-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EUAOsul21OwQioHNAVqoVfyf8RRQR8BWPj637pOl9gPiFSDzeY1XXIbxBax5vsLU Z7zHRpOPewXruLIJzajo4w== 0001012118-03-000021.txt : 20030219 0001012118-03-000021.hdr.sgml : 20030219 20030219171212 ACCESSION NUMBER: 0001012118-03-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARK SOLUTIONS INC CENTRAL INDEX KEY: 0000807397 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 010564816 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17118 FILM NUMBER: 03573303 BUSINESS ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 BUSINESS PHONE: 9738930500 MAIL ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 FORMER COMPANY: FORMER CONFORMED NAME: SHOWCASE COSMETICS INC DATE OF NAME CHANGE: 19920703 10-Q 1 f10q1202.txt 10-Q FOR PERIOD ENDED 12-31-02 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------- FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE - ----- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2002 ------------------- Commission File Number: 0-17118 ---------------------------------- Mark Holdings, Inc. - ----------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 01-0564816 - ------------ ----------------------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation) Identification No.) 1135 Clifton Avenue Clifton, New Jersey 07013 - --------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (973) 773-8100 ------------------------------ Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Indicate by check whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that 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: Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date: Common Stock,$.01 par value:9,714,606 shares outstanding as of February 10,2003. MARK HOLDINGS, INC. Form 10-Q for Quarter Ended December 31, 2002 Index Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Balance Sheets as of December 31, 2002 and June 30, 2002 . . . . . . . . . . . . . 3 Consolidated Statements of Operations for the Six and Three Months Ended December 31, 2002 and 2001 . . . . . . . . . . . . . . . . .4 Consolidated Statements of Cash Flow for the Six Months Ended December 31, 2002 and 2001 . . . . . . . . . . . . . . . . . . . . . . . .5 Notes to Consolidated Financial Statements . . . . . . . . .6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . 8-10 Item 3. Quantitative and Qualitative Disclosures About Market Risks . . . . . . . . . . . . . . . . . . . . . . . . 10 Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . .10 Part II. Other Information Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .12 Item 2. Changes in Securities and Use of Proceeds. . . . . . . . . . 12 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . 12 Item 4. Submission of Matters to a vote of Security Holders . . . . .12 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . .12 Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . .12 Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Certifications . . . . . . . . . . . . . . . . . . . . . . . . . .14-15 -2- Part I. Financial Information MARK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2002 June 30, 2002 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 5 $ 156 Notes receivable 71 71 Accounts receivable 1,184 2,028 Costs in excess of contract revenue recognized 8 323 Inventories 25 25 Prepaid expenses 25 74 -------- ------- Total Current Assets 1,318 2,677 -------- ------- PROPERTY AND EQUIPMENT, NET: 158 297 OTHER ASSETS 36 36 -------- ------ Total Assets $1,512 $3,010 ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $1,271 $1,088 Current portion of long-term debt 268 268 Current portion of obligations under capital leases 11 13 Billings in excess of costs and estimated earnings on uncompleted contracts 94 89 Accrued liabilities 444 381 ------- ------- Total Current Liabilities 2,088 1,839 ------- ------- OTHER LIABILITIES: Long-term portion of obligations under capital leases 17 20 ------- ------- Total Other Liabilities 17 20 ------- ------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock, $.01 par value, 100,000,000 shares authorized, 9,714,606 shares issued and outstanding 97 97 Preferred stock, $1.00 par value, $10 liquidation value; 5,000,000 shares authorized: Additional paid-in capital 36,881 36,881 Deficit (37,520) (35,776) Treasury stock, at cost; 17,500 shares (51) (51) ------- ------- Total Stockholders' Equity (593) 1,151 ------- -------- Total Liabilities and Stockholders' Equity $1,512 $3,010 ======= ======= -3- MARK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands)
