-----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, ArSI+i/Wr/4AwGOUiG87XVIHCI5XghLRB8RLNDVi5MyrvVQbJKW2dRYL5Wie3Vbe 5N4lXpi0FXQ9byCMAgVGBw== 0000868075-03-000016.txt : 20030520 0000868075-03-000016.hdr.sgml : 20030520 20030520160534 ACCESSION NUMBER: 0000868075-03-000016 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLASSICA GROUP INC CENTRAL INDEX KEY: 0000868075 STANDARD INDUSTRIAL CLASSIFICATION: DAIRY PRODUCTS [2020] IRS NUMBER: 133413467 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-19721 FILM NUMBER: 03712623 BUSINESS ADDRESS: STREET 1: 1835 SWARTHMORE AVENUE CITY: LAKEWOOD STATE: NJ ZIP: 08701 BUSINESS PHONE: 7323633800 MAIL ADDRESS: STREET 1: 1835 SWARTHMORE AVE CITY: LAKEWOOD STATE: NJ ZIP: 08701 FORMER COMPANY: FORMER CONFORMED NAME: EMPIRE SPECIALTY FOODS INC /NY/ DATE OF NAME CHANGE: 19600201 10QSB 1 tcgiq103.txt QUARTERLY REPORT 3/31/03 U.S. 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 EXCHANGE ACT OF 1934 Commission file number 0-19721 THE CLASSICA GROUP, INC. (Exact name of small business issuer as specified in its charter) New York 13-3413467 (State or other jurisdiction of (IRS Employer identification no.) incorporation or organization) 2400 Main Street, Suite #12, Sayreville, New Jersey 08872 (Address of principal executive offices) (732) 727-7800 (Issuer's telephone number) ----------------6----------------- Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ...X.. No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d)of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes .......No ....... APPLICABLE ONLY TO CORPORATE ISSUERS Number of shares outstanding of each of the issuer's classes of common equity as of March 31, 2003 Title of Each Class Number of Shares Outstanding Common Stock, $.001 par value per share 5,142,211 PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements THE CLASSICA GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited) March 31, 2003 ASSETS ----------- Current Assets: Cash $361,258 Accounts receivable 1,126 Inventories 328,007 Prepaid expenses 164,495 Assets relating to discontinued operation 84,416 ------------------- Total current assets 939,302 Property and equipment, net 627,859 Intangible assets, net 1,397,095 Other assets 136,142 ------------------- TOTAL ASSETS $3,100,398 =================== See notes to the consolidated financial statements (Unaudited). 2 THE CLASSICA GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited) (continued) March 31, 2003 LIABILITIES AND STOCKHOLDERS' EQUITY --------------------------------------------------- LIABILITIES --------------- Current Liabilities: Accounts payable $ 174,889 Accrued expenses 61,157 Liabilities relating to discontinued operations 50,000 ------------------ Total current liabilities 286,046 ------------------ TOTAL LIABILITIES 286,046 ------------------ STOCKHOLDERS' EQUITY ------------------------------- Preferred stock Class A participating convertible preferred shares, $1 par value, stated at liquidation value, authorized 200 shares of which 16.5 shares are issued and outstanding. 397,898 Common stock Par value $.001 - 25,000,000 shares authorized, 5,142,211 shares issued and outstanding 5,142 Additional paid-in-capital 5,756,166 Accumulated deficit (3,359,799) Accumlated other comprehensive income 14,945 ------------------ Total Stockholders' Equity 2,814,352 ------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,100,398 ================== See notes to the consolidated financial statements (Unaudited). 3 THE CLASSICA GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Operations and Comprehensive Income (Unaudited) For the three months ended March 31, 2003 2002 ----------------------------- Revenue $ 5,736 $ 4,361 Cost of sales 18,588 0 ----------------------------- Gross profit (loss) (12,852) 4,361 Selling, general and administrative expenses 520,820 262,622 ----------------------------- Loss from continuing operatons (533,672) (258,261) Income (loss) from discontinued operations (89,398) 103,659 ----------------------------- Net loss before other comprehensive income (623,070) (154,602) Other comprehensive income: Foreign currency translation, net of tax effect of $-0- 1,093 0 ----------------------------- Comprehensive income $ (621,977) $ (154,602) ============================= EARNINGS PER COMMON SHARE BASIC & DILUTED Loss from continuing operations $ (0.10) $ (0.10) Income (loss) from discontinued operations (0.02) 0.04 ----------------------------- Net loss $ (0.12) $ (0.06) ============================= Weighted average shares outstanding, basic and diluted 5,142,211 2,747,050 See notes to the consolidated financial statements (Unaudited). 