**FORM 10-QSB**

 

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

 

**Quarterly Report Under Section 13 or 15 (d)**

**of the Securities Exchange Act of 1934**

 

**For theQuarter Ended September 30, 2002**

 

**CommissionFile No. 0-9996**

 

**DOTRONIX, INC.**

(Exact name of registrantas specified in its charter)

 

| **Minnesota**                                                    |   | **41-1387074**                        |
|------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification No.) |

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by section 13 or 15 (d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports) and (2) has been subject to suchfiling requirements for the past 90 days.

 

 

YES   ý                  NO  o

 

 

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock as of the latest practicable date.

 
| **Class**                               |   | **Outstanding at November 12, 2002** |
|-----------------------------------------|--------|--------------------------------------|
| Common stock, par value  $.05 per share |   | 4,172,841 shares                     |

 

 

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DOTRONIX, INC.

INDEX

 

 
| Part I  - Financial Information |
|---------------------------------|
|                            |
|                            | Item  1. | Financial  Statements (Unaudited) |
|                            |   |   |
|                            |   | Balance Sheets |
|                            |   |   |
|                            |   | Statements of Operations |
|                            |   |   |
|                            |   | Statements of Cash Flows |
|                            |   |   |
|                            |   | Notes to Financial  Statements |
|                            |   |   |
|                            | Item  2. | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |
|                            |   |   |
|                            | Item  3. | Controls  and Procedures |
|                            |   |   |
| Part  II - Other Information    |
|                            |   |   |
|                            | Item  6. | Exhibits  and Reports on Form 8-K |

 

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

**BALANCESHEETS**

**DOTRONIX, INC.**

**(UNAUDITED)**

 
|                                                                                |   | **September 30  2002** |      | **June 30  2002** |   |
|-------------------------------------------------------------------------------------|--------|------------------------|-----------|-------------------|--------|
| ASSETS                                                                              |   |                   |      |              |   |
| CURRENT  ASSETS:                                                                    |   |                   |      |              |   |
| Cash  and cash equivalents                                                          |   | $                      | 59,780    |              | $      | 150,328 |   |
| Accounts  receivable, less allowance for doubtful accounts of $18,000               |   | 367,480                |      | 369,162           |   |
| Inventories:                                                                        |   |                   |      |              |   |
| Raw  materials                                                                      |   | 684,899                |      | 728,913           |   |
| Work-in-process                                                                     |   | 103,030                |      | 159,172           |   |
| Finished  goods                                                                     |   | 155,758                |      | 160,332           |   |
| Total  inventories                                                                  |   | 943,687                |      | 1,048,417         |   |
| Prepaid  expenses                                                                   |   | 96,494                 |      | 6,631             |   |
| Total  current assets                                                               |   | 1,467,441              |      | 1,574,538         |   |
|                                                                                |   |                   |      |              |   |
| PROPERTY,  PLANT & EQUIPMENT                                                    |   |                   |      |              |   |
| at  cost net of accumulated depreciation of $5,567,781 and $5,522,612  respectively |   | 721,371                |      | 757,793           |   |
|                                                                                |   |                   |      |              |   |
| TOTAL  ASSETS                                                                       |   | $                      | 2,188,812 |              | $      | 2,332,331 |   |
|                                                                                |   |                   |      |              |   |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY                                          |   |                   |      |              |   |
| CURRENT  LIABILITIES:                                                               |   |                   |      |              |   |
| Revolving  loan payable to a related party                                          |   | $                      | 839,403   |              | $      | 767,720 |   |
| Accounts  payable                                                                   |   | 208,509                |      | 104,209           |   |
| Salaries,  wages and payroll taxes                                                  |   | 42,209                 |      | 78,233            |   |
| Current  portion-deferred gain on sale of building                                  |   | 47,613                 |      | 47,613            |   |
| Other  accrued liabilities                                                          |   | 39,177                 |      | 45,912            |   |
| Total  current liabilities                                                          |   | 1,176,911              |      | 1,043,687         |   |
|                                                                                |   |                   |      |              |   |
| DEFERRED  GAIN ON SALE OF BUILDING                                                  |   | 271,224                |      | 277,742           |   |
|                                                                                |   |                   |      |              |   |
| STOCKHOLDERS’  EQUITY:                                                         |   |                   |      |              |   |
| Common  stock, $.05 par value                                                       |   | 208,642                |      | 208,642           |   |
| Additional  paid-in capital                                                         |   | 10,922,201             |      | 10,922,201        |   |
| Accumulated  deficit                                                                |   | (10,390,166            | )         | (10,119,941       | )      |
| Total  stockholders’ equity                                                    |   | 740,677                |      | 1,010,902         |   |
| TOTAL  LIABILITIES AND STOCKHOLDERS’ EQUITY                                    |   | $                      | 2,188,812 |              | $      | 2,332,331 |   |

