GENESIS TECHNOLOGY GROUP INC - 10-Q Quarterly Report

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United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal quarter ended: March 31, 2003
Commission file number: 333-86347

GENESIS TECHNOLOGY GROUP, INC.
(Exact name of registrant as specified in its charter)

Florida 65-1130026
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

777 Yamato Road, Suite 130
Boca Raton, Florida 33431
(Address of principal executive offices)(Zip code)

(561) 988-9880
(Registrant's telephone number, including area code)

Indicate by check mark whether 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 the number of shares outstanding of each of the registrant's classes of
common stock, as of May 20, 2003:32,517,353 outstanding shares of common stock,
$.001 par value per share.

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
FORM 10-QSB
QUARTERLY PERIOD ENDED March 31, 2003
INDEX

Page

PART I - FINANCIAL INFORMATION

Item 1 - Consolidated Financial Statements

Consolidated Balance Sheet
March 31, 2003 (Unaudited).......................................3
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2003 and 2002...............4
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2003 and 2002...............5

Notes to Consolidated Financial Statements................................6-12

Item 2 - Management's Discussion and Analysis and Plan of Operation......13-21

Item 3 - Controls and Procedures............................................22

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings..................................................22

Item 2 - Changes in Securities and Use of Proceeds..........................22

Item 3 - Default upon Senior Securities.....................................23

Item 4 - Submission of Matters to a Vote of Security Holders................23

Item 6 - Exhibits and Reports on Form 8-K................................23-24

Signatures..................................................................25

Certifications...........................................................26-27

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

March 31,
2003
------------
(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 262,303
Marketable equity securities 279,837
Accounts receivable 45,536
Inventories 31,378
Prepaid expenses and other 414,440

Total Current Assets 1,033,494

PROPERTY AND EQUIPMENT - Net 122,078

OTHER ASSETS:
Goodwill 10,540
Other assets 34,946

Total Other Assets 45,486

Total Assets $ 1,201,058

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Loans payable $ 220,919
Accounts payable and accrued expenses 176,000
Due to related party 32,151

Total Current Liabilities 429,070

MINORITY INTEREST 33,079

STOCKHOLDERS' EQUITY:
Preferred stock ($.001 Par Value; 20,000,000 Shares Authorized;
no shares issued and outstanding) -
Common stock ($.001 Par Value; 200,000,000 Shares Authorized;
32,517,353 shares issued and outstanding) 32,518
Additional paid-in capital 13,323,704
Accumulated deficit (11,206,304)
Less: Deferred compensation (140,224)
Less: Subscriptions receivable (195,850)
Accumulated other comprehensive loss (1,074,935)

Total Stockholders' Equity 738,909

Total Liabilities and Stockholders' Equity $ 1,201,058

See notes to consolidated financial statements

-3-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

See notes to consolidated financial statements

-4-

GENESIS TECHNOLOGY GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

See notes to consolidated financial statements.

-5-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003
(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

The Company

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). The accompanying consolidated
financial statements for the interim periods are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the periods presented. The consolidated
financial statements include the accounts of the Company and its wholly and
partially owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. These consolidated financial statements
should be read in conjunction with the financial statements for the year ended
September 30, 2002 and notes thereto contained in the Transition Report on Form
10-KSB of Genesis Technology Group, Inc. (the "Company") as filed with the
Securities and Exchange Commission. The results of operations for the six months
ended March 31, 2003 are not necessarily indicative of the results for the full
fiscal year ending September 30, 2003.

Net income (loss) per share

Basic earnings per share is computed by dividing net loss by weighted average
number of shares of common stock outstanding during each period. Diluted loss
per share is computed by dividing net loss by the weighted average number of
shares of common stock, common stock equivalents and potentially dilutive
securities outstanding during each period.

Marketable equity securities

Marketable equity securities consist of investments in equity of publicly traded
and non-public domestic and foreign companies and are stated at market value
based on the most recently traded price of these securities at March 31, 2003.
All marketable securities are classified as available for sale at March 31,
2003. Unrealized gains and losses, determined by the difference between
historical purchase price and the market value at each balance sheet date, are
recorded as a component of Accumulated Other Comprehensive Income in
Stockholders' Equity. Realized gains and losses are determined by the difference
between historical purchase price and gross proceeds received when the
marketable securities are sold. Restricted marketable equity securities are show
as long-term assets.

-6-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)

Foreign currency translation

Transactions and balances originally denominated in U.S. dollars are presented
at their original amounts. Transactions and balances in other currencies are
converted into U.S. dollars in accordance with Statement of Financial Accounting
Standards (SFAS) No. 52, "Foreign Currency Translation," and are included in
determining net income or loss.

For foreign operations with the local currency as the functional currency,
assets and liabilities are translated from the local currencies into U.S.
dollars at the exchange rate prevailing at the balance sheet date. Revenues,
expenses and cash flows are translated at weighted average exchange rates for
the period to approximate translation at the exchange rates prevailing at the
dates those elements are recognized in the financial statements. Translation
adjustments resulting from the process of translating the local currency
financial statements into U.S. dollars are included in determining comprehensive
loss. As of March 31, 2003, the exchange rate for the Chinese Renminbi (RMB) was
$1 US for 8.27 RMB.

