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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2003
Commission File Number 0-25312
STARTECH ENVIRONMENTAL CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
- ----------------------------- -------------------
Colorado 84-1286576
15 Old Danbury Road, Suite 203
Wilton, Connecticut 06897
------------------- -----
(Address of principal executive offices) Zip Code
(203) 762-2499
--------------
(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, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
The number of shares outstanding for each of Registrant's classes of Common
Stock are as follows:
Title of each class Outstanding at March 12, 2003
------------------- -----------------------------
Common Stock - No Par Value 11,323,302
STARTECH ENVIRONMENTAL CORPORATION
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE NO.
- ------------------------------ --------
Item 1. Financial Statements
Consolidated Balance sheets - January 31, 2003 (unaudited) and 3
October 31, 2002
Consolidated Statements of operations for the three months ended 4
January 31, 2003 and 2002 (unaudited)
Consolidated Statements of cash flows for the three months ended 5
January 31, 2003 and 2002 (unaudited)
Notes to Consolidated Financial Statements (unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial Condition 8-13
and Results of Operations
Item 3. Quantitative and Qualitative Disclosure about Market Risk 13
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceeding 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
STARTECH ENVIRONMENTAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited) (audited)
January 31, October 31,
2003 2002
------------ ------------
ASSETS
Current assets:
Cash and Cash Equivalents ........................................ $ 344,204 $ 509,321
Accounts receivable .............................................. 0 290,000
Inventory ........................................................ 307,486 273,706
Prepaid Expenses ................................................. 5,000 5,000
Other current assets ............................................. 12,650 17,380
------------ ------------
Total current assets .................................... 669,340 1,095,407
Property and equipment, net ...................................... 1,747,270 1,794,067
Other assets ..................................................... 254,300 248,756
------------ ------------
Total assets ............................................ $ 2,670,910 $ 3,138,230
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable ................................................. $ 179,236 $ 260,116
Capital lease - short-term ....................................... 39,741 44,885
Other accrued expenses ........................................... 467,454 421,221
------------ ------------
Total Current liabilities ............................... 700,740 726,222
Long-term liability:
Capital lease payable net of current portion .................... 14,308 17,580
------------ ------------
Total liabilities ....................................... 692,572 743,802
------------ ------------
Stockholders' equity:
Preferred stock, no par value 10,000,000 shares authorized; Shares
issued and outstanding: 13,539 at January 31, 2003, (aggregate
liquidation preference of $135,393); 35,655 (aggregate liquidation
preference of 356,990) at October 31, 2002 ....................... 135,393 356,553
Common stock, no par value, 800,000,000 shares authorized;
Shares issued and outstanding: 11,323,302 January 31, 2003
and 10,293,392 at October 31, 2002 ............................... 15,748,713 14,790,453
Additional paid-in capital ....................................... 1,742,745 1,742,745
Accumulated deficit .............................................. (15,506,680) (14,495,324)
------------ ------------
2,120,171 2,394,427
Less Subscription receivable ..................................... (150,000) 0
------------ ------------
Total stockholders' equity ....................................... 1,970,171 2,394,427
------------ ------------
Total liabilities and stockholders' equity .............. $ 2,670,910 $ 3,138,230
============ ============
See accompanying notes to consolidated financial statements
3
STARTECH ENVIRONMENTAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
January 31, 2003 January 31, 2002
---------------- ----------------
Revenue ........................................ $ 0 $ 116,205
Cost of sales .................................. 83,306 71,973
------------ ------------
Gross Profit ................................... (83,306) 44,232
------------ ------------
Operating expenses
Selling expense ....................... 201,980 210,174
Research and Development .............. 72,161 50,444
General and administrative expense .... 647,053 677,403
------------ ------------
Total operating expense ........................ 921,194 938,021
------------ ------------
Loss from operations ........................... (1,004,500) (893,789)
------------ ------------
Other income (expense):
Other income ................................... (1,371) 0
Interest income ................................ 1,330 10,319
Gain/Loss on sale of asset ..................... 193 0
Interest expense ............................... (2,346) 0
------------ ------------