4 THE CLASSICA GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2003 and 2002 March 31, -------------------------------- 2003 2002 -------------------------------- Cash flows from operating activities: Loss from continuing operations $ (533,672) $ (258,261) Income(loss) from discontinued operations (89,398) 103,659 Foreign currency translation 1,093 0 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 44,075 79,553 (Increase) decrease in accounts receivable 13,307 (178,484) Decrease in receivable from sale of discontinued operation 426,819 0 (Increase) decrease in inventories (30,445) 68,251 (Increase) in prepaid expenses and other assets (63,009) (24,022) Increase in accounts payable and accrued expenses 71,480 62,665 -------------------------------- Net cash used in operating activities (159,750) (146,639) -------------------------------- Cash flows used in investing activities: Purchase of fixed assets (173,924) (84,937) Increase in other assets (12,719) (7,172) Realization of assets relating to discontinued oeration 313,025 0 Settlement of liabilities relating to discontinued operastion (347,441) 0 -------------------------------- Net cash used in investing activities (221,059) (92,109) -------------------------------- Cash flows from financing activities: Repayment of long-term debt 0 (22,727) Proceeds from Issuance of capital stock 0 280,000 -------------------------------- Net cash provided by financing activities 0 257,273 -------------------------------- Net increase (decrease) in cash (380,809) 18,525 Cash at beginning of period 742,067 100,997 -------------------------------- Cash at end of period $ 361,258 $ 119,522 ================================ Supplemental disclosure of cash flows information: Interest paid $ 45 $ 44,257 ================================ See notes to the consolidated financial statements (Unaudited). 5 THE CLASSICA GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 --ORGANIZATION AND BASIS OF PRESENTATION The Classica Group, Inc. ("The Company") and its wholly owned subsidiaries Classica Microwave Technologies, Inc. (United States) and CGTI Classica Group Technologies Italia, S.r.l. ("Classica Italy") (collectively "CMT") provide safe food solutions through its automated microwave processing systems. In addition, CMT's technologically advanced design of post packaging processing, extends refrigerated shelf life through pasteurization and permits non-refrigerated shelf life through sterilization without the use of any chemical additives. The system is designed to promote food safety while reducing overall operating costs, inventory storage and delivery costs without sacrificing productivity or food quality. Professor Giuseppe Ruozi, the key developer of the process and one of the leading European experts in the field of microwave technology as it applies to the food industry is under contract with CMT as its Chief Technology Officer. The use of microwave technology in concert with proprietary knowledge acquired over years of research and development by Professor Ruozi gives CMT a strong position in the growing field of new and innovative processing technologies for the food industry. CMT expects to generate revenues in two different areas. First, the company sells microwave based processing systems for pasteurization, sterilization, sanitizing and drying of food products. Second, the company intends to utilize its microwave application expertise to provide development services to new and existing clients. In October 2002, the Company sold its grated, shredded and dry cheese processing and distributing business, and in December 2002, the Company sold its Galbani(R) brand cheese and meat importing and distribution business, and discontinued the operation of its Cucina Classica Italiana, Inc. subsidiary. The unaudited consolidated financial statements included herein have been prepared by the Company in accordance with the same accounting principles followed in the presentation of the Company's annual financial statements for the year ended December 31, 2002 pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments that are of a normal and recurring nature and are necessary to fairly present the financial position, results of operations, and cash flows of the Company have been made on a consistent basis. This report should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-KSB Annual Report for the year ended December 31, 2002. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances are eliminated. Income taxes for the interim period are based on the estimated effective tax rate expected to be applicable for the full fiscal year. The Company has recorded a full valuation allowance related to the deferred tax asset at March 31, 2003. NOTE 2 -PER SHARE DATA The per share data has been calculated using the weighted average number of Common Shares outstanding during each period presented on both a basic and diluted basis in accordance with SFAS 128. Outstanding options and warrants have been excluded from the computation due to their antidilutive effect. 6 THE CLASSICA GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3 - Property and equipment Property and equipment are carried at cost, less accumulated depreciation and amortization computed on a straight-line basis over the lesser of the estimated useful lives of the assets (generally three to ten years for furniture and equipment and the lease term for leasehold improvements). Property and equipment consists of the following at March 31, 2003: Furniture & equipment $ 656,527 Leasehold improvements 43,067 ---------------- Total cost 699,594 Less accumulated depreciation and amortization (71,735) ---------------- $ 627,859 ================ NOTE 4 - Intangible Assets Patents, recorded at cost, are amortized over their estimated useful lives, approximating 15 years. Intangible assets are reviewed for impairment whenever events or circumstances indicate impairment might exist or at least annually. The Company assesses the recoverability of its assets in accordance with SFAS No. 142 "Goodwill and Other Intangible Assets," comparing projected undiscounted cash flows associated with those assets against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company determined that there is no impairment of the assets at March 31, 2003. Intangible assets consist of the following at March 31, 2003: Patents $ 1,552,328 Accumulated amortization (155,233) -------------- Intangible assets, net $ 1,397,095 ============== For the years ending December 31, 2003 through 2007 the patents will be amortized at the rate of $103,489 per annum for a total amortization for the five year period of $517,245. 