The functional currency of the Company's Chinese subsidiaries is the local
currency. The financial statements of the subsidiary are translated to United
States dollars using period-end rates of exchange for assets and liabilities,
and average rates of exchange for the period for revenues, costs, and expenses.
Net gains and losses resulting from foreign exchange transactions are included
in the consolidated statements of operations and were not material during the
periods presented. The cumulative translation adjustment and effect of exchange
rate changes on cash at March 31, 2003 was not material.

Reclassifications

Certain prior periods' balances have been reclassified to conform to the current
period's financial statement presentation. These reclassifications had no impact
on previously reported results of operations or stockholders' equity (deficit).

-7-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 2 - ACQUISITIONS AND SALE OF SUBSIDIARY

Acquisitions

On November 15, 2001, the Company entered into a Stock Purchase Agreement with
Shanghai Zhaoli Technology Development Company, Limited ("Zhaoli") and Zhaoli's
shareholder. For the six months ended March 31, 2002, the results of operations
of Zhaoli are included in the accompanying financial statements from November
15, 2001 (effective date of acquisition) to March 31, 2002.

On December 1, 2001, the Company entered into a Stock Purchase Agreement with
Yastock Investment Consulting Company, Limited ("Yastock") and the shareholders
of Yastock. For the six months ended March 31, 2002, the results of operations
of Yastock are included in the accompanying financial statements from December
1, 2001 (effective date of acquisition) to March 31, 2002.

The following unaudited pro forma consolidated results of operations have been
prepared as if the acquisitions of Zhaoli and Yastock had occurred as of the
beginning of the following periods:

Six Months Ended
March 31, 2002
-------------------

Net Revenues $ 7,017,000
Net Income from continuing operations $ 158,000
Net Income per Share from continuing operations $ .01

Pro forma data does not purport to be indicative of the results that would have
been obtained had these events actually occurred at the beginning of the periods
presented and is not intended to be a projection of future results.

Sale of Subsidiary

Effective June 30, 2002, the Company sold its 80% interest in its subsidiary
Shanghai G-Choice Science and Technology Development Company Ltd. ("G-Choice")
for 1,549,791 common shares of the NETdigest.com, Inc. ("NET"). The Company
concluded the sale of G-Choice as of June 30, 2002. For the six months ended
March 31, 2002, G-Choice is reported separately as a discontinued operation, and
prior periods have been restated in the Company's financial statements, related
footnotes and the management's discussion and analysis to conform to this
presentation.

-8-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 3 - SEGMENT INFORMATION

The following information is presented in accordance with SFAS No. 131,
Disclosure about Segments of an Enterprise and Related Information. In the
periods ended March 31, 2003 and 2002, the Company operated in two reportable
business segments - (1) sale of computer equipment and accessories and (2)
consulting services for small public and private companies regarding public
relations, corporate financing, mergers and acquisitions, e-commerce, business
operations support and marketing . The Company's reportable segments are
strategic business units that offer different products. They are managed
separately based on the fundamental differences in their operations.

Information with respect to these reportable business segments for the six
months ended March 31, 2003 is as follows:

----------------- -------------- -------------
Computer and Consulting Consolidated
Equipment Sales Services Totals
----------------- ------------- -------------

Net Revenues $ 10,989,842 $ 168,315 $ 11,158,157
Gross Profit $ 168,315 $ 164,388 $ 332,703
Segment profit income (Loss)
from operations $ 5,097 $ (728,866) $ (723,769)

For the six months ended March 31, 2003, the Company derived approximately 99%
of its revenue from its subsidiaries located in the People's Republic of China.
Sales and identifiable assets by geographic areas as of March 31, 2003 and for
the six months ended March 31, 2003 were as follows:

Sales Identifiable Assets

United States $ 161,175 $ 447,254
China 10,996,982 748,539
----------------- -----------------

Total $ 11,158,157 $ 1,195,793
================= =================

Currently, the Company's revenues are primarily derived from sale of
computer equipment and accessories to customers in the Peoples Republic of China
(PRC). The Company hopes to expand its operations to countries outside the PRC,
however, such expansion has not been commenced and there are no assurances that
the Company will be able to achieve such an expansion successfully. Therefore, a
downturn or stagnation in the economic environment of the PRC could have a
material adverse effect on the Company's financial condition.

-9-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 4 - RELATED PARTY TRANSACTIONS

Due from/to related party

Occasionally, the Company borrows funds from an officer of the Company. The
advances are non-interest bearing and are payable on demand. At March 31, 2003,
the Company owed an officer of the Company $32,151.

NOTE 5 - LOANS PAYABLE

On April 1, 2002, the Company borrowed $80,000 from an individual related to an
officer of the Company. The loan bears interest at 10% per annum and is
unsecured. All unpaid principal and accrued interest is payable on April 1,
2003. In the event of default of the loan agreement, the Lender is to receive
free trading shares of the Company's common stock at a 25% discount to the
average closing price of the previous 20 trading days equal to the total amount
due to the lender. As of March 31, 2003, the loan remains unpaid.

On July 31, 2002, the Company borrowed $20,000 from an individual related to an
officer of the Company. The loan bears interest at 10% per annum and is
unsecured. All unpaid principal and accrued interest was payable on January 1,
2003. At the option of the lender, the entire obligation may be repaid with
common stock calculated by dividing the amount due by the average closing common
stock price for ten days prior to the repayment discounted by 40%, with a
maximum price of $0.13 per share. The beneficial conversion feature present in
the issuance of this note payable as determined on the date funds were received
under the loan agreement totaled $12,500 and was recorded as interest expense
and additional paid-in capital. As of March 31, 2003, no conversion had
occurred. As of March 31, 2003, the loan remains unpaid.

