Cosmos Health Inc 10-Q for FY2022 Q3

Cosmos Health Inc. (COSM)

10-Q 2022-11-14 For: 2022-09-30

Added on April 07, 2026

About this 10-Q

Cosmos Health Inc filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $12.02M; down 11.6% from $13.6M a year earlier
Net loss: $1.97M; compared with a net loss of $1.94M a year earlier
Diluted EPS: -$0.08; compared with -$0.11 a year earlier

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Nevada		27-0611758
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

141 West Jackson Blvd, Suite 4236 Chicago, Illinois		60604
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited).

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	45

Item 4.	Controls and Procedures.	45

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	47

Item 1A	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	47

Item 3.	Defaults Upon Senior Securities.	47

Item 4.	Mine Safety Disclosures.	47

Item 5.	Other Information.	47

Item 6.	Exhibits.	48

SIGNATURES		49

COSMOS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	312,385		$	286,487
Accounts receivable, net		25,252,750			26,858,114
Accounts receivable - related party		1,997,427			2,901,300
Marketable securities		9,987			11,468
Inventory		3,983,023			3,147,276
Loans receivable		340,092			377,590
Prepaid expenses and other current assets		1,816,583			2,987,687
Prepaid expenses and other current assets - related party		4,121,184			3,263,241
Operating lease right-of-use asset		760,180			834,468
Financing lease right-of-use asset		255,556			211,099

TOTAL CURRENT ASSETS		38,849,167			40,878,730

Property and equipment, net		1,449,961			1,888,052
Goodwill and intangible assets, net		682,408			485,767
Loans receivable - long term portion		3,553,039			4,410,689
Other assets		824,829			915,250
Deferred tax assets		261,971			850,774

TOTAL ASSETS	$	45,621,375		$	49,429,262

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	11,408,585		$	12,126,626
Accounts payable and accrued expenses - related party		322,824			599,125
Accrued interest		1,853,357			1,019,889
Lines of credit		4,924,655			4,743,557
Convertible notes payable, net of unamortized discount of $0 and $258,938, respectively		625,000			381,062
Derivative liability - convertible note		40,663			45,665
Notes payable		12,391,919			5,462,504
Notes payable - related party		401,299			464,264
Loans payable		1,000,000			1,000,000
Loans payable - related party		1,538,088			1,293,472
Taxes payable		1,051,827			1,324,722
Operating lease liability, current portion		155,432			138,450
Financing lease liability, current portion		83,545			73,078
Other current liabilities		1,106,897			1,255,824

TOTAL CURRENT LIABILITIES		36,904,091			29,928,238

Share settled debt obligation		1,554,590			1,554,590
Lines of credit - long-term portion		194,132			366,171
Notes payable - long term portion		1,026,049			12,356,384
Operating lease liability, net of current portion		604,746			696,015
Financing lease liability, net of current portion		181,899			148,401
TOTAL LIABILITIES		40,465,507			45,049,799

Commitments and Contingencies (see Note 14)		-			-

MEZZANINE EQUITY
Preferred stock, $0.001 par value; 100,000,000 shares authorized:
Series A preferred stock, stated value $1,000 per share, 6,000,000 shares authorized; 1,500 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; liquidation preference of $1,868,567 and $0, respectively		1,712,035			-

STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value; 300,000,000 shares authorized; 26,365,404 and 17,544,509 shares issued and 25,977,980 and 17,157,085 outstanding as of September 30, 2022 and December 31, 2021, respectively		26,365			17,544
Additional paid-in capital		61,194,291			39,675,753
Treasury stock, 387,424 shares as of September 30, 2022 and December 31, 2021		(816,707	)		(816,707	)
Accumulated deficit		(54,345,250	)		(34,345,506	)
Accumulated other comprehensive loss		(2,614,866	)		(151,621	)

TOTAL STOCKHOLDERS' EQUITY		3,443,833			4,379,463

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY	$	45,621,375		$	49,429,262

