SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2003
---------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
-------------------- to -----------------------
Commission file number 000-22281
24HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0726608
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Cyberia House
Church Street, Basingstoke
Hampshire RG21 7QN
United Kingdom
(Address of Principal Executive Offices)
+44 1256 867 800
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) had been subject to such
filing requirements for the past 90 days. Yes X No
--- -----
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Number of shares of Common Stock outstanding at August 13, 2003:
85,486,716.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
24HOLDINGS INC.
(FORMERLY KNOWN AS SCOOP, INC.)
CONSOLIDATED BALANCE SHEETS
June 30, 2003 December 31, 2002
-------------- -----------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,305 $ 802,091
Accounts receivable 1,532,363 1,424,802
Inventory 500,308 315,576
Prepaid expenses and other assets 43,780 67,230
-------------- ---------------
Total current assets 2,078,756 2,609,699
Property and equipment, net of
accumulated depreciation and amortization 1,421,829 1,368,342
-------------- -------------
$ 3,500,585 $ 3,978,041
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,660,918 $ 2,377,599
Credit facility 1,299,092 874,110
Current portion of loan payable, bank 105,142 88,469
Total current liabilities 3,065,152 3,340,178
Loan payable, bank, less current portion 158,620 212,414
Deferred taxes 88,000 89,200
Shareholders' equity:
Preferred stock; $0.001 par value, 5,000,000 authorized,
no shares issued and outstanding - -
Common stock; $.001 par value, 100,000,000 shares
authorized 96,147,396 and 96,147,396 shares
issued and outstanding, respectively 36,742 36,742
Additional paid in capital 10,362,233 10,362,233
Other comprehensive loss (174,506) (194,643)
Accumulated deficit (10,035,656) (9,868,083)
------------- ----------------
Total shareholders' equity 188,813 336,249
$ 3,500,585 $ 3,978,041
============= ================
The accompanying notes form an integral part of these financial statements
24HOLDINGS INC.
(FORMERLY KNOWN AS SCOOP, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Three months ended Six months ended Six months ended
June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002
-------------------- ----------------- ----------------- -----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ 2,991,615 $ 5,930,663 $ 7,182,227 $ 10,903,327
Cost of Revenue 2,623,529 5,440,061 6,247,213 9,961,437
-------------------- ---------------- ----------------- ---------------
Gross profit 368,086 490,602 935,014 941,890
Operating expenses:
Distribution costs 68,332 85,789 167,016 171,197
General and adminstrative expenses 414,692 433,427 869,743 854,096
Depreciation 19,395 16,125 36,913 33,630
-------------------- ---------------- ----------------- ---------------
Total operating expenses 502,419 535,341 1,073,672 1,058,923
-------------------- ---------------- ----------------- ---------------
Net loss before interest and other
income and interest expense (134,333) (44,740) (138,658) (117,034)
Interest and other income (894) (1,443) (1,693) (2,914)
Interest expense 16,612 13,212 30,607 31,450
-------------------- ---------------- ----------------- ---------------
Net loss before provision for income taxes (150,051) (56,509) (167,573) (145,570)
Provision for income taxes - - - -
-------------------- ---------------- ----------------- ---------------
Net loss $ (150,051) $ (56,509) $ (167,573) $ (145,570)
==================== ================ =============== ===============
Net loss per share -
basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
==================== ================ =============== ===============
Weighted average number of shares outstanding -
basic and diluted 85,493,352 95,199,780 85,493,352 90,316,417
==================== ================ =============== ===============
The accompanying notes form an integral part of these financial statements
24HOLDINGS INC.
