FORM 10-QSB MARCH 31, 2003
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
Commission file number: 0-24092
[GRAPHIC OMITTED]
POSITRON
Positron Corporation
A Texas Corporation
I.D. No. 76-0083622
1304 Langham Creek Drive, Suite 300, Houston, Texas 77084
(281) 492-7100
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No
--- ---
As of March 31, 2003, there were 62,173,303 shares of the Registrant's Common
Stock, $.01 par value outstanding.
Transitional Small Business Disclosure Format. Yes No X
--- ---
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FORM 10-QSB MARCH 31, 2003
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POSITRON CORPORATION
TABLE OF CONTENTS
Form 10-QSB for the quarter ended March 31, 2003
PART I - FINANCIAL INFORMATION PAGE
Item 1. Condensed Financial Statements
Condensed Balance Sheet as of March 31, 2003 3
Condensed Statements of Operations for the three months ended
March 31, 2003 and 2002 4
Condensed Statements of Cash Flows for the three months ended
March 31, 2003 and 2002 5
Selected Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation 9
Item 3. Controls and Procedures 10
PART II - OTHER INFORMATION 11
Signature Page 12
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POSITRON CORPORATION
CONDENSED BALANCE SHEET
MARCH 31, 2003
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
ASSETS
------
Current assets:
Cash and cash equivalents $ 17
Accounts receivable, net 1,287
Inventories 1,407
Prepaid expenses 66
Other current assets 40
---------
Total current assets 2,817
Property and equipment, net 286
---------
Total assets $ 3,103
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Note payable to stockholder $ 2,000
Accounts payable, trade and accrued liabilities 2,107
Customer deposits 285
Unearned revenue 163
Current portion of capital lease obligation 22
---------
Total current liabilities 4,577
Stockholders' equity:
Series A Preferred Stock: $1.00 par value; 8% cumulative,
convertible, redeemable; 5,450,000 shares authorized;
510,219 shares issued and outstanding at March 31, 2003
and December 31, 2002. 510
Common Stock: $0.01 par value; 100,000,000 shares
authorized; 62,233,459 shares issued and 62,173,303 shares
outstanding at March 31, 2003 and December 31, 2002. 622
Additional paid-in capital 55,093
Subscription receivable (30)
Accumulated deficit (57,654)
Treasury Stock: 60,156 shares at cost (15)
---------
Total stockholders' equity (1,474)
---------
Total liabilities and stockholders' equity $ 3,103
=========
See accompanying notes
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POSITRON CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended
------------------------
March 31, March 31,
2003 2002
----------- -----------
Revenues:
System sales $ 3,425 $ 1,150
Service and component 342 346
----------- -----------
Total revenues 3,767 1,496
Costs of sales and services:
System sales 2,861 1,098
Service, warranty and component 166 140
----------- -----------
Total costs of sales and services 3,027 1,238
----------- -----------
Gross profit 740 258
Operating expenses:
Research and development 244 265
Selling and marketing 71 96
General and administrative 361 303
----------- -----------
Total operating expenses 676 664
----------- -----------
Income (loss) from operations 64 (406)
Other income (expense):
Interest income -- 1
Interest expense (51) (106)
----------- -----------
Total other income (expense) (51) (105)
----------- -----------
Net income (loss) $ 13 $ (511)
=========== ===========
Basic income (loss) per common share $ 0.00 $ (0.01)
Diluted income (loss) per common share $ 0.00 $ (0.01)
Weighted average number of basic common
shares outstanding 62,173 62,173
Weighted average number of diluted common
shares outstanding 62,683 62,173
See accompanying notes
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POSITRON CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended
------------------------
March 31, March 31,
2003 2002
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 13 $ (511)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 22 23
Amortization of loan costs -- 50
Changes in operating assets and liabilities:
Accounts receivable (208) (363)
Inventory 1,877 481
Prepaid expenses 17 (47)
Other current assets 43 (37)
Accounts payable and accrued liabilities 280 (47)
Customer deposits (2,103) 259
Unearned revenue (15) (88)
----------- -----------
Net cash used in operating activities (74) (280)
----------- -----------
Cash flows from investing activities:
Capital expenditures (5) --
----------- -----------
Net cash used in investing activities (5) --
----------- -----------
Cash flows from financing activities:
Repayment of capital lease obligation (11) (10)
----------- -----------
Net cash used in financing activities (11) (10)
----------- -----------
Net decrease in cash and cash equivalents (90) (290)
Cash and cash equivalents, beginning of period 107 635
----------- -----------
Cash and cash equivalents, end of period $ 17 $ 345
=========== ===========
See accompanying notes
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POSITRON CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
-----------------------
The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles and the rules
of the U.S. Securities and Exchange Commission, and should be read in
conjunction with the audited financial statements and notes thereto
contained in the Annual Report Form 10-KSB for Positron Corporation (the
"Company") for the year ended December 31, 2002. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein.
