|U.S. SECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549


FORM 10-QSB



QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly
period ended September 30, 2002


Commission File
Number: 0-230 17


SONTRA MEDICAL
CORPORATION (Exact name of registrant as specified in its charter)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|MINNESOTA                                                                  |  | 41-1649949                                         
|-------------------------------------------------------------------------- |  | ---------------------------------------------------
|(State or
      other jurisdiction of
      Incorporation or organization) |  | (I.R.S.
      Employer
      Identification Number)
|                                                                           |  |                                                    
|58 Charles
      Street, Cambridge, Massachusetts                          |  | 02141                                              
|(Address
      of principal executive offices)                             |  | (Zip Code)                                         

|(617) 494-5337(Registrants
telephone number, including area code)


ChoiceTel
Communications, 15500 Wayzata Blvd., #1029, Wayzata Minnesota 55391(Former name,
former address and former fiscal year if changed from last report)


Indicate by check mark whether the
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 the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.


Yes |X|  No
|_|


As of the date of this
filing, the Registrant had 9,330,090 shares of Common Stock outstanding.



1
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|SONTRA MEDICAL
CORPORATION


FORM 10-QSB INDEX
|----------------------------------------------

|                                     | Page
      Number
|------------------------------------ | -----------------
|                                     |                  
|                                     |                  
|Part
      I - Financial Information
|                                     |                  
|Item 1.                              |                  
|                                     |                  
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|                                     |                  
|Item 2.                              |                  
|                                     |                  
|                                     |                  
|Item 3.                              |                  
|                                     |                  
|Part
      II - Other Information   
|                                     |                  
|Item 1.                              |                  
|                                     |                  
|Item 6.                              |                  
|                                     |                  
|                                     |                  

|
|

|SONTRA MEDICAL
CORPORATION(A Development Stage Company)Consolidated Balance Sheets
|----------------------------------------------------------------------------------

|                                                                                        | As
      of                    |            
|--------------------------------------------------------------------------------------- | ------------------------------ | -----------
|                                                                                        | September
      30,
      2002 |            
|                                                                                        |                                |            
|Assets:                                                                                 | (Unaudited)                    |            
|Current
      Assets:                                                                   |                                |            
|Cash
      and cash equivalents                                                         | $                              | 3,594,331  
|Prepaid
      expenses and other current assets                                         |                                | 165,462    
|                                                                                        |                                |            
|Total
      current assets                                                              |                                | 3,759,793  
|                                                                                        |                                |            
|Property
      and Equipment, at cost                                                   |                                |            
|Computer
      equipment                                                                |                                | 152,421    
|Office
      and laboratory equipment                                                   |                                | 380,396    
|Furniture
      and fixtures                                                            |                                | 16,011     
|Leasehold
      improvements                                                            |                                | 287,035    
|                                                                                        |                                |            
|                                                                                        |                                | 835,863    
|Less-Accumulated
      depreciation and amortization                                    |                                | (600,678   
|                                                                                        |                                |            
|Net
      property and equipment                                                        |                                | 235,185    
|Restricted
      Cash                                                                   |                                |            
|Other
      Assets                                                                      |                                | 31,675     
|                                                                                        |                                |            
|Total
      assets                                                                      | $                              | 4,026,653  
|                                                                                        |                                |            
|                                                                                        |                                |            
|LIABILITIES,
      CONVERTIBLE PREFERRED STOCK AND
      STOCKHOLDERS EQUITY (DEFICIT) |                                |            
|Current
      Liabilities:                                                              |                                |            
|Accounts
      payable                                                                  | $                              | 245,046    
|Accrued
      expenses                                                                  |                                | 669,445    
|                                                                                        |                                |            
|Total
      current liabilities                                                         |                                | 914,491    
|                                                                                        |                                |            
|Series
      A Convertible Preferred Stock, $0.01 par value                             |                                |            
|Authorized,
      issued and outstanding 1,938,075 shares in 2001                       |                                |            
|and
      no shares in 2002 (liquidation preference of $7,000,000)                      |                                |           
|                                                                                        |                                |            
|Series
      B Redeemable Convertible Preferred Stock, $0.01 par value                  |                                |            
|Authorized
      3,994,514 shares, issued and outstanding 1,646,354 shares              |                                |            
|in
      2001 and no shares in 2002, at redemption value (liquidation                   |                                |            
|preference
      of $3,420,789 at 2001)                                                 |                                |           
|                                                                                        |                                |            
|Stockholders
      Equity:                                                             |                                |            
|Common
      stock, $0.01 par value, Authorized 20,000,000 shares                       |                                |            
|issued
      and outstanding 9,289,624 shares in 2002 and 2,613,348 in 2001             |                                | 92,896     
|Additional
      paid-in capital                                                        |                                | 19,480,740 
|Deferred
      stock-based compensation                                                 |                                | (1,825,716 
|Subscriptions
      receivable                                                          |                                | (17,294    
|Deficit
      accumulated during the development stage                                  |                                | (14,618,464
|                                                                                        |                                |            
|                                                                                        |                                | 3,112,162  
|                                                                                        |                                |            
|Total
      liabilities, convertible preferred stock and stockholders                  |                                |            
|equity
      (deficit)                                                                  | $                              | 4,026,653  
|                                                                                        |                                |            

|The accompanying notes
are an integral part of these financial statements.


3
|------------------------------------------------------------------------------

|SONTRA MEDICAL
CORPORATION(A Development Stage Company)Consolidated Statements of Operations(Unaudited)
|-------------------------------------------------------------------------------------------------------

