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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark one)
__X__ Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2003.
_____ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ______ to ______
Commission File Number 1-16165
AQUACELL TECHNOLOGIES, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 33-0750453
------------------------ ------------------------------------
(State of Incorporation) (IRS employer identification number)
10410 Trademark Street
Rancho Cucamonga, CA 91730
----------------------------------------
(Address of Principal Executive Offices)
(909) 987-0456
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
____________________________________
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
Securities under a plan confirmed by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $.001 par value 10,454,255 shares outstanding
as of November 12, 2003.
Transitional Small Business Disclosure Format (check one):
Yes _____ No __X__
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AQUACELL TECHNOLOGIES, INC.
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 2003
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
PAGE
Item 1 Financial Statements:
Condensed Consolidated Balance Sheet as of September 30, 2003 .. 1
Condensed Consolidated Statements of Operations for the
three-month periods ended September 30, 2003 and 2002 .......... 2
Condensed Consolidated Statements of Cash Flow for the
three-month periods ended September 30, 2003 and 2002 .......... 3
Notes to Condensed Consolidated Financial Statements ........... 4
Item 2 Management's Discussion and Analysis: .......................... 7
Forward-Looking Statements
Overview
Results of Operations
Liquidity and Capital Resources
Item 3 Controls and Procedures ........................................ 10
PART II - OTHER INFORMATION
Item 2(C) Sales of Unregistered Securities ............................... 10
Item 4 Submission of Matters to a Vote of Security Holders ............ 10
Item 6 Exhibits and reports on Form 8-K ............................... 10
Signature ................................................................. 10
Certifications ............................................................ 10
i
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2003
(Unaudited)
ASSETS
Current assets:
Cash ........................................................ $ 1,500,000
Notes receivable, including accrued interest of $62,000 ..... 85,000
Accounts receivable, net of allowance of $25,000 ............ 64,000
Inventories ................................................. 234,000
Prepaid expenses and other current assets ................... 158,000
-------------
Total current assets ................................... 2,041,000
-------------
Property and equipment, net ...................................... 31,000
-------------
Other assets:
Goodwill .................................................... 1,042,000
Patents, net ................................................ 93,000
Security deposits ........................................... 13,000
-------------
Total other assets ..................................... 1,148,000
-------------
$ 3,220,000
=============
LIABILITIES
Current liabilities:
Accounts payable ............................................ $ 509,000
Accrued expenses ............................................ 539,000
Preferred stock dividend payable ............................ 16,000
Customer deposits ........................................... 29,000
Current portion of deferred payable-derivative .............. 20,000
Current portion of long-term debt ........................... 4,000
Loans payable - related parties.............................. 55,000
-------------
Total current liabilities .............................. 1,172,000
Deferred payable-derivative, net of current portion .............. 327,000
Long-term debt, net of current portion............................ 2,000
-------------
Total liabilities ...................................... 1,501,000
-------------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock - Class A, par value $.001; 1,870,000 shares
authorized; 1,185,000 shares issued and outstanding ......... 1,000
Preferred stock, par value $.00l; 8,130,000 shares authorized;
no shares issued ............................................ -
Common stock, par value $.001; 40,000,000 shares authorized;
10,454,255 shares issued and outstanding .................... 10,000
Additional paid-in capital ....................................... 18,414,000
Accumulated deficit .............................................. (14,177,000)
-------------
4,248,000
Unamortized deferred compensation ................................ (2,529,000)
-------------
Total stockholders' equity ............................. 1,719,000
-------------
$ 3,220,000
=============
See notes to condensed consolidated financial statements
1
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
--------------------------
2003 2002
------------ ------------
Revenue:
Net sales ......................................... $ 201,000 $ 930,000
Rental income ..................................... - 2,000
------------ ------------
201,000 932,000
Cost of sales ....................................... 129,000 465,000
------------ ------------
Gross profit ........................................ 72,000 467,000
------------ ------------
Selling, general and administrative expenses:
Salaries and wages ................................ 299,000 310,000
Legal, accounting and other professional expenses.. 65,000 74,000
Stock based compensation .......................... 375,000 45,000
Fair value adjustment of derivative ............... 207,000 -
Other ............................................. 255,000 277,000
------------ ------------
1,201,000 706,000
------------ ------------
Loss from operations before other income (expense)... (1,129,000) (239,000)
------------ ------------
Other income (expense):
Interest income ................................... 1,000 18,000
Interest (expense) ................................ - (4,000)
------------ ------------
1,000 14,000
------------ ------------
Net loss for the period ............................. $(1,128,000) $ (225,000)
============ ============
Weighted average shares outstanding-
basic and diluted ................................. 9,349,000 8,601,000
============ ============
Loss attributable to common stockholders:
Net loss .......................................... $(1,128,000) $ (225,000)
Preferred stock dividends ......................... 16,000 -
------------ ------------
Loss attributable to common stockholders .......... $(1,144,000) $ (225,000)
============ ============
Net loss per common share ......................... $ (0.12) $ (0.03)
============ ============
See notes to condensed consolidated financial statements.