The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the disclosures
contained in the audited financial statements for the most recent fiscal
year ended December 31, 2002, as reported in the Form 10-KSB, have been
omitted.
Certain prior period amounts have been reclassified to conform to current
period presentation.
2. REVENUE RECOGNITION
--------------------
Revenues from POSICAMTM system contracts are recognized when all
significant costs have been incurred and the system has been shipped to the
customer. The Company also recognizes revenue on bill and hold transactions
when the product is completed and is ready to be shipped and the risk of
loss is transferred to the customer. In certain cases, at the customers'
request, the Company is storing the product for a brief period of time.
Revenues from maintenance contracts are recognized over the term of the
contract. Service revenues are recognized upon performance of the services.
3. INVENTORIES
-----------
Inventories at March 31, 2003 consisted of the following (in thousands):
Raw materials $1,067
Work in progress 440
-------
Subtotal 1,507
Less reserve for obsolescence (100)
-------
Total $1,407
=======
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
--------------------------------------------
Accounts payable and accrued liabilities at March 31, 2003 consisted of the
following (in thousands):
Trade accounts payable $ 552
Accrued interest 328
Accrued royalties 306
Accrued property taxes 202
Accrued professional fees 180
Accrued rent 154
Accrued compensation 143
Sales taxes payable 127
Accrued warranty costs 60
Other accrued liabilities 55
------
Total $2,107
======
5. EARNINGS PER SHARE
--------------------
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Basic earnings per common share are based on the weighted average number of
common shares outstanding in each period and earnings adjusted for
preferred stock dividend requirements. Diluted earnings per common share
assume that any dilutive convertible preferred shares outstanding at the
beginning of each period were converted at those dates, with related
interest, preferred stock dividend requirements and outstanding common
shares adjusted accordingly. It also assumes that outstanding common shares
were increased by shares issuable upon exercise of those stock options and
warrants for which market price exceeds exercise price, less shares which
could have been purchased by the Company with related proceeds. The
convertible preferred stock and outstanding stock options and warrants were
not included in the computation of diluted earnings per common share for
the three month period ended March 31, 2002 since it would have resulted in
an antidilutive effect.
The following table sets forth the computation of basic and diluted
earnings per share.
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
---------- -----------
(In Thousands)
Numerator
Basic and diluted income (loss) $ 13 $ (511)
========== ===========
Denominator
Denominator for basic earnings per share-weighted average share 62,173 62,173
Effect of dilutive securities:
Convertible Series A preferred stock 510 --
---------- -----------
Denominator for diluted earnings per share adjusted weighted
average shares and assumed conversions 62,683 62,173
========== ===========
Basic income (loss) per common share $ 0.00 $ (0.01)
Diluted income (loss) per common share $ 0.00 $ (0.01)
6. LITIGATION
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PROFUTURES CAPITAL BRIDGE FUND, L.P.