The Company's Chinese subsidiary, Zhaoli, entered into a loan agreement with a
Chinese bank to borrow $120,919. The loan bears interest at a rate of 5.85% per
annum and is payable prior to March 31, 2003. As of the date of this report the
loan has not been repaid.

NOTE 6 - STOCKHOLDERS' EQUITY

Preferred stock

The Company is authorized to issue 20,000,000 shares of Preferred Stock, par
value $.001, with such designations, rights and preferences as may be determined
from time to time by the Board of Directors.

-10-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 6 - STOCKHOLDERS' EQUITY (continued)

Common stock

On January 3, 2003, the Company entered into an agreement with a public
relations company. The term of this agreement was for forty-five (45) days; the
Company issued such consultant 400,000 restricted shares of its common stock for
these services. The Company valued these shares at the fair market value on the
date of the agreement or $0.14 per share and recorded consulting expense of
$56,000.

On January 7, 2003, the Company issued 800,000 shares of its common stock
relating to the exercise of options held by certain employees and consultants.
The Company received $50,000 in proceeds from this issuance and offset by
$13,688 in certain debts.

On February 19, 2003, the Company issued 700,000 shares of its common stock
relating to the exercise of stock options. The Company received proceeds of
$33,250 and has a subscription receivable of $45,850.

Stock options

On December 18, 2002, the Company entered into a consulting agreement with a
third party for business development services. In connection with this
consulting agreement, the Company granted 750,000 options to purchase shares of
common stock for services rendered. The options have an exercise price of $.15
per share and expire in 45 days. The fair value of each option grant was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions: dividend yield of -0- percent;
expected volatility of 96 percent; risk-free interest rate of 4.50 percent and
an expected holding period of 0.25 years. The Company valued these options based
on the above factors at $34,500. On December 19, 2002, these options were
exercised and the Company issued 750,000 shares of its common stock. In
connection with these options, on February 6, 2003, the consultant returned
505,000 shares of the Company's common stock due to the cancellation of this
agreement. Through the date of cancellation the Company had expensed $11,500 as
consulting expense. The Company expensed the remaining balance of its deferred
expense related to this agreement of $23,000 to consulting expense.
Additionally, the Company wrote off the remaining subscription receivable from
this consultant of $4,848 to consulting expense.

-11-

GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
March 31, 2003
(UNAUDITED)

NOTE 6 - STOCKHOLDERS' EQUITY (Continued)

Stock options (Continued)

On January 25, 2002, the Company entered into a one year consulting agreement
with a third party for business development and marketing services. In
connection with this consulting agreement which commences on February 1, 2002,
the Company shall grant 50,000 options per month to purchase shares of common
stock for services rendered for an aggregate of 600,000 options. The options
have an exercise price of $.35 per share and expire five years from grant date.
For the six months ended March 31, 2003, the Company granted 200,000 additional
options under this agreement. As of March 31, 2003, the Company has granted
600,000 options under this agreement. The fair value of each option grant was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions: dividend yield of -0- percent;
expected volatility of 77 percent; risk-free interest rate of 4.50 percent and
an expected holding period of 5 years. For the six months ended March 31, 2003,
in connection with these options, the Company recorded consulting expense
amounting to $14,840.

On January 7, 2003, the Company granted 50,000 options to an employee for
services rendered, these options were immediately exercised. The Company
recorded $5,000 in compensation expense relating to this issuance of these
options.

On January 7, 2003, the Company granted 250,000 options to a consultant for debt
and services rendered. The Company recorded compensation of $21,312 and offset
$13,688 of debt against the exercise price of these options.

On January 23, 2003, the Company entered into a one-year agreement with a
consultant. The consultant received 1,000,000 options to purchase shares of the
Company's common stock at an exercise price of $0.11 per share. The Company
valued these shares at approximately $0.09 per share and recorded compensation
expense relating to this issuance of options of $15,312 and deferred consulting
expenses of $76,558. This consultant exercised 700,000 of these options on
February 19, 2003 (see Common stock).

A summary of outstanding options and warrants at March 31, 2003 are as follows:

Shares Range of Remaining Average
Underlying Exercise Contractual Exercise
Warrants Price Life Price
----------- ------------ ------------- ---------
Outstanding at 5,645,000 $ 0.25-0.50 1 to 5 yrs 0.33
September 30, 2002

Granted 5,420,000 0.07-0.35 .5 to 5 yrs 0.13
Expired (0) 0.00 -
Exercised (4,570,000) 0.07-0.15 0.12
----------- ------------ ---------
Outstanding at
March 31, 2003 6,495,000 $ 0.10-2.25 0.31
=========== ============== =========

-12-

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following analysis of the results of operations and financial
condition of the Company should be read in conjunction with the financial
statements of Genesis Technology Group, Inc. for the year ended September 30,
2002 and notes thereto contained in the Report on Form 10-KSB of Genesis
Technology Group, Inc. as filed with the Securities and Exchange Commission.

