SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number: 000-21898
INTERACTIVE GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 46-0408024
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(state or other jurisdiction of (IRS Employer
incorporation or organization) ID No)
204 N. Main, Humboldt, SD 57035
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(Address of principal executive offices)
(605) 363-5117
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Issuer's telephone number
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 5,276,039 shares atMay 10, 2003
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Transitional Small Business Disclosure Format (Check one): Yes No X
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1
INTERACTIVE GROUP, INC.
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Page(s)
-------
Balance Sheets - March 31, 2003 and September 30, 2002 3
Statements of Operations - Six and Three Months Ended
March 31, 2003 and 2002 4
Statement of Stockholders' Deficit - Six Months Ended
March 31, 2003 5
Statements of Cash Flows - Six Months Ended March 31, 2003 and 2002 6
Notes to Financial Statements 7-9
Item 2. Management's Discussion and Analysis or Plan of Operation 10-11
Item 3. Controls and Procedures 11-12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
2
INTERACTIVE GROUP, INC.
BALANCE SHEETS
ASSETS 3/31/2003 9/30/2002
Unaudited
------------ ------------
Current Assets
Cash $ 410 $ 18,491
Inventories 13,411 13,005
Prepaid expenses and other assets 1,428 627
------------ ------------
Total current assets 15,249 32,123
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Property and Equipment, at cost
Land, building and improvements 100,516 100,516
Equipment 12,694 12,694
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113,210 113,210
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Less accumulated depreciation 85,177 81,772
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28,033 31,438
------------ ------------
Total assets $ 43,282 $ 63,561
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes payable, related parties $ 600,000 $ 600,000
Current maturities of long-term debt 3,000 6,000
Accounts payable 20,478 14,312
Accounts payable, related parties 278,390 244,217
Accrued expenses 24,028 23,599
Accrued expenses, related parties 790,428 698,614
------------ ------------
Total current liabilities 1,716,324 1,586,742
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Long-term Debt, less current maturities 27,500 27,500
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Stockholders' Deficit
Series A preferred stock, $.001 par value; authorized 2,000,000 shares;
issued and outstanding 2,000,000 shares; liquidation preference
at March 31, 2003 of $300,000 2,000 2,000
Common stock, $.001 par value; authorized 50,000,000 shares;
issued and outstanding 5,276,039 shares 5,276 5,276
Additional paid-in capital 8,054,967 8,054,967
Accumulated deficit (9,762,785) (9,612,924)
------------ ------------
Total stockholders' deficit (1,700,542) (1,550,681)
------------ ------------
Total liabilities and stockholders' deficit $ 43,282 $ 63,561
============ ============
See Notes to Financial Statements.
3
INTERACTIVE GROUP, INC.
STATEMENTS OF OPERATIONS
Six and three Months Ended March 31, 2003 and 2002
(Unaudited)
Six months ended March 31, Three months ended March 31,
2003 2002 2003 2002
-------------- ---------------- ----------------- ---------------
Net sales $ 2,444 $ 1,907 $ 875 $ 555
Cost of goods sold 72 75 21 15
-------------- ---------------- ----------------- ---------------
Gross profit 2,372 1,832 854 540
-------------- ---------------- ----------------- ---------------
Operating expenses
Selling 12,343 10,770 3,761 7,357
General and administrative 51,762 39,234 26,562 15,610
-------------- ---------------- ----------------- ---------------
64,105 50,004 30,323 22,967
-------------- ---------------- ----------------- ---------------
Operating (loss) (61,733) (48,172) (29,469) (22,427)
-------------- ---------------- ----------------- ---------------
Nonoperating income (expense):
Write off of accounts payable
and debt, net - 48,856 - 48,856
Interest expense (88,853) (74,991) (76,019) (36,972)
Other income, net 725 904 725 390
-------------- ---------------- ----------------- ---------------
(88,128) (25,231) (75,294) 12,274
-------------- ---------------- ----------------- ---------------
(Loss) before income taxes (149,861) (73,403) (104,763) (10,153)
Income tax expense 0 0 0 0
-------------- ---------------- ----------------- ---------------
Net (loss) $ (149,861) $ (73,403) $ (104,763) $ (10,153)
============== ================ ================= ===============
Loss per common share $ (0.03) $ (0.01) $ (0.02) $ 0.00
============== ================ ================= ===============
See Notes to Financial Statements.