|                                                 | Three
      Months Ended
      September 30, |            | Nine
      Months Ended
      September 30, |   | Cumulative 
      Period from 
      Inception 
      (January 29, 1996 to
      September 30, 2002) |  
|------------------------------------------------ | -------------------------------------------- | ---------- | ------------------------------------------- | - | ---------------------------------------------------------------------------------------------------- | -
|2002                                             |                                              | 2001       | 2002                                        |   | 2001                                                                                                
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Revenue                                          | $                                            |           |                                             | $ |                                                                                                     |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Operating
      Expenses:                        |                                              |            |                                             |   |                                                                                                      |  
|Research
      and development                   |                                              | 539,461    |                                             |   | 549,260                                                                                              |  
|General
      and administrative                 |                                              | 544,494    |                                             |   | 313,006                                                                                              |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Total
      operating expenses                   |                                              | 1,083,955  |                                             |   | 862,266                                                                                              |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Loss
      from operations                       |                                              | (1,083,955 | )                                           |   | (862,266                                                                                             | )
|Interest
      income (expense), net             |                                              | 20,290     |                                             |   | (20,428                                                                                              | )
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Net
      loss                                   |                                              | (1,063,665 | )                                           |   | (882,694                                                                                             | )
|Accretion
      of Dividend on Series B          |                                              |            |                                             |   |                                                                                                      |  
|Redeemable
      Convertible Preferred           |                                              |            |                                             |   |                                                                                                      |  
|Stock                                            |                                              |           |                                             |   | (143,959                                                                                             | )
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Net
      loss applicable to common shareholders | $                                            | (1,063,665 | )                                           | $ | (1,026,653                                                                                           | )
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|                                                 |                                              |            |                                             |   |                                                                                                     
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Net
      loss per common, basic and diluted     | $                                            | (0.11      | )                                           | $ | (0.39                                                                                                | )
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  
|Basic
      and diluted weighted average         |                                              |            |                                             |   |                                                                                                      |  
|common
      shares outstanding                  |                                              | 9,265,775  |                                             |   | 2,612,819                                                                                            |  
|                                                 |                                              |            |                                             |   |                                                                                                      |  

|The accompanying notes
are an integral part of these financial statements.


4
|------------------------------------------------------------------------------

|Sontra Medical
Corporation(A Development Stage Company)Consolidated Statement of Cash Flows(Unaudited)
|------------------------------------------------------------------------------------------------------

|                                                                    | Nine
      Months Ended Sept 30, |            | Cumulative period
      January 29,1996 
      to September 30, |  
|------------------------------------------------------------------- | -------------------------------- | ---------- | --------------------------------------------------------------- | -
|2002                                                                |                                  | 2001       | 2002                                                           
|                                                                    |                                  |            |                                                                 |  
|Cash
      Flows From Operating Activities:                         |                                  |            |                                                                 |  
|Net
      loss                                                      | $                                | (2,747,943 | )                                                               | $
|Adjustments
      to reconcile net loss to net                      |                                  |            |                                                                 |  
|cash
      used in operating activities:                            |                                  |            |                                                                 |  
|Depreciation
      and amortization                                 |                                  | 104,086    |                                                                 |  
|Stock
      based compensation                                      |                                  | 312,533    |                                                                 |  
|Amortization
      of discount on convertible                       |                                  |            |                                                                 |  
|promissory
      notes                                              |                                  |           |                                                                 |  
|Changes
      in assets and liabilities:                            |                                  |            |                                                                 |  
|Prepaid
      assets and other current assets                       |                                  | (113,408   | )                                                               |  
|Accounts
      payable                                              |                                  | 80,447     |                                                                 |  
|Accrued
      expenses                                              |                                  | (101,719   | )                                                               |  
|                                                                    |                                  |            |                                                                 |  
|Net
      cash used for operating activities                        |                                  | (2,466,004 | )                                                               |  
|                                                                    |                                  |            |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Cash
      Flows from Investing Activities:                         |                                  |            |                                                                 |  
|Purchase
      of property and equipment                            |                                  | (76,782    | )                                                               |  
|Sale
      of fixed assets                                          |                                  | 8,428      |                                                                 |  
|(Increase)
      decrease in restricted cash                        |                                  | 10,500     |                                                                 |  
|(Increase)
      decrease in other long-term assets                 |                                  |           |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Net
      cash used in investing activities                         |                                  | (57,854    | )                                                               |  
|                                                                    |                                  |            |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Cash
      Flows From Financing Activities                          |                                  |            |                                                                 |  
|Proceeds
      from equipment loan                                  |                                  |           |                                                                 |  
|Repayment
      of equipment loan                                   |                                  |           |                                                                 |  
|Deferred
      Financing Costs                                      |                                  |            |                                                                 |  
|Net
      proceeds from the sale of common stock                    |                                  |           |                                                                 |  
|Cash
      received from ChoiceTel merger                           |                                  | 4,727,566  |                                                                 |  
|Net
      proceeds from the sale of preferred stock                 |                                  | 980,107    |                                                                 |  
|Proceeds
      from issuance of Series B stock                      |                                  |           |                                                                 |  
|Proceeds
      from stock option exercise                           |                                  | 29,449     |                                                                 |  
|Distribution
      to shareholders                                  |                                  |           |                                                                 |  
|Payment
      of subscription receivable                            |                                  |           |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Net
      cash provided by financing activities                     |                                  | 5,737,122  |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Net
      Increase (Decrease) in Cash and Cash Equivalents          |                                  | 3,213,264  |                                                                 |  
|Cash
      and Cash Equivalents, beginning of period                |                                  | 381,067    |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Cash
      and Cash Equivalents, end of period                      | $                                | 3,594,331  |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|                                                                    |                                  |            |                                                                 |  
|Supplemental Disclosure
        of Non Cash Financing Transactions: |                                  |            |                                                                 |  
|Conversion
      of note in Series A pfd stock                      | $                                |           |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Conversion
      of note into Series B pfd stock                    | $                                |           |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Accretion
      of dividend on Series B pfd stock                   | $                                | 148,101    |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Issuance
      of common stock in connection                        |                                  |            |                                                                 |  
|with
      the convertible promissory notes                         | $                                |           |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Beneficial
      conversion feature on convertible                  |                                  |            |                                                                 |  
|promissory
      notes                                              | $                                |           |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Conversion
      of Series A and B Preferred Stock in               |                                  |            |                                                                 |  
|common stock                                                        | $                                | 11,548,997 |                                                                 | $
|                                                                    |                                  |            |                                                                 |  
|Supplemental
      Disclosue of Cash Flow Information:              |                                  |            |                                                                 |  
|Cash
      paid for interest                                        | $                                |           |                                                                 | $
|                                                                    |                                  |            |                                                                 |  

|The accompanying notes
are an integral part of these financial statements.


