U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
SOFTSTONE INC.
(Exact name of registrant as specified in its charter)
Delaware 0-29523 73-1564807
-------- ------- ----------
(state of (Commission File Number) (IRS Employer
incorporation) I.D. Number)
111 Hilltop Lane, Pottsboro, TX 75076,
903-786-9618
-------------------------------------------------------
(Address and telephone number of registrant's principal
executive offices and principal place of business)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 [ ]
As of February 11, 2003, the Company had 7,041,965 shares of its $.001 par
value common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page
Balance Sheet December 31, 2002 (Unaudited) 3
Statements of Operations for the Six Month Periods
Ended December 31, 2002 and 2001 (Unaudited) 4
Statements of Cash Flows for the Six Month Periods
Ended December 31, 2002 and 2001 (Unaudited) 5
Notes to the Financial Statements 6
2
SOFTSTONE, INC.
BALANCE SHEET
December 31, 2002
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash & cash equivalents $ 25,897
Accounts receivable 1,765
------------
Total current assets 27,662
PROPERTY AND EQUIPMENT, net 346,822
------------
$ 374,484
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 34,311
Accounts payable-related party 160,879
Accrued expenses 62,982
Loans - current, including $547,852 to related parties 712,457
------------
Total current liabilities 970,628
LONG TERM LIABILITIES
Notes payable, financial institutions 49,043
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value;
30,000,000 shares authorized;
7,041,965 shares issued and outstanding 7,042
Additional paid-in capital 2,232,162
Shares to be issued 27,499
Accumulated deficit (2,911,890)
------------
Total stockholders' deficit (645,187)
------------
$ 374,484
============
The accompanying notes are an integral part of these financial statements.
3
SOFTSTONE, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTH AND SIX MONTH PERIODS ENDED DECEMBER 31, 2002 AND 2001
(Unaudited)
Three months ended Dec. 31, Six months ended Dec. 31,
--------------------------- -------------------------
2002 2001 2002 2001
----------- ------------ ----------- -----------
Revenues $ 3,850 $ 24,614 $ 90,275 $ 27,496
Cost of revenue 39,568 - 54,390 -
----------- ----------- ----------- -----------
Gross profit (loss) (35,718) 24,614 35,885 27,496
Operating expenses
General and administrative 44,012 112,312 85,517 275,373
----------- ----------- ----------- -----------
Operating loss (79,730) (87,698) (49,632) (247,877)
Other expense
Interest expense 23,630 11,705 32,598 22,402
Loss on sale of assets 239 - 21,114 -
----------- ----------- ----------- -----------
Total other expense 23,868 11,705 53,711 22,402
----------- ----------- ---------- -----------
Loss before income taxes (103,598) (99,403) (103,343) (270,279)
Income taxes - - - -
----------- ----------- ----------- -----------
Net loss $ (103,598) $ (99,403) (103,343) (270,279)
=========== =========== =========== ===========
Basic and diluted weighted
average number of common
stock outstanding 7,041,965 5,647,929 7,041,965 5,893,304
=========== =========== =========== ===========
Basic and diluted net
loss per share $ (0.01) $ (0.02) (0.01) (0.05)
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
4
SOFTSTONE, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED DECEMBER 31, 2002 AND 2001
(Unaudited)
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(103,343) $(270,279)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 34,075 43,386
Issuance of common stock for compensation - 59,415
Loss on sale of assets 21,114 -
Decrease of accounts receivable 818 (17,343)
Decrease in other current assets - 2,237
Decrease of accounts payable (5,055) 24,331
Increase of accrued expense 33,365 11,929
--------- ---------
Total adjustments 84,317 123,955
--------- ---------
Net cash used in operating activities (19,026) (146,324)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 19,826 -
Purchase of property and equipment - (10,000)
--------- ---------
Net cash provided by (used in)
investing activities 19,826 (10,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Investments by stockholders - 14,676
Proceeds from loans - 46,021
Payments of loans (656) (7,942)
Cash received for shares to be issued 24,500 -
Issuance of common stock for cash - 92,320
--------- ---------
Net cash provided by financing activities 23,844 145,075
--------- ---------
Net increase (decrease) in cash & cash equivalents 24,644 (11,249)
CASH & CASH EQUIVALENTS, BEGINNING 1,253 12,673
--------- ---------
CASH & CASH EQUIVALENTS, ENDING $ 25,897 $ 1,424
========= =========
CASH PAID FOR:
Interest $ 8,261 $ 8,278
========= =========
Income taxes $ - $ -
========= =========
The accompanying notes are an integral part of these financial statements.