On September 26, 2000, ProFutures Bridge Capital Fund, L.P. ("ProFutures")
filed a complaint against the Company in Colorado state court for
declaratory relief and breach of contract (the "Complaint"). The Complaint
alleged that the Company breached four stock purchase warrants issued to
ProFutures on the bases that the Company failed to notify ProFutures of
dilutive events and failed to register the full number of shares ProFutures
as allegedly entitled to purchase under the warrants when, on February 14,
2000, the Company registered 1,500,000 shares of stock underlying
ProFutures' warrants instead of 4,867,571. The Complaint further alleged
that the Company's issuance of shares of common stock to Imatron, Inc. on
or about January 22, 1999, (the "Imatron Transaction") was a dilutive event
pursuant to the anti-dilution clauses of the four stock purchase warrants.
The Complaint sought declarations that the consideration received by the
Company in the Imatron Transaction increased the number of shares issuable
under the warrants, the Company breached the warrants by failing to notify
ProFutures of the Imatron Transaction and its effect on ProFutures'
warrants at the time of the Imatron Transaction and that the Company
further breached the warrants by failing to register the number of shares
ProFutures alleged were purchasable under its warrants. The Complaint
sought an unspecified amount of monetary damages.
The Colorado State level case of ProFutures v. Positron, District Court,
City and County of Denver, Colorado, Case No. 00CV7146, was tried before
the Court in June 2002. The Court issued its Findings of Fact, Conclusions
of Law and Judgment on November 13, 2002. The Court agreed with Positron's
determination of the value of the consideration paid for the shares issued
to Imatron and
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FORM 10-QSB MARCH 31, 2003
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that there was no evidence of fraud by Positron. The Court agreed with
ProFutures that Positron breached the 1996 stock purchase warrant with
ProFutures by failing to give ProFutures written notice stating the
adjusted exercise price and the new number of shares deliverable as a
result of the Imatron Transaction and by failing to register the shares to
which ProFutures was entitled under the warrant as a result of the Imatron
Transaction. Nevertheless, the Court also found that ProFutures' alleged
damages were uncertain and speculative and the ProFutures was not entitled
to recover actual damages. Therefore ProFutures was awarded $1 in nominal
damages. ProFutures has appealed the trial Court's findings and Positron
has cross-appealed. Those appeals are presently pending before the Court of
Appeals, State of Colorado.
In the federal case of ProFutures v. Positron, et al., United States
District Court for the District of Colorado, Case No. 02-N-0154, the
Complaint alleged two causes of action against the Company: fraudulent
transfer and injunctive relief. The allegations arose out of a June 2001
loan agreement between Positron and Imatron. The action was dismissed in
2002 without prejudice.
CHINA XINXING
In July 2001 and February 2002, the Company received demands from China
Xinxing Shanghai Import and Export Company ("China Xinxing"), a company
located in Shanghai, China, for payment of an arbitration award in favor of
China Xinxing and against the Company, in the total amount of approximately
$297,000. The award was rendered on or about August 25, 2000 by arbitrators
affiliated with the Shanghai Sub-commission of the China International
Economic and Trade Arbitration Commission (CIETAC Case No. SM9872, Award
No. (2000) HMZZ 1154). The award represents the amount of a refund
(together with arbitration costs) of an advance payment made by China
Xinxing under a contract with the Company dated September 12, 1996. In
August 2002, China Xinxing filed suit in the United States to obtain
confirmation and enforcement of the award.
The Company entered into a Settlement Agreement and Release with China
Xinxing in November 2002. The Company was obligated to pay the $297,000
obligation in five periodic monthly installments of $50,000 beginning in
November 2002, with a sixth final payment of approximately $47,000 due in
March 2003. The Company has paid all six installments, and China Xinxing
has executed a Satisfaction of Judgment reflecting satisfaction all of the
Company's obligations under the award, the Judgment entered on the award,
and the Settlement Agreement.
10P10, L.P.