5
|------------------------------------------------------------------------------

|SONTRA MEDICAL
CORPORATION(Formerly ChoiceTel Communications, Inc.)(A Development Stage Company)Notes to
Consolidated Financial StatementsSeptember 30, 2002(Unaudited)


(1) BASIS OF PRESENTATION


The
accompanying consolidated financial statements include the accounts of Sontra Medical
Corporation (the Company) and its wholly-owned subsidiary, Sontra Medical,
Inc. (Sontra). All significant inter-company balances and transactions have
been eliminated in consolidation. The financial information included in this report has
been prepared in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-QSB, as recently amended.
Accordingly, they do not include all of the information and disclosures required for
annual financial statements. These financial statements should be read in conjunction
with the financial statements and related footnotes of the annual report of the
predecessor company, ChoiceTel Communications, Inc. (ChoiceTel), filed with
the Securities and Exchange Commission (the SEC) on Form 10-KSB for the
fiscal year ended December 31, 2001, and the financial statements and related footnotes
of Sontra Medical Inc., which are included in the Companys Registration Statement
on Form S-4 (Registration No 333-86814) as filed with the SEC on May 16, 2002.


In the
opinion of the Companys management, all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the Companys financial position as
of September 30, 2002 and the results of operations and cash flows for the three and nine
month periods ended September 30, 2002 and September 30, 2001 have been included.
However, the results of operations for the three and nine months ended September 30, 2002
are not necessarily indicative of the results of operations for the full fiscal year or
any other interim period.


(2) MERGER AGREEMENT
WITH CHOICETEL COMMUNICATIONS, INC.


At an
annual meeting of ChoiceTel shareholders and a special meeting of Sontra stockholders
held on June 20, 2002, the stockholders of Sontra and the shareholders of ChoiceTel
approved and adopted the Agreement and Plan of Reorganization, dated as of February 27,
2002 (the Merger Agreement), among ChoiceTel, its wholly-owned subsidiary, CC
Merger Corp., and Sontra. Pursuant to the Merger Agreement, Sontra merged with and into
CC Merger Corp., with Sontra surviving the merger as a wholly-owned subsidiary of
ChoiceTel (the Merger). Subsequent to the consummation of the Merger,
ChoiceTel changed its name to Sontra Medical Corporation.


For
accounting purposes, the Merger transaction is treated as a capital transaction and a
recapitalization, whereby the historical financial statements of Sontra become the
historical financial statements of the combined entity. Following the Merger, the
business conducted by the combined entity will be the business conducted by Sontra prior
to the Merger. The accounting treatment for the recapitalization is similar to that
resulting from an acquisition, except that goodwill and other intangible assets were not
recorded.


Pursuant
to the recapitalization and in consideration for the $4,794,524 of net assets that Sontra
received from ChoiceTel, the shareholders of ChoiceTel were deemed to have received
3,035,795 shares of the Companys common stock. In addition, the preferred
stockholders of Sontra converted their shares of Series A Preferred Stock and Series B
Preferred Stock into common stock of Sontra. Thereafter, 32,227,829 shares of Sontras
common stock were exchanged at a ratio of .1927 for 6,210,289 shares of the Companys
common stock. Upon completion of the Merger, 9,246,084 shares of the Companys
common stock were issued and outstanding, with the former ChoiceTel shareholders owning
approximately 32.83% of the Companys common stock and the former Sontra
shareholders owning approximately 67.17% of the Companys outstanding common stock.
All of the per share data for periods prior to September 30, 2002 have been retroactively
adjusted by the .1927 exchange ratio to reflect the recapitalization. In the quarter
ended September 30, 2002, certain adjustments including an additional ligitagion
liability were made to the net assets of ChoiceTel. These adjustments which reduced net
assets acquired by $149,366 were recorded as a reduction in additional paid in capital.


The
Merger was effected pursuant to the Delaware General Corporation Law, and is intended to
be a tax-free reorganization under Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended.


On
April 12, 2002, Sontra granted a consultant the option to purchase 38,540 shares of the
Companys common stock at an exercise price of $.52 per share in exchange for
services related to the proposed Merger with ChoiceTel. The shares underlying the option
vested 100% upon the consummation of the Merger and were valued as of June 20, 2002, the
closing date of the Merger, at approximately $115,000 using the Black-Scholes option
pricing model. However, since the services provided by the consultant are considered to
be costs associated with the Merger, there is no impact on additional paid-in capital.


(3) REDEEMABLE PREFERRED
STOCK


In
conjunction with the Merger (see Note 2) on June 20, 2002, all outstanding shares of
Sontras Series A Preferred Stock and Series B Preferred Stock converted into an
equal number of shares of Sontra common stock.


Prior
to being converted into common stock in connection with the merger, the Series B
Preferred Stock of Sontra was recorded at net sales price and the carrying value was
accreted over time such that at the earliest date of possible redemption, the Series B
Preferred Stock was carried at its redemption value. The periodic accretion, which was
recorded to increase the carrying value, was charged directly to deficit accumulated in
the development stage. For the nine months ended September 30, 2002, $148,101 was charged
to deficit accumulated in the development stage and related to the accretion on the
Series B Preferred Stock through the date of conversion. The carrying value of the Series
A Preferred Stock of Sontra did not accrete prior to its conversion into common stock.


6
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES


The
accompanying financial statements reflect the application of certain accounting policies
as described in this note and elsewhere in the accompanying financial statements.


(a) Use of Estimates


The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts
of expenses during the reporting period. Actual results could differ from those
estimates.


(b) Cash and Cash
Equivalents


The
Company considers all highly liquid investments with maturities of ninety days or less to
be cash equivalents. Cash equivalents consist primarily of commercial paper and money
market funds as of September 30, 2002 and December 31, 2001.


(c) Depreciation and
Amortization


The
Company provides for depreciation and amortization by charges to operations for the cost
of assets using the straight-line method based on the estimated useful lives of the
related assets, as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Asset
      Classification            |  | Estimated
      Useful Life
|------------------------------------- |  | ---------------------------
|Computer
      equipment              |  |                            
|Office
      and laboratory equipment |  |                            
|Furniture
      and fixtures          |  |                            
|Leasehold
      improvements          |  |                            

|(d) Stock-Based
Compensation


The
Companys employee stock option plan is accounted for using the intrinsic
value-based method of Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. Sontra uses the fair value
method of SFAS No. 123, Accounting for Stock-Based Compensationto account for
non-employee stock-based compensation.


