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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-26534
VION PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3671221
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4 Science Park
New Haven, Ct 06511
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 498-4210
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The number of shares outstanding of the registrant's common stock as of May 7,
2003 was 28,935,440.
Page 1
PART I
FINANCIAL INFORMATION
ITEM 1. Financial Statements
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Balance Sheet
(Unaudited)
March 31, December 31,
(In thousands, except share and per share data) 2003 2002
- ----------------------------------------------- --------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 8,146 $ 10,131
Interest receivable 4 10
Accounts receivable 19 48
Prepaid expenses 140 249
--------- ---------
Total current assets 8,309 10,438
Property and equipment, net 416 456
Security deposits 29 29
--------- ---------
Total assets $ 8,754 $ 10,923
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accrued payroll and payroll-related expenses $ 486 $ 411
Accounts payable and other accrued expenses 1,821 1,648
--------- ---------
Total current liabilities 2,307 2,059
--------- ---------
Shareholders' Equity:
Preferred stock, $0.01 par value, authorized: 5,000,000 shares; issued and
outstanding: none -- --
Common stock, $0.01 par value, authorized: 100,000,000 shares;
issued and outstanding: 28,932,385 and 28,908,872 shares
at March 31, 2003 and December 31, 2002, respectively 289 289
Additional paid-in-capital 112,455 112,447
Accumulated deficit (106,297) (103,872)
--------- ---------
6,447 8,864
--------- ---------
Total liabilities and shareholders' equity $ 8,754 $ 10,923
========= =========
The accompanying notes are an integral part of these financial statements.
Page 2
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the Period from
For the Three Months Ended May 1, 1994 (Inception)
March 31, through
(In thousands, except per share data) 2003 2002 March 31, 2003
- ------------------------------------- ------- ------- -----------------------
Revenues:
Contract research grants $ 66 $ 21 $ 2,258
Laboratory support services 3 -- 146
Technology license fees -- 26 4,431
Research support services -- -- 5,503
------- ------- ---------
Total revenues 69 47 12,338
------- ------- ---------
Operating expenses:
Research and development 969 2,011 59,578
Clinical trials 876 1,420 22,243
------- ------- ---------
Total research and development 1,845 3,431 81,821
General and administrative 702 911 22,879
------- ------- ---------
Total operating expenses 2,547 4,342 104,700
------- ------- ---------
Interest income (31) (266) (4,768)
Interest expense -- -- 208
------- ------- ---------
Loss before income tax benefits (2,447) (4,029) (87,802)
Income tax benefits (22) -- (249)
------- ------- ---------
Net loss (2,425) (4,029) (87,553)
Preferred stock dividends and accretion -- -- (18,489)
------- ------- ---------
Loss applicable to common shareholders $(2,425) $(4,029) $(106,042)
======= ======= =========
Basic and diluted loss applicable to
common shareholders per share $ (0.08) $ (0.14)
======= =======
Weighted-average number of shares of
common stock outstanding 28,927 28,880
======= =======
The accompanying notes are an integral part of these financial statements.
Page 3
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity
(Unaudited)
Accumulated
Additional Other Total
Common Stock Paid-in Comprehensive Accumulated Shareholders'
(In thousands, except share data) Shares Amount Capital Income (Loss) Deficit Equity
- ----------------------------------------- ---------- ------ ---------- ------------- ----------- -------------
Balance at December 31, 2000 26,167,642 $ 262 $ 100,027 $ 120 $ (77,752) $ 22,657
Public offering of common stock -
August 2001 2,500,000 25 11,386 11,411
Exercise of stock options 191,527 2 777 779
Exercise of warrants 4,015 -- 14 14
Compensation associated with stock option
grants 111 111
Issuances under employee benefit plans 10,189 -- 62 62
Change in net unrealized gains and losses (126) (126)
Net loss (13,810) (13,810)
--------
Comprehensive loss (13,936)
---------- ----- --------- ----- --------- --------
Balance at December 31, 2001 28,873,373 $ 289 $ 112,377 $ (6) $ (91,562) $ 21,098
---------- ----- --------- ----- --------- --------
Exercise of stock options 10,395 -- 32 32
Issuances under employee benefit plans 25,104 -- 38 38
Change in net unrealized gains and losses 6 6
Net loss (12,310) (12,310)
--------
Comprehensive loss (12,304)
---------- ----- --------- ----- --------- --------
Balance at December 31, 2002 28,908,872 $ 289 $ 112,447 $ -- $(103,872) $ 8,864
---------- ----- --------- ----- --------- --------
Issuances under employee benefit plans 23,513 -- 8 8
Net loss (2,425) (2,425)
---------- ----- --------- ----- --------- --------
Balance at March 31, 2003 28,932,385 $ 289 $ 112,455 $ -- $(106,297) $ 6,447
========== ===== ========= ===== ========= ========
The accompanying notes are an integral part of these financial statements.