Six Months Ended Six Months Ended Three Months Ended Three Months Ended December 31, 2002 December 31, 2001 December 31, 2002 December 31, 2001 Revenues $ 1,234 $ 5,447 $ 225 $ 2,155 --------- -------- ------ --------- Costs and Expenses: Cost of sales 2,192 3,422 1,195 1,259 General and administrative expenses 775 1,290 401 665 -------- ------- ------ ------ Total Costs and Expenses 2,967 4,712 1,596 1,924 ======== ====== ====== ====== Operating (Loss)/Income (1,733) 735 (1,371) 231 -------- ------ ------ ------ Other Income (Expenses): Interest income - 15 - 7 Interest expense (11) (44) (6) (5) -------- ----- ------ ------- Total Other Expenses (11) (29) (6) 2 ======== ====== ======= ====== (Loss) Income from Continuing Operations before extraordinary gain and income tax (1,744) 706 (1,377) 233 Income tax - - - - -------- ----- ------ ---- (Loss) Income from Continuing Operations before extraordinary gain (1,744) 706 (1,377) 233 Discontinued Operations: Loss from sale of discontinued segment - (200) - (200) Extraordinary gain on extinguishment of debt - 1,121 - - ------ ------ ------ ------ Net (Loss)/Income $(1,744) $ 1,627 $(1,377) $ 33 ======== ======== ======= ====== Basic Income (Loss) per Share Income (loss) per share from continuing operations $(0.18) $0.07 $(0.14) $0.02 (Loss) income from sale of discontinued segment - (0.02) - (0.02) Extraordinary gain on extinguishment of debt - 0.12 - - -------- ------- ------- ----- Income (loss) per share $(0.18) $0.17 $(0.14) $ 0.00 ======== ======= ======= ======= Fully Diluted (Loss)/Income per Share (Loss)/income per share from continuing operations $(0.18) $0.07 $(0.14) $0.02 (Loss) from sale of discontinued segment - (0.02) - (0.02) Extraordinary gain on extinguishment of debt - 0.12 - - -------- ------ -------- ------ (Loss)/income per share $(0.18) $0.17 $(0.14) $ - ======== ====== ======== ====== Weighted Average Number of Basic Shares Outstanding 9,697,106 9,697,106 9,697,106 9,697,106 ========= ========== ========= ========= Weighted Average Number of Fully Diluted Shares Outstanding 9,697,106 9,697,106 9,697,106 9,697,106 ========= ========== ========= ========= Dividends Paid $ - $ - $ - $ - ========= ========== ========= ========
-4- MARK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDTED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended Six Months Ended December 31, 2002 December 31, 2001 ----------------- ----------------- Cash Flows From Operating Activities: Net (loss) income $ (1,744) $ 1,627 Adjustments to reconcile net (loss) income to net cash (used for) provided by operating activities: Depreciation and amortization 139 144 Allowance for notes receivable - 200 Gain on extinguishment of debt - (1,121) Deferred tax asset - 198 (Increase) decrease in assets: Accounts receivable 844 897 Billing in excess of contract revenue recognized 315 270 Other current assets 49 (24) Increase (decrease) in liabilities: Accounts payable 183 (1,069) Billings in excess of contract revenue earned 5 (111) Accrued liabilities 63 (196) ------- -------- Net adjustments to reconcile net (loss) income to net cash (used for) provided by operating activities 1,598 (812) ------- ------- Net Cash (Used for) Provided by Operating Activities (146) 815 ------- ------- Cash Flows From Investing Activities: Acquisition of property and equipment - (17) Repayment of note receivable - 42 Note receivable - (330) ------- ------- Net Cash (Used For) by Investing Activities - (305) ------- ------- Cash Flows From Financing Activities: Repayment of convertible debt - (500) Repayment of notes payable for equipment and vehicles (5) (41) Notes payable officer/ shareholder - (97) ------- -------- Net Cash Used for Financing Activities (5) (638) ------- -------- Net decrease in Cash (151) (128) Cash and Cash Equivalents at Beginning of Period 156 536 ------- ------- Cash and Cash Equivalents at End of Period $ 5 $ 408 ======= ========== -5- MARK HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 INTERIM FINANCIAL INFORMATION The consolidated balance sheet of the Company as of December 31, 2002, the consolidated statements of operations for the six and three months ended December 31, 2002 and 2001 and the consolidated statements of cash flow for the six months ended December 31, 2002 and 2001 are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (which included only normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows have been included. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The June 30, 2002 balance sheet data is derived from the audited consolidated financial statements. The attached financial statements should be read in connection with the consolidated financial statements and notes hereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2002. Certain reclassifications have been made to the current and prior years amounts to conform to the current period presentation. Note 2 COMMON STOCK AND ADDITIONAL PAID-IN-CAPITAL Basic earnings (loss) per common share is computed by dividing the net earning by the weighted average number of shares of common stock outstanding during the period. Dilutive earnings per share gives effect to stock options and warrants which are considered to be dilutive common equivalents. Note 3 CONVERTIBLE NOTES PAYABLE In September 2001, the Company entered into a compromise agreement with the holder of the convertible notes payable in the amount of $1,880,000. Under the terms of the agreement the Company will pay $1,000,000 in full satisfaction of the outstanding indebtedness and accrued interest. The compromise amount is payable In four (4) equal installments of $250,000 due upon the execution of the agreement, November 30, 2001, February 28, 2002 and March 1, 2003. The first three payments were made in September 2001, November 2001 and February 2002. It is questionable whether the Company will have the financial resources to make the March 1, 2003 payment and if not, the Company will seek an extension of time to make the payment. As a result of this transaction the Company realized a gain of $1,069,000 from the extinguishment of debt. Note 4 PROPOSED SALES OF ASSETS In February 2002 the Company entered into a non-binding agreement to sell substantially all of the net assets of Mark Correctional Systems ("Mark Correctional"), our modular steel cell division, to Rite-Way of New Jersey, a corporation owned by the Company's Executive Vice President. The agreement by its terms automatically -6- terminated on September 30, 2002 but the parties agreed to reinstate the agreement. The consideration will consist of $2,500,000 based on an estimated book value of the assets. Any shortfall in the value of the assets will be adjusted at closing. Payment shall consist of $500,000 cash at closing and the balance of $2,000,000 payable in 36 equal monthly installments evidenced by a secured promissory note bearing interest at 8% per annum. The Company will also receive cash on hand and/ or a short-term promissory note for a total of an additional $1,000,000. Completion of the sale is dependent upon shareholder approval. The carrying value of the net assets of the Correctional division at December 31, 2002 consists of the following: Cash $ 5,000 Accounts Receivable 1,184,000 Costs in excess of contract revenue earned 8,000 Inventories 25,000 Property and equipment, net 133,000 Other assets 36,000 Accounts payable (1,011,000) Obligations under capital leases (11,000) Billings in excess of contract revenues earned (94,000) Accrued liabilities (74,000) Long-term debt (17,000) ----------- $ 184,000 The closing of this transaction is subject to the purchaser completing its due diligence to determine if there have been any material changes in the financial condition of the jail cell business. If there have been any such changes, the purchaser can elect not to close the transaction. -7- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Mark Holdings, Inc. ("Mark" or "The Company" or "We") is a Delaware corporation, which operates its only business through a division of a wholly owned subsidiary, Mark Solutions, Inc. ("Mark Solutions"). The division is known as Mark Correctional Systems. The business consists of the design, manufacture, and installation of modular steel jail cells for correctional institution construction. We market our modular steel products by responding to public bids and by pursuing joint ventures and affiliations with other companies to solicit design/build correctional facilities. We have recently entered into an agreement to sell our jail cell manufacturing business. The sale of the business was subject to approval by shareholders. A meeting of shareholders was held on December 20, 2002. On January 6, 2003 shareholders holding 5,041,759 shares of the Company's Common Stock approved the sale of the assets of the Company's jail cell division, Mark Correctional Division. Holders of 689,270 shares voted against the proposal. Accordingly, the Company had received the requisite majority for approval by shareholders of the sale of the assets of the jail cell division. The closing of this transaction is subject to the purchaser completing its due diligence to determine if there have been any material changes in the financial condition of the jail cell business. If there have been any such changes, the purchaser can elect not to close the transaction. IN such an event the Company would then attempt to sell off the asets. If the sale is consummated, we will essentially be a non- operating "shell." Our objective is to acquire another business or merge with another company; however there can be no assurances that we will be successful. See footnotes to Consolidated Financial Statements. -8- Results of Operations Revenues from continuing operations for the six months ended December 31, 2002, decreased 77% to $1,234,000 from $5,447,000 for the comparable period. This decrease is attributable to