2
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30,
--------------------------
2003 2002
------------ ------------
Cash flows from operating activities:
Net loss ........................................ $(1,128,000) $ (225,000)
Adjustment to reconcile net loss to net cash
used in operating activities:
Stock based compensation ...................... 375,000 45,000
Fair value adjustment of derivative ........... 207,000 -
Depreciation and amortization ................. 13,000 15,000
Changes in:
Accounts receivable ........................... 10,000 (543,000)
Accrued interest receivable ................... 7,000 (18,000)
Prepaid expenses and other current assets ..... (35,000) 40,000
Inventories ................................... (150,000) (5,000)
Security deposits ............................. - 3,000
Accounts payable .............................. (226,000) 65,000
Accrued expenses .............................. 37,000 217,000
Customer deposits ............................. 6,000 1,000
------------ ------------
Net cash used in operating activities ... (884,000) (405,000)
------------ ------------
Cash flows from investing activities:
Collections on notes receivable ............... 68,000 -
Note issued for purchase of property and
equipment, net of payments .................. (1,000) 9,000
Purchase of property and equipment ............ (1,000) (11,000)
------------ ------------
Net cash provided by (used in)
investing activities .................. 66,000 (2,000)
------------ ------------
Cash flows from financing activities:
Proceeds from private placements of
common stock ................................ 2,555,000 -
Expense of offerings .......................... (259,000) -
Preferred stock dividend paid ................. (12,000) -
Exercise of stock options ..................... 27,000 -
Proceeds of loans from finance company ........ - 376,000
Proceeds (repayments) of loans from
related parties ............................. (25,000) 6,000
------------ ------------
Net cash provided by
financing activities .................. 2,286,000 382,000
------------ ------------
Increase (decrease) in cash ..................... 1,468,000 (25,000)
Cash, beginning of period ....................... 32,000 51,000
------------ ------------
Cash, end of period ............................. $ 1,500,000 $ 26,000
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest ....................... $ - $ -
Supplemental schedule of non-cash investing and
financing activities:
Issuance of common stock warrants for
services to the company ..................... $ 2,564,000 $ 43,000
Principal payments on notes receivable
by conversion of accrued officers salaries .. $ - $ 153,000
Dividends payable on preferred stock .......... $ 16,000 $ -
See notes to condensed consolidated financial statements
3
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003 (Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of AquaCell Technologies, Inc. and its wholly owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with U.S. generally accepted accounting principles
for interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by U.S. generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. The results of operations for the three months ended September 30,
2003 are not necessarily indicative of the results to be expected for the full
year. For further information, refer to the Company's annual report filed on
Form 10-KSB for the year ended June 30, 2003.
NOTE B - NOTES RECEIVABLE
At September 30, 2003, the notes receivable consisted of the balances of
notes aggregating $200,000 due from non-director/non-employee stockholders and
entities owned by them bearing an annual interest rate of 8%.
The first note, with a balance of $23,000, is unsecured and matured October
2002. The note that matured in October 2002 was extended for one year. In July
2003 the Company received a $68,000 principal payment plus accrued interest on
this note and extended the remaining balance to June 30, 2004.