This report on Form 10-QSB contains forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those discussed in the forward-looking statements and from
historical results of operations. Among the risks and uncertainties which could
cause such a difference are those relating to our dependence upon certain key
personnel, our ability to manage our growth, our success in implementing the
business strategy, our success in arranging financing where required, and the
risk of economic and market factors affecting us or our customers. Many of such
risk factors are beyond the control of the Company and its management.

OVERVIEW

Genesis Technology Group Inc. ("Genesis" or the "Company") is an
international business development firm that specializes in assisting companies
in penetrating the Chinese market for business development as well as in
assisting Chinese companies in penetrating the US market or listing in the
US public market. We are a resource for companies that desire expertise in
marketing, distribution, manufacturing, forming joint ventures, or establishing
a base in China. As a part of that strategy, the company is a member of the
Shanghai Technology Stock (Property Rights) Exchange, an organization that
promotes the influx of technology into China.

Our key area of focus is the Life and Health Science arena in China.
Life and Health Science is compromised of different but related industries such
as environmental science, biotechnology, pharmaceuticals and healthcare
development. These industries range from water, soil, and air testing and
remediation to hospital facility development and management. These are new and
robust areas in China that desperately need attention and expertise. Genesis'
goal is to assist companies that are active in these areas in entering the
Chinese market.

In addition to its consulting services, we have also acquired companies
in the U.S. and China for the purposes of further developing these companies,
with operational, managerial and financial support. Our strategy envisions and
promotes opportunities for synergistic business relationships among all of the
companies that Genesis works with, both clients and subsidiaries.

We currently have three active subsidiary companies. We own 80% of one
computer hardware and software manufacturer/distributor located in Shanghai
China. We own 100% of two consulting companies, one in the U.S. and one in
China. We own 85% of an inactive biotechnology-marketing firm that is located
in the Unites States.

By building on the success of already successful businesses, Genesis
intends to become an important player in the expanding Cross-Pacific marketplace
- -increasing its revenues, profitability and market value by accelerating the
success of its subsidiaries and partner companies.

-13-

Company management and partners have been responsible for successfully
negotiating contracts in China for over 10 years. The Company is able to bring
talent in the areas of marketing, finance and business development to its
clients and subsidiaries, to help guide those companies to success.

ACQUISITIONS AND DISPOSITIONS

On August 14, 2001, we acquired 100 % of PropaMedia, Inc., a provider
of media rich Web hosting and distribution services, located in Los Angeles, CA.
Propamedia offers end-to-end streaming and hosting services, including content
capture, encoding and production, storage, live and on-demand video and audio
streaming, and managed services. On December 16, 2002, the Genesis Board voted
to discontinue the operations of PropaMedia as it does not complement the
company's continuing focus on the China market. We are in negotiations to sell
Propamedia to an unrelated party in the near future.

On November 15, 2001, we acquired 80% of Shanghai Zhaoli Technology
Development Company, Limited (Zhaoli"), an Information Technology enterprise
that integrates sales and technology with services. Currently, its sales cover
printer, copier, scanner and network products, as well as network integration.
In addition to hardware sales and service, the company focuses much of its
resources on the development of proprietary software systems, such as its
e-learning software for K-12 education in China. Zhaoli has approximately 65
employees at seven branches and exclusive stores in Shanghai and a strong and
growing presence throughout eastern areas of China. The increase in sales mainly
resulted from increasing demand from the market, as the Chinese government will
require all companies to issue all transaction receipts and invoices by using a
printer and a computer in order to smooth its tax collections by July 1, 2003.
Zhaoli expects its sales will be increased significantly in the near future due
to this new regulation. Zhaoli is planning to increase its sales, as well as
increase its profit margin. Hardware has been low profit margin business
historically. Zhaoli is working with its parent company, Genesis, to bring more
software development and sales in order to increase its profit margin.

On December 1, 2001, we acquired 80% of Yastock Investment Consulting
Company, Limited ("Yastock"), an investment consulting firm located in Shanghai,
China that specializes in consulting for Chinese and American companies in a
number of areas, including financial, public relations, corporate management,
corporate strategic evaluations and human resources. In addition to its ongoing
business, Yastock's management oversees all of Genesis' operations in China and
is important source of financial and operational support for our Chinese
subsidiaries. On January 1, 2002, we acquired the remaining 20% of Yastock,
making it a wholly owned subsidiary. Yastock has 15 part and full-time
employees.
Yastock is also managing the seat that Genesis Technology Group, Inc.
has with the Shanghai Technology Stock Exchange. Shanghai Technology Stock
(Property Rights) Exchange (STSE) was founded in December 1999 and is sponsored
by the Shanghai Municipal Government with independent corporate qualifications.
STSE was established to promote the commercialization of technological
innovations, to solve bottleneck problems in combining technological,
industrial, and financial capitals, and to actively construct operational and
exit mechanisms for venture investments. STSE has both a physical exchange
located in Shanghai and data mining techniques that target licensees' interests
using its two-way delivery system. In 2000 and 2001, over 2,500 transactions
were completed with over $12 billion in transaction volume through its 363
members that control over $24 billion in capital. The STSE is a specialized
equity capital market to serve all of China. It provides services in property
rights and equity financing for companies looking to enter China markets.

