prior period, the Company's
operations, including costs associated with its research and development
programs, will be internally funded with cash flows from its current operating
business and cash reserves. If successful in its efforts to enter into new
collaborative research and development arrangements, the Company could earn
additional contract research revenues in future periods.
As of September 30, 2002, the Company had total cash of approximately $7.0
million, of which $2.2 million is being held as a compensating balance under a
long-term obligation and subject to withdrawal restrictions. Cash in excess of
immediate requirements is invested in a manner which is intended to maximize
liquidity and return while minimizing investment risk, and, whenever possible,
the Company seeks to minimize the potential effects of concentration of credit
risk.
The Company generated $471,000 in cash from operating activities during the
current quarter, compared to consumption of $2.2 million during the prior year
period. The increased cash generation from operations is a result of higher
quarterly sales, cost reduction and control measures implemented in the prior
year and changes in working capital.
Historically, the Company's operations have not been capital intensive.
However, during fiscal 2001 the Company invested approximately $3.3 million for
the relocation and consolidation of its research and manufacturing facilities
and for new equipment to automate its manufacturing process. The Company used
long-term financing agreements to fund these investments.
As of September 30, 2002, the Company had approximately $3.0 million
outstanding under long-term financing agreements, including the current portion.
The Company may enter into additional financing agreements to fund the majority
of its capital equipment needs during the next 12 months, but does not
anticipate a significant investment in capital equipment during that time. The
Company's expenditures for
Page 9 of 14
equipment and furniture in excess of equipment acquired under financing
agreements were $28,000 and $23,000 in the current and prior year quarters,
respectively.
The Company used $152,000 and $157,000 of cash for payments on long-term
obligations during the current and prior year quarters, respectively. Restricted
cash requirements decreased $99,000 and $92,000 in the current and prior year
quarters, respectively.
The Company will continue to incur costs associated with its product
development activities. During fiscal 2003, these costs will be funded
internally from the Company's established commercial business, term loan and
capital lease financing agreements and from existing cash balances. The Company
anticipates that at its current operating levels, existing cash balances and
cash generated from operations will be sufficient to fund its operating needs
through fiscal 2004 and beyond. However, the Company may be required to or elect
to raise additional capital before that time. The Company's actual capital
requirements will depend on numerous factors, many of which are outside the
Company's control.
CRITICAL ACCOUNTING POLICIES
Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. The following list is not intended to be a comprehensive
list of all of our accounting policies. Our significant accounting policies are
more fully described in Note 1 of our consolidated financial statements for the
year ended June 30, 2002. In many cases, the accounting treatment of a
particular transaction is dictated by accounting principles generally accepted
in the United States, with no need for management's judgment or estimation in
its application. There are also areas in which management's judgment in
selecting an available alternative would not produce a materially different
result. The following is a brief discussion of the more significant accounting
policies and methods used by us:
GENERAL - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
REVENUE RECOGNITION - Revenues on product sales are recognized when there
is persuasive evidence that an arms length transfer has occurred, generally upon
shipment, when title has passed, and the price is fixed or determinable. The
Company recognizes revenue from contract research based upon performance of its
obligations, making qualifying expenditures and delivery of reports and data.
Revenues from royalty and license agreements are based on third-party sales and
are recognized in the quarter in which payment is either received or may be
reasonably estimated.
LONG LIVED ASSETS - The carrying amounts of long-lived assets, and the
related amortization periods, are reviewed for impairment whenever events occur
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable within the estimated useful life. When the Company determines
the existence of impairment indicators, the impairment loss is measured based on
the excess of carrying value over the estimated fair value of the impaired
assets. The carrying value of the underlying assets is reduced, with the
reduction charged to expense, so that the carrying value is equal to fair value.
INVENTORIES - Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out method. The Company evaluates the
carrying value of its inventories at least quarterly, taking into account such
factors as historical and anticipated future sales compared with quantities on
hand, the price the Company expects to obtain for its products in their
respective markets compared with historical cost, and the remaining shelf life
of goods on hand.
Page 10 of 14
Item 4. CONTROL AND PROCEDURES
Within the 90 days prior to the date of filing this Quarterly Report
on Form 10-Q, an evaluation was performed under the supervision and with the
participation of the Company's management, including the Chief Operating
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14). Based upon that evaluation, the Company's management, including the
Chief Operating Officer, concluded that, as of the date of that evaluation, the
disclosure controls and procedures were effective in timely alerting them to
material information relating to the Company required to be included in the
Company's periodic SEC filings. Subsequent to the date of that evaluation, there
have been no significant changes in internal controls or in other factors that
could significantly affect internal controls, nor were any corrective actions
required with regard to significant deficiencies and material weaknesses.
Page 11 of 14
PART II -- OTHER INFORMATION
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS:
EXHIBIT NO. DESCRIPTION
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
REPORTS ON FORM 8-K:
No reports were filed on Form 8-K during the period covered by this
report.
Page 12 of 14
IOMED, INC.
------------
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.
IOMED, INC.
------------------------
(Registrant)
Date: November 13, 2002 By: /s/ Robert J. Lollini
--------------------------------
Robert J. Lollini
Chief Operating Officer and
Chief Financial Officer
Page 13 of 14
IOMED, INC.
-------------
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert J. Lollini, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Iomed, 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 Iomed, Inc. as of, and for, the periods presented in this
quarterly report.
4. I am 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 Iomed, Inc. is made known to me by
others within the entity, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of Iomed, Inc.'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 my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to Iomed, Inc.'s
auditors and the audit committee of Iomed, Inc.'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 Iomed, Inc.'s internal
controls; and
6. 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 my most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 13, 2002 By: /s/ ROBERT J. LOLLINI
--------------------------------
Robert J. Lollini
Chief Operating Officer and
Chief Financial Officer
Page 14 of 14