 

See notes to financialstatements

 

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**STATEMENTS OF OPERATIONS**

**DOTRONIX,INC.**

**(UNAUDITED)**

 
|                                         |   | **Three months ended September 30** |     |
|----------------------------------------------|--------|-------------------------------------|----------|
|                                         |   | **2002**                            |     | **2001** |   |
|                                         |   |                                |     |   |   |
| REVENUES                                     |   | $                                   | 641,999  |   | $ | 590,818 |   |
|                                         |   |                                |     |   |   |
| OPERATING  EXPENSES:                         |   |                                |     |   |   |
| Cost  of sales                               |   | 492,763                             |     | 532,823 |   |
|                                         |   |                                |     |   |   |
| Selling,  general and administrative         |   | 403,509                             |     | 477,781 |   |
|                                         |   |                                |     |   |   |
| Interest                                     |   | 15,952                              |     | 13,388 |   |
|                                         |   |                                |     |   |   |
| Net  loss                                    |   | $                                   | (270,225 | ) | $ | (433,174 | ) |
|                                         |   |                                |     |   |   |
| Basic  and diluted loss per common share     |   | $                                   | (0.06    | ) | $ | (0.10 | ) |
|                                         |   |                                |     |   |   |
| Average  number of common shares outstanding |   | 4,172,841                           |     | 4,171,341 |   |

 

See notes to financialstatements

 

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**STATEMENTS OF CASH FLOWS**

**DOTRONIX, INC**

**(UNAUDITED)**

 
|                                                                              |   | **Three months ended September 30** |     |
|-----------------------------------------------------------------------------------|--------|-------------------------------------|----------|
|                                                                              |   | **2002**                            |     | **2001** |   |
| CASH  FLOWS FROM OPERATING ACTIVITIES:                                            |   |                                |     |   |   |
|                                                                              |   |                                |     |   |   |
| Net  loss                                                                         |   | $                                   | (270,225 | ) | $ | (433,174 | ) |
| Adjustment  to reconcile net income to net cash provided by operating activities: |   |                                |     |   |   |
|                                                                              |   |                                |     |   |   |
| Depreciation  and amortization                                                    |   | 38,651                              |     | 72,994 |   |
| Change  in assets and liabilities:                                                |   |                                |     |   |   |
| Accounts  receivable                                                              |   | 1,682                               |     | 519,498 |   |
| Inventories                                                                       |   | 104,730                             |     | 10,645 |   |
| Prepaid  expenses                                                                 |   | (89,863                             | )        | (55,718 | ) |
| Other  assets                                                                     |   | —                              |     | (500 | ) |
| Accounts  payable and accrued liabilities                                         |   | 97,565                              |     | 30,416 |   |
| Salaries,  wages and payroll taxes payable                                        |   | (36,024                             | )        | (46,916 | ) |
|                                                                              |   |                                |     |   |   |
|                                                                              |   |                                |     |   |   |
| NET  CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                              |   | (153,484                            | )        | 97,245 |   |
|                                                                              |   |                                |     |   |   |
| CASH  FLOWS FROM INVESTING ACTIVITIES:                                            |   |                                |     |   |   |
| Purchase  of property, plant and equipment                                        |   | (8,747                              | )        | (13,441 | ) |
|                                                                              |   |                                |     |   |   |
| NET  CASH USED IN INVESTING ACTIVITIES                                            |   | (8,747                              | )        | (13,441 | ) |
|                                                                              |   |                                |     |   |   |
| CASH  FLOWS FROM FINANCING ACTIVITIES:                                            |   |                                |     |   |   |
| Borrowings  on revolving loan                                                     |   | 807,000                             |     | 1,065,000 |   |
| Repayments  on revolving loan                                                     |   | (735,317                            | )        | (1,152,196 | ) |
|                                                                              |   |                                |     |   |   |
|                                                                              |   |                                |     |   |   |
| NET  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                              |   | 71,683                              |     | (87,196 | ) |
|                                                                              |   |                                |     |   |   |
| NET  DECREASE IN CASH AND CASH EQUIVALENTS                                        |   | (90,548                             | )        | (3,392 | ) |
|                                                                              |   |                                |     |   |   |
| CASH  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                 |   | 150,328                             |     | 68,956 |   |
|                                                                              |   |                                |     |   |   |
| CASH  AND CASH EQUIVALENTS AT END OF THE PERIOD                                   |   | $                                   | 59,780   |   | $ | 65,564 |   |