The remaining notes, aggregating $177,000, were in the original principal
amount of $1,750,000, maturing August 16, 2001 and were extended to September
16, 2001. At September 16, 2001 the notes were restructured into twelve-month
installment notes collateralized by marketable securities with the first
installment due October 16, 2001. The Company recorded an adjustment to reflect
a reduction in the estimated fair value of these notes of $365,000 at June 30,
2001. Officers/stockholders of AquaCell have personally guaranteed up to
$1,750,000 of the notes and have offered as collateral designated assets.
Installment payments of $438,000 were received by the Company and the officers/
stockholders have paid $1,135,000 of the remaining principal balance of
$1,312,000 and $32,000 in interest through September 30, 2003. These payments
were made through contribution of salaries in the amount of $916,000 and
surrender of 82,422 shares of the Company's common stock, valued at $251,000
through June 30, 2003. Such shares were recorded as treasury stock and retired
by the Company at December 31, 2002. In January 2003 the collateral underlying
the guarantees was released.
At September 30, 2003, the balance of the reserve against these notes
amounted to $177,000
Interest receivable at September 30, 2003 amounted to $62,000.
4
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003 (Unaudited)
NOTE C - INVENTORIES
Inventories consist of the following at September 30, 2003:
Raw materials .................... $ 155,000
Work in progress ................. 79,000
-----------
$ 234,000
===========
NOTE D - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows at September 30, 2003:
Furniture and fixtures ........... $ 35,000
Equipment - office ............... 96,000
Machinery and equipment .......... 122,000
Rental units ..................... 9,000
Leasehold improvements ........... 10,000
Truck ............................ 11,000
-----------
283,000
Less accumulated depreciation .... 252,000
-----------
$ 31,000
===========
NOTE E - LOANS PAYABLE - RELATED PARTIES
At September 30, 2003 the loans payable to related parties consist of
unsecured demand interest free loans of $55,000.
NOTE F - LONG TERM DEBT
At September 30, 2003 long-term debt consists of an installment note,
secured by a truck, payable in monthly payments of $342 through February 2005.
Maturities on the note are as follows:
Year ending:
September 30, 2004 .... $ 4,000
September 30, 2005 .... 2,000
-----------
$ 6,000
===========
5
AQUACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003 (Unaudited)
NOTE G - EQUITY TRANSACTIONS
During July through September 2003 the Company completed a private
placement of 1,703,000 shares of its common stock. The offering consists of one
share of common stock at a price of $1.50 per share and one common stock
purchase warrant exercisable at $4.00 per share. The warrant contains a call
feature. The Company received proceeds of $2,296,000 net of expenses of
$259,000. In connection with the offering the placement agent received 341,000
common stock purchase warrants exercisable at $4.00 per share.
During August 2003 the Company entered into marketing and consulting
agreements with five separate entities. Consideration for these agreements
included cash fees of $45,000 and 1,250,000 warrants to purchase shares of
common stock of the Company at a price of $.01 per share. These warrants were
valued at $2,564,000 utilizing the Black-Scholes valuation method. Such amount
will be amortized to expense over the term of the agreements. Amortization
amounted to $336,000 for the quarter ended September 30, 2003.
NOTE H - CONCENTRATION OF CREDIT RISK
The Company's financial instruments that are exposed to concentration of
credit risk consists of cash. Such amounts are in excess of FDIC insurance
limits.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
When used in this Form 10-QSB and in future filings by the Company with the
Commission, statements identified by the words "believe", "positioned",
"estimate", "project", "target", "continue", "will", "intend", "expect",
"future", "anticipates", and similar expressions express management's present
belief, expectations or intentions regarding the Company's future performance
within the meaning of the Private Securities Litigation Reform Act of 1995.
Readers are cautioned not to place undue reliance on any such forward-looking
statements, each of which speaks only as of the date made. Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. The Company has no obligations to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the date of
such statements.
Overview
The following discussions and analysis should be read in conjunction with
the Company's condensed consolidated financial statements and the notes
presented following the condensed consolidated financial statements. The
discussion of results, causes and trends should not be constructed to imply any
conclusion that such results or trends will necessarily continue in the future.
During the quarter ended September 30, 2003 the Company raised net equity
of $2,296,000 putting AquaCell in a strong cash position. In addition, as
discussed in Liquidity and Capital Resources, the Company has the possibility of
future financing through the exercise of warrants, previously issued, which
could generate up to $13,900,000 in additional cash. There is no assurance that
any of these warrants will be exercised.