7 THE CLASSICA GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 5 - Discontinued Operations On October 18, 2002, the Company sold assets comprised of manufacturing equipment, certain inventory and related packaging materials and supplies, customer lists, goodwill, trademark and rights to its lease of the distribution facility and other rights relating to the grated, shredded and dry cheese processing and distributing business of its Cucina Classica Italiana, Inc. subsidiary. On December 30, 2002, the Company sold assets comprised of a customer list, goodwill, right to use a license and distribution agreement with a supplier, certain inventory and related packaging materials and supplies a portfolio of import licenses for dairy products, and an assumption of a liability to its distributor relating to the Galbani(R) brand cheese and meat importing and distribution business of its Cucina Classica Italiana, Inc. subsidiary and discontinued the operations of that subsidiary effective December 31, 2002. Operating results of Cucina Classica Italiana, Inc. for the three months ended March 31, 2002 are included in income from discontinued operations shown separately in the accompanying financial statements. Revenues of Cucina Classica Italiana, Inc. for the three months ended March 31, 2002 were $1,771,878. This amount is not included in Revenues in the accompanying financial statements. The operations of the Company's Deli King, Inc. ("Deli King") mobile catering subsidiary ceased on March 9, 2001, and as of December 31, 2001, all of the assets of Deli King, Inc. had been disposed of or were deemed to be worthless. Deli King had no operations during the quarter ended March 31, 2002. However, during the quarter Deli King, Inc. filed for liquidation under Chapter VII of the U.S. Bankruptcy Act in the U.S. Bankruptcy Court for the District of New Jersey and the case has been concluded. Management believes that there are no material present or future liabilities on the part of the Company for matters relating to Deli King, Inc. 8 Item 2. Management's Discussion and Analysis Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Unaudited Financial Statements and related notes, which are contained herein. Results of Operations for the Three Months Ended March 31, 2003 and 2002 Net Revenues. Net revenues for the three months ended March 31, 2003 were $ 5,736 compared with $ 4,361 in 2002, an increase of $1,375, or 31.5%. This increase is insignificant as the revenues in both years represent only incidental amounts related to the start-up of our microwave technology subsidiary. Gross Profit. We generated gross operating loss of ($12,852) or (224.1%) of net revenues for 2003 versus gross profit of $4,361 for 2002. This decrease is insignificant as the revenues in both years represent only incidental amounts related to the start-up of our microwave technology subsidiary. The cost of sales amounts reported in 2003 represent some fixed manufacturing- related expenses of our Italian operation as well as the direct costs related to the testing services performed in the quarter. Selling, General and Administrative Expenses. Selling, general and administrative expenses were $520,820 in 2003 versus $262,622 for 2002. This represents an increase of $258,198, all of which represents start-up costs of our microwave technology subsidiary. The infrastructure that is currently in place in 2003 was not completed during the first quarter of 2002. There were non-recurring moving and start-up expenses of approximately $36,200 that were incurred relating to the move from Lakewood to Sayreville. Loss from Continuing Operations. Loss from continuing operations for 2003 was $533,672 versus $258,261 for 2002. These amounts represent start-up costs of our microwave technologies subsidiary. Income Taxes. We reported no provision for Federal income taxes for the three month periods ended March 31, 2003 and 2002, as we had net losses for both years. 9 Liquidity and Capital Resources The Company's sources of capital include, but are not limited to, the issuance of public or private debt, bank borrowings, capital leases and the issuance of equity securities. On December 13, 2002, we completed a private placement of 1,030,000 shares of our common stock and 200,000 shares issuable upon the exercise of warrants, from which we received gross proceeds of $1,030,000. The warrants are dated December 13, 2002 and expire on December 12, 2005. The exercise price is $1.00 per share. The shares of common stock issued in the transaction and those issuable upon exercise of the warrants are subject to a registration rights agreement. In accordance therewith, we filed a registration statement on Form SB-2 with the Securities and Exchange Commission on January 22, 2003. We are using the proceeds from this private placement to fund the growth of our microwave technology business. At March 31, 2003, the Company had a net worth of $2,814,352 compared to $2,350,841 at March 31, 2002. The Company has limited requirements for capital expenditures in the immediate future, except for the start-up of the CMT subsidiary for which the Company may undertake an additional private placement. The Company utilizes capital leases for the acquisition of operating assets at its subsidiaries when appropriate. At March 31, 2003 the Company had no capital leases. Management believes that the Company has sufficient working capital to meet the needs of its current level of operations, with the exception of the requirements of CMT. Seasonality The Company's businesses are not subject to the effects of seasonality. 