4
INTERACTIVE GROUP, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
Six months ended March 31, 2003
(Unaudited)
Series A
Preferred Common Additional Paid- Accumulated Total
Stock Stock in Capital Deficit Total
---------- ------- ----------------- ------------- ------------
Balance, September 30, 2002 $ 2,000 $ 5,276 $ 8,054,967 $ (9,612,924) $(1,550,681)
Net loss - - - (149,861) (149,861)
---------- ------- ----------------- ------------- ------------
Balance, March 31, 2003 $ 2,000 $ 5,276 $ 8,054,967 $ (9,762,785) $(1,700,542)
========== ======= ================= ============= ============
See Notes to Financial Statements.
5
INTERACTIVE GROUP, INC.
STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 2003 and 2002
(Unaudited)
2003 2002
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CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(149,861) $(73,403)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation 3,405 102
Write off of accounts paayble and debt, net - (48,856)
Change in assets and liabilities:
Decrease in accounts receivable - 568
(Increase) decrease in inventories (406) 75
(Increase) in prepaid expenses and other assets (801) (230)
Increase in accounts payable 4,625 556
Increase in accrued expenses 89,284 78,447
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Net cash (used in) operating activities (53,754) (42,741)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - (1,675)
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Net cash (used in) investing activities - (1,675)
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CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related party 38,673 49,526
Principal payments on long-term debt (3,000) (2,500)
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Net cash provided by financing activities 35,673 47,026
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Net increase (decrease) in cash (18,081) 2,610
CASH
Beginning 18,491 271
---------- ---------
Ending $ 410 $ 2,881
========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ - $ -
Income tax - -
See Notes to Financial Statements.
6
INTERACTIVE GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
The financial information presented has been prepared from the books and records
without audit, but in the opinion of management, includes all adjustments
consisting of only normal recurring adjustments, necessary for a fair
presentation of the financial information for the periods presented. The
results of operations for the six months ended March 31, 2003, are not
necessarily indicative of the results expected for the entire year.
NOTE 2. STOCK OPTIONS
The Company has stock-based compensation plans which are described below. The
Company applies APB Opinion No. 25 and related interpretations in accounting for
its options to employees and outside directors. The Company grants options at
market price on the date of grant, and accordingly, no compensation cost has
been recognized for such grants. Options issued to other than employees and
outside directors are accounted for under the provisions of Financial Accounting
Standards Board Statement No. 123.
A total of 100,000 options were provided for under the 1993 plan to be granted
to employees and other individuals that provide services to the Company.
Options granted are at the discretion of the Board of Directors, have a maximum
term of 10 years, and vest with the holder over three years of continuous
service with the Company. The plan expired March 2003.
A total of 3,000,000 options were provided for under the 2000 plan to be granted
to employees and other individuals that provide services to the Company.
Options granted are at the discretion of the Board of Directors, have a maximum
term of 10 years, or 5 years if the option holder has more than a 10% interest
of the combined voting power of all classes of outstanding stock of the Company.
No options are outstanding under this plan as of March 31, 2003. The plan
expires February 2011.
In connection with the creation of the Carlsbad Security Products Division
(CSPD) during 2002, the Board of Directors authorized the issuance of 3,800,000
nonqualified options to three independent sales consultants. These options were
issued outside of the 1993 and 2000 plans and have an exercise price of $.05
per share. These options are only exercisable (vest) upon the achievement of
minimum revenue and gross margin performance criteria of the Company as defined
in the respective stock option agreement with each independent sales consultant.
During the six months ended March 31, 2003, 600,000 options expired as minimum
revenue and gross margin performance criteria were not met.
For pro forma presentation purposes, had compensation cost for the Company's
stock-based compensation plans been determined based on the grant date fair
values of awards (the method described in Financial Accounting Standards Board
Statement No. 123), the reported net loss and loss per share amounts would have
been the same as the reported net loss and loss per share amounts for the three
and six months ended March 31, 2003 and 2002, as the fair value of each grant is
7
estimated at the grant date using the Black-Scholes option-pricing model with an
assumption that all outstanding options will be 100% forfeited.