For the quarter ended September 30, 2003 revenues were $201,000
representing a decrease of $731,000 from the same quarter of the prior year.
Virtually the entire decrease, approximately $700,000, were sales in the prior
year to Corbett Water Technologies, Inc. (Corbett) the Company's former
exclusive distributor of its patented self-filling water coolers. Corbett has
not purchased any water coolers since the quarter ended September 30, 2002. The
Company went through a lengthy negotiation process to recover its marketing
rights, during which time the Company was impeded from pursuing new marketing
avenues or channels of distribution. As a direct result of the Corbett
distribution agreements and return of the exclusive marketing rights, the
Company has incurred significant non-cash losses, aggregating $1,847,000 through
September 30, 2003, since the inception of these agreements in October of 2001.
The quarter ended September 2003 represented the first period during which
the Company has had the ability to restructure its marketing plan and form new
sales and marketing alliances. As a part of this restructuring, we have engaged
several new marketing partners, including internationally renowned security
experts Beau Dietl & Associates, providing access to major corporations for the
marketing and sales of our products that we expect to come to fruition over the
next six months and provide significant revenues for the Company.
7
The Company is embarking on additional opportunities which we believe will
provide long-term benefits to the Company.
The Company does not anticipate incurring significant marketing costs as it
intends to utilize channels of distribution where the selling groups will be
responsible for payment of their own sales and marketing expenses.
Results of Operations
During the three months ended September 30, 2003 on a consolidated basis,
revenues were $201,000 as compared to $932,000 for the similar period of the
preceding year resulting from the negotiation for the return of the exclusive
distribution right discussed in the overview section.
On a consolidated basis gross margin decreased to 36% for the quarter ended
September 30, 2003 as compared to 50% for the same quarter of the prior year.
The decrease is attributable to increased labor and related costs and a decrease
in revenues.
Net loss on a consolidated basis, attributable to common stockholders, for
the three months ended September 30, 2003 was $1,128,000 or $0.12 per share, as
compared to $225,000 or $.03 per share for the same period of the prior year.
The increase in the loss is primarily attributable to the decrease in revenues,
as well as an increase in stock based compensation in the amount of $330,000 and
fair value adjustment of derivative in the amount of $207,000.
Salaries and wages decreased by $11,000 for the quarter ended September 30,
2003 over the prior year. Legal, accounting and other professional expensed
decreased by approximately $9,000 for the quarter ended September 30, 2003.
Stock based compensation increased by $330,000 to $375,000 for the quarter ended
September 30, 2003 resulting from amortization of Black Scholes charges on
common stock purchase warrants issued in connection with marketing and
consulting agreements initiated during the quarter ended September 30, 2003.
Other selling, general and administrative expenses, consisting primarily of
rent- $39,000, telephone and utilities- $18,000, travel- $15,000, business
promotion- $30,000, insurance- $24,000, and vehicle expenses-$25,000 decreased
by approximately $22,000 to $255,000 for the quarter ended September 30, 2003.
During the quarter ended September 30, 2003, the Company recorded a fair
value adjustment of a derivative, in connection with a put option relating to
the return and cancellation of all exclusive distribution and marketing rights
from Corbett Water Technologies, Inc. in the amount of $207,000.
8
Liquidity and Capital Resources
During the three months ended September 30, 2003 we raised, through the
completion of a private placement of our common shares, net equity of
approximately $2,296,000.
Cash used by operations during the three months ended September 30, 2003
amounted to $884,000. Net loss of $1,128,000 was reduced by non-cash stock
based compensation in the amount of $375,000, fair value adjustment of
derivatives in the amount of $207,000 and depreciation and amortization of
$13,000. Cash used by operations was further increased by increases in
inventories, in anticipation of business growth, in the amount of $150,000 and
prepaid expenses in the amount of $35,000, and a decrease in accounts payable
in the amount of $226,000. Net loss was further decreased by net changes in
accrued interest receivable, accrued expenses, customer deposits and accounts
receivable amounting to $63,000.