10 Plan of Operation More than 200 installations of microwave heat processing systems and technology have been undertaken in Europe and Japan. All but two of those installations were undertaken by OMAC, the Company from which we purchased the technology, patents and laboratory in Italy, and other entities. We have only delivered two systems, one of which is in Switzerland and the other in Italy. The system installed in Italy was developed for the rapid drying of candy coated fruit. This system has undergone minor changes at the installation site, and the Company believes it is now fully functional; however, the Company may be taking the system back to be later sold to another customer. Our systems and the technology are not well known outside Europe and Japan. Our plan is to continue to promote and market our systems in Europe and Japan, and to penetrate other markets. Our goal is to generate revenues from the sale of microwave heat processing systems and the sale of technical services. In order to facilitate sales of our microwave systems, we have undertaken a major campaign of communications and education among future users, governmental regulatory agencies and food industry professionals. We are seeking to introduce our company, our systems, and the benefits of our systems to potential users, so that we can obtain a high level of recognition and acceptance of our systems. Simultaneously with the communications and education campaign, we have begun to use both a direct sales force and an independent agent with regional offices and representation throughout the United States. In addition, we have relationships with a network of agents worldwide who will identify market and sell our equipment to customers. In addition to selling our microwave systems, we intend to provide technical services to customers. We have two laboratories, one at our Sayreville, New Jersey location, and one in our Italy location. Our Sayreville location is also equipped with a full commercial kitchen. We have provided potential clients with access to our laboratories in the USA and Italy so that we can work with them to develop and customize new microwave heat processing applications. Some of the technical services are, and will continue to be, provided free of charge as part of our marketing efforts. Other more comprehensive research and development services are marketed and will be offered to customers for fees. We hope to market our company and our capabilities to food and pharmaceutical manufacturers through many means, including through partnerships with engineering and design companies, and with manufacturers of complementary equipment. We believe that such partnerships would be beneficial to both our company and to our potential partner by enabling us to avoid duplication of marketing, and research and development costs, and by expanding the field of potential customers to whom our products would become known. We are a member of ten relevant trade associations through which we promote recognition of microwave technology in general and of our unique systems in particular. Members of our staff have made presentations at various trade association meetings and seminars to acquaint the members with our unique systems. 11 At the present time the design and construction of systems is carried out in Italy by our subsidiary CGTI and third parties. We are evaluating additional manufacturing capabilities in the USA, so as to be prepared for domestic construction of our systems as our sales volumes increase. Anticipated Future Growth CMT has a unique patented and proprietary expertise in microwave processing applications. While the technology has been in use in Europe and in Japan, with more than 200 successful installations, it is virtually unknown beyond those markets. CMT plans to penetrate these new markets and generate revenues from 2 distinct sources: >> Sales of Microwave heat processing systems. >> Sales of Technical Services. In order to facilitate sales of the company's Microwave systems, a major campaign of communications and education will be undertaken among future users, government regulatory agencies and food industry professionals - globally. The objectives of this campaign are: >> To introduce the company and the benefits of its systems to the universe of future potential users >> To gain for these technologies a high level of recognition and acceptance. Concurrent with the communications and education campaign, the company will establish its direct sales force in the USA, and a network of exclusive agents worldwide to identify, negotiate and sell its equipment to clients on a global basis. The second revenue channel is from Technical Services. The company will provide potential clients with access to its laboratories in the USA and Italy, for the purpose of developing and customizing new processing applications. While some of these services are provided free of charge as part of the marketing efforts, other more comprehensive research and development services will be marketed and offered to clients for fees. The company uses its laboratories and technical staff to continuously improve current systems, and develop next generation systems. Beyond the efforts to sell systems to food manufacturers, the company will market itself and its capabilities through partnerships with engineering design companies, and with manufacturers of complimentary equipment, to provide future clients with "Total Delivered Solutions". 