In
1997, the Company adopted the 1997 Long-term Incentive and Stock Option Plan (the 1997
Plan). In connection with the Merger, the Company assumed the 1999 Sontra Medical,
Inc. Stock Option and Incentive Plan (the 1999 Plan and together with the
1997 Plan, the Plans). Pursuant to the Plans, the Board of Directors (or
committees and/or executive officers delegated by the Board) may grant incentive and
nonqualified stock options to the Companys employees, officers, directors,
consultants and advisors. The Company has reserved an aggregate of 1,500,000 shares of
common stock under the 1997 Plan and 866,539 shares of common stock under the 1999 Plan.



There
were no options issued in the quarter ended March 31, 2002. In the quarter ended June 30,
2002, the Company granted options to purchase 1,366,041 shares of common stock at prices
ranging from $0.52 to $3.74 which approximated fair value. In the quarter ended September
30, 2002, the Company granted options to purchase 281,685 shares of common stock at an
exercise price of $1.69 per share which approximated fair value. As of September 30,
2002, outstanding options to purchase common stock totaled 2,142,673 shares at a weighted
average exercise price of $1.65 per share.


In
consideration of the treatment of the Merger as a recapitalization as discussed in Note
2, the Company assumed the options that were issued by ChoiceTel prior to the Merger,
which upon exercise, would constitute 212,341 shares of the Companys common stock.


On
June 28, 2002, Sontra granted non-qualified stock options to certain members of its Board
of Directors for a total of 200,000 shares of common stock. The options had an exercise
price of $2.50 and the fair value of the common stock on this date was $4.00. As a
result, Sontra recorded additional paid in capital and non-cash compensation expense of
$300,000 for the quarter ending June 30, 2002.


On
September 23, 2002, the Company repriced certain options previously granted to the chief
executive officer and chief financial officer, which relate to an aggregate of 850,000
shares of the Companys common stock. The new exercise prices for these options are
between $.5189 and $2.55 per share. As a result of this repricing, the Company will
recognize the intrinsic value of these options over the remaining vesting term. The
intrinsic value will continue to be re-measured each period throughout the life of the
options. As a result, the Company recorded additional paid-in capital of approximately
$1,838,000, deferred compensation of approximately $1,826,000 and non-cash compensation
expense of $12,532 for the three and nine month periods ended September 30, 2002. This
re-measurement will result in unpredictable charges or credits, which will depend on
fluctuations in quoted prices for the Companys common stock.


(e) Net Loss per Common
Share


Basic
and diluted net loss per share of the Companys common stock are presented in
conformity with SFAS No. 128, Earnings per Share, for all periods presented.
Accordingly, basic and diluted net loss per share of common stock has been computed by
dividing the net loss applicable to common stockholders in each period by the weighted
average number of shares of common stock outstanding during such period.


7
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) Research and
Development Expenses


The
Company charges research and development expenses to operations as incurred. Research and
development expenses primarily consist of salaries and related expenses for personnel and
consulting services. Other research and development expenses include fees paid to
consultants and outside service providers, the costs of materials used in research and
development, information technology and facilities costs.


(g) Income Taxes


The
Company accounts for federal and state income taxes in accordance with SFAS No. 109, Accounting
for Income Taxes. Under SFAS No. 109, deferred tax assets and liabilities are
recognized based upon temporary differences between the financial statement and the tax
basis of assets and liabilities. Deferred income taxes are based upon prescribed rates
and enacted laws applicable to periods in which differences are expected to reverse.
Valuation allowances are provided as needed to reduce deferred tax assets to the amount
expected to be realized. Accordingly, the Company has not recorded any federal or state
tax benefits, as the Company has incurred net losses for all periods presented herein.


(5) LITIGATION


A suit
was filed on June 4, 2001 in Hennepin County, Minnesota District Court by Leaf
Industries, seeking to pierce the corporate veil and hold the Company responsible for the
debts of a former ChoiceTel subsidiary, Advants, Inc. Tomato Land Displays was also a
plaintiff in this action, as it filed cross claims against the Company. In October 2002,
the Company settled the suit with the plaintiffs for $210,000. The net assets received
from ChoiceTel in the Merger were adjusted at September 30, 2002 as a result of this
settlement (see Note 2).


Based
on ChoiceTels activities in the public payphone market in Puerto Rico, in August
2002, Sontra Medical Corporation has filed a lawsuit against GTE International
Telecommunications, Inc. and Puerto Rico Telephone Company in the United States District
Court for the District of Puerto Rico for violations of federal and Commonwealth
antitrust laws, among others. Sontras lawsuit is joined by two other Puerto Rican
payphone providers, Pan American Telephone Co., Inc. and In Touch Telecommunications,
Inc. The lawsuit alleges that Puerto Rico Telephone Company and its operating company,
GTE International Telecommunications, Inc., engaged in a pattern of unlawful exclusionary
acts in order to maintain its monopoly position in the market for the provision of
payphones to payphone location owners in Puerto Rico. The defendants are expected to file
a motion to dismiss.


Item 2. Managements
Discussion and Analysis or Plan of Operation


The
following discussion of the consolidated financial condition and results of operations of
the Company should be read in conjunction with the financial statements and the related
notes thereto included elsewhere in this Form 10-QSB, the audited financial statements
and notes thereto, Managements Discussion and Analysis of Financial Condition and
Results of Operations included in ChoiceTels Annual Report on Form 10-KSB filed
with the SEC for the fiscal year ended December 31, 2001, and the financial statements
and related footnotes of Sontra included in the Registration Statement on Form S-4, as
amended, (Registration No. 333-86814) dated May 16, 2002. Except for the historical
information contained herein, the following discussion contains forward-looking
statements that involve risks and uncertainties, certain of which are beyond our control.
Actual results could differ from these forward-looking statements as a result of a number
of factors including, but not limited to, those factors described in Factors That
May Affect Future Results of this Form 10-QSB.


Overview


On
June 20, 2002, ChoiceTel (the predecessor corporation to the Company), Sontra, a wholly
owned subsidiary of ChoiceTel, consummated a business combination whereby Sontra became a
wholly-owned subsidiary of ChoiceTel. Following the Merger, ChoiceTel changed its
corporate name to Sontra Medical Corporation and began operating in Sontras line of
business.


Sontra
Medical Corporation is a development stage life sciences company that is working to
develop non-invasive, transdermal, diagnostic and drug delivery products based on the
Companys SonoPrep® ultrasound-mediated skin permeation technology. The Companys
lead product in development is its Symphony Diabetes Management System for the
continuous non-invasive monitoring of glucose levels in diabetic patients. Other products
in development that are based upon the Companys SonoPrep® skin permeation
technology include skin preparation to improve electrophysiology tests, the enhanced
transdermal delivery of topically applied drugs and cosmetics, and the transdermal drug
delivery of large molecule injectable biopharmaceuticals.