Cash provided by investing activities during the three months ended
September 30, 2003 represented collections on a note receivable in the amount of
$68,000 decreased by expenditures for property and equipment in the amount of
$1,000 decreased by notes issued for the purchase of equipment in the amount of
$1,000.
Cash provided by financing activities was approximately $2,286,000.
Proceeds from sales of common stock in a private placement amounted to
$2,296,000 net of expenses of $259,000. Proceeds from exercise of stock options
amounted to $27,000. The Company paid a dividend of $12,000 on its Series A
convertible preferred stock and the repayment of a loan to a related party
amounted to $25,000.
We have granted warrants, subsequent to our initial public offering in
connection with private placements, consulting, marketing and financing
agreements that may generate additional capital of up to approximately
$13,900,000 if exercised. The private placement warrants are exercisable at
prices ranging from $1.16 to $4.00 and the warrants granted in connection with
consulting, marketing and financing agreements are exercisable at prices ranging
from $0.01 to $5.50. There is no assurance however, that any of the warrants
will be exercised.
In connection with the written put option regarding the return and
cancellation of all exclusive distribution and marketing rights, reflected as a
derivative in the accompanying financial statements, the Company has adjusted
its liability to $347,000 at September 30, 2003. Such amount represents the fair
value of liability in the event that the counterparty does not realize
$1,339,000 from the sale of its shares owned in the Company. The net remaining
obligation, if any, will be paid from 5% of future revenues to be generated by
the Company's Global Water-Aquacell, Inc. subsidiary.
Management believes that its present cash balance and cash flows expected
to be generated from future operations will be sufficient to meet presently
anticipated needs for working capital and capital expenditures through at least
the next 12 months; however, there can be no assurance in that regard. The
Company presently has no material commitments for future capital expenditures.
9
ITEM 3. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this Report the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company's chief executive officer and chief financial
officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Rule 13a-14 adopted under the
Securities Exchange Act of 1934. Based upon that evaluation, the chief executive
officer and chief financial officer concluded that the Company's disclosure
controls and procedures are effective. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation.
PART II. OTHER INFORMATION
ITEM 2(C). SALES OF UNREGISTERED SECURITIES
As reported in the subsequent event footnote to the Company's Form 10-KSB
for the year ended June 30, 2003, during July through September 2003 the
Registrant sold 1,703,031 shares of Common Stock at $1.50 per share together
with 1,703,031 Common Stock Purchase Warrants to 15 accredited investors
pursuant to the exemption provided by Regulation D, Rule 505, and section 4 (2)
of the Securities Act of 1933, as amended. Each warrant is convertible into one
common share at an exercise price of $4.00. The total amount of the offering
sold was $2,554,546 and the placement agent received a commission of $255,455
and 340,607 Common Stock Purchase Warrants exercisable at $4.00 per share.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K: None.
SIGNATURE
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.
AquaCell Technologies, Inc.
-----------------------------------------
Registrant
Date: November 13, 2003 /s/ Gary S. Wolff
-----------------------------------------
Gary S. Wolff
Chief Financial Officer
10
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AquaCell Technologies, Inc. (the
"Company") on Form 10-QSB for the first fiscal quarter ended September 30, 2003
as filed with the Securities and Exchange Commission (the "Report"), each of the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
1. the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
Dated: November 13, 2003 /s/ James C. Witham
-----------------------------------------
Name: James C. Witham
Title: Chief Executive Officer
Dated: November 13,2003 /s/ Gary S. Wolff
-----------------------------------------
Name: Gary S. Wolff
Title: Chief Financial Officer
11
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, James C. Witham, Chief Executive Officer of AquaCell Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of AquaCell
Technologies, 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 officer 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 we 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 of 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 of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):
(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 officer 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.
Dated: November 13, 2003 /s/ James C. Witham
-----------------------------------------
Name: James C. Witham
Title: Chief Executive Officer
12
CERTIFICATION PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Gary S. Wolff, Chief Financial Officer of AquaCell Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of AquaCell
Technologies, 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 officer 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 we 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 of 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 of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):
(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 officer 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.
Dated: November 13, 2003 /s/ Gary S. Wolff
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Name: Gary S. Wolff
Title: Chief Financial Officer
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