 

See notes to financialstatements

 

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DOTRONIX, INC.

NOTES TO FINANCIAL STATEMENTS

 

A.            Basis ofPresentation

 

The balance sheet as of September 30, 2002, the statements ofoperations for the three month periods ended September 30, 2002 and 2001and the statements of cash flows for the three month periods ended September30, 2002 and 2001 have been prepared by the Company without audit.  In the opinion of management, alladjustments (consisting only of normal recurring accruals) necessary to presentfairly the financial position, results of operations and cash flows atSeptember 30, 2002 and for the three month periods ended September 30, 2002 and2001 presented herein have been made.

 

Certain information and footnote disclosures normally included infinancial statements prepared in accordance with generally accepted accountingprinciples have been condensed or omitted. It is suggested that these financial statements be read in conjunctionwith the Company’s financial statements and notes thereto included in theAnnual Report on Form 10-KSB of the Company for the fiscal year ended June 30,2002.

 

B.            Revolving Lineof  Credit

 

On February 23, 2000, the Company entered into a revolving creditfacility with its president, who is also a major stockholder, and in September2000, the Company’s president extended the loan agreement to February 28, 2002,and increased the loan limit to $1,250,000 in secured financing. In September2001, the Company’s president extended the loan agreement to February 28, 2003and increased the loan limit to $1,500,000 in secured financing. In September2002 the Company’s president extended the loan agreement to September 30, 2003.The revolving credit facility contains a minimum tangible net worth covenant,which the president and major stockholder reduced to $1.0 million in the first quarter of fiscal 2002. InSeptember of 2002 the president eliminated the tangible net worth covenant. Asof November 12, 2002 the Company had $613,165 available under the extension ofthe revolving credit facility.

 

Interest on outstanding borrowings under the revolving credit facilityis accrued at the Wells Fargo Bank prime interest rate plus 3%. Additionally,the Company is required to issue warrants on the Company’s stock to thepresident and major shareholder for incremental increases in the outstandingborrowings balance.  One warrant isissued for every $4 in incremental borrowings made by the Company.  All warrants issued expire in 4 years andhave an exercise price equal to the fair market value of the Company’s stock atthe date of grant. Once repayments on the facility have been made, additionalwarrants are issued for incremental borrowings on the facility only to theextent that the new outstanding borrowings balance exceeds the previous highoutstanding borrowings balance. No additional warrants were issued in thecurrent fiscal year.

 

Company management believes that the cash and cash equivalents on handat November 12, 2002 and future amounts available under the aforementionedcredit agreement should be adequate to meet cash requirements for the balanceof the fiscal year. There is no certainty that the existing credit facilitywill be extended beyond September 30, 2003, or that the Company will be able toreplace it.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

 

INTRODUCTORY STATEMENT

 

The Company experienced substantial revenue declines and incurredsubstantial net losses during fiscal 2002, 2001, and 2000.  Accordingly, during those years it engagedin significant cost cutting measures, including staff reductions.