Sontra
has incurred net losses since its inception in 1996, including a net loss of
approximately $2,748,000 and $4,725,000 for the nine months ended September 30, 2002 and
the year ended December 31, 2001 respectively. As of September 30, 2002, the Company had
an accumulated deficit of $14,618,000. The Companys losses have resulted
principally from costs incurred in conjunction with its research and development
initiatives. The Company expects additional losses in the foreseeable future primarily as
a result of its research and development activities and other administrative-related
expenses.


A
significant portion of the Companys research and development expenses include
salaries paid to personnel and outside consultants and service providers, as well as the
cost of materials used in research and development, and information technology and
facilities costs. The Company expects that its research and development expenses will
continue to increase as it works to complete the development of its products, obtain
regulatory clearances or approvals, and conduct further research and development.


General
and administrative expenses consist primarily of non-research personnel salaries and
related expenses, facilities costs and professional fees. The Company expects general and
administrative expenses to increase as it hires additional personnel and builds its
infrastructure to support future growth.


Stock-based
compensation expense, a non-cash expense, represents the difference between the exercise
price and fair value of common stock on the date of grant. The stock-based compensation
expense is remeasured each period and amortized over the vesting period of the applicable
options, which is generally 42 months.


8
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|Financial
Reporting Release No. 60, which was recently issued by the SEC, requires all registrants
to discuss critical accounting policies or methods used in the preparation of the
financial statements. The notes to the consolidated financial statements includes a
summary of the significant accounting policies and methods used in the preparation of our
consolidated financial statements.


Further,
we have made a number of estimates and assumptions that affect reported amounts of
assets, liabilities, revenues and expenses, and actual results may differ from those
estimates. As we are a development stage company, the areas that require the greatest
degree of management judgment are the assessment of the recoverability of long-lived
assets, primarily intellectual property, and the realization, if any, of our net deferred
tax assets.


We
believe that full consideration has been given to all relevant circumstances that Sontra
may be subject to, and the financial statements accurately reflect Sontras best
estimate of the results of operations, financial position and cash flows for the periods
presented.


Results of Operations


Comparison
of the quarters ended September 30, 2002 and 2001


Research
and development expenses. Research and development expenses decreased to $539,000 for
the quarter ended September 30, 2002 from $549,000 for the quarter ended September, 2001.
This reduction was primarily attributable to a decrease in spending on outside
consultants. The Company expects research and development expenses to increase
substantially over the next year as it accelerates the commercialization of its SonoPrep® technology.


General
and administrative expenses. General and administrative expenses increased by
$231,000 to $544,000 for the quarter ended September 30, 2002 from $313,000 for the
quarter ended September 30, 2001. The increase was attributable to the hiring of members
of the Companys senior management team as well as expenses related to the filing
and reporting obligations of a public company.


Interest
income. Interest income was $20,290 for the quarter ended September 30, 2002 compared
to interest expense of $20,000 for the quarter ended September 30, 2001. This decrease in
interest expense is attributable to the Company having no loans outstanding in 2002, as
well as the additional interest income earned on the cash received in the merger.


Comparison
of the nine months ended September 30, 2002 and 2001


Research
and development expenses. Research and development expenses decreased to $1,400,000
for the nine months ended September 30, 2002 from $1,522,000 for the nine months ended
September 30, 2001. This decrease was primarily attributable to a decrease in spending
for outside consultants. The Company expects research and development expenses to
increase substantially over the next year as it accelerates the commercialization of its
SonoPrep® technology.


General
and administrative expenses. Selling, general and administrative expenses increased
by $285,000 to $1,371,000 for the nine months ended September 30, 2002 from $1,086,000
for the nine months ended September 30, 2001. The increase is primarily attributable to a
$300,000 non-cash compensation expense charge recorded in the second quarter of 2002. The
Company expects general and administrative expenses to increase in the future as a result
of the hiring of members of its senior management team, and expenses related to the
filing and reporting obligations of a public company following the completion of the
Merger with ChoiceTel.


Interest
income (expense). Interest income was $23,016 for the nine months ended September 30,
2002 compared to interest expense of $1,283,000 for the nine months ended September
30,2001. The decrease in interest expense is attributable to the Company having no loans
outstanding in 2002. In addition, the Company recorded a non-cash interest expense of
$1,200,000 in the first quarter of 2001 to amortize a discount on a convertible
promissory note.


Liquidity and Capital
Resources


The
Company is a development stage company and has financed its operations since inception
primarily through private sales of its preferred stock, the issuance of convertible
promissory notes, and the cash it received in connection with the Merger. As of September
30, 2002, the Company had $3,594,000 in cash and cash equivalents.


Net
cash used in operating activities was $2,466,000 for the nine months ended September 30,
2002, primarily due to the increase in our operating losses of $2,747,000 due primarily
to increases in general and administrative expenses.


Net
cash used in investing activities was $58,000 for the nine month period ended September
30, 2002, resulting from $77,000 used to purchase equipment and $11,000 provided from the
release of restricted cash.


Net
cash provided by financing activities was $5,737,000 for the nine months ended September
30, 2002. The Merger provided for $4,727,000 in cash proceeds while the net proceeds from
the sale of preferred stock provided for $980,000 in cash. In addition, the exercise of
stock options provided $29,000 in cash.


9
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|The Company expects that the cash
and marketable securities of the combined company will be sufficient to meet its cash
requirements through March 2003. The Company will be required to raise a substantial
amount of capital in the future to complete the commercialization of its products.
However, the Companys future capital requirements will depend on many factors,
including the following:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | its
ability to obtain funding from third parties, including any future collaborative partners;
| | - |  | ----------------------------------------------------------------------------------------------

| |  |  | its
progress on research and development programs and pre-clinical and clinical trials;
| | - |  | ---------------------------------------------------------------------------------------

| |  |  | the
time and costs required to gain regulatory approvals;
| | - |  | ---------------------------------------------------------

| |  |  | the
costs of manufacturing, marketing and distributing its products, if successfully
developed and approved;
| | - |  | ------------------------------------------------------------------------------------------------------------

| |  |  | the
costs of filing, prosecuting and enforcing patents, patent applications, patent claims
and trademarks;
| | - |  | ----------------------------------------------------------------------------------------------------------

| |  |  | the
status of competing products; and
| | - |  | -------------------------------------

| |  |  | the
market acceptance and third-party reimbursement of its products, if successfully
developed and approved.
| | - |  | ------------------------------------------------------------------------------------------------------------

|If the
Company is unable to raise sufficient additional financing, its business and operations
will be materially adversely affected and it may not be able to sustain its operations.