Total other income ............................. (2,194) 10,319
------------ ------------
Loss before Income Taxes ....................... (1,006,694) (883,470)
------------ ------------
Income tax expense ............................. 4,663 (1,693)
------------ ------------
Net loss ....................................... $ (1,011,357) $ (881,777)
============ ============
Net loss ....................................... $ (1,011,357) $ (881,777)
Less: preferred dividends ...................... 0 8,409
------------ ------------
Loss attributable to common shareholders ....... $ (1,011,357) $ (890,186)
============ ============
Net loss per share ............................. $ (0.10) $ (0.10)
============ ============
Weighted average common
shares outstanding ............................. 10,477,453 9,287,877
============ ============
See accompanying notes to these consolidated financial statements
4
STARTECH ENVIRONMENTAL CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended Three Months Ended
January 31, 2003 January 31, 2002
---------------- ----------------
Cash flows from operating activities:
Net loss ................................................ $(1,011,357) $ (881,777)
Adjustments to reconcile net loss to net cash provided
By operating activities:
Depreciation ............................................ 48,758 45,893
401K plan match made by the issuance of shares .......... 20,572 18,777
Gain on sale of asset ................................... (193) 0
(Increase) decrease in accounts receivable .............. 290,000 (57,205)
(Increase) decrease in inventory ........................ (33,780) 5,036
(Increase) decrease in other current assets ............. 4,730 (32,251)
(Increase) decrease in other assets ..................... (5,544) 1,200
Increase (decrease) in accounts payable ................. (80,880) (25,679)
Increase (decrease) in customer deposits ................ 0 0
Increase (decrease) in accrued expense .................. 51,261 (191,492)
----------- -----------
Net cash used in operating activities ................... (716,433) (1,117,498)
----------- -----------
Cash flows used in investing activities:
Capital expenditures .................................... (3,749) (27,465)
----------- -----------
Cash flows from financing activities:
Payment for capital leases .............................. (12,027) (9,977)
Proceeds from sale of assets ............................ 5,593 0
Proceeds from common stock issuance ..................... 561,499 0
----------- -----------
Net cash provided by financing activities ............... 555,065 (9,977)
----------- -----------
Net increase (decrease) in cash ......................... (165,117) (1,154,940)
Cash at beginning of period ............................. 509,321 2,207,328
----------- -----------
Cash and cash equivalents at end of period .............. $ 344,204 $ 1,052,388
=========== ===========
Supplemental Disclosure- Taxes Paid ..................... 4,663 (1,693)
=========== ===========
See accompanying notes to consolidated financial statements
5
STARTECH ENVIRONMENTAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of Startech Environmental Corporation
(referred to herein as the "Company", unless the context indicates otherwise)
presented herein are unaudited. In the opinion of management, these financial
statements include all adjustments necessary for a fair presentation of the
financial position. Results for the three months ended January 31, 2003 are not
necessarily indicative of results for the entire year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements and related footnotes for the year ended October 31, 2002 which are
included in the Company's annual report on form 10-K for the period ended
October 31, 2002.
Note 1. Capital Lease Obligation:
The Company has entered into capital lease obligations for computer, telephone,
and capital equipment. The term of the leases range from 24 to 48 months, with
principal and interest due in aggregate monthly installments of $4,873 at
interest rates ranging from 0.0% to 27.5%. The equipment was capitalized at
$127,078 and is being depreciated over five to fifteen years. Depreciation
expense for the three months ended January 31, 2003 was $3,490.
Note 2. Equity Transactions
The following reconciles the number of common shares outstanding to the weighted
average number of common shares outstanding and the weighted average number of
common and dilutive potential common shares outstanding for the purposes of
calculating basic and diluted earnings per common share at January 31 of each
period indicated (shares in millions):
THREE MONTHS ENDED JANUARY 31,
2003 2002
---- ----
Number of common shares outstanding at end
of period...................................... 11.3 9.3
Effect of using weighted average common shares
outstanding.................................... 0.9 0
Basic common shares outstanding................ 10.4 9.3
Dilutive effect of common stock options and
warrants....................................... .0 .0
---- ----
Diluted common shares outstanding.............. 10.4 9.3
For the three months ended January 31, 2003 and January 31, 2002, the effect of
the Company's common stock options and warrants and convertible preferred stock
are excluded from the diluted earnings per share calculation since the inclusion
of such items would be anti-dilutive.