-14-

The STSE provides flexible and convenient financing and investment
services for various enterprises by means of technology rights and ownership.
STSE supports the advancement of technological innovation, and brings optimal
allocation of hi-tech and social resources, as well as the combination of
talented people and tremendous networks. Genesis is the first member of the
exchange in the U.S. As a trust member on the exchange, Genesis can directly
introduce technology companies and owners to the exchange and generate earnings
via success fees on completed transactions with those companies. Genesis will
focus its initial efforts on working with companies in the U.S that want to
expand their business via China. In addition, Genesis will enjoy preferential
policies issued by the Shanghai and Chinese national governments for introducing
new and high technologies into China. Under the landmark agreement, Genesis and
STSE are planning to form a joint venture to launch a similar physical property
rights exchange in the U.S. This joint venture will be the exclusive authorized
representative for STSE in the US. For more information in English about the
Shanghai Technology Stock (Property Rights) Exchange, please visit
www.saviaq.com/english/index.asp In addition, Yastock serves Chinese companies
that wish to enter both the general market and the public market in the United
States. In addition, Yastock has developed its own joint ventures and projects
in the areas of Internet wireless messaging for lottery information
(http://www.zc8888.com), gasoline replacement fuel, software development and so
on. It is expected that such projects or joint ventures will generate
significant cash flow in the near future.

CONSULTING ACTIVITIES

In addition to overseeing the operation of its subsidiaries, we have
been growing our cross-pacific consulting business. Management believes that
China's entrance into the WTO offers a unique opportunity for Genesis to secure
itself a position as a leader in the growing market for cross-pacific products,
technology, capital, and property exchange. To that end, we market our self to
other U.S. firms interested in Chinese partnerships for manufacturing and
distribution of a variety of products in China, with a strong focus on the Life
and Health Science arena

We currently have nine clients under contract. We are assisting these
clients in penetrating the Chinese market for the purposes of product and
solutions sales, distribution, manufacturing, and/or research and development.
To aid in achieving these goals, we signed on as a U.S. representative of the
Shanghai Technology Stock (Property Rights) Exchange (STSE). STSE is a
technology transfer exchange sponsored by the Shanghai Municipal Government with
independent corporate qualifications. STSE is essentially a vehicle for the
transfer of technology and property rights into China. As a representative of
the STSE, we can directly introduce American companies and individuals who would
like to sell or license intellectual property to a Chinese partner, or use
technology to form a joint venture in China, to the STSE for purposes of listing
their technologies or intellectual properties. Our clients pay a monthly
retainer and a success fee based on any completed transactions, a portion of
which goes to the STSE. In addition, the standard Genesis contract calls for the
company to receive ongoing compensation by clients via a percentage of any
licensing fees or an equity position in any joint ventures/partnerships formed
with Chinese entities.

-15-

Management has utilized a successful means of developing Western
clients for purposes of technology transfer and investment in China. We abide by
an "RCD" development formula and an "RSE" fee formula. The former enables the
Company to recruit prospective clients (R), close on those that are deemed good
candidates for business in China (C), and delivering enforceable, profitable
contracts (D). The secondary function, as it rewards Genesis, manifests in
client contracts, which require a retainer (R), success fee (S), and often an
equity position (E) in any resultant Sino-Western entity.

Among those Genesis contract clients who have benefited from this
time-tested business model are: Viragen International, Dynegy Energy,Enviro
Voraxial Technology, Inc, Mark Capital Management, Inc., Flowers Chemical
Laboratories, Sarlo Power Mowers, Custom Biologicals Inc., Frank Medical
Systems, Powerbetter (UK), Agronix, Inc., Kane, Laduzinsky, & Mendoza, LTD.,
Ayiko (Europe), eProtea (Malaysia), Shanghai Dongda Insurance Brokerage
Company, Ltd., and others.

Historically, such contracts should generate an average benefit of
$250,000 to the Company, not including accumulated equity positions in private
and public entities in China. The latter holdings are designed to gain a
ground-floor position in dozens of companies, some of which could reach
substantial value in the Asian and Western stock markets.

RESULTS OF OPERATIONS

SIX MONTHS ENDED MARCH 31, 2003 COMPARED TO SIX MONTHS ENDED MARCH 31, 2002

REVENUES AND COSTS BY SEGMENT:

For the six months ended March 31, 2003, we had consolidated revenues
of $11,158,157 as compared to $5,403,616 for the six months ended March 31,
2002. This increase resulted from the acquisition of our subsidiaries and is
outlined below.

Genesis Technology Group, Inc.

Revenue for the six months ended March 31, 2003 was $145,875 as
compared to $16,250 for the six months ended March 31, 2002. This revenue was
generated from consulting services.

For the six months ended March 31, 2003, we incurred consulting fees of
$371,202 as compared to $72,685 for the six months ended March 31, 2002. For the
six months ended March 31, 2003, consulting fees expense was attributable to the
granting of stock options and issuance of common shares to consultants for
marketing and business development activities. For the six months ended March
31, 2003, we incurred salary expense of $220,837 as compared to $15,320 for the
six months ended March 31, 2002. The increase in salary expense was attributable
to the hiring of key personnel to support our current business plan. For the six
months ended March 31, 2003, other selling, general and administrative expenses
consisted of rent of $42,500 and other expenses such as professional fees and
office expenses of $176,524. For the six months ended March 31, 2003, other
selling, general and administrative expenses consisted of rent of $3,297 and
other expenses such as professional fees and office expenses of $65,577.