Factors That May Affect
Future Results


The
Company operates in a rapidly changing environment that involves a number of risks, some
of which are beyond our control. This discussion highlights some of the risks which may
affect future operating results.


Sontra has a history of
losses, and the Company expects losses to continue for several years.


Sontra
has generated limited revenues and has had operating losses since its inception in 1996.
Sontras accumulated deficit was approximately $14.6 million as of September 30,
2002. It is possible that the Company will never generate any additional revenue or
generate enough additional revenue to achieve profitability. Even if the Company obtains
profitability, it may not be able to sustain or increase profitability. The Company
expects its operating losses to continue for the foreseeable future as it continues to
expend substantial resources to conduct research and development, feasibility and
pre-clinical studies, obtain limited regulatory approvals for specific use applications
of its SonoPrep®  device, identify and secure collaborative partnerships,
and manage and execute its obligations in strategic collaborations.


The Company will need
additional capital in the future.


The
Company has generated limited revenue and does not expect to generate revenues in the
near future. The Companys development efforts to date have consumed and will
continue to require substantial amounts of capital to complete the development of its
SonoPrep®  technology and to meet other cash requirements in the future.
Based on the Companys current operating plan, the Company estimates that it will be
required to raise additional funds prior to April 2003 through public or private
financing, collaborative relationships or other arrangements the source of which is
unknown. Any future equity financing, if available, may result in substantial dilution to
existing stockholders, and debt financing, if available, may include restrictive
covenants or may require the Company to grant a lender a security interest in its assets.
To the extent that the Company attempts to raise additional funds through third party
collaborations and/or licensing arrangements, the Company may be required to relinquish
some rights to its technologies or products currently in various stages of development,
or grant licenses on terms that are not favorable to the Company. If the Company is
unable to raise sufficient additional financing, it may not be able to sustain its
operations.


The price of the Companys
stock may be volatile and trading in the stock is likely to be limited.


The
trading price of the Companys common stock has fluctuated in the past and is
expected to continue to do so in the future as a result of a number of factors, many of
which are outside the Companys control. The Companys common stock reached a
high of $5.70 per share and traded as low as $0.70 per share between September 30, 2001
and September 30, 2002. Since the Companys initial listing on the Nasdaq SmallCap
Market in 1998, the volume of trading in the Companys common stock has been limited
and fluctuations in price have been volatile.


In
addition, the stock market has experienced price and volume fluctuations that have
affected the market prices of many companies, and that have often been unrelated or
disproportionate to the operating performance of these companies. These broad market
fluctuations could adversely affect the market price of the Companys common stock.
In the past following periods of volatility in the market, price of a particular companys
securities, securities class action litigation has often been brought against that
company. Potential securities class action litigation brought against the Company could
result in substantial costs and a diversion of the Companys managements
attention and resources.


The Company has a short
operating history, which makes it difficult to evaluate the Companys business.


Because
limited historical information is available on the Companys business, it may be
difficult to evaluate the Companys business and prospects. The Companys
business and prospects must be considered in light of the substantial risks, expenses,
uncertainties and difficulties encountered by entrants into the medical device industry,
which is characterized by increasingly intense competition and a high failure rate. To
date, the Company has engaged primarily in research and development efforts, prototype
development and testing, and pre-clinical and feasibility studies. The Companys
results of operations will depend on, among other things, the following factors:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | research
and development activities and outcomes;
| | - |  | -------------------------------------------------

| |  |  | results
of feasibility and pre-clinical studies;
| | - |  | ------------------------------------------------

| |  |  | the
ability to enter into collaborative agreements;
| | - |  | ---------------------------------------------------

| |  |  | the
timing of payments, if any, under future collaborative agreements; and
| | - |  | --------------------------------------------------------------------------

| |  |  | costs
related to obtaining, defending and enforcing patents.
| | - |  | ------------------------------------------------------------

|10
|--

|The
development and commercialization of the Companys potential products, including the
SonoPrep®  device, will require the formation of strategic partnerships with third
parties, as well as substantial capital expenditures either by the Company or the
strategic partner of the Company on research, regulatory compliance, sales and marketing
and manufacturing.


The Companys
future success is dependent upon successful collaborations with strategic partners.


The
Companys future success is dependent upon its ability to selectively enter into and
maintain collaborative arrangements with leading medical device and pharmaceutical
companies. The Company is not currently a party to any collaborative agreements and may
not be able to enter into any collaborative arrangements on acceptable terms, if at all.
If the Company is not able to collaborate with a partner, the business, financial
condition and results of operation of the Company could be materially adversely affected.


Even
if the Company were to enter into a collaborative arrangement, there can be no assurance
that the financial condition or results of operation of the Company will significantly
improve. The risks involved with collaborating with strategic partners include, but are
not limited to, the following risks:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | such
collaborative arrangements could terminate upon the expiration of certain notice periods;
| | - |  | ----------------------------------------------------------------------------------------------

| |  |  | funding
by collaborative partners may be dependent upon the satisfaction of certain goals or
milestones by certain specified dates, some of which may be outside of the
Companys control;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | collaborative
partners may retain a significant degree of discretion regarding the timing of these
activities and the amount and quality of financial, personnel and other resources that
they devote to these activities;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | disputes
may arise between the Company and any future collaborative partner regarding their
respective rights and obligations under the collaborative arrangements, which may be
costly; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | any
future collaborative partner may not be able to satisfy its obligations under its
arrangement with the Company or may intentionally or unintentionally breach its
obligations under the arrangement.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|All of the Companys
products are in initial stages of development, and the Company faces risks of failure
inherent in developing products based on new technologies.