Page 4
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
For The Period From
For the Three Months Ended May 1, 1994
March 31, (Inception) through
(In thousands) 2003 2002 March 31, 2003
- ------------------------------------------------------ ------- ------- -------------------
Cash flows from operating activities:
Net loss $(2,425) $(4,029) $(87,553)
Adjustments to reconcile net loss to net cash used
in operating activities -
Depreciation and amortization 53 58 2,473
Loss on equipment disposals 9 -- 13
(Increase) decrease in receivables and prepaid
expenses 144 (9) (162)
Increase in other assets -- -- (26)
Increase in current liabilities 248 552 2,272
Non-cash compensation -- -- 1,068
Purchased research and development -- -- 4,481
Stock issued for services -- -- 600
Amortization of financing costs -- -- 346
Extension/reissuance of placement agent warrants -- -- 168
------- ------- --------
Net cash used in operating activities (1,971) (3,428) (76,320)
------- ------- --------
Cash flows from investing activities:
Purchases of marketable securities -- (2,297) (83,351)
Maturities of marketable securities -- 5,944 83,351
Acquisition of property and equipment (22) (44) (1,958)
------- ------- --------
Net cash provided by (used in) investing activities (22) 3,603 (1,958)
------- ------- --------
Cash flows from financing activities:
Initial public offering -- -- 9,696
Net proceeds from issuance of common stock 8 35 33,897
Net proceeds from issuance of preferred stock -- -- 20,716
Net proceeds from exercise of Class A Warrants -- -- 5,675
Net proceeds from exercise of Class B Warrants -- -- 17,538
Net proceeds from exercise of other warrants -- -- 115
Repayment of equipment capital leases -- -- (927)
Other financing activities, net -- -- (286)
------- ------- --------
Net cash provided by financing activities 8 35 86,424
------- ------- --------
Change in cash and cash equivalents (1,985) 210 8,146
Cash and cash equivalents, beginning of period 10,131 6,645 --
------- ------- --------
Cash and cash equivalents, end of period $ 8,146 $ 6,855 $ 8,146
======= ======= ========
The accompanying notes are an integral part of these financial statements.
Page 5
Vion Pharmaceuticals, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
1. The Company
Vion Pharmaceuticals, Inc. (the "Company") is a development stage
biopharmaceutical company engaged in the research, development and
commercialization of therapeutics and technologies for the treatment of cancer.
The Company, formerly OncoRx, Inc., was incorporated in March 1992 as a Delaware
corporation and began operations on May 1, 1994.
2. Liquidity and Continuation of Operations
Through March 31, 2003, the Company has continued to use cash to fund
significant, recurring operating losses. At March 31, 2003, the Company had
remaining cash and cash equivalents of $8.1 million. The Company will need to
raise additional capital to fund its future operations. The Company is currently
pursuing additional financing and other strategic alternatives. If the Company
is unable to raise additional capital or consummate a strategic transaction,
it will have to make substantial changes to its operating plan or cease
operations. The Company must implement changes to its operating plan by the
end of the third quarter of 2003 in order to fund its operations into 2004.
Accordingly, substantial doubt exists as to the ability of the Company to
continue as a going concern. The accompanying financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result should the Company be unable to continue as a going
concern.
3. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and on
a going concern basis, which assume continuity of operations and realization of
assets and liquidation of liabilities in the ordinary course of business.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States 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 interim periods are not necessarily
indicative of the results that may be
Page 6
expected for the year ending December 31, 2003. For further information, refer
to the financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002 (File No.
000-26534).
4. Per Share Data - Antidilution
The warrants, stock options and preferred stock were antidilutive and not
included in the calculation of the diluted loss applicable to common
shareholders per share.
5. Income Tax Benefits
The Company recognized a state tax benefit of $22,000 during the
three-month period ended March 31, 2003 related to the sale of research and
development tax credits to the State of Connecticut.
6. Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees ("APB 25") and related
Interpretations in accounting for its employee stock options. Under APB 25, if
the terms of the option are fixed and the exercise price of the Company's
employee stock options equals the fair value of the underlying stock on the date
of grant, no compensation expense is recognized. For the three-month periods
ended March 31, 2003 and 2002, no compensation expense has been recorded in the
accompanying financial statements.