NOTE 3. INCOME TAXES
Deferred taxes are provided on an asset and liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
At March 31, 2003, the Company has for tax reporting purposes approximately
$15,000 in unused research and development credits and a net operating loss
carryforward of approximately $8,134,000 available to be offset against future
federal taxable income or income tax liabilities. These carryforwards expire in
varying amounts in years ending September 30, 2005 through 2023. The Company
has recorded a full valuation allowance on the deferred tax assets due to lack
of assurance that the tax benefits can be realized. Realization of deferred tax
assets is dependent upon sufficient future taxable income during the period that
deductible temporary differences and carryforwards are expected to be available
to reduce taxable income.
NOTE 4. LOSS PER COMMON AND COMMON EQUIVALENT SHARE
The loss per common and common equivalent share has been computed using the
weighted average of the number of shares outstanding for the six and three
months ended March 31, 2003 and 2002. Securities that could potentially dilute
basic earnings per share in the future that were not included in the computation
of diluted earnings per share for the six and three month periods ended March
31, 2003, because to do so would have been antidilutive are as follows:
20,000,000 shares of common stock issuable upon the conversion of Series A
preferred stock, 37,500 shares of common stock issuable upon the exercise of
options, and 1,000,000 shares of common stock issuable upon the exercise of
stock warrants. In addition, the 2,800,000 remaining stock options contingently
issuable under the agreements with three independent sales consultants and any
shares which may be issuable upon conversion of the Bluestem Capital Partners
III Limited Partnership note payable, are not included in diluted earnings per
share. Securities that could potentially dilute basic earnings per share in the
future that were not included in the computation of diluted earnings per share
for the six and three month periods ended March 31, 2002, because to do so would
have been antidilutive are as follows: 20,000,000 shares of common stock
issuable upon the conversion of Series A preferred stock, 44,834 shares of
common stock issuable upon the exercise of options, and 1,000,000 shares of
common stock issuable upon the exercise of stock warrants. All references to
(loss) per share in the financial statements are to basic (loss) per share.
Diluted (loss) per share is the same as basic (loss) per share for all per share
amounts presented. The weighted number of common and common equivalent shares
outstanding for the six and three months ended March 31, 2003 and 2002 were
5,276,039.
NOTE 5. NOTES PAYABLE
At March 31, 2003 and September 30, 2002, the Company had a $500,000 note
payable to Old TPR, Inc. (TPR), a related party, that is due on demand. The
note was originally to a bank and was assumed by TPR in a prior year on behalf
8
of the Company as a result of its guarantee of the loan. The note to TPR bears
interest at the rate of 13.6% and is secured by substantially all the assets of
the Company. In connection with the assumption of the loan, TPR received
1,000,000 restricted common stock warrants that each represent the right to
purchase one share of common stock at $.50. The warrants expire one year
following satisfaction of the note.
During fiscal 2002, the Company entered into an agreement with Bluestem Capital
Partners III Limited Partnership (Bluestem), a related party. Under the terms
of a subordinated convertible note, Bluestem loaned the Company the sum of
$100,000 with interest to accrue at the rate of 10% per year. The note was
payable April 23, 2003. The Company plans to discuss an extension of the due
date for this note with Bluestem. If the loan was converted, it would have been
converted into Company stock, at a number of shares to be agreed upon by the
parties. Repayment of the loan is expressly subordinated to payment in full of
any and all Senior Indebtedness (as defined in the convertible note) of the
Company. At March 31, 2003, interest payable in the amount of $9,558 had been
accrued for this note.
NOTE 6. MANAGEMENT'S PLANS
The Company has no significant revenue sources and the Company has sustained
operating losses for several years and its current liabilities substantially
exceeded current assets at March 31, 2003. Continued operations of the Company
are dependent upon the Company's ability to meet its debt requirements on a
continuing basis and its ability to generate profitable future operations.
Management's plans in this regard are to attempt to increase its revenues
through the CSPD, which was created in April 2002 with the assistance of TPR
for the purpose of developing, marketing and selling networked monitoring and
security systems incorporating third party security components, such as digital
video recorders and video cameras, with the Company's SoundXchange products and
proprietary software. There can be no assurance that TPR will continue to
provide assistance or any other support to the Company. As of March 31, 2003,
the Company had not yet sold any networked security products. The directors and
management of the Company are in the process of reviewing the progress of the
security products sales efforts, and the prospects for raising new capital.