The
Companys products under development have a high risk of failure because they are in
the early stages of development. To date, the Company has only tested the feasibility of
its SonoPrep®  technology for various applications, including glucose monitoring,
transdermal drug delivery and certain aesthetic applications. None of the products
currently being developed by the Company, including the SonoPrep® device, have
received regulatory approval or clearance for commercial sale. Substantial expenditures
for additional research and development, including feasibility studies, pre-clinical
studies and clinical testing, the establishment of collaborative partnerships, and
regulatory, manufacturing, sales and marketing activities by collaborative partners will
be necessary before commercial production of any of the Companys technologies or
their incorporation into products of third parties. The Companys future prospects
are substantially dependent on forming collaborative partnerships, further developing its
products and obtaining favorable results from pre-clinical studies and clinical trials
and satisfying regulatory standards and approvals required for the market introduction of
the SonoPrep®  device.


There
can be no assurance that the Company or any future strategic partner of the Company will
not encounter unforeseen problems in the development of the SonoPrep® technology, or
that the Company or any such strategic partner will be able to successfully address the
problems that do arise. In addition, there can be no assurance that any of the Companys
potential products will be successfully developed, proven safe and efficacious in
clinical trials, meet applicable regulatory standards, be capable of being produced in
commercial quantities at acceptable costs, be eligible for third-party reimbursement from
governmental or private insurers, be successfully marketed or achieve market acceptance.
If any of the Companys development programs are not successfully completed,
required regulatory approvals or clearances are not obtained, or potential products for
which approvals or clearances are obtained are not commercially successful, the Companys
business, financial condition and results of operations would be materially adversely
affected.


Failure to obtain
necessary regulatory approvals will prevent the Company or its collaborators from
commercializing the Companys SonoPrep® device and related product concepts
currently under development.


The
design, manufacturing, labeling, distribution and marketing of the Companys
potential products will be subject to extensive and rigorous government regulation in the
United States and certain other countries. The process of obtaining and maintaining
required regulatory clearance and approvals in the United States is lengthy, expensive
and uncertain. In order for the Company to market its potential products in the United
States, the Company must obtain clearance by means of a 510(k) pre-market notification,
or approval by means of a pre-market approval (PMA) application, from the
United States Food and Drug Administration (FDA). The PMA process is more
rigorous and lengthier than the 510(k) clearance process and can take several years from
initial filing and require the submission of extensive supporting data and clinical
information.


Even
if the Company receives 510(k) clearance or PMA approval, there can be no assurance that
the FDA will not impose strict labeling or other requirements as a condition of its
clearance or approval, any of which could limit the Companys ability to market its
products under development. Further, if the Company wishes to modify a product after FDA
clearance or approval, including changes in indications or other modifications that could
affect safety and efficacy, additional clearances or approvals could be required from the
FDA. Any request by the FDA for additional data or any requirement by the FDA that the
Company conduct additional clinical studies could significantly delay the
commercialization of the Companys products and require the Company to make
substantial additional research, development and other expenditures by the Company.
Similarly, any labeling or other conditions or restrictions imposed by the FDA on the
marketing of the Companys potential products could hinder the Companys
ability to effectively market these products.


A substantial portion of
the intellectual property used by the Company is owned by the Massachusetts Institute of
Technology.


The
Company has an exclusive world-wide license to use and sell certain technology owned by
the Massachusetts Institute of Technology (MIT) related to the Companys
ultrasound-mediated skin permeation technology. This license, which includes eight issued
patents in the United States, five issued foreign patents and four pending foreign patent
applications, comprises a substantial portion of the Companys patent portfolio
relating to its technology.


11
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|While
under the license agreement, the Company has the right to advise and cooperate in MIT
with the prosecution and maintenance of the foregoing patents, the Company does not
control the prosecution of such patents or the strategy for determining when such
licensed patents should be enforced. Instead, the Company relies upon MIT to determine
the appropriate strategy for prosecuting and enforcing these patents. If MIT does not
adequately protect or enforce its patent rights, the Companys ability to
manufacture and market its products, currently in various stages of development, would be
adversely affected.


The Company will need to
obtain and protect the proprietary information on which its SonoPrep® technology
relies.


The
Company has an exclusive license from the Massachusetts Institute of Technology on eight
issued patents in the United States, five issued foreign patents and four pending foreign
patent applications, and as of August 8, 2002, the Company owned 2 issued patents and 4
pending patent applications in the United States and 1 issued foreign patent and 6
pending foreign applications. The Company can provide no assurance that patents will be
issued from the patent applications, or, if issued, that they will be issued in a form
that will be advantageous to the Company.


There
can be no assurance that one or more of the patents owned or licensed by the Company will
not be successfully challenged, invalidated or circumvented or that the Company will
otherwise be able to rely on such patents for any reason. If any of the Companys
patents or any patents licensed from MIT are successfully challenged or the Companys
right or ability to manufacture its future products (if successfully developed and
commercialized) were to be limited, the Companys ability to manufacture and market
these products could be adversely affected, which would have a material adverse effect
upon the Companys business, financial condition and results of operations.


In
addition to patent protection, the Company relies on a combination of copyright, trade
secret and trademark laws, and nondisclosure, confidentiality agreements and other
contractual restrictions to protect its proprietary technology. However, these legal
means afford only limited protection and may not adequately protect the rights or
competitive advantage of the Company. The Company may not be able to prevent the
unauthorized disclosure or use of its technical knowledge or other trade secrets by its
employees. Nondisclosure and confidentiality agreements with third parties may be
breached, and there is no assurance that the Company would have adequate remedies for any
such breach.


If the
Company fails to protect its intellectual property rights, the Companys competitors
may take advantage of its ideas and compete directly against the Company. There can be no
assurance that competitors, many of whom have substantial resources and have made
substantial investments in competing technologies, will not seek to apply for and obtain
patents that limit the Companys ability to make, use and sell its potential
products either in the United States or in foreign markets. Furthermore, if the Companys
intellectual property is not adequately protected, the Companys competitors may be
able to use the Companys intellectual property to enhance their products and
compete more directly with the Company, which could prevent the Company from entering its
products into the market or result in a decrease in the Companys eventual market
share.


We have limited
manufacturing experience, which could limit our growth.