At January 31, 2003, there were approximately 14.8 million shares of common
stock potentially issuable with respect to stock options, warrants and
convertible preferred, which could dilute basic earnings per share in the
future.
6
Note 3. Cash Flow
During the three months ended January 31, 2003 the Company had non-cash
transactions. The following is a listing of these transactions and the dollar
value of the stock associated with these transactions.
Three months ended January 31, 2003 and 2002 January 31, 2003 January 31, 2002
- -------------------------------------------- ---------------- ----------------
Preferred stock dividend 0 8,409
Series A convertible preferred shares converted to common shares 221,160 5,000
Accrued Preferred Dividends 0 3,170
401k Plan Match 25,187 18,777
Property & Equipment acquired under capital lease 3,612 0
Note 4. Interim Financial Information (Unaudited)
The interim financial statements of the Company for the three months ended
January 31, 2003 and 2002, included herein, have been prepared by the Company,
without audit, pursuant to the rules and regulations of the SEC. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principals generally accepted in the
United States of America have been condensed or omitted pursuant to the rules
and regulations relating to interim financial statements.
Note 5. Revenue Recognition
The Company recognizes revenue on the sale of its manufactured products at the
date of shipment. Revenues earned from consulting and design services are
recognized when the services are completed.
Note 6. Employee Benefit Plan
Contributions for the three months ended January 31, 2003 were $25,187, which
represents the issuance of approximately 27,083 shares of our common stock.
Note 7. Stock Subscription Receivable
On January 14th we announced a private placement with Paradigm Group LLC. This
offering was for an aggregate amount of $750,000 which equaled 882,352 common
shares. While the offering officially closed on January 14th part of the
proceeds were not received prior to January 31, 2003. Resulting in a note
receivable in the amount of $150,000. As of March 14, 2003 the Company has
received $45,621 which was applied towards this note receivable.
7
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward looking statements involve risks, uncertainties and
assumptions as described from time to time in registration statements, annual
reports and other periodic reports and filings of the Company filed with the
Securities and Exchange Commission. All statements, other than statements of
historical facts, which address the Company's expectations for the future with
respect to financial performance or operating strategies, can be identified as
forward-looking statements. As a result, there can be no assurance that the
Company's future results will not be materially different from those described
herein as "believed," "anticipated," "estimated" or " expected," which reflect
the current views of the Company with respect to future events. We caution
readers that these forward-looking statements speak only as the date hereof. The
Company hereby expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect any change
in the Company's expectations or any change in events, conditions or
circumstances on which such statement is based.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
Our core Plasma Converter Technology addresses waste and resource issues by
offering remediation solutions that are integrated with a range of equipment
solutions and services. Our products add value to our customers' business so
they can now realize revenue streams from tipping fees, as well as from the sale
of resulting commodity products and services.
Since 1995 we have been actively discussing the superiority of plasma over other
waste remediation technologies. This ongoing education of the public and
government is continuing today. Similar to other new technologies we have been
met with varying degrees of resistance. In 2001, recognizing the increasing
importance of alternative energy and power sources in general, and hydrogen in
particular, we expanded our product line to include a StarCell (TM) hydrogen
separation technology. Working in conjunction with our core product, the Plasma
Converter(TM), StarCell(TM) will provide a green and renewable source of
hydrogen for power and processing applications. In 2003 this brings significant
change and, due to the factors mentioned above, as well as the rising comfort
level with plasma based technologies through our educational and informational
efforts we are now being greeted by a much more receptive marketplace. We have
taken steps to transform our business model from being solely a seller of
equipment to a total solutions provider, including waste facility ownership or
management. This change was dictated by the needs of our customers and the
demands of the marketplace. This change began in January 2002 and continues to
be integrated.