5
SOFTSTONE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Softstone, Inc. (the "Company"), was formed to manufacture a patented
rubber product used in the road and building construction industries. The
Company plans to create rubber modules entirely from recycled tires, which
can be used in the construction of roads, driveways, decks, and other types
of walkways. Its principal activities have consisted of financial planning,
establishing sources of production and supply, developing markets, and
raising capital. Prior to July 2002, the Company was in the development
stage in accordance with Statement of Financial Accounting Standards No. 7.
Its principal operations began in the quarter ended September 30, 2002.
On October 7, 1998, SoftStone Building Products, Inc. ("SSBI" - an Oklahoma
corporation and predecessor to the Company) was incorporated. Effective May
31, 1999, SSBI was merged into Softstone, Inc. (incorporated January 28,
1999 under the laws of the State of Delaware) and SSBI was subsequently
dissolved. Each share of previously outstanding common stock was converted
into 2,500 shares of common stock of the new entity and the new
capitalization is reflected in the accompanying financial statements as if
it had occurred at the beginning of the period presented.
On July 24, 2001, the Company entered into a plan of reorganization
involving Kilkenny Acquisition Corp. (Kilkenny) whereby the Company is the
survivor and in control of the board of directors. The merger agreement
provided for the exchange of 1,158,387 shares of the Company's common stock
for all the common stock of Kilkenny. In connection with this merger, on
April 4, 2001, certain insider shareholders of the Company contributed
3,947,698 shares of their common stock to the Company effectively reducing
the then outstanding shares of stock to 3,685,992. Subsequent issues of
common stock for cash and services increased the outstanding stock of the
Company to 4,590,646. The issuance of the above mentioned shares of the
Company's common stock on the merger date increased the common stock of the
Company to 5,669,033 with the Company shareholders, prior to the merger,
owning approximately 81% of the outstanding shares of the Company. For
accounting purposes, the transaction between the Company and Kilkenny has
been treated as a re-capitalization of the Company, with the Company as the
accounting acquirer (reverse acquisition), and has been accounted for in a
manner similar to a pooling of interests.
Basis of presentation
The accompanying unaudited condensed interim financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission for the presentation of interim financial information,
but do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
audited consolidated financial statements for the year ended June 30, 2002
were filed on October 15, 2002 with the Securities and Exchange Commission
and are hereby referenced. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating
results for the six-month ended December 31, 2002 are not necessarily
indicative of the results that may be expected for the year ended June 30,
2003.
Segment Reporting
During the periods ended December 31, 2002 and 2001, the Company only
operated in one segment. Therefore, segment disclosure has not been
presented.
6
SOFTSTONE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Reclassifications
Certain comparative amounts have been reclassified to conform to the
current year's presentation.
2. RECENT PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting
for Asset Retirement Obligations". SFAS 143 addresses financial accounting
and reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. This Statement
is effective for financial statements issued for fiscal years beginning
after June 15, 2002.
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," was issued in August 2001. SFAS No. 144 is effective for fiscal
years beginning after December 15, 2001, and addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
statement supersedes SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business.
The Company does not expect that the adoption of above pronouncements will
have a material effect on its earnings or financial position.
In May 2002, the Board issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections ("SFAS 145"). SFAS 145 rescinds the automatic treatment of
gains or losses from extinguishments of debt as extraordinary unless they
meet the criteria for extraordinary items as outlined in APB Opinion No.