fewer active modular steel cell projects because we submitted fewer bids and a general slow down in the industry. Revenues from continuing operations, for the three months ended December 31, 2002, decreased 90% to $225,000 from $2,155,000. This decrease is also attributable to fewer active modular steel cell projects because we submitted fewer bids and encountered a general slow down in the industry. Cost of sales from continuing operations for the six months ended December 31, 2002, consisting of materials, subcontractor fees, labor and fixed factory overhead expense decreased to $2,192,000 from $3,422,000 for the comparable period. Cost of sales as a percentage of revenues was 177.6% for the six months ended December 31, 2002 as compared to 62.8% for the prior comparable period. The increase of cost of sales as a percentage of sales reflects the under-utilization of overhead resulting from lower production activity. In addition, the late delivery of product resulting from a downturn in the economy increased cost of procurement, manufacture and onsite work. Cost of sales from continuing operations for the three months ended December 31, 2002, consisting of materials, subcontractor fees, labor and fixed factory overhead expense decreased to $1,195,000 from $1,259,000 for the comparable period. Cost of sales as a percentage of revenues was 531.1% for the three months ended December 31, 2002 as compared to 58.4% for the prior comparable period. The increase of cost of sales as a percentage of sales also reflects the under-utilization of overhead resulting from lower production activity. In addition, the late delivery of product resulting from a downturn in the economy increased cost of procurement, manufacture and onsite work. General and administrative expenses from continuing operations for the six months ended December 31, 2002, decreased to $775,000 from $1,290,000 for the comparable period. This decrease reflects the Company's efforts to control costs by virtue of a reduction of administrative personnel, advertising and marketing costs, as well as travel related expenses. General and administrative expenses from continuing operations for the three months ended December 31, 2002, decreased to $401,000 from $665,000 for the comparable period. This decrease reflects the Company's efforts to control costs by virtue of a reduction of administrative personnel, advertising and marketing costs, as well as travel related expenses. Liquidity and Capital Resources The Company entered into an Asset Purchase Agreement on April 4, 2002, the terms of which provide that the Company will sell its jail cell manufacturing business to Rite-Way of New Jersey, Inc., a privately held company. The Agreement expired by its terms. The Company and the proposed buyer Rite-Way thereafter revived the Agreement. The sale was approved of shareholders at the Annual Meeting of Shareholders held on December 20, 2002. Under the terms of the Agreement, the purchase price is $2,500,000 subject to valuation of the net assets at time of closing. At closing we will receive a $500,000 down payment, cash on hand in the Mark Correctional Division of at least $500,000 up to a minimum of $1,000,000 and the balance in 36 equal monthly installments together with interest. If there is a cash shortfall at closing, we will receive a 90-day note from Rite-Way for the difference between the actual cash on hand we receive and $1,000,000. We are therefore entitled to receive in total $3,500,000 subject to adjustment of the net book value at the time of closing. However, the net book value of the assets as of December 31, 2002 was -9- $184,000 and accordingly the Company anticipates receiving $1,184,000 as the total purchase price. The Company will use the proceeds of the sale to acquire another business or enter into a business combination with another company. Accordingly, we are unable to predict what our working capital requirements will be under those circumstances. If the sale is not consummated, we will consider our options of whether to continue the business or close the business by completing our current backlog and disposing of our fixed assets in private sales and satisfying our contractual obligations. If we elect to continue the business, we will require additional capital for which we would principally look to private sources in the form of debt or equity financing since our present cash flow would be inadequate to enable us to take on any significant contracts. It is questionable whether the Company will have the financial resources to make the March 1, 2003 payment of the compromise agreement and if not, the Company will seek an extension of time to make the payment. When the sale is finalized, the Company will have no operating business and it will essentially be a "shell." Management's intention is to acquire