Our business model and its market development strategies arise from our goal,
which is to change the way the world views and employs discarded materials
commonly referred to as waste. We expect to achieve these objectives by
strategically marketing a series of products and services emanating from our
core Plasma Converter (TM) technology, resulting in saleable fossil fuel
alternatives while providing a safer and healthier environment. This shifting
strategy will be implemented through the use of our enhanced business model that
provides for direct sales, build own operate/build own and waste processing
transfer projects, joint development projects, engineering services and direct
equipment sales with after sales support and service.
8
Recent Developments
- -------------------
Sales and Project Update
Sales and project activities have continued to progress during the first quarter
of 2003.
Our signed contracts with two private concerns in Poland, Ekologia and Chempol,
continue to move forward. We are working with a dedicated and capable group of
people who have the resources and finances to bring these matters forward. We
have been to Poland numerous times to speak with all the parties involved, tour
the facilities that will house our systems, and negotiate the contracts. These
customers are working on their own timeframe and schedule and doing all they can
to expedite the funding process. They have worked effectively to receive the
support and approval from all the necessary stakeholder groups. We are provided
constant updates as they continue to put their financing in place through public
and private sources of capital. We have received an initial payment for one of
these announced projects, and we are told to expect continued funding for both
projects to accelerate over the next 30-45 days.
Our project in Bytom, Poland also continues to move forward. We have been
advised that all the necessary site and operational permits to begin the project
have been received by the customer. We have signed a contract with the company
representing the Polish Municipality of Bytom for a 10 ton-per-day Plasma
Converter System(TM).
Our initiative in South Carolina is steadily progressing. The joint development
project in South Carolina with ViTech Enterprises is to manufacture and install
a 10 ton per day Plasma Converter facility designed to destroy out of date
pharmaceutical products. Installing a U.S. based commercial system remains a key
component of Startech's marketing strategy. The permitting cycle has been
initiated and ViTech continues to work towards issuance with the South Carolina
authorities.
In addition to Poland and South Carolina there is good reason to believe we will
be able to close at least one or two additional sales over the next sixty days.
These sales are based out of Australia and Japan. A site-specific Environmental
Impact Assessment (EIA) is still underway in South Africa. In support of the
Environmental Impact Assessment (EIA) we recently delivered the result of an
independent third party test program that examined emission gas compositions for
processing surrogate medical waste. These results were superior to both European
Union Standards and US Standards.
On January 8, 2003 we were notified by a firm representing Eico Systems
Corporation that Eico had filed Civil Rehabilitation under Japan's Civil
Rehabilitation Law. We had been attempting for the previous month to establish a
timetable with Eico regarding system turn-on and commercial operation but had
not received confirmatory responses. As previously announced, the Plasma
Converter System installed in Japan is operationally ready to process 5 tons per
day of hazardous incinerator ash. One of the circumstances that is outside our
control is the Eico Systems Corporation's ongoing corporate restructuring. Our
first commercial plasma converter is awaiting full scale operation. We have had
excellent dialogue with the management of Eico and we believe we are nearing an
agreed upon plan to achieve the long awaited operation of our ash processing
system. The entire system has been delivered and will begin to operate as soon
as the customer is ready to proceed. Based upon recent discussions which we had
in Japan with the president of Eiko we expect this to occur within the next
sixty days.
9
In addition to the specific projects and countries referred to above we continue
to pursue and/or support international opportunities in Canada, China,
Philippines, South Africa, Italy, Ireland, Japan, and others.
Domestically we continue to move forward on various projects. These applications
include medical waste, chemicals, tires, sludge's, silt and landfill mining
sectors. To support these efforts we have demonstrated our system for local,
state and federal environmental officials including representatives from the
Environmental Protection Agency and the Department of Energy. We have been
encouraged by the feedback we have received.
10
Results of Operations
- ---------------------
Comparison of three months ended January 31, 2003 and 2002
Revenues. Our total revenues were $ 0 for the three months ended January 31,
2003, as compared to $116,205 for the same period in 2002. Until our product
matures and is readily accepted in the marketplace we will continue to
experience volatility in our revenues.
Gross Profit. Our gross loss was $83,306 for the three months ended January 31,
2003 compared to a profit of 44,232 in the same period in 2002, an decrease of
$127,538. Our gross margins were negatively impacted as a result of expenses
related to the systemization and optimization of the Eico system in Japan.