30, Reporting the Results of Operations, Reporting the Effects of Disposal
of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions. SFAS 145 also requires sale-leaseback
accounting for certain lease modifications that have economic effects that
are similar to sale-leaseback transactions and makes various technical
corrections to existing pronouncements. The provisions of SFAS 145 related
to the rescission of FASB Statement 4 are effective for fiscal years
beginning after May 15, 2002, with early adoption encouraged. All other
provisions of SFAS 145 are effective for transactions occurring after May
15, 2002, with early adoption encouraged. The Company does not anticipate
that adoption of SFAS 145 will have a material effect on our earnings or
financial position.
In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
with exit or Disposal Activities." This Statement addresses financial
accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." This Statement requires that a liability for a cost
associated with an exit or disposal activity be recognized when the
liability is incurred. Under Issue 94-3 a liability for an exit cost as
defined, was recognized at the date of an entity's commitment to an exit
plan. The Company does not anticipate that adoption of SFAS 146 will have a
material effect on our earnings or financial position.
In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions." SFAS No. 147 removes the requirement in SFAS No.
7
SOFTSTONE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
72 and Interpretation 9 thereto, to recognize and amortize any excess of
the fair value of liabilities assumed over the fair value of tangible and
identifiable intangible assets acquired as an unidentifiable intangible
asset. This statement requires that those transactions be accounted for in
accordance with SFAS No. 141, "Business Combinations," and SFAS No. 142,
Impairment or Disposal of Long-Lived Assets," to include certain financial
institution-related intangible assets. The Company does not expect adoption
of SFAS No. 147 to have a material impact, if any, on its financial
position, results of operations or cash flows.
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 FIN45 is not expected to have a material effect
on the Company's financial position, results of operations, or cash flows.
In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based
Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock Based Compensation", to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this
Statement amends the disclosure requirements of Statement 123 to require
prominent disclosures in both annual and interim financial statements about
the method of accounting for stock-based employee compensation and the
effect of the method used, on reported results. The Statement is effective
for the Companies' interim reporting period ending January 31, 2003. The
Companies do not expect the adoption of SFAS No. 148 to have a material
impact on its financial position or results of operations or cash flows.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at December 31, 2002:
Furniture and computer equipment $ 42,198
Production and other equipment 485,160
Vehicles 29,381
--------
556,739
Less: Accumulated depreciation (209,917)
--------
$ 346,822
=========
4. NOTES PAYABLE
Notes payable consist of the following at December 31, 2002:
Revolving note payable to bank;
interest due 7/5/02, prime + 1%,
maturing December 5, 2002 $100,035
8
SOFTSTONE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Notes payable to stockholder,
8% & 12% interest rates 547,852
Bank term loan; 3.9% interest
rate; maturing September 24, 2002.
The fair value of the loan at
current market rate of 9% would
be approximately $64,000 64,570
Note payable to finance vehicle,
9.5% interest rate, maturing
July 15, 2005, collaterized
by vehicle 14,739
Refinanced bank term loan; payable
on demand or in semiannual payments
of $6,485, including interest at 10.75%
(variable); collateralized by
equipment, accounts receivable
and intangibles and guaranteed by
the principal stockholder of the
Company, due July 15, 2004 25,331
Note payable to bank, collateralized
by tractor, 9%, variable payable in
60 monthly installments beginning
July 29, 2001 8,973
Payable to stockholder; interest
free; due on demand and unsecured 160,879
---------
922,379
Less: current portion 873,336
---------
Long-term debt $ 49,043
=========
The following is a summary of maturities of principal under long-term debt
for periods ending December 31:
2004 $ 25,331
2005 14,739
2006 8,973
---------
$ 49,043
=========
The notes payable has been classified in the balance sheet at
December 31, 2002 as per follows:
Accounts payable - related party $ 160,879
Loans current 712,457
---------
Current liabilities 873,336
Notes Payable 49,043
---------
$ 922,379
=========
9
SOFTSTONE, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
5. MERGER & ACQUISITION
The Company has agreed to participate in a plan of reorganization involving
Kilkenny Acquisition Corp. (Kilkenny) whereby the Company, upon merger, is
the survivor and controls the board of directors. To facilitate the merger
and acquire additional capital, the Company is committed to issue certain
of the Company stock for all the common stock of Kilkenny. In connection
with this merger, on April 4, 2001, certain insider shareholders of the
Company contributed 3,947,686 of their common stock to the Company and
effectively reduced the then outstanding shares of stock to 3,685,992.