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

REVENUE	$	12,016,098		$	13,595,418		$	38,296,402		$	40,061,419

COST OF GOODS SOLD		10,232,201			11,249,848			32,774,701			34,677,671

GROSS PROFIT		1,783,897			2,345,570			5,521,701			5,383,748

OPERATING EXPENSES
General and administrative expenses		1,335,033			2,427,085			3,192,137			6,708,796
Salaries and wages		576,118			683,129			1,675,068			1,786,954
Sales and marketing expenses		103,979			41,715			496,371			586,440
Depreciation and amortization expense		112,879			108,192			334,349			323,678
TOTAL OPERATING EXPENSES		2,128,009			3,260,121			5,697,925			9,405,868

INCOME (LOSS) FROM OPERATIONS		(344,112	)		(914,551	)		(176,224	)		(4,022,120	)

OTHER INCOME (EXPENSE)
Other expense, net		(5,431	)		(122,477	)		(60,558	)		(340,103	)
Interest expense		(461,945	)		(670,282	)		(1,541,937	)		(2,182,715	)
Non-cash interest expense		(295,846	)		(353,303	)		(772,180	)		(492,391	)
Gain on equity investments, net		359			38			415			317
Gain on extinguishment of debt		-			350,008			1,004,124			795,644
Change in fair value of derivative liability		628			125,621			(6,627	)		213,490
Foreign currency transaction, net		(468,362	)		(183,036	)		(984,401	)		(392,472	)
TOTAL OTHER EXPENSE, NET		(1,230,597	)		(853,431	)		(2,361,164	)		(2,398,230	)

LOSS BEFORE INCOME TAXES		(1,574,709	)		(1,767,982	)		(2,537,388	)		(6,420,350	)

PROVISION FOR INCOME TAXES		(398,066	)		(168,561	)		(473,296	)		(69,152	)

NET LOSS		(1,972,775	)		(1,936,543	)		(3,010,684	)		(6,489,502	)

Deemed dividend on issuance of warrants		-			-			(5,788,493	)		-
Deemed dividend on downround of warants		-			-			(8,480,379	)		-
Deemed dividend on downround of preferred stock		-			-			(8,189,515	)		-
Deemed dividend on preferred stock		(19,607	)		-			(372,414	)		-

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		(1,992,382	)		(1,936,543	)		(25,841,485	)		(6,489,502	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment, net		(1,029,141	)		(214,216	)		(2,463,245	)		(687,510	)

TOTAL COMPREHENSIVE LOSS	$	(3,021,523	)	$	(2,150,759	)	$	(28,304,730	)	$	(7,177,012	)

BASIC NET LOSS PER SHARE	$	(0.08	)	$	(0.11	)	$	(1.17	)	$	(0.40	)
DILUTED NET LOSS PER SHARE	$	(0.08	)	$	(0.11	)	$	(1.17	)	$	(0.40	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic		25,806,871			17,136,735			22,013,556			16,103,193
Diluted		25,806,871			17,136,735			22,013,556			16,103,193

Cosmos Holdings, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) AND MEZZANINE EQUITY

																							Accumulated			Total
											Additional												Other			Stockholders'
	Preferred Stock				Common Stock						Paid-in			Treasury Stock						Accumulated			Comprehensive			Equity
	No. of Shares		Value		No. of Shares			Value			Capital			No. of Shares			Value			Deficit			Income (Loss)			(Deficit)