For purposes of pro forma disclosures computed under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, the
estimated fair value of employee stock option grants is amortized to expense
over the options' vesting periods. The Company's pro forma information is as
follows (in thousands, except per share amounts):
Page 7
For the Three Months From Inception
Ended March 31, (May 1, 1994)
-------------------- through
2003 2002 March 31, 2003
------- -------- --------------
Net loss, as reported $(2,425) $(4,029) $ (87,553)
Add: Stock-based employee compensation
expense included in reported net loss -- -- 768
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards (845) (938) (15,567)
------- ------- ---------
Pro forma net loss (3,270) (4,967) (102,352)
Pro forma preferred stock dividend and accretion -- -- (18,489)
------- ------- ---------
Pro forma loss applicable to common
shareholders per share $(3,270) $(4,967) $(120,841)
======= ======= =========
Pro forma basic and diluted loss applicable
to common shareholders per share $ (0.11) $ (0.17)
======= =======
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
All statements other than statements of historical fact included in this
Quarterly Report on Form 10-Q, including without limitation statements under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," regarding our financial position, business strategy, and plans and
objectives of our management for future operations, are forward-looking
statements. When used in this Quarterly Report on Form 10-Q, words such as
"may," "will," "should," "could," "potential," "seek," "project," "predict,"
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to us or our management, identify forward-looking statements.
Forward-looking statements are based on the beliefs of our management as well as
assumptions made by and information currently available to our management. These
statements are subject to risks and uncertainties that may cause actual results
and events to differ significantly. A detailed discussion of risks attendant to
the forward-looking statements is included under Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our
Annual Report on Form 10-K for the year ended December 31, 2002. The information
contained in this Quarterly Report on Form 10-Q is believed to be current as of
the date of filing with the U.S. Securities and Exchange Commission. We do not
intend to update any of the forward-looking statements after the date of this
filing to conform these statements to actual results or to changes in our
expectations, except as required by law.
Overview
We are a development stage biopharmaceutical company committed to the
development and commercialization of therapeutics and technologies for the
treatment of cancer. Our activities to date have consisted primarily of research
and product development,
Page 8
obtaining regulatory approval for clinical trials, conducting clinical trials,
negotiating and obtaining collaborative agreements, and obtaining financing in
support of these activities. Our current revenues consist of contract research
grants. Since inception, we have generated minimal revenues and have incurred
substantial operating losses from our activities. We expect to incur substantial
operating losses for the foreseeable future due to expenses associated with our
activities.
At the present time, under our current operating plan, we do not have
sufficient cash to fund our operations through March 31, 2004. Accordingly,
this raises substantial doubt as to our ability to continue as a going
concern. If we are unable to raise additional capital or consummate a
strategic relationship as further described in "Liquidity and Capital
Resources", we will have to substantially reduce our operating plan, or cease
operations. In addition, if we were to cease operations, it could have a
material adverse effect on our ownership of, or ability to use, our
technologies.
If we are able to obtain additional financing or consummate a strategic
transaction, our plan of operations for the next 12 months includes the
following elements:
o Conduct Phase I clinical studies for safety and dosage of
Triapine'r' in conjunction with standard chemotherapy treatments;
o Conduct Phase II clinical studies of Triapine in conjunction with
standard chemotherapy treatments;
o Conduct Phase II clinical studies of Triapine as a single agent;
o Conduct Phase I clinical studies for safety and dosage of VNP40101M, a
member of the Sulfonyl Hydrazine Prodrug class;
o Conduct Phase II clinical studies of VNP40101M;
o Conduct Phase I clinical studies of TAPET'r' in conjunction with
immune system modulation for further safety and "optimized" selective
accumulation of bacteria in the tumor;
o Develop second generation TAPET vectors;
o Continue to conduct internal research and development with respect to
our core technologies and other product candidates that we may
identify;
o Continue to support research and development being performed at Yale
University and by other collaborators;
o Continue to seek collaborative partnerships, joint ventures,
co-promotional agreements or other arrangements with third parties.
Page 9
Results of Operations
Comparison of the Three-Month Periods Ended March 31, 2003 and 2002
Revenues. Revenues were $69,000 for the three-month period ended March 31,
2003, as compared to $47,000 for the same period in 2002. The increase was due
primarily to higher research grants and laboratory support service revenue,
partially offset by lower technology license fees.
Research and Development. Total research and development expenses (which
include clinical trials expenses and other research and development expenses)
were $1.8 million for the three-month period ended March 31, 2003, compared with
$3.4 million for the same 2002 period. Clinical trials expenses decreased by
$0.5 million due primarily to lower costs associated with clinical trials of
Triapine'r' and TAPET'r', partially offset by higher patient enrollment
associated with expanded trials of VNP40101M. Other research and development
costs decreased by $1.1 million primarily due to lower external research support
and fewer employees.
General and Administrative. General and administrative expenses decreased
to $0.7 million for the three-month period ended March 31, 2003 from $0.9
million for the comparable 2002 period. The decrease was primarily due to lower
patent and professional fees.