General and Administrative Expenses. Our general and administrative expenses for
the three months ended January 31, 2003 were $647,053 compared to 677,403 for
the same period in 2002, an decrease of $30,350 or 4.4%, from the same period in
2002. This decrease is related to focusing some of our personnel resources on
the continued development of our products which were categorized in the Research
and Development accounts. This adjustment was reflected in the research and
development expense category.
Research and Development Expenses. Our research and development expenses for the
three months ended January 31, 2003 were $72,161 an increase $21,717 or 43.1%,
from the same period in 2002. This increase is related to focusing some of our
personnel resources on the continued development of our products as well as
research and development improvements and upgrades relative to our Bristol
demonstration facility.
Selling Expenses. Our selling expenses for the three months ended January 31,
2003 were $201,980 an decrease of $8,194 or 3.9%, for the same period in 2002.
Selling expenses decreased as a result of reduced reliance on outside
consultants and reduced printing expenses.
Interest Income. Our interest income for the three months ended January 31, 2003
was $1,330, as compared to $10,319 in the same period in 2002 a decrease of
87.1%. The decrease is due to lower average cash balances, and lower interest
rates earned on our investments as a result of the Federal Reserve's lowering
short-term interest rates.
Income Taxes. During the three months ended January 31, 2003 corporate income
taxes paid were $4,663 as compared to tax refund of $1,693 in the same period
2002. This payment was related to an estimated tax payment to the State of
Connecticut. We have minimal tax obligations due to the fact that we have not as
yet had any profitability. We have loss carry forwards of $12.7 million to
offset against any future profits.
11
Liquidity and Capital Resources
- -------------------------------
As of January 31, 2003, we had cash and cash equivalents of $344,204 and a
negative working capital of $31,400. During the three months ended January 31,
2003, our cash decreased by $165,117.
We have and will continue to be dependent upon the deposits and progress
payments from the sale of equipment and the private sale of securities. It is
anticipated that our capital requirements for future periods will increase and
our future working capital needs will be obtained from the above sources and
demonstration and testing programs, joint development programs, build own and
operate facilities, and from cash generated from the operations of our business.
In October 2002 the Company announced that contracts to sell two Plasma
Converters were signed aggregating in excess of $10 million dollars in sales.
The contracts include an established payment schedule coordinated to provide
progress payments at various stages of the manufacturing and delivery cycle. We
believe these progress payments, along with a recently completed sole source
private placement which raised $700,000 after commissions and expenses will
provide enough operating capital to sustain company operations at the current
level for more than 1 year. The private placement requires the issuance of
882,353 shares of our unregistered common stock at $.85 per share. We also are
required to issue one common stock purchase warrant for each share of common
stock purchased, exercisable at a price equal of $1.80 per share. The warrants
will expire in January 2006 provided the common stock is trading at $1.80 per
share at this time. If the stock is below the $1.80 per share the Company has
agreed to extend the period for up to two consecutive years. It must be noted,
however, that if the progress payments are not received in a timely manner or
additional sales of Plasma Converters or funding is not available we may have to
significantly cut expenses to maintain our operations over the next year.
The Company has historically satisfied its capital needs primarily by the sale
of equity securities. However there is no assurance that this financing will be
available when needed or that management will be able to obtain this or any
additional financing on terms acceptable to the Company. As stated, we believe
these financing needs will be satisfied but there can be no assurance this will
be the case.
The Company believes that continuing operations for the longer term will be
supported primarily through anticipated growth in revenues and, if necessary,
through additional sales of the Company's securities.
Our investing activities have consisted primarily of short-term high quality
liquid investments, with maturities with three months or less when purchased,
which are considered cash equivalents. The primary investments are high quality
commercial paper, U.S. treasury notes and Treasury-bills.
12
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
We develop products in the United States and market our products in North
America, Japan, Europe, Asia, Africa, Middle East, South America as well as
other parts of the world. As a result, our financial results could be affected
by factors such as changes in foreign currency exchange rates or weak economic
conditions in foreign markets. Because a significant portion of our revenues are
currently denominated in U. S. dollars, a strengthening of the dollar could make
our products less competitive in foreign markets. Our interest income is
sensitive to changes in the general level of U.S. interest rates, particularly
since the majority of our investments are in short - term instruments. Due to
the short-term nature of our investments, we believe that there is not a
material risk exposure.