(FORMERLY KNOWN AS SCOOP, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Six months ended Six months ended
June 30, 2003 June 30, 2002
(Unaudited) (Unaudited)
Cash flows provided by (used for) operating activities:
Net income (loss) $ (167,573) $ (145,570)
Adjustments to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Depreciation 36,913 33,630
Foreign currency translation 20,903 45,589
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (68,334) 103,068
Loans receivable, related party - (10,607)
Prepaid expenses 24,708 (14,203)
Inventory (173,935) 164,935
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts payable and accrued expenses (767,843) (977,535)
Income taxes payable (1,049) 785
Deferred taxes (1,200) (1,200)
---------------- -------------------
Total adjustments (929,837) (655,538)
---------------- -------------------
Net cash used for operating activities (1,097,410) (801,108)
Cash flows used for investing activities -
Acquisition of property and equipment (53,974) (3,969)
---------------- -------------------
Net cash provided by (used for) investing activities (53,974) (3,969)
---------------- -------------------
Cash flows provided by (used for) financing activities:
Credit facility 396,218 (311,469)
Payment on long-term debt, bank (44,620) (33,749)
--------------- -------------------
Net cash provided by (used for) financing activities 351,598 (345,218)
--------------- -------------------
Net decrease in cash (799,786) (1,150,295)
Cash, beginning of period 802,091 1,339,650
--------------- -------------------
Cash, end of period $ 2,305 $ 189,355
=============== ===================
Supplemental disclosure of cash flow information:
Interest paid $ 29,192 $ 73,687
=============== ===================
Income taxes paid $ - $ -
=============== ===================
Supplemental disclosure of non-cash investing and financing activities:
Shares issued upon conversion of long term debt, related party $ 517,043
===================
The accompanying notes form an integral part of these financial statements
24HOLDINGS INC.
(formerly known as Scoop, Inc.)
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2003
(1) Description of Business:
Interim Financial Statements:
The accompanying financial statements include all adjustments (consisting
of only normal recurring accruals), which are, in the opinion of
management, necessary for a fair presentation of the results of operations
for the periods presented. Interim results are not necessarily indicative
of the results to be expected for a full year. The financial statements
should be read in conjunction with the financial statements included in the
annual report of 24Holdings Inc. and subsidiary on Form 10-K for the year
ended December 31, 2002.
General:
24Holdings Inc., formerly known as Scoop, Inc. ("24Holdings" or the
"Company"), was incorporated in 1996 in the state of Delaware as an online
news provider. In July 1998, the Company filed a petition for relief under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy
Court for the Central District of California. On October 5, 1999 pursuant
to a Plan of Reorganization approved by the Bankruptcy Court, the Company
was acquired in a reverse merger with 24STORE (Europe) Limited, formerly
known as 24STORE.com Limited ("24STORE"), whose parent company acquired 91%
of the outstanding shares of the Company, or 60,783,219 of newly issued
shares, in exchange for all the outstanding shares of 24STORE.
24STORE was incorporated July 28, 1998 in England and Wales, and was a
wholly owned subsidiary of InfiniCom AB, a publicly listed company on the
SBI market in Sweden, whose principal activity is that of a consulting
company.
On May 6, 1999, 24STORE acquired three companies registered in the United
Kingdom, related through common ownership.
Scoop, Inc. changed its name to 24Holdings Inc. on April 2, 2001.
All the consolidated entities are in the business of selling and
distributing consumer and commercial electronic products in Europe.
Basis of Presentation:
The Company's financial statements have been presented on the basis that
the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal
course of business. The Company incurred net losses of $827,279 and
$167,573 during the year ended December 31, 2002 and the six months ended
June 30, 2003, respectively, and has an accumulated deficit of $10,035,656
at June 30, 2003. The Company had negative working capital of $986,396 at
June 30, 2003. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management is currently attempting
to decrease operating costs and enter into new sources of revenue,
including software sales and consulting, and selling some assets to raise
funds. The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.
-2-
24HOLDINGS INC.
(formerly known as Scoop, Inc.)
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2003
Recent Accounting Pronouncements:
During April 2003, the FASB issued SFAS 149 - "Amendment of Statement 133
on Derivative Instruments and Hedging Activities", effective for contracts
entered into or modified after June 30, 2003, except as stated below and
for hedging relationships designated after June 30, 2003. In addition,
except as stated below, all provisions of this Statement should be applied
prospectively. The provisions of this Statement that relate to Statement
133 Implementation Issues that have been effective for fiscal quarters that
began prior to June 15, 2003, should continue to be applied in accordance
with their respective effective dates. In addition, paragraphs 7(a) and
23(a), which relate to forward purchases or sales of when-issued securities
or other securities that do not yet exist, should be applied to both
existing contracts and new contracts entered into after June 30, 2003. The
Company does not participate in such transactions. However, the Company is
evaluating the effect of this new pronouncement, if any, and will adopt
FASB 149 within the prescribed time.
During May 2003, the FASB issued SFAS 150 - "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity",
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. This Statement establishes standards
for how an issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. It requires that an
issuer classify a freestanding financial instrument that is within its
scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. Some of the provisions of
this Statement are consistent with the current definition of liabilities in
FASB Concepts Statement No. 6, Elements of Financial Statements. The
Company is evaluating the effect of this new pronouncement and will adopt
FASB 150 within the prescribed time.