In December 2001, 10P10, L.P., the Company's previous landlord for its
premises located at 16350 Park Ten Place, Suite 150, Houston, Texas, filed
a complaint (Cause No. 2001-65534 in the 165th Judicial District Court of
Harris County, Texas) against the Company alleging breach of lease
agreement. The Company disputes the amount of lease commissions and
construction costs charged by 10P10, L.P. in conjunction with the
subleasing of the premises. 10P10, L.P. has asserted a claim in excess of
$150,000. Although the Company disputes the amount of the claim, due to the
pending lawsuit, Company management took a conservative position and has
this sum recorded as an accrued liability as of March 31, 2003. The case is
set for trial on a two week docket beginning June 9, 2003.
7. SUPPLEMENTAL CASH FLOW DATA
------------------------------
Three Months Ended
----------------------
March 31, March 31,
2003 2002
---------- ----------
Supplemental disclosure of cash flow information (In thousands):
Cash paid for interest $ 1 $ 6
Cash paid for income taxes $ -- $ --
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FORM 10-QSB MARCH 31, 2003
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
We are including the following cautionary statement in this Quarterly Report on
Form 10-QSB to make applicable and utilize the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 regarding any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements, which are
other than statements of historical facts. Certain statements contained herein
are forward-looking statements and, accordingly, involve risks and
uncertainties, which could cause actual results or outcomes to differ materially
from those expressed in the forward-looking statements.
Our expectations, beliefs and projections are expressed in good faith and are
believed by us to have a reasonable basis, including without limitations, our
examination of historical operating trends, data contained in our records and
other data available from third parties, but there can be no assurance that our
expectations, beliefs or projections will result, or be achieved, or be
accomplished.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
--------------------------------------------------------------------------------
2003 AND 2002
---------------
We earned income of $13,000 for the three months ended March 31, 2003 compared
to a loss of $511,000 for the same quarter in 2002. The income in the first
quarter of 2003 resulted primarily from $564,000 in gross profits from the sale
of three systems.
We generated revenues of $3,425,000 from the sale of three systems during the
quarter ended March 31, 2003 compared to the sale of one system for $1,150,000
in the same quarter in 2002. Our service revenues decreased $4,000 to $342,000
in the three months ended March 31, 2003 from $346,000 in the same period in
2002.
We generated gross profits of $740,000 during the three months ended March 31,
2003 compared to $258,000 for the same quarter in 2002. Gross profits in the
quarter ended March 31, 2003 included $564,000 in profits from the sale of three
systems compared to a profit of $52,000 on the sale of one system in the same
period in 2002.
Our operating expenses increased $12,000 to $676,000 for the three months ended
March 31, 2003 from $664,000 for the same period in 2002. Operating expenses in
the quarter ended March 31, 2002 were reduced significantly due to rental
obligations that were paid by subtenants. These reductions in rental expense
ceased at the end of the term of the lease on June 30, 2002. Legal fees
decreased significantly in the quarter ended March 31, 2003 compared to the same
quarter in 2002, as a result of the reduction in legal activities associated
with litigation.
Interest expense decreased $55,000 to $51,000 in the first quarter of 2003 from
$106,000 from the same period in 2002. Interest expense in the quarter ended
March 31, 2002 included $50,000 of loan cost amortization.
FINANCIAL CONDITION
--------------------
We had cash and cash equivalents of $17,000 and accounts receivable of
$1,287,000 on March 31, 2003. A significant portion of the receivables
outstanding on March 31, 2003 were collected in the following month. We had
accounts payable and accrued liabilities of $2,107,000 on March 31, 2003 and
were in default on a $2,000,000 note payable to a stockholder. We sold three
imaging systems in the first quarter of 2003. In order to resolve the liquidity
problems, we must continue to sale imaging systems or seek alternative sources
of equity funding. However, there is no assurance that we will be successful in
selling new systems or securing additional equity funds.
Since inception, we have been unable to sell our POSICAMTM systems in quantities
sufficient to be operationally profitable. Consequently, we have sustained
substantial losses. Due to the sizable selling prices of our systems and the
limited number of systems sold or placed into service each year, our revenues
have fluctuated significantly from year-to-year. We have an accumulated deficit
of $57,654,000 at March 31, 2003. The Company will need to increase system
sales to achieve continued profitability.