13
Part II - Other Information
ITEM 1. Legal Proceeding
On June 5, 2002, the Company received a Demand for Arbitration filed with the
American Arbitration Association in East Hartford, CT by Peter Francisco and
Fran Environmental, LLC. Fran Environmental has a Representatives Agreement with
the Company. Peter Francisco is the principal member of Fran Environmental. The
claim being made is that Startech has failed to provide proper support to assist
this representative in its effort to market and sell our products in Brazil. The
relief sought is for no less than $150,000. The Company does not believe the
claim is subject to Arbitration under the terms of its agreement with the
representative and has so advised the American Arbitration Association. On
January 6, 2003 a temporary injunction was granted to Startech to stop the
arbitration process and conduct a hearing as to whether a permanent injunction
should be granted to enjoin the arbitration proceeding from continuing. A
hearing was held for this purpose on February 24, 2003. However no final
determination was made as the moving party requested a continuance. There are no
other pending legal, regulatory or administrative matters to which we are a
party.
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit 99.1: Certification by the CEO (annexed hereto)
Exhibit 99.2: Certification by the Principal Financial Officer (annexed
hereto)
Reports on Form 8-K: None
14
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 14th day of
March 2003.
STARTECH ENVIRONMENTAL CORPORATION
(Registrant)
BY: /S/ Joseph S. Klimek
------------------------
Joseph S. Klimek
CEO & President
BY: /S/ Robert L. DeRochie
--------------------------
Chief Financial Officer,
Vice President Investor Relations,
(Principal Financial Officer)
15
CERTIFICATIONS
Certification requirements set forth in Section 302(a) of the Sarbanes-Oxley
Act.
I, Joseph S. Klimek certify that:
1. I have reviewed this quarterly report on Form 10-Q of Startech
Environmental Corp;
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 officer and I are responsible for
establishing and maintaining internal controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such internal 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 internal 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 internal 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.
I am responsible for preparing the Company's consolidated financial
statements and the other information that appears in this Form 10-Q. I believe
that the consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America
appropriate in the circumstances to reflect, in all material respects, the
substance of events and transactions that should be included, and that the other
information in this Form 10-Q is consistent with those statements. In preparing
the consolidated financial statements, management makes informed judgments and
estimates of the expected effects of events and transactions that are currently
being accounted for.
In meeting its responsibility for the reliability of the consolidated
financial statements, I depend on the Company's system of internal accounting
controls. This system is designed to provide reasonable assurance that assets
are safeguarded and transactions are executed in accordance with management's
authorization, and are recorded properly to permit the preparation of
consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America.
Date: March 14, 2003
/s/ Joseph S. Klimek
- -------------------------
Joseph S. Klimek
President and Chief Executive Officer
CERTIFICATIONS
Certification requirements set forth in Section 302(a) of the Sarbanes-Oxley
Act.
I, Robert DeRochie certify that:
1. I have reviewed this quarterly report on Form 10-Q of Startech
Environmental Corp;
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 officer and I are responsible for
establishing and maintaining internal controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such internal 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 internal 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 internal 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.
I am responsible for preparing the Company's consolidated financial
statements and the other information that appears in this Form 10-Q. I believe
that the consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America
appropriate in the circumstances to reflect, in all material respects, the
substance of events and transactions that should be included, and that the other
information in this Form 10-Q is consistent with those statements. In preparing
the consolidated financial statements, management makes informed judgments and
estimates of the expected effects of events and transactions that are currently
being accounted for.
In meeting its responsibility for the reliability of the consolidated
financial statements, I depend on the Company's system of internal accounting
controls. This system is designed to provide reasonable assurance that assets
are safeguarded and transactions are executed in accordance with management's
authorization, and are recorded properly to permit the preparation of
consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America.
Date: March 14, 2003
/s/ Robert L. DeRochie
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Robert L. DeRochie
Chief Financial Officer &
Vice President, Investor Relations