Following this review, it is contemplated that additional efforts may be made to
raise new debt or equity financing, and then to attempt to sell the Company's
current or additional products and services. There can be no assurance that the
Company will be successful in raising new capital, at least on terms that are
acceptable to the Company, or in selling sufficient products and/or services to
enable the Company to attain profitability.
NOTE 7. RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued certain Statements of
Financial Accounting Standards which have required effective dates occurring
during the Company's September 30, 2003 fiscal year end. The Company's
financial statements, including the disclosures in this Form 10-QSB, are not
expected to be materially affected by those accounting pronouncements.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Revenue. Net sales were $875 and $2,444 for the three and six months ended
March 31, 2003 compared to $555 and $1,907 for the three and six month period
ended March 31, 2002. The Company's increase in sales was primarily
attributable to a slight increase in demand for it's SoundXchange product.
Gross Profit. Gross profit increased 58% to $854 for the three months
ended March 31, 2003 from $540 for the three months ended March 31, 2002. Gross
profit increased 29% to $2,372 for the six months ended March 31, 2003 from
$1,832 for the six months ended March 31, 2002. The increase in the three and
six month period ended March 31,2003 was due to a slight increase in sales of
the Company's SoundXchange product.
Selling expenses. Selling expenses decreased to $3,761 for the three
months ended March 31, 2003 from $7,357 for the three months ended March 31,
2002. Selling expenses increased to $12,343 for the six months ended March 31,
2003 from $10,770 for the six months ended March 31, 2002. The decrease in the
three month period was due to less emphasis in the second quarter on the
Company's efforts to begin selling digital security products. See also
"Liquidity and Capital Resources" section below.
General and administrative. General and administrative expenses were
$26,562 and $51,762 for the three and six months ended March 31, 2003 and
$15,610 and $39,234 for the three and six months ended March 31, 2002. The
increase from the previous periods is primarily due to increased costs in
support of the Company's efforts to enter new markets and expenses related to
its annual audit.
Depreciation. Depreciation expense for the three months ended March 31,
2003 and 2002 was $1,702 and $65, respectively. Depreciation expense for the
six months ended March 31, 2003 and 2002 was $3,405 and$102, respectively. The
increase in depreciation expense was mainly due to reclassifying land, building,
and improvements from being held for sale to being held and used during the
quarter ending September 30, 2002 and adjusting the carrying amount of the
related assets to their carrying amount before being classified as held for
sale, adjusted for any depreciation expense that would have been recognized had
the assets been continuously classified as held and used.
Nonoperating income (expense). Nonoperating income (expense) for the three
months ended March 31, 2003 and March 31, 2002 was ($75,294) and $12,274,
respectively. Nonoperating (expense) for the six months ended March 31, 2003
and 2002 was ($88,128) and ($25,231), respectively. The increase in
nonoperating expense for the three month and six month period ending March 31,
2003 was primarily due to an increase in interest accruals on past due
liabilities.
Net Loss. Net loss for the three months ended March 31, 2003 was
($104,763) or ($0.02) per share compared to a net loss for the three months
ended March 31, 2002 of ($10,153) or ($0.00) per share. Net loss for the six
months ended March 31, 2003 was ($149,861) or ($0.03) per share compared to a
net loss for the six months ended March 31, 2002 of ($73,403) or ($0.01) per
share. The increase in losses was due largely to the write off of accounts
payable and debt, which was included in nonoperating income during fiscal year
2002.
10
LIQUIDITY AND CAPITAL RESOURCES
The Company has no significant revenue sources and the Company has
sustained operating losses for several years and its current liabilities
substantially exceeded current assets at March 31, 2003. Continued operations
of the Company are dependent upon the Company's ability to meet its debt
requirements on a continuing basis and its ability to generate profitable future
operations. Management's plans in this regard are to attempt to increase its
revenues through the CSPD, which was created in April 2002 with the assistance
of TPR for the purpose of developing, marketing and selling networked monitoring
and security systems incorporating third party security components, such as
digital video recorders and video cameras, with the Company's SoundXchange
products and proprietary software. As of March 31, 2003 the Company had not yet
sold any networked security products. There can be no assurance that TPR will
continue to provide assistance or any other support to the Company. The
directors and management of the Company are in the process of reviewing the
progress of the security products sales efforts, and the prospects for raising
new capital. Following this review, it is contemplated that additional efforts
may be made to raise new debt or equity financing and then to attempt to sell
the Company's current or additional security products and services. There can
be no assurance that the Company will be successful in raising new capital, at
least on terms that are acceptable to the Company, or in selling sufficient
products and/or services to enable the Company to attain profitability.