-16-

Genesis Systems, Inc.

Revenue for the six months year ended March 31, 2003 from Genesis
Systems, Inc. was $19,000 as compared to $176,500 of revenue for the six months
ended March 31, 2002. This revenue was generated from consulting service in
which we received stock or cash for services. The decrease was attributable the
fact that we shifted our focus to our parent company, Genesis Technology Group,
Inc

For the six months ended March 31, 2003, operating expenses of our
Genesis Systems subsidiary consisted of salaries of $-0-, rent of $2,820,
consulting fees of $2,500 and other general and administrative expenses
amounting to $19,115. Additionally, we recorded a realized loss from the sale of
marketable securities received for consulting services of $16,222 for the six
months ended March 31, 2003. For the six months ended March 31, 2002, other
selling, general and administrative expenses of our Genesis Systems subsidiary
consisted of salaries of $56,000, rent of $12,478, consulting fees of $10,000
and other general and administrative expenses amounting to $49,119.

Yastock

Revenue for the six months ended March 31, 2003 from Yastock was $7,140
as compared to $326,107 for the six months ended March 31, 2002. This revenue
was generated from consulting services and software licensing fees.

Other selling, general and administrative expenses consisting of
salaries, commissions, accounting fees and office rent amounted to $43,945 for
the six months ended March 31, 2003 as compared to $82,170. We have incurred
additional marketing costs associated with increased business development
efforts.

Zhaoli

Revenue for the six months ended March 31, 2003 were $10,989,842 as
compared to $4,894,759 to March 31, 2002 from our subsidiary Zhaoli, a Chinese
company. This revenue was generated from sales of printers, copiers, network
equipment and software licensing fees. The increase in sales mainly resulted
from increasing demand from the market, as the Chinese government will require
all companies to issue all transaction receipts and invoices by using a printer
and a computer in order to smooth its tax collections by July 1, 2003. Cost of
sales for Zhaoli for the six months ended March 31, 2003 amounted to $10,825,454
or 98.5% of net sales as compared to $4,809,368 or 98.3% of net sales for the
six months ended March 31, 2002.

For the six months ended March 31, 2003, other selling, general and
administrative expenses amounted to $158,063 as compared to $82,170 for the
period from acquisition (November 15, 2001) to March 31, 2003. Other selling,
general and administrative expenses consisted of salaries, rent and other
expenses.

Discontinued Operations

For the six months ended March 31, 2003, we had a loss from
discontinued operations of $405 related to the discontinuation of our Propamedia
and eSpectus subsidiaries as compared to income from discontinued operations of
$109,208 for the six months ended March 31, 2002.

-17-

Overall

We reported a loss from operations for the six months ended March 31,
2003 of $(706,584) compared to income from operations for the six months ended
March 31, 2002 of $219,736. Additionally, we reported a loss from discontinued
operations for the six months ended March 31, 2003 of $405 as compared to an
income from discontinued operations of $109,208 for the six months ended March
31, 2002.

This translates to an overall per-share loss of ($.02) for the six
months ended March 31, 2003 compared to per share income of $.01 for the six
months ended March 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2003, we had cash and equivalents balance of $262,303. As
of March 31, 2003, our cash position by geographic area is as follows:

Cash
United States $ 52,428
China 209,875
----------------

Total $ 262,303
===============

Management has invested substantial time evaluating and considering
numerous proposals for possible acquisition or combination developed by
management or presented by investment professionals, the Company's advisors and
others. We continue to consider acquisitions, business combinations, or start up
proposals, which could be advantageous to shareholders. No assurance can be
given that any such project, acquisition or combination will be concluded.

We intend to continue our trading activities and as a consequence the
future financial results of the Company may be subject to substantial
fluctuations. As part of our investment activities, we may sell a variety of
equity or debt securities obtained as revenue for consulting services. Such
investments often involve a high degree of risk and must be considered extremely
speculative.

At March 31, 2003, our Company had stockholders' equity of $738,909.
Our Company's future operations and growth will likely be dependent on our
ability to raise capital for expansion and to implement our strategic plan.

Net cash used in operations was $(102,245) for the six months ended
March 31, 2003 as compared to net cash provided by operations of $97,306 for the
six months ended March 31, 2002. The difference is due to the implementation of
our new business model and the acquisition of our subsidiaries between August
and December 2001.

Net cash provided by investing activities for the six months ended
March 31, 2003 was $11,041 as compared to net cash used in investing activities
for the six months ended March 31, 003 of $72,711. For the six months ended
March 31, 2003, we received $16,963 from the sale of marketable securities
offset by cash used for capital expenditures of $(1,785).

-18-

Net cash provided by financing activities were $293,481 for the six
months ended March 31, 2003 as compared to $124,500 for the six months ended
March 31, 2002 and related primarily to proceeds from the exercise of stock
options and related party loans of $288,089 and $5,392, respectively.

We currently have no material commitments for capital expenditures. Our
future growth is dependent on our ability to raise capital for expansion, and to
seek additional revenue sources. If we decide to pursue any acquisition
opportunities or other expansion opportunities, we may need to raise additional
capital, although there can be no assurance such capital- raising activities
would be successful.