Balance at January 1, 2020		-	$	-		13,485,128		$	13,484		$	14,333,285			(415,328	)	$	(611,854	)	$	(18,750,824	)	$	854,896		$	(4,161,013	)
Foreign currency translation adjustment, net		-		-		-			-			-			-			-			-			(473,578	)		(473,578	)
Sale of treasury stock to third party		-		-		-			-			249,350			65,000			650			-			-			250,000
Restricted stock issued to a consultant		-		-		1,800,000			1,800			1,187,650															1,189,450
Conversion of notes payable into shares of common stock		-		-		781,819			782			2,563,582			-			-			-			-			2,564,364
Net loss		-		-		-			-			-			-			-			(2,173,903	)		-			(2,173,903	)
Balance at March 31, 2021		-		-		16,066,947			16,066			18,333,867			(350,328	)		(611,204	)		(20,924,727	)		381,318			(2,804,680	)
Foreign currency translation adjustment, net		-		-		-			-			-			-			-			-			284			284
Conversion of related party debt		-		-		500,000			500			2,999,500			-			-			-			-			3,000,000
Forgiveness of related party debt		-		-		-			-			600,000			-			-			-			-			600,000
Restricted stock issued to a consultant		-		-		-			-			1,968,000			-			-			-			-			1,968,000
Net loss		-		-		-			-			-			-			-			(2,379,056	)		-			(2,379,056	)
Balance at June 30, 2021		-		-		16,566,947			16,566			23,901,367			(350,328	)		(611,204	)		(23,303,783	)		381,602			384,548
Foreign currency translation adjustment, net		-		-		-			-			-			-			-			-			(214,216	)		(214,216	)
Cancellation of treasury shares		-		-		(57,120	)		(57	)		(171,303	)		57,120			171,360			-			-			-
Conversions of convertible note payable		-		-		126,501			127			569,302			-			-			-			-			569,429
Conversion of related party debt		-		-		375,000			375			2,249,625			-			-			-			-			2,250,000
Conversion of notes payable into shares of common stock		-		-		321,300			321			1,313,796			-			-			-			-			1,314,117
Beneficial conversion feature discount related to convertible notes payable		-		-		-			-			294,000			-			-			-			-			294,000
Restricted stock issued to a consultant		-		-					-			1,989,626			-			-			-			-			1,989,626
Net loss		-		-		-			-			-			-			-			(1,936,543	)		-			(1,936,543	)
Balance at September 30, 2021		-	$	-		17,332,628		$	17,332		$	30,146,413			(293,208	)	$	(439,844	)	$	(25,240,326	)	$	167,386		$	4,650,961

COSMOS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended September 30,
	2022			2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,010,684	)	$	(6,489,502	)
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Depreciation and amortization expense		273,415			243,410
Amortization of right-of-use assets		60,934			80,268
Amortization of debt discounts and accretion of debt		772,180			492,391
Lease expense		158,406			146,831
Interest on finance leases		11,645			9,995
Stock-based compensation		27,221			5,147,076
Deferred income taxes		490,460			62,606
Gain on extinguishment of debt		(1,004,124	)		(795,644	)
Change in fair value of the derivative liability		6,627			(213,490	)
(Gain) loss on net change in fair value of equity investments		(415	)		3,586
Changes in assets and liabilities:
Accounts receivable		(2,255,383	)		(5,122,888	)
Accounts receivable - related party		481,941			464,223
Inventory		(1,392,884	)		(481,409	)
Prepaid expenses and other assets		117,498			(2,839,134	)
Prepaid expenses and other current assets - related party		(1,413,967	)		1,064,000
Other assets		-			157,920
Accounts payable and accrued expenses		1,692,704			2,040,097
Accounts payable and accrued expenses - related party		(216,456	)		83,645
Accrued interest		881,347			217,904
Lease liabilities		(158,788	)		(104,126	)
Taxes payable		(101,909	)		-
Other current liabilities		27,900			303,779
Other liabilities		-			(20,807	)
NET CASH USED IN OPERATING ACTIVITIES		(4,552,332	)		(5,549,269	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from loan receivable		267,205			-
Purchase of property and equipment		(37,137	)		(521,758	)
Sale of fixed assets		12,859			-
Purchase of intangible assets		(311,859	)		(313,667	)
NET CASH USED IN INVESTING ACTIVITIES		(68,932	)		(835,425	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of convertible note payable		-			(529,000	)
Proceeds from convertible note payable		-			600,000
Payment of related party note payable		-			(3,473	)
Payment of note payable		(2,454,143	)		(300,364	)
Proceeds from note payable		490,365			578,850
Payment of related party loan		(557,361	)		(122,716	)
Proceeds from related party loan		973,424			5,830,757
Payment of loans payable		-			390,000
Payment of lines of credit		(16,348,941	)		(18,281,863	)
Proceeds from lines of credit		17,206,099			18,139,012
Proceeds from issuance of Series A Preferred Stock		5,452,300			-
Payments of finance lease liability		(71,172	)		(75,801	)
Payments of financing fees		(212,728	)		-
Proceeds from sale of treasury stock		-			250,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		4,477,843			6,475,402