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FORM 10-QSB MARCH 31, 2003
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These events raise doubt as to our ability to continue as a going concern. The
report of our independent public accountants, which accompanied our financial
statements for the year ended December 31, 2002, was qualified with respect to
that risk. If we are unable to refinance or otherwise satisfy the note payable
to a stockholder or to otherwise obtain financing to meet our cash needs we may
have to severely limit or cease our business activities or may seek protection
from our creditors under the bankruptcy laws.
NEW ACCOUNTING PRONOUNCEMENTS
-------------------------------
Please refer to the Annual Report Form 10-KSB for the year ended December 31,
2002 for disclosures regarding the Company's treatment of new accounting
pronouncements.
CRITICAL ACCOUNTING POLICIES
------------------------------
REVENUE RECOGNITION
Revenues from POSICAMTM system contracts are recognized when all
significant costs have been incurred and the system has been shipped to the
customer. The Company also recognizes revenue on bill and hold transactions
when the product is completed and is ready to be shipped and the risk of
loss is transferred to the customer. In certain cases, at the customers'
request, the Company is storing the product for a brief period of time.
Revenues from maintenance contracts are recognized over the term of the
contract. Service revenues are recognized upon performance of the services.
ITEM 3 - CONTROLS AND PROCEDURES
Within 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 President and Chief Financial Officer, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Company's President and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company that is required
to be included in the Company's periodic filings with the Securities and
Exchange Commission. There have been no significant changes in the Company's
internal controls or, to the Company's knowledge, in other factors that could
significantly affect those internal controls subsequent to the date the Company
carried out its evaluation, and there have been no corrective actions with
respect to significant deficiencies and material weaknesses.
The Company's management, including the President and the Chief Financial
Officer, does not expect that our disclosure controls or our internal controls
will prevent all error and all fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions;
over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.
PART II OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
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The information regarding legal proceedings set forth above under Part I -
Financial Information, Note 6 to the Condensed Financial Statements, is hereby
incorporated by reference into Part II, Item 1 - Legal Proceedings.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
The Company entered into a loan arrangement on June 29, 2001 with Imatron Inc.,
a stockholder of the Company, for the purpose of borrowing up to $2,000,000 to
fund operating activities. The loan is collateralized by substantially all the
assets of the Company. As of March 31, 2003, principal of $2,000,000 has been
advanced on the loan. The loan bears interest on the outstanding principal
balance at an annual rate of 10% and is payable monthly. Principal on the loan
amounting to $1,000,000 and $500,000 was to be repaid within five (5) business
days of December 31, 2001 and March 31, 2002, respectively. The remaining
$500,000 of loan principal and all unpaid interest was due and payable no later
than June 30, 2002. The Company has not made the interest payments that are due
monthly on the loan, resulting in outstanding accrued interest of approximately
$328,000 at March 31, 2003. The portions of the loan principal due on December
31, 2001, March 31, 2002, and June 30, 2002 are currently in default.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Description of the 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.
99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on From 8-K
There were no reports filed on From 8-K for the quarterly period ended
March 31, 2003.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
POSITRON CORPORATION
(Registrant)
Date: May 15, 2003 /s/ Gary H. Brooks
----------------------
Gary H. Brooks
President & CEO
Date: May 15, 2003 /s/ Michael L. Golden
-------------------------
Michael L. Golden
Chief Financial Officer
(Principal Financial and Accounting
Officer)
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I, Gary H. Brooks, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Positron
Corporation;
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:
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.
Dated: May 15, 2003 /s/ Gary H. Brooks
------------------
Gary H. Brooks
President & CEO
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FORM 10-QSB MARCH 31, 2003
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I, Michael L. Golden, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Positron
Corporation;
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:
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.
Dated: May 15, 2003 /s/ Michael L. Golden
---------------------
Michael L. Golden
Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit Description of the 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.
99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
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