12 Forward Looking Statements The matters discussed in this Item 2 may contain forward-looking statements that involve risk and uncertainties. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors, including without limitation the presence of competitors with broader product lines and greater financial resources; intellectual property rights and litigation, needs of liquidity; and the other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. 13 Item 4. Controls and Procedures (a) Evaluation of disclosure controls and procedures. The Company's principal executive officer and its principal financial officer, based on their evaluation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c)) as of a date within 90 days prior to the filing of this Quarterly Report on Form 10-QSB, have concluded that the Company's disclosure controls and procedures are adequate and effective for the purposes set forth in the definition in Exchange Act rules.. (b) Changes in internal controls. There were no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation. 14 PART II - OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K (a) Exhibits: (99.1) Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. Filed herewith. (99.2) Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. Filed herewith. (b) Reports on Form 8-K: Form 8K/A - Filed May 8, 2003 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Related to the sale of the Company's cheese business. ITEM 5. OTHER EVENTS Related to the December 13, 2002 private placement for $1,030,000. 15 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf the undersigned thereunto duly authorized THE CLASSICA GROUP, INC. (Registrant) Date: May 20, 2003 By: /s/ Scott G. Halperin --------------------- Scott G. Halperin Chairman Chief Executive Officer Date: May 20, 2003 By: /s/ Bernard F. Lillis, Jr. -------------------------- Bernard F. Lillis, Jr. Chief Financial Officer Chief Administrative Officer Treasurer 16 THE CLASSICA GROUP, INC. CERTIFICATION PURSUANT TO RULE 13-A-14 OF THE SECURITIES ACT OF 1934 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION I, Scott G. Halperin, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of The Classica Group, Inc.; 2. Based upon my knowledge, this quarterly report does not contain any untrue statement of 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 period presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure the 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 upon 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 weakness in internal control; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there are 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 20, 2003 /s/ Scott G. Halperin Scott G. Halperin Chief Executive Officer 17 THE CLASSICA GROUP, INC. CERTIFICATION PURSUANT TO RULE 13-A-14 OF THE SECURITIES ACT OF 1934 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION I, Bernard F. Lillis, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-QSB of The Classica Group, Inc.; 2. Based upon my knowledge, this quarterly report does not contain any untrue statement of 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 period presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure the 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 upon 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 weakness in internal control; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there are 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 20, 2003 /s/ Bernard F. Lillis, Jr. Bernard F. Lillis, Jr. Chief Financial Officer 18 EX-99.77Q1 3 ex99-1.txt CERTIFICATION - HALPERIN 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 of The Classica Group, Inc. (the "Company") on Form 10-QSB for the period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Scott G. Halperin, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of 13(a) or 15(d) of the Securities and Exchange Act of 1934; (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Scott G. Halperin Scott G. Halperin Chief Executive Officer May 20, 2003 EX-99.77Q1 4 ex99-2.txt CERTIFICATION - LILLIS EXHIBIT (99.2) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of The Classica Group, Inc. (the "Company") on Form 10-QSB for the period ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard F. Lillis, Jr., Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of 13(a) or 15(d) of the Securities and Exchange Act of 1934; (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Bernard F. Lillis, Jr. Bernard F. Lillis, Jr. Chief Financial Officer May 20, 2003 -----END PRIVACY-ENHANCED MESSAGE-----