Effect of exchange rate changes on cash		169,318			314,772

NET CHANGE IN CASH		25,898			405,480

CASH AT BEGINNING OF PERIOD		286,487			628,395
CASH AT END OF PERIOD	$	312,385		$	1,033,875

Supplemental Disclosure of Cash Flow Information

Cash paid during the period:
Interest	$	317,449		$	208,565
Income tax	$	-		$	-

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Cancellation of treasury shares	$	-		$	171,360
Discounts related to beneficial conversion features of convertible debentures	$	-		$	294,000
Conversion of convertible notes payable to common stock	$	959,025		$	350,000
Conversion of notes payable to common stock	$	973,420		$	3,878,160
Deemed dividend on warrants upon conversion of convertible debt	$	5,788,493		$	-
Deemed dividend on preferred stock and warrants upon trigger of downround feature	$	16,669,894		$	-
Deemed dividend upon cumulative dividend on preferred stock	$	372,414		$	-
Conversion of Series A preferred stock	$	2,427,693		$	-
Conversion of convertible debt	$	38,144		$	-

		Estimated Useful Life
Leasehold improvements and technical works		Lesser of lease term or 40 years
Vehicles		6 years
Machinery		20 years
Furniture, fixtures and equipment		5–10 years
Computers and software		3-5 years

	September 30, 2022						Total Carrying
	Level 1		Level 2		Level 3		Value
Marketable securities – ICC International Cannabis Corp.	$	-	$	-		-	$	-
Marketable securities – National Bank of Greece		4,934		-		-		4,934
Equity securities – Pancreta Bank		-		5,053		-		5,053
	$	4,934	$	5,053			$	9,987

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Weighted average number of common shares outstanding-Basic		25,806,871		17,136,735		22,013,556		16,103,193
Potentially dilutive common stock equivalents		-		-		-		-
Weighted average number of common and equivalent shares outstanding - Diluted		25,806,871		17,136,735		22,013,556		16,103,193

	September 30, 2022			December 31, 2021
Leasehold improvements	$	456,780		$	519,278
Vehicles		71,877			96,657
Furniture, fixtures and equipment		1,776,457			2,065,100
Computers and software		125,333			141,490
		2,430,447			2,822,525
Less: Accumulated depreciation and amortization		(980,486	)		(934,473	)
Total	$	1,449,961		$	1,888,052

	September 30, 2022			December 31, 2021
License	$	592,467		$	345,739
Trade name / mark		36,997			36,997
Customer base		176,793			176,793
		806,257			559,529
Less: Accumulated amortization		(173,546	)		(123,459	)
Subtotal		632,711			436,070
Goodwill		49,697			49,697
Total	$	682,408		$	485,767

	September 30, 2022			December 31, 2021

Beginning balance	$	464,264		$	501,675
Foreign currency translation		(62,965	)		(37,411	)
Ending balance	$	401,299		$	464,264

	September 30, 2022			December 31, 2021
National	$	2,664,679		$	3,265,236
Alpha		809,447			947,333
Pancreta		1,013,595			489,985
National – COVID		302,516			407,174
EGF		328,550			-
Subtotal		5,118,787			5,109,728
Reclassification of National-COVID – Long-term		(194,132	)		(366,171	)
Ending balance	$	4,924,655		$	4,743,557

	September 30, 2022			December 31, 2021

Beginning balance convertible notes	$	640,000		$	1,447,000
Proceeds		-			625,000
Payments		-			(907,000	)
Conversion to common stock		(15,000	)		(525,000	)
Subtotal notes		625,000			640,000
Debt discount at year end		-			(258,938	)
Convertible note payable, net of discount	$	625,000		$	381,062

	Amount
Balance on January 1, 2022	$	45,665
Issuances to debt discount		-
Reduction of derivative related to conversions		(11,629	)
Change in fair value of derivative liabilities		6,627
Balance on September 30, 2022	$	40,663

	September 30,			December 31,
	2022			2021
Dividend yield		0	%		0	%
Expected volatility		157.2	%	106.8%-107.3%
Risk free interest rate		3.75	%	0.41%-0.44%
Contractual terms (in years)		0.50		0.50 – 0.52