 

The Company has also undertaken a major change in strategy whichincludes two major goals. One goal is to purchase its products rather thanmanufacture them. The costs of maintaining manufacturing capacity in a highlyvolatile and uncertain market makes in house manufacturing impractical andunprofitable.  The other goal is to become more valuable to the end userof display devices by incorporating all elements of a display system, includinghardware, software, content, installation, and maintenance,  into the Company’s product offerings. Thereis no assurance that the Company will be successful in executing these strategies,or that they will increase the Company’s revenues or improve its results ofoperations.

 

In conjunction with this change in strategy, the Company plans to moveits manufacturing capability from Eau Claire, Wisconsin to New Brighton,Minnesota, in fiscal 2003. All manufacturing operations other than finalassembly will be discontinued.  The Eau Claire building, although still inoperation, has been listed for sale with a real estate agent.

 

Currently, the Company does not generate enough revenue to support itscost structure, and the Company will continue to need external borrowings tosupport operations until the operations improve. The Company has been unable toobtain traditional financing arrangements, and instead has entered into thefinancing arrangements with its president, who is also a major stockholder,which are described under “Liquidity and Capital Resources” below.  The Company will continue to be dependent onthese arrangements to remain in business unless and until its results ofoperations improve.  The Company’spresident is not obligated to continue these arrangements beyond their currentexpiration date of September 30, 2003.

 

RESULTS OF OPERATIONS

 

Revenue increased  by $51,181 or9% for the three months ended September 30, 2002 compared to the prior year.Although revenues appear to have stabilized relative to the severe downturn infiscal 2002, there was only a modest increase in airport and other travelrelated business. Several fast food restaurant chains, while demonstrating aninterest in the Company’s products by placing small evaluation oriented orders,have not yet engaged in significant placement of large scale orders.

 

Gross margin percentage for the quarter ended September 30, 2002 was23% compared to 10% for the same quarter ended September 30, 2001. The improvementwas due in large part to the realignment of manufacturing capacity with orders,after the sudden and unexpected decline in orders in the first quarter offiscal 2001.

 

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Selling, general, and administrative expenses decreased $74,272 or 16%in the quarter ended September 30, 2002, when compared to the prior year. Thedecrease was due to continuing reductions in personnel and a continuing Companywide cost reduction program.

 

Interest expense increased by $2,564, or 19% during the three monthperiod ended September 30, 2002 compared to the same period of the prior year.Although interest rates declined from the prior year, higher sales and theadditional borrowings required due to continuing losses contributed to theincrease in interest expense.

 

LIQUIDITY AND CAPITAL RESOURCES

 

On February 23, 2000, the Company entered into a revolving creditfacility with its president, who is also a major stockholder, and in September2000, the Company’s president extended the loan agreement to February 28, 2002,and increased the loan limit to $1,250,000 in secured financing. In September2001, the Company’s president extended the loan agreement to February 28, 2003and increased the loan limit to $1,500,000 in secured financing. In September2002 the Company’s president extended the loan agreement to September 30, 2003.The revolving credit facility contains a minimum tangible net worth covenant,which the president and major stockholder reduced to $1.0 million in the firstquarter of fiscal 2002. In September of 2002 the president eliminated thetangible net worth covenant. As of November 12, 2002, the Company had $613,165available under the extension of the revolving credit facility.

 

Interest on outstanding borrowings under the revolving credit facilityis accrued at the Wells Fargo Bank prime interest rate plus 3%. Additionally,the Company is required to issue warrants on the Company’s stock to thepresident and major shareholder for incremental increases in the outstandingborrowings balance.  One warrant isissued for every $4 in incremental borrowings made by the Company.  All warrants issued expire in 4 years andhave an exercise price equal to the fair market value of the Company’s stock atthe date of grant. Once repayments on the facility have been made, additionalwarrants are issued for incremental borrowings on the facility only to theextent that the new outstanding borrowings balance exceeds the previous highoutstanding borrowings balance. No additional warrants were issued in thecurrent fiscal year.