Subsequent issues of common stock for cash and services increased the
outstanding stock of the Company to 4,590,646. The issuance of the above
mentioned shares of the Company's common stock on the merger date, July 24,
2001, increased the Common stock of the Company to 5,669,033 with the
Company shareholders, prior to the merger, owning approximately 81% of the
outstanding shares of the merged Company.
In March 2002, the Company entered into a purchase agreement with Levgum,
Ltd. (Levgum) of Tel Aviv, Israel, where the Company received 83 shares
with 1.00 par value representing 10% of outstanding capital, for $250,000.
The Company also received the right to use their technology for rubber
devulcanization and right to sublicense as part of this purchase agreement.
The recorded its investment in Levgum for $125,000 and license agreement
acquired through acquisition at $125,000. On June 30, 2002, the Company
evaluated its investment and patents rights according to FASB 121 and
recognized an impairment loss equal to the book value of these intangible
assets.
6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction of
its liabilities in the normal course of business. Through December 31,
2002, the Company had incurred cumulative losses of $2,911,890 and negative
working capital of $942,966. The Company's goal to attain profitable
operations is dependent upon obtaining financing adequate to fulfill its
research and development activities, production of its equipment and
achieving a level of revenues adequate to support the Company's cost
structure. Management's plan of operations anticipates that the cash
requirements for the next twelve months will be met by obtaining capital
contributions through the sale of common stock and cash flow from
operations. However, there is no assurance that the Company will be able to
implement its plan.
10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in conjunction with
the financial statements and the accompanying notes thereto and is qualified in
its entirety by the foregoing and by more detailed financial information
appearing elsewhere. See "Item 1. Financial Statements."
Results of Operations - Second Quarter (Q2) of Fiscal Year 2003 Compared to
---------------------------------------------------------------------------
Second Quarter of Fiscal Year 2002
---------------------------------------
Softstone had sales of $3,850 in Q2 2003, as compared with sales of $24,614
in Q2 2002 (Softstone's fiscal year ends on June 30). Until Softstone (i)
successfully sells its devulcanized rubber technology or (ii) consistently
brokers crumb rubber, it will continue to operate at a loss.
Our general, selling and administrative expenses - which have been devoted
to raising capital and acquiring a public market for our common stock - were
$44,012 in Q2 2003 as compared with $112,312 in Q2 2002.
We had a loss of $103,598 in Q2 2003, or $0.01 a share, as compared with a
loss of $99,403 in Q2 2002, or $0.02 a share.
Results of Operations - First Half of Fiscal Year 2003 Compared to First
---------------------------------------------------------------------------
Half of Fiscal Year 2002
----------------------------
Softstone had sales of $90,275 in the first half of FY 2003 (December 31,
2002) compared to sales of $27,496 in the first half of FY 2002 (December 31,
2001). Until Softstone (i) acquires equipment that produces wire-free chips
from shredded tires and (ii) refurbishes its tire shredder, it is unable to
operate its tires-to-products business profitably. Accordingly, Softstone is
not pursuing sales that must be made before such equipment purchase and
renovation takes place. And, until Softstone (i) successfully sells its
devulcanized rubber technology or (ii) consistently brokers crumb rubber, it
will continue to operate at a loss.
Our general, selling and administrative expenses - which have been devoted
to raising capital and acquiring a public market for our common stock - were
$85,517 in the first half of FY 2003 as compared with $275,373 in the first half
of FY 2002.
We had a net loss of $103,343, or $0.01 a share, in the first half of FY
2003 as compared with a net loss of $270,279, or $0.05 a share, in the first
half of FY 2002.
We covered our $103,343 loss in the first half of FY 2003 by (i)
non-payment of accrued expenses of $33,365, (ii) receipt of $19,826 cash from
the sale of assets, (iii) $24,500 received from the sale of shares of common
stock and (iv) $34,075 of our loss being attributed to depreciation and
amortization.