(2) Principles of Consolidation:
The accompanying consolidated statements include the accounts of 24Holdings
Inc. and subsidiaries. All significant intercompany transactions and
accounts have been eliminated.
The financial statements of subsidiaries outside the United States are
generally measured using the local currency as the functional currency.
Accordingly, assets and liabilities are translated at year-end exchange
rates, and operating statement items are translated at average exchange
rates prevailing during the year. The resulting translation adjustments are
recorded as other comprehensive income. Exchange adjustments resulting from
foreign currency transactions are included in the determination of net
loss.
(3) Contingencies:
On January 28, 2002, the Company's parent company, InfiniCom AB, applied to
the Stockholm District Council for reconstruction in accordance with
Swedish law, similar to a Chapter 11 filing in the United States bankruptcy
system. The parent company restructured its debt and emerged from
reconstruction during 2002. As a result, the parent company is experiencing
difficulties in providing funds to assist in financing the working capital
of the Company, including the reporting requirements of the Company. The
parent company experienced a change of control during the second quarter of
2003 and subsequent to June 30, 2003 has advanced some funds to the
Company. However, it cannot be guaranteed that the parent company will
continue to advance funds to the Company, either for operations or
reporting requirements.
On July 17, 2002, the Company, by way of redundancy, terminated the
employment of its President/Chief Executive Officer, with the Company's
Board of Directors ratifying the termination on August 12, 2002. Under the
terms of the former President/Chief Executive Officer's employment
agreement with the operating companies, the Company paid six months' salary
to him upon his termination. The former President/Chief Executive Officer
pursued a claim against the Company in the United Kingdom for unfair
dismissal; however, during March 2003 the Company reached a settlement
agreement with the former President/Chief Executive Officer for
approximately $72,000, which amount has been paid as of June 30, 2003.
-3-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's interim
results of operations and financial condition. This discussion should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2002, filed with the Securities and Exchange
Commission.
Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements 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. On an on-going
basis, management will evaluate its estimates and judgments, including those
related to revenue recognition, accrued expenses, financing operations, and
contingencies and litigation. Management will base its estimates and judgments
on historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The most significant
accounting estimates inherent in the preparation of our financial statements
include estimates as to the appropriate carrying value of certain assets and
liabilities which are not readily apparent from other sources, such as the
deferred tax asset valuation. These accounting policies are described at
relevant sections in this discussion and analysis and in the notes to the
consolidated financial statements included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2002.
RESULTS OF OPERATIONS
For the Three Months ended June 30, 2003:
NET SALES. Net sales for the three months ended June 30, 2003 were $2,991,615
compared to $5,930,663 for the three months ended June 30, 2002 representing a
decrease of 50%. The main reasons for the reduction in the three months ended
June 30, 2003 were reduced sales to a volume export account, and general market
weakness in the computer hardware market.
GROSS PROFIT. Gross profit for the three months ended June 30, 2003 was $368,086
compared to $490,602 for the three months ended June 30, 2002 representing a
decrease of 25%. Gross profits as a percentage of sales were 12.3% for the three
months ended June 30, 2003 compared to 8.3% for the three months ended June 30,
2002. The increase in gross profit as a percentage of sales between periods is
primarily a result of the reduction in sales to a low margin high volume export
account, which had decreased the gross profit during the three months ended June
30, 2002, and improved product mix.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses for the three months ended June 30, 2003 were
$502,419 compared to $535,341 for the three months ended June 30, 2002. The
decrease is primarily attributable to a reduction in advertising expenditure and
reduction in audit/accountancy cost accruals.
INTEREST EXPENSE. Interest expense, net of interest income for the three months
ended June 30, 2003 was $15,718 compared to $11,769 for the three months ended
June 30, 2002.
INCOME TAXES.
There was no tax expense during either period.
For the Six Months ended June 30, 2003:
NET SALES. Net sales for the six months ended June 30, 2003 were $7,182,227
compared to $10,903,327 for the six months ended June 30, 2002 representing a
decrease of 34%. The reduction in sales was primarily attributable to a drop in
demand across the computer market and reduced sales to a low margin volume
export account in the first half of 2002. This volume export customer accounted
for approximately 20% of net sales in the six months ended June 30, 2002.