 

During the three months ended September 30, 2002, cash flow used inoperating activities was approximately $153,000. Non-cash depreciation of$45,000 reduced the effect on cash of a net loss of $270,000. Net changes incurrent assets and current liabilities other than cash and cash equivalentsreduced the effects of the net loss by approximately $78,000. Cash used topurchase fixed assets amounted to $9,000. Additional borrowings totaled $72,000. Cash and cash equivalentsdecreased  by approximately $150,000.

 

Company management believes that the cash and cash equivalents on handat November 12,  2002 and future amountsavailable under the aforementioned credit agreement should be adequate to meetcash requirements for the balance of the fiscal year. There is no certaintythat the existing credit facility will be extended beyond September 30, 2003,or that the Company will be able to replace it.

 

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CRITICAL ACCOUNTING POLICIES

 

The Company has credit policies that establish specific criteriarelated to credit worthiness that its customers must meet prior to the shipmentof product to the customer. The Company periodically makes limited andselective exceptions to its policy of not shipping to customers with overduebalances when the particular customer has met specific criteria which areindicative of a wherewithal to pay their past due and future balances.

 

The Company does not accept returns from customers without its priorauthorization. Returns are typically accepted only for damaged or defectivegoods, or for pricing or shipping discrepancies. The Company reserves the rightto refuse authorization of any returns. If the Company accepts an unauthorizedreturn or if a return is the result of a customer error, the  customer may be subject to a 10% handlingcharge. The Company reserves the right to cancel open orders or backorders forthose customers who abuse or excessively use return privileges.

 

The Company believes that the selection and application of itsaccounting policies are appropriately reasoned. The following are theaccounting policies that management believes require the most difficult,subjective or complex judgments about matters that are inherently uncertain.

 

Inventory Valuation - A reserve is established for estimated surplusand discontinued inventory items. The amount of the reserve is determined byanalyzing historical and projected sales information, plans for discontinuedproducts and other factors. Changes in sales volumes due to unexpected economicor competitive conditions are among the factors that would result in materiallydifferent amounts for this item.

 

Allowance for Doubtful Accounts - An allowance is established forestimated uncollectible accounts receivable. The required allowance isdetermined by reviewing customer accounts and making estimates of amounts thatmay be uncollectible. Factors considered in determining the amount of thereserve include the age of the receivable, the financial condition of thecustomer, general business, and economic conditions, and other relevant factsand circumstances. Unexpected changes in the aforementioned factors wouldresult in materially different amounts for this item.

 

Recognition of revenue  -** **The Company recognizes revenuewhen title of goods passes to the customer.

 

ACCOUNTING PRONOUNCEMENTS

 

In August 2001, the FASB issued SFAS No. 144*, Accounting for the Impairment ofDisposal of Long-Lived Assets*. SFAS No. 144 addresses financial accounting and reporting for theimpairment or disposal of long-lived assets and supercedes SFAS No. 121, andthe accounting and reporting provisions of Accounting Principles Board (APB)Opinion No. 30,*Reporting the Results of Operations-Reporting the Effects of Disposalof a Segment of a Business and Extraordinary, Unusual, and InfrequentlyOccurring Transactions.*  SFASNo. 144 requires that long-lived assets to be disposed of be measured at thelower of carrying amount or fair value less cost to sell.  The Company has adopted SFAS 144 in fiscal2003, which had no effect on its financial statements.

 

FASB issued SFAS No. 146*, Accounting for Costs Associated with Exit orDisposal Activities.*  TheStandard requires companies to recognize with exit or disposal activities whenthey are incurred rather than at the date of a commitment to an exit ordisposal plan.  SFAS No. 146

 

9

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replaces previous accounting guidance provided by the Emerging IssuesTask Force (EITF) Issue No. 94-3, *Liability Recognition for Certain EmployeeTermination Benefits and Other Costs to Exit an Activity (including CertainCosts Incurred in a Restructuring)* and is to be appliedprospectively to exit or disposal activities initiated after December 31, 2002.The company is evaluating the impact of the adoption of these standards and hasnot yet determined the effect of adoption on its financial position and resultsof operations.

 

COMMON STOCK LISTING

 

The Company’s Common Stock is quoted on the OTC Bulletin Board underthe symbol “DOTX”.