11
OUTLOOK
The statements made in this Outlook are based on current plans and
expectations. These statements are forward looking, and actual results may vary
considerably from those that are planned.
We propose to raise additional funds for the purposes of pursuing the
marketing of our devulcanized rubber technology that we purchased from Levgum,
Ltd. for the exclusive rights to the Western Hemisphere, as well as further
expanding our brokering of crumb rubber business that was founded in August of
2002.
Item 3. Controls and Procedures
Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in this
report is recorded, processed, accumulated and communicated to our management,
including our chief executive officer and our chief financial officer, to allow
timely decisions regarding the required disclosure. Within the 90 days prior to
the filing date of this report, our management, with the participation of our
chief executive officer and chief financial officer, carried out an evaluation
of the effectiveness of the design and operation of these disclosure controls
and procedures. Our chief executive officer and chief financial officer
concluded, as of fifteen days prior to the filing date of this report, that
these disclosure controls and procedures are effective.
Changes in internal controls. Subsequent to the date of the above
evaluation, we made no significant changes in our internal controls or in other
factors that could significantly affect these controls, nor did we take any
corrective action, as the evaluation revealed no significant deficiencies or
material weaknesses.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed, by incorporation by reference, as
part of this Form 10-QSB:
2 Agreement and Plan of Reorganization of July 24, 2001 between
Softstone, Inc. and Kilkenny Acquisition Corp.*
3 Certificate of Incorporation of Softstone Inc.*
3.1 Bylaws of Softstone, Inc.*
12
10 Lease Agreement of February 1, 2000, between Ardmore
Development Authority, as lessor, and Softstone, Inc., as
lessee.*
10.1 Scrap Tire Disposal Agreement of January 11, 2000, between
Michelin North America, Inc., and Softstone, Inc.*
10.2 Letter of intent of May 1, 2001, of Little Elm Independent
School District regarding the Little Elm Walking Trail.*
16 Letter of August 8, 2001 of Baron Accountancy Corp. agreeing
with the statements made in this Form 8-K by Softstone,
Inc., concerning Softstone's change of principal independent
accountants.*
16.1 Letter of August 27, 2001 of Grant Thornton LLP. agreeing
with the statements made in this Form 8-K by Softstone,
Inc., concerning Softstone's change of principal independent
accountants.**
99 United States Patent No. 5,714,219.*
* Previously filed with Form 8-K August 8, 2001 Commission
File No. 000-29523; incorporated by reference.
** Previously filed with Form 8-K August 27, 2001 Commission
File No. 000-29523; incorporated by reference.
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: February 19, 2003 SOFTSTONE INC.
By:/s/ Keith P. Boyd
-----------------------------------
Keith P. Boyd, President
13
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, Keith Boyd, Chief Executive Officer of the registrant, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Softstone
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
14
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.
Date: February 19, 2003 /s/ Keith Boyd
---------------------------------------
Keith Boyd
Chief Executive Officer
15
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, Keith Boyd, Chief Financial Officer of the registrant, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Softstone
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
16
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.
Date: February 19, 2003 /s/ Keith Boyd
---------------------------------------
Keith Boyd
Chief Financial Officer
17
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Softstone Inc. (the
"Company") on Form 10-QSB for the period ended December 31, 2002 (the "Report"),
I, Keith Boyd, Chief Executive Officer of the Company, hereby certify that to my
knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Keith Boyd
Dated: February 19, 2003 ---------------------------------------------
Keith Boyd
Chairman and Chief Executive Officer
The above certification is furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of
the Form 10-QSB or as a separate disclosure document.
18
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Softstone Inc. (the
"Company") on Form 10-QSB for the period ended December 31, 2002 (the "Report"),
I, Keith Boyd, Chief Financial Officer of the Company, hereby certify that to my
knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Keith Boyd
Dated: February 19, 2003 ---------------------------------------------
Keith Boyd
Chief Financial Officer
The above certification is furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of
the Form 10-QSB or as a separate disclosure document.
19