another business or merge with another company. At the current time, we are looking at other companies for a possible acquisition or merger. Management has had only very preliminary conversations with representatives from other companies. Nothing of any definitive nature has developed from these preliminary conversations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Not Applicable. ITEM 4. CONTROLS AND PROCEDURES Under the supervision and with the participation of our management, including our principal executive and financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on their evaluation, our principal executive and financial officer has concluded that these controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure. -10- Forward Looking Statements Except for the historical information contained herein, the matters discussed in this report are forward looking statements under the federal securities law. These statements are based on current plans and expectations of the Company and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include whether cell projects are awarded to us, and the timing of their completion, meeting current and future financial requirements and competition. -11- PART II OTHER INFORMATION Item 1. Legal Proceedings On June 28, 2001, the Company was scheduled to receive the final installment of the payment for the sale of the assets of MarkCare Medical Systems segments from MMSI Acquisition Corp. ("MMSI"). The final installment was evidenced by a $500,000 promissory note. Prior to the due date of the promissory note, June 30, 2001, the Company was advised by MMSI that they were evaluating the value of the net assets transferred and they might be entitled to an offset against the promissory note for differences in the valuation of the net assets. Subsequently, MMSI defaulted on the payment of the note, and as a result, we obtained a judgment by default against both MMSI and MediSolution. MediSolution then filed a motion to vacate the default and the action was later dismissed. We thereafter re-filed the action in Canada seeking payment of the promissory note. MediSolution alleges certain counterclaims and seeks damages of $2,500,000. We believe the counterclaims are without merit. Item 2. Changes In Securities and Use Of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a vote of Security Holders On December 20, 2002, the Annual Meeting of Shareholders was held at the offices of the Company. The matters to be voted upon were the approval by Shareholders of the sale of the assets of the Mark Correctional Division; the election of Directors; approval of an amendment to the Company's Certificate of Incorporation increasing the authorized capital common stock from 50,000,000 to 100,000,000 shares of common stock; and the ratification of the appointment of Holtz Rubenstein & Co., LLP as Registrant's auditors. The holders of a majority of the shares entitled to vote approved the election of Carl Coppola, Ronald Olszowy and William DeMarco as Directors. Shareholders also approved the amendment to the Company's Certificate of Incorporation increasing the authorized capital common stock from 50,000,000 shares to 100,000,000 shares; and the ratification of the appointment of Holtz Rubenstein & Co., LLP as auditors for the fiscal year ending June 30, 2003. With respect to the sale of the Mark Correctional Systems' assets, the shareholders have approved the sale. Once the sale is finalized the Company will cease to be an operating company. Thereafter, management intends to acquire a new business or merge with another operating company. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K None -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. Date: February 18, 2003 MARK HOLDINGS, INC. By:/s/ Carl Coppola President and Chief Executive Officer -13- CERTIFICATIONS I, CARL COPPOLA, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Mark Holdings, Inc.; 2. Based on my knowledge, this annual 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 annual report. 3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report. Date: February 18, 2003 S/ Carl Coppola Carl Coppola, Chief Executive Officer and Principal Financial Officer CERTIFICATIONS I, CARL COPPOLA, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Mark Holdings, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 1. As the registrant's certifying officer, 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 function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, -14- 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 1. As the registrant's certifying officer 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. Date: February 18, 2003 S/ Carl Coppola Carl Coppola, Chief Executive Officer and Principal Financial Officer -15 -----END PRIVACY-ENHANCED MESSAGE-----