During fiscal 2002, the Company entered into an agreement with Bluestem.
Under the terms of a subordinated convertible note, Bluestem loaned the Company
the sum of $100,000 with interest to accrue at the rate of 10% per year. The
note was payable April 23, 2003. The Company plans to discuss an extension of
the due date for this note with Bluestem. If the loan was converted, it would
have been converted into Company stock, at a number of shares to be agreed upon
by the parties. Repayment of the loan is expressly subordinated to payment in
full of any and all Senior Indebtedness (as defined in the convertible note) of
the Company. At March 31, 2003, interest payable in the amount of $9,558 had
been accrued for this note.
The Company has approximately $9,000 in past due accounts payable with
judgments against these amounts. The Company does not intend to pay any
unsecured debts until its obligations to its secured creditors are satisfied.
The Company follows the practice of writing off accounts payable, debt and
related accrued interest when extinguished under the statute of limitations.
Management believes that the largest challenges that the Company will
confront are in achieving increases in revenues and profitability in the future
and obtaining financing to fund operations. While the Company is optimistic
about the possibility of overcoming these challenges and achieving its goals,
there can be no assurance that it will be able to achieve any or all of its
objectives.
ITEM 3. CONTROLS AND PROCEDURES
During the 90-day period prior to the filing date of this report,
management, including the Company's President and Accounting Manager evaluated
the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based upon, and as of the date of that evaluation, the
President and Accounting Manager concluded that the disclosure controls and
procedures were effective in all material respects, to ensure that information
required to be disclosed in the reports the Company files and submits under the
Exchange Act is recorded, processed, summarized and reported as and when
required.
11
There have been no significant changes in the Company's internal controls
or in other factors which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation. There were no
significant deficiencies or material weaknesses identified in the evaluation
other than one person has the primary responsibility for performing the
accounting and financial duties. However, as a compensating control to this
concentration of duties, all banking and other monetary transactions are
reviewed and approved by the President or the Vice President of the Company.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibit 99.1 Principal officers certification
b. No reports on Form 8-K have been filed during the quarter for which
this report is filed
12
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: May 14, 2003 INTERACTIVE GROUP, INC.
/s/ Robert Stahl
----------------
Robert Stahl
President and Secretary
/s/ Carol Flickinger
--------------------
Carol Flickinger
Accounting Manager
13
SECTION 302 CERTIFICATION
CERTIFICATION
Of the President
I, Robert J. Stahl, President of InterActive Group, Inc. (the "Company"),
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the Company
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 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 officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer 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:May 14,2003 /s/ Robert J. Stahl
------------ --------------------
Robert J. Stahl
President, Secretary
14
SECTION 302 CERTIFICATION
CERTIFICATION
of the Accounting Manager
I, Carol Flickinger of InterActive Group, Inc. (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the Company;
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
by the 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 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 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 functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in the
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: May 14,2003 /s/ Carol Flickinger
----------- ---------------------
Carol Flickinger
Accounting Manager
15
EXHIBIT 99.1
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 on Form 10-QSB of InterActive Group,
Inc. (the Company) for the quarterly period ending March 31, 2003, each of the
following hereby certifies, in Accordance with U.S.C. 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer
of the Company, that, to his knowledge the 10-QSB Report fully complies with
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the
information contained in such report fairly presents, in all material respects,
the financial condition and results of operation of the Company.
/s/ Robert J. Stahl
- ----------------------
Robert J. Stahl
President, Secretary
May 14, 2003
/s/ Carol Flickinger
- ----------------------
Carol Flickinger
Accounting Manager
May 14, 2003
This certification accompanies this Report Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
Section 18 of the Securities Act of 1934, as amended.