September 30, 2022	Loan Facility			Trade Facility			Third Party			COVID Loans			Total
Beginning balance	$	1,299,784		$	6,207,010		$	10,077,977		$	234,117		$	17,818,888
Proceeds		-			-			479,723			-			479,723
Payments		(190,622	)		(147,830	)		(2,132,165	)		(4,586	)		(2,475,203	)
Conversion of debt		(1,190,000	)		-						-			(1,190,000	)
Recapitalized upon debt modification		(785	)		(51,190	)		(781,752	)		-			(833,727	)
Accretion of debt and debt discount		0			-			(12,223	)		-			(12,223	)
Foreign currency translation		110,335			(299,325	)		(146,201	)		(34,299	)		(369,490	)
Subtotal		28,712			5,708,665			7,485,359			195,232			13,417,968
Notes payable - long-term		-			-			(855,345	)		(170,704	)		(1,026,049	)
Notes payable - short-term	$	28,712		$	5,708,665		$	6,630,014		$	24,528		$	12,391,919

Our outstanding debt as of September 30, 2022 is repayable as follows:
	September 30, 2022
2022	$	2,065,142
2023		11,244,009
2024		316,759
2025		320,620
2026 and thereafter		317,388
Total debt		14,263,918
Less: fair value adjustments to assumed debt obligations		(845,950	)
Less: notes payable - current portion		(12,391,919	)
Notes payable - long term portion	$	1,026,049

	·	Issue on August 4, 2021, 321,300 shares of common stock to settle $1,606,500 (€1,350,000) of debt. The Company recorded a gain on settlement of $292,383 upon the issuance of the 321,300 shares

	·	Agreed to issue no more than 238,000 shares of common stock upon approval of the listing of the Company’s common stock on Nasdaq to settle $1,190,000 (€1,000,000) of debt. The Company issued these shares on February 28, 2022. Upon issuance of the 238,000 shares of common stock, the Company recorded a gain on extinguishment of debt in the amount of $216,580 determined using the fair value of the Company’s common stock at the commitment date of $4.09 per share.

Maturity of Lease Liability:
Remainder of 2022	$	48,395
2023		193,582
2024		193,582
2025		127,009
2026		93,721
Thereafter		257,538
Total undiscounted operating lease payments	$	913,827
Less: Imputed interest		(153,649	)
Present value of operating lease liabilities		760,178

Maturity of Lease Liability
Remainder of 2022	$	25,931
2023		95,787
2024		81,047
2025		54,516
2026		29,844
Thereafter		9,359
Total undiscounted finance lease payments	$	296,484
Less: Imputed interest		(31,040	)
Present value of finance lease liabilities	$	265,444

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
Options	Shares			Price		Term		Value
Balance outstanding, January 1, 2022		37,000		$	1.32		0.01	$	75,850
Granted		-			-		-		-
Forfeited		-			-		-		-
Exercised		-			-		-		-
Expired		(37,000	)		-		-		-
Balance outstanding, September 30, 2022		-		$	-		-	$	-

Exercisable, September 30, 2022		-		$	-		-	$	-

	September 30,			September 30,
Country	2022			2021
Germany		-			(102	)
Greece		11,990,599			13,555,718
Italy		-			(118	)
Denmark		-			(488	)
Cyprus		-			13,982
UK		26,209			23,318
Croatia		(710	)		3,107
Total	$	12,016,098		$	13,595,418

	o	Drug shortages due to ban of exports
	o	Problems/restrictions in supply chain
	o	Logistics delays
	o	Restrictions on employees’ ability to work
	o	Liquidity issues (AR/AP) – payment delays and new government regulations for freezing payment terms
	o	National or EU long lasting recession

	Management has identified opportunities as listed below, that could balance, at least in part, the adverse effects of COVID-19. However, there can be no assurance that this will occur prior to a vaccine and treatment becoming effective.

	Opportunities

Exhibit No.		Document Description

31.1*		Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

*	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

**	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

	Cosmos Holdings Inc.

Date: November 14, 2022	By:	/s/ Grigorios Siokas
		Grigorios Siokas
		Chief Executive Officer
		(Principal Executive Officer)

Date: November 14, 2022	By:	/s/ Georgios Terzis
		Georgios Terzis
		Chief Financial Officer
		(Principal Financial Officer, And Principal Accounting Officer)

1.	I have reviewed this report on Form 10-Q of Cosmos Holdings Inc. for the quarter ended September 30, 2022;

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

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

4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.