NEW ACCOUNTING STANDARDS

The Financial Accounting Standards Board has recently issued several new
accounting pronouncements:

Statement No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146")
addresses the recognition, measurement, and reporting of cost that are
associated with exit and disposal activities that are currently accounted for
pursuant to the guidelines set forth in EITF 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to exit an Activity
(including Certain Cost Incurred in a Restructuring)," cost related to
terminating a contract that is not a capital lease and one-time benefit
arrangements received by employees who are involuntarily terminated - nullifying
the guidance under EITF 94-3. Under SFAS 146, the cost associated with an exit
or disposal activity is recognized in the periods in which it is incurred rather
than at the date the Company committed to the exit plan. This statement is
effective for exit or disposal activities initiated after December 31, 2002 with
earlier application encouraged. The adoption of SFAS 146 did not have a material
impact on the Company's financial position, results of operations or liquidity.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.
Statement 148 provides alternative methods of transition to Statement 123's fair
value method of accounting for stock-based employee compensation. It also amends
the disclosure provisions of Statement 123 and APB Opinion No. 28, Interim
Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. Statement 148's amendment of the
transition and annual disclosure requirements of Statement's 123 are effective
for fiscal years ending after December 15, 2002. Statement 148's amendment of
the disclosure requirements of Opinion 28 is effective for interim periods
beginning after December 15, 2002. The adoption of the disclosure provisions of
Statement 148 as of December 31, 2002 did not have a material impact on the
Company's financial condition or results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 requires that upon
issuance of a guarantee, a guarantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 are effective for any guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. The adoption of this pronouncement does not have a material effect on the
earnings or financial position of the Company.

-19-

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 requires that if an entity
has a controlling financial interest in a variable interest entity, the assets,
liabilities and results of activities of the variable interest entity should be
included in the consolidated financial statements of the entity. FIN 46 requires
that its provisions are effective immediately for all arrangements entered into
after January 31, 2003. The Company does not have any variable interest entities
created after January 31, 2003. For those arrangements entered into prior to
January 31, 2003, the FIN 46 provisions are required to be adopted at the
beginning of the first interim or annual period beginning after June 15, 2003.
The Company has not identified any variable interest entities to date and will
continue to evaluate whether it has variable interest entities that will have a
significant impact on its consolidated balance sheet and results of operations.

CRITICAL ACCOUNTING POLICIES

A summary of significant accounting policies is included in Note 1 to
the audited consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the year ended September 30, 2002. Management believes
that the application of these policies on a consistent basis enables the Company
to provide useful and reliable financial information about the company's
operating results and financial condition.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from those estimates.

OPERATING RISK

(a) Country risk

Currently, the Company's revenues are primarily derived from sale of
computer equipment and accessories to customers in the Peoples Republic of China
(PRC). The Company hopes to expand its operations to countries outside the PRC,
however, such expansion has not been commenced and there are no assurances that
the Company will be able to achieve such an expansion successfully. Therefore, a
downturn or stagnation in the economic environment of the PRC could have a
material adverse effect on the Company's financial condition.

(b) Products risk

In addition to competing with other computer and electronics equipment
companies, the Company could have to compete with larger US companies who have
greater funds available for expansion, marketing, research and development and
the ability to attract more qualified personnel if access is allowed into the
PRC market. If US companies do gain access to the PRC markets, it may be able to
offer products at a lower price. There can be no assurance that the Company will
remain competitive should this occur.

-20-

(c) Exchange risk

The Company generates revenue and incurs expenses and liabilities in
Chinese renminbi and U.S. dollars. As a result, the Company is subject to the
effects of exchange rate fluctuations with respect to any of these currencies.
For example, the value of the renminbi depends to a large extent on PRC's
domestic and international economic and political developments, as well as
supply and demand in the local market. Since 1994, the official exchange rate
for the conversion of renminbi to U.S. dollars has generally been stable and the
renminbi has appreciated slightly against the U.S. dollar. However, given recent
economic instability and currency fluctuations, the Company can offer no
assurance that the renminbi will continue to remain stable against the U.S.
dollar or any other foreign currency. The Company's results of operations and
financial condition may be affected by changes in the value of renminbi and
other currencies in which its earnings and obligations are denominated. The
Company has not entered into agreements or purchased instruments to hedge its
exchange rate risks, although the Company may do so in the future.

Although Chinese governmental policies were introduced in 1996 to allow
the convertibility of renminbi into foreign currency for current account items,
conversion of renminbi into foreign exchange for capital items, such as foreign
direct investment, loans or security, requires the approval of the State
Administration of Foreign Exchange, or SAFE, which is under the authority of the
People's Bank of China. These approvals, however, do not guarantee the
availability of foreign currency. The Company cannot be sure that the Company
will be able to obtain all required conversion approvals for its operations; or
that Chinese regulatory authorities will not impose greater restrictions on the
convertibility of the renminbi in the future. Because a significant amount of
its revenues are in the form of renminbi, its inability to obtain the requisite
approvals or any future restrictions on currency exchanges will limit its
ability to utilize revenue generated in renminbi to fund its business activities
outside PRC.

(d) Political risk

Currently, PRC is in a period of growth and is openly promoting
business development in order to bring more business into PRC. Additionally PRC
allows a Chinese corporation to be owned by the United States corporation. If
the laws or regulations are changed by the PRC government, the Company's ability
to operate the PRC subsidiaries could be affected.