 

Item 3.CONTROLS AND PROCEDURES

 

(a)                                  Evaluationof disclosure controls and procedures.

 

Our chief executive officer and our chief financialofficer, after evaluating the effectiveness of the Company’s disclosurecontrols and procedures as of November 8, 2002, (the “Evaluation Date”) haveconcluded that, as of the Evaluation Date, the Company’s disclosure controlsand procedures were adequate and designed to ensure that material informationrelating to the Company would be made known to them by others within theCompany.

 

(b)                                 Changesin internal controls*.*

 

There were no significant changes in the Company’scontrols or in other factors that could significantly affect the Company’sdisclosure controls and procedures subsequent to the date of their most recentevaluation.

 

PART II - OTHER INFORMATION

 

Item 6. Exhibits and Reports on Form 8-K

 

(a)                                                                                  Listingof Exhibits

 

10.4                           Thirdextension and amendment of loan and security agreements by and between  the Company and William S. Sadler, datedOctober 7, 2002 (filed herewith).

 

99.1                           Certificationof Chief Executive Officer required pursuant to 18 U.S.C. §1350 as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

99.2                           Certificationof Chief Financial Officer required pursuant to 18 U.S.C. §1350 as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

(b)                                 Acurrent report on Form 8-K was filed on October 1, 2002 with Item 7, FinancialStatements and Exhibits, and Item 9, Regulation FD Disclosure, being reported.The Company included as exhibits the certifications provided by its chiefexecutive officer

 

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and its chief financial officer as required pursuantto 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Actof 2002.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

 
| Date:  November  12, 2002 |   |   |   |   |   | Dotronix, Inc.                                |
|--------------------------------|--------|--------|--------|--------|--------|-----------------------------------------------|
|                           |   |   |   |   |   |                                          |
|                           |   |   |   |   | By     | /s/ William S. Sadler                         |   |
|                           |   |   |   |   |   | William S. Sadler                             |
|                           |   |   |   |   |   | President                                     |
|                           |   |   |   |   |   | (Principal Executive  Officer)                |
|                           |   |   |   |   |   |                                          |
|                           |   |   |   |   | By     | /s/ Robert V. Kling                           |   |
|                           |   |   |   |   |   | Robert V. Kling                               |
|                           |   |   |   |   |   | Chief Financial Officer                       |
|                           |   |   |   |   |   | (Principal Financial  and accounting Officer) |

 

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**SECTION 302 CERTIFICATIONS**

I, William S. Sadler, certify that:

 

1.                                       Ihave reviewed this quarterly report on Form 10-QSB of Dotronix, Inc.;

 

2.                                       Basedon my knowledge, this quarterly report does not contain any untrue statement ofa material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this quarterlyreport;

 

3.                                       Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;

 

4.                                       Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and have:

 

a)                                      designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

 

b)                                     evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofNovember 8, 2002 (the “Evaluation Date”); and

 

c)                                      presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

 

5.                                       Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunctions):

 

a)                                      allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)                                     anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.                                       Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date   November 12, 2002 |   | .      |   | By                           | /s/ William S. Sadler |   |
|-------------------------------|--------|--------|--------|------------------------------|-----------------------|--------|
|                          |   |   |   | William S. Sadler, President |

 

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I, Robert V. Kling, certify that:

 

1.                                       Ihave reviewed this quarterly report on Form 10-QSB of Dotronix, Inc.;

 

2.                                       Basedon my knowledge, this quarterly report does not contain any untrue statement ofa material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this quarterly report;

 

3.                                       Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;

 

4.                                       Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and have:

 

a)                                      designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

 

b)                                     evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofNovember 8, 2002 (the “Evaluation Date”); and

 

c)                                      presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the EvaluationDate;

 

5.                                       Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunctions):

 

a)                                      allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)                                     anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.                                       Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date   November 12, 2002 |   | .      |   | By                                       | /s/ Robert V. Kling |   |
|-------------------------------|--------|--------|--------|------------------------------------------|---------------------|--------|
|                          |   |   |   | Robert V. Kling, Chief Financial Officer |

 

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