-4-
GROSS PROFIT. Gross profit for the six months ended June 30, 2003 was $935,014
compared to $941,890 for the six months ended June 30, 2002 representing a
decrease of 1%. Gross profit as a percentage of sales was 13.0% for the six
months ended June 30, 2003 compared to 8.6% for the six months ended June 30,
2002. The increase in percentage gross profits is primarily attributable to
reduced sales to the low margin volume export account, improved product mix, and
higher margins achieved on a new division offering solution based computer
software sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses for the six months ended June 30, 2003 were
$1,073,672 compared to $1,058,924 for the six months ended June 30, 2002.
In local currency both the Parent company, and its UK subsidiaries reduced their
expenses for the six months ended June 30, 2003, expense reductions were
primarily in staffing levels, and legal and professional expenses. Due however
to the change in US Dollar/Pounds Sterling exchange rates after translation
there was a 2% increase in expenses compared to the six months ended June 30,
2002.
INTEREST EXPENSE. Interest expense, net of interest income for the six months
ended June 30, 2003 was $28,915 compared to $28,536 for the six months ended
June 30, 2002.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at June 30, 2003 were $2,305 compared to $802,891 as
of December 31, 2002. This decrease is primarily due to the position of cash
advances on the revolving line of credit at year-end and the timing of payments
to creditors at year-end and at June 30, 2003.
The cash balance has remained substantially unchanged for the three months ended
June 30, 2003, compared to a net decrease of $174,532 in the three months ended
June 30, 2002.
In its United Kingdom operating subsidiaries the Company has (1) a revolving
line of credit based on 70% of eligible receivables and (2) a ten year mortgage
expiring in 2008, secured by the underlying property and (3) a $75,000 overdraft
facility. The mortgage, the revolving line of credit and the overdraft facility
bear interest at the prime rate plus 2%.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company does not hold any derivative financial instruments. However, the
Company is exposed to interest rate risk. The Company believes that the market
risk arising from holdings of its financial instruments is not material.
However, all of the Company's operations are conducted through its subsidiary
24STORE and denominated in British pounds sterling and none of the Company's
revenues are generated in US Dollars. For consolidation purposes, the assets and
liabilities of 24STORE are converted to US Dollars using year-end exchange rates
and results of operations are converted using a monthly average rate during the
year. Fluctuations in the currency rates between the United Kingdom, Norway and
the United States may give rise to material variances in reported earnings of
the Company.
Item 4. Controls and Procedures.
The Company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. Within 90 days prior to the date of
this report, the Company's Chief Executive Officer and Chief Financial Officer
evaluated the effectiveness of these controls and procedures. Based on the
evaluation, which disclosed no significant deficiencies or material weaknesses,
the Company's Chief Executive Officer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective. There were no
significant changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to the evaluation.
-5-
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2 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.
No reports on Form 8-K were filed during the quarter for which this report
is filed.
-6-
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.
Date: August 14, 2003 24HOLDINGS INC.
By: /s/ Michael Neame
-------------------------------------
Michael Neame
President and Chief Executive Officer
By: /s/ Roger Woodward
-------------------------------------
Roger Woodward
Chief Financial Officer and Secretary
(Principal Accounting Officer)
CERTIFICATIONS
I, Michael Neame, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of 24Holdings Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the issuer as of,
and for, the periods presented in this report;
4. The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer's internal
control over financial reporting that occurred during the period covered by the
Annual Report that has materially affected, or is reasonably likely to
materially affect, the issuer's internal control over financial reporting; and
5. The issuer's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the issuer's ability to record, process, summarize
and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's internal control
over financial reporting.
Date: August 14, 2003
By: /s/ Michael Neame
--------------------------------
Name: Michael Neame
Title: President and Chief Executive Officer
-2-
CERTIFICATIONS
I, Roger Woodward, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of 24Holdings Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the issuer as of,
and for, the periods presented in this report;
4. The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer's internal
control over financial reporting that occurred during the period covered by the
Annual Report that has materially affected, or is reasonably likely to
materially affect, the issuer's internal control over financial reporting; and
5. The issuer's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the issuer's ability to record, process, summarize
and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's internal control
over financial reporting.
Date: August 14, 2003
By: /s/ Roger Woodward
---------------------------------------
Name: Roger Woodward
Title: Chief Financial Officer
(Principal Accounting Officer)
-4-