(e) Our future performance is dependent on its ability to retain key personnel

Our performance is substantially dependent on the performance of our
senior management. In particular, the Company's success depends on the continued
efforts of our senior management to maintain all contact with our Chinese
subsidiaries. The Company's inability to retain senior management could
have a material adverse effect on our prospects, businesses, Chinese operations,
financial conditions and share price.

(f) The Severe Acute Respiratory Syndrome (SARS)

The recent SARS outbreak in China may have a material impact on the company
ongoing business. The current travel safety and health concerns may delay
scheduled trips by our clients to China, thereby impeding their planning
initiatives in China. As a result, the company business could be impacted
negatively.

-21-

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of
our chief executive officer and principal financial and accounting officer,
conducted an evaluation of our "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-14(c))
within 90 days of the filing date of this Quarterly Report on Form 10-QSB (the
"Evaluation Date"). Based on their evaluation, our chief executive officer and
principal financial and accounting officer have concluded that as of the
Evaluation Date, our disclosure controls and procedures are effective to ensure
that all material information required to be filed in this Quarterly Report on
Form 10-QSB has been made known to them in a timely fashion.

Changes in Internal Controls

There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the Evaluation Date set forth above.

Part II - OTHER INFORMATION

Item 1.Legal Proceedings

None

Item 2. Changes in Securities and Use of Proceeds

Common stock

On January 3, 2003, the Company entered into an agreement with a
public relations company. The term of this agreement was for forty-five (45)
days; the Company issued such consultant 400,000 144 restricted shares of
its common stock for these services. The Company valued these shares at the fair
market value on the date of the agreement or $0.14 per share and recorded
consulting expense of $56,000.

On January 7, 2003, the Company issued 800,000 shares of its common
stock relating to the exercise of options held by certain employees and
consultants. The Company received $50,000 in proceeds from this issuance and
offset $13,688 in certain debts.

On February 19, 2003, the Company issued 700,000 shares of its
common stock relating to the exercise of stock options. The Company received
proceeds in the aggregate of $33,250 and has a subscription receivable of
$45,850.

The issuance of the securities was to consultants and employees that
were sophisticated investors with sufficient resource. Such transactions were in
compliance with Section 4 of the Securities Act of 1934

-22-

Stock options

On January 25, 2002, the Company entered into a one year consulting
agreement with a third party for business development and marketing services. In
connection with this consulting agreement which commences on February 1, 2002,
the Company shall grant 50,000 options per month to purchase shares of common
stock for services rendered for an aggregate of 600,000 options. The options
have an exercise price of $.35 per share and expire five years from grant date.
For the six months ended March 31, 2003, the Company granted 200,000 additional
options under this agreement. As of March 31, 2003, the Company has granted
600,000 options under this agreement. The fair value of each option grant was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions: dividend yield of -0- percent;
expected volatility of 77 percent; risk-free interest rate of 4.50 percent and
an expected holding period of 5 years. For the six months ended March 31, 2003,
in connection with these options, the Company recorded consulting expense
amounting to $14,840.

On January 7, 2003, the Company granted 50,000 options to an employee for
services rendered, these options were immediately exercised. The Company
recorded $5,000 in compensation expense relating to this issuance of these
options.

On January 7, 2003, the Company granted 250,000 options to a consultant for debt
and services rendered. The Company recorded compensation of $21,312 and offset
$13,688 of debt against the exercise price of these options.

On January 23, 2003, the Company entered into a one-year agreement with a
consultant. The consultant received 1,000,000 options to purchase shares of the
Company's common stock at an exercise price of $0.11 per share. The Company
valued these shares at approximately $0.09 per share and recorded compensation
expense relating to this issuance of options of $15,312 and deferred consulting
expenses of $76,558. This consultant exercised 700,000 of these options on
February 19, 2003 (see Common stock).

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

The company will hold its annual meeting on May 30, 2003. Proxy votes for
5 members of board of directors, management compensation, and a possible change
to business development firm were sent to all shareholders of the common stock.

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(1) Exhibits

-23-

Exhibit
Number Description
- ----------- ----------------
99.1 Certification by Chief Executive Officer

99.2 Certification by Chief Financial Officer

(2) Reports on Form 8-K

None

-24-

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boca Raton, Florida
on May 20, 2003.

GENESIS TECHNOLOGY GROUP, INC.

By: /s/ Gary Wolfson
------------------
Gary Wolfson
Chief Executive Officer

In accordance with the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------ ---------- --------

/s/ Gary Wolfson Chief Executive Officer May 20, 2003
- ------------------
Gary Wolfson

/s/ Adam Wasserman CFO and Principal Financial May 20, 2003
- ------------------- and Accounting Officer
Adam Wasserman

-25-

CERTIFICATIONS

I, Gary Wolfson, the Chief Executive Officer of Genesis Technology Group, Inc.
certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Genesis Technology
Group, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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.

Date: May 20, 2003
/s/ Gary Wolfson
--------------------------------------
Gary Wolfson, Chief Executive Officer

-26-

CERTIFICATIONS

I, Adam Wasserman, Chief Financials Officer of Genesis Technology Group, Inc.
certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Genesis Technology
Group, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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.

Date: May 20, 2003
/s/ Adam Wasserman
-----------------------------------------
Adam Wasserman, Chief Financial Officer

-27-