Interest Income. Interest income was $31,000 for the three-month period
ended March 31, 2003, as compared to $0.3 for the same period in 2002. The
decrease was due to a lower level of invested funds and, to a lesser extent,
lower interest rates.
Net Loss. The net loss was $2.4 million, or $0.08 per share, for the
three-month period ended March 31, 2003, compared to a net loss of $4.0 million,
or $0.14 per share, for the same period in 2002.
Liquidity and Capital Resources
At March 31, 2003, we had cash and cash equivalents of $8.1 million
compared to cash and cash equivalents of $10.1 million at December 31, 2002. The
decrease was due to cash used to fund operating activities of $2.0 million.
We need to raise additional capital or consummate a strategic transaction,
such as an acquisition or business partnership, in order for our operations to
continue. We are currently pursuing additional financing and other strategic
alternatives. We cannot assure you that we will be able to raise additional
capital or otherwise complete another form of transaction to allow us to
continue our operations, nor can we predict what the terms of any
Page 10
financing or other transaction might be. Any financing or other strategic
transaction could be extremely dilutive to our current stockholders.
Until we raise capital or consummate a strategic transaction, if ever, our
operating plan will be under constant evaluation by our Board and management for
potentially substantial changes, including reducing expenses through reductions
in the number of employees, and curtailment or complete cessation of product
trials or research. If we are unable to raise additional capital or consummate
a strategic transaction, we will have to make substantial changes to our
operating plan or cease operations. We must implement changes to our operating
plan by the end of the third quarter of 2003 in order to fund our operations
into 2004. Accordingly, substantial doubt exists as to our ability to continue
as a going concern.
Our operating plans and cash requirements for the next twelve months may
vary materially from the foregoing because of the results of research,
development, clinical trials, product testing, relationships with strategic
partners, changes in focus and direction of our research and development
programs, competitive and technological advances, the regulatory process in the
United States and abroad, and other factors.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see Item
7A, "Quantitative and Qualitative Disclosures About Market Risk", in our Annual
Report on Form 10-K for the year ended December 31, 2002. There have been no
significant changes in our market risk exposure since then.
ITEM 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures - Within 90 days prior
to the date of this report, we carried out an evaluation, under the supervision
and with the participation of our chief executive officer and chief financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our chief executive officer
and chief financial officer concluded that our disclosure controls and
procedures are effective in timely alerting them to material information
required to be included in our periodic filings with the Securities and Exchange
Page 11
Commission. It should be noted that the design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how remote.
(b) Changes in internal controls - There have been no significant changes
in our internal controls or in other factors that could significantly affect
those controls subsequent to the date of their last evaluation.
PART II
OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 99.1 CEO Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 99.2 CFO Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
The Registrant filed the following reports on Form 8-K during the
quarter ended March 31, 2003:
1. On January 21, 2003 under Item 5 and Item 7 to announce the
Company received notification from The Nasdaq Stock Market that
the Company received an additional 180-day grace period to
evidence compliance with the $1.00 minimum closing bid price
requirement for its common stock to remain listed on the Nasdaq
SmallCap Market'sm'.
2. On January 28, 2003 under Item 5 and Item 7 to announce the
Company initiated a Phase II trial of Triapine'sm' in prostate
cancer.
Page 12
3. On February 3, 2003 under Item 5 and Item 7 to announce the
Company initiated a second Phase I trial of VNP40101M in solid
tumors.
4. On March 28, 2003 under Item 5 and Item 7 to announce the
Company's 2002 year-end and fourth quarter financial results.
5. On March 31, 2003 under Item 5 and Item 7 to announce the Company
initiated a Phase I combination trial of Triapine in leukemia.
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.
Dated: May 15, 2003 Vion Pharmaceuticals, Inc.
By: /s/ Howard B. Johnson
--------------------------------
Howard B. Johnson
Vice President, Finance and
Chief Financial Officer
Page 13
CERTIFICATE OF CHIEF EXECUTIVE OFFICER
I, Alan Kessman, President and Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vion Pharmaceuticals,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
Page 14
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Alan Kessman
- -------------------------------------
Alan Kessman
President and Chief Executive Officer
Date: May 15, 2003
Page 15
CERTIFICATE OF CHIEF FINANCIAL OFFICER
I, Howard B. Johnson, Vice President, Finance and Chief Financial Officer,
certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vion Pharmaceuticals,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
Page 16
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Howard B. Johnson
- ---------------------------------------------------
Howard B. Johnson
Vice President, Finance and Chief Financial Officer
Date: May 15, 2003
Page 17
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as.................. 'r'
The service mark symbol shall be expressed as.......................... 'sm'
The section symbol shall be expressed as............................... 'SS'