To
successfully commercialize its SonoPrep® device and related product concepts, the
Company will have to manufacture or engage others to manufacture the particular device in
compliance with regulatory requirements. The Company has limited manufacturing experience
that would enable it to make products in the volumes that would be necessary for it to
achieve significant commercial sales, and there can be no assurance that the Company will
be able to establish and maintain reliable, efficient, full scale manufacturing at
commercially reasonable costs, in a timely fashion. Difficulties the Company encounters
in manufacturing scale-up, or its failure to implement and subsequently maintain its
manufacturing facilities in accordance with good manufacturing practice regulations,
international quality standards or other regulatory requirements, could result in a delay
or termination of production. Companies, and especially small companies in the medical
device field, often encounter these type of difficulties in scaling up production,
including problems involving production yield, quality control and assurance, and
shortages of qualified personnel.


The Company may be
subject to litigation or other proceedings relating to its patent rights.


The
medical device industry has experienced extensive litigation regarding patents and other
intellectual property rights. In addition, the United States Patent and Trademark Office
may institute litigation or interference proceedings against the Company. The defense and
prosecution of intellectual property proceedings are both costly and time consuming.


Litigation
may be necessary to enforce patents issued to the Company, to protect trade secrets or
know how owned by or licensed to the Company or to determine the enforceability, scope
and validity of the proprietary rights of others. Any litigation or interference
proceedings involving the Company may require the Company to incur substantial legal and
other fees and expenses. Such proceedings would also be time consuming and can be a
significant distraction for employees and management, resulting in slower product
development and delays in commercialization. In addition, an adverse determination in
litigation or interference proceedings could subject the Company to significant
liabilities to third parties, require the Company to obtain licenses from third parties
or prevent it from selling its products, once developed, in certain markets, or at all,
which would have a material adverse effect on the Companys business, financial
condition and results of operations.


The Companys
potential markets are highly competitive and most participants are larger, better
capitalized, and more experienced than the Company.


The
industries in which the Companys potential products may eventually be marketed are
intensely competitive, subject to rapid change and significantly affected by new product
introductions. The Companys SonoPrep®  device and related product concepts will
compete directly with glucose monitoring products manufactured by Roche Diagnostics,
LifeScan, Inc., a division of Johnson & Johnson, Bayer Corporation, MediSense, a
division of Abbott Laboratories, Cygnus, Inc., SpectRx Inc. and TheraSense, Inc. and drug
delivery products manufactured by companies such as Inhale Therapeutic Systems Inc.,
Alkermes, Inc. Bioject, Inc. PowderJect Pharmaceuticals PLC, Antares Pharma, Inc., Becton
Dickinson and Company, Aerogen, Inc. ALZA Corporation, a division of Johnson and Johnson,
and 3M Company.


These companies are already
producing and marketing glucose monitoring or drug delivery products, are either publicly
traded or a division of a publicly-traded company, and enjoy several competitive
advantages over the Company. In addition, several of the Companys competitors have
products in various stages of development and commercialization similar to the Companys
SonoPrep® device and related product concepts. At any time, these companies and
others may develop products that compete directly with its proposed product concepts. In
addition, many of the Companys competitors have resources allowing them to spend
significantly greater funds for the research, development, promotion and sale of new or
existing products, thereby allowing them to respond more quickly to new or emerging
technologies and changes in customer requirements. For all of the foregoing reasons, the
Company may not be able to compete successfully against its current and future
competitors. If any of the Companys competitors succeeds in developing a
commercially viable product and obtaining government approval, the business, financial
condition and results of operations of the Company would be materially adversely
affected.



12
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|The Company operates in
an industry with significant product liability risk.


The
Companys business will expose it to potential product liability claims that are
inherent in the testing, production, marketing and sale of human diagnostic and
ultrasonic transdermal drug delivery products. While the Company intends to take steps to
insure against these risks, there can be no assurance that it will be able to obtain
insurance in amounts or scope sufficient to provide it with adequate coverage against all
potential liabilities. The Companys current product liability insurance provides
for coverage in the amount of $2,000,000 and upon successful development and
commercialization of its products, the Company intends to obtain product liability
insurance in the amount of $5,000,000. A product liability claim in excess of the Companys
product liability insurance would have to be paid out of the Companys cash
reserves, if any, and would harm the Companys reputation in the industry and
adversely affect its ability to raise additional capital.


Management of the
Company has significant influence over the control the Company.


The
officers and directors of the Company own beneficially approximately 48% of the
outstanding shares of the Companys common stock. Accordingly, the Companys
officers and directors will have significant influence over the outcome of any corporate
transaction or other matters submitted to the shareholders for approval, including
mergers, consolidations and the sale of all or substantially all of the Companys
assets, and also could prevent or cause a change in control. Third parties may be
discouraged from making a tender offer or bid to acquire the Company because of this
concentration of ownership.


If the Company is unable
to retain or hire additional key personnel, the Company may not be able to sustain or
grow its business.


The
Companys future success will depend upon its ability to successfully attract and
retain key scientists, engineers and other highly skilled personnel. With the exception
of Dr. Thomas W. Davison, its President and Chief Executive Officer, Sean Moran, its
Chief Financial Officer, and Dr. Kost, its Chief Scientific Officer, the Companys
employees are at-will and not subject to employment contracts and may terminate their
employment with the Company at any time. In addition, the Companys current
management team is understaffed and has very limited experience managing a public company
subject to the Securities and Exchange Commissions periodic reporting obligations.
Hiring qualified management and technical personnel will be difficult due to the limited
number of qualified professionals in the work force in general and the intense
competition for these types of employees in the medical device industry, in particular.
The Company has in the past experienced difficulty in recruiting qualified personnel and
there can be no assurance that the Company will be successful in attracting and retaining
additional members of management if the business begins to grow. Failure to attract and
retain personnel, particularly management and technical personnel, would materially harm
the Companys business, financial condition and results of operations.


The Companys
failure to comply with Nasdaqs listing standards would subject its common stock to
being delisted from the Nasdaq SmallCap Market, which would severely limit a shareholders
ability to sell any shares of the Companys common stock.


The
Companys common stock is currently listed for trading on the Nasdaq SmallCap
Market. Prior to the merger between the Company and Sontra Medical, Inc., Nasdaq notified
the Company that it was in danger of falling out of compliance with the continued listing
requirements of the Nasdaq SmallCap Market. Although the Company believes that it is
currently in compliance with the Nasdaq continued listing requirements, there is no
assurance that the Company will be able to continue to comply with the continued listing
requirements.


If the Companys common stock
is removed from the Nasdaq SmallCap Market, it would trade on Nasdaqs OTC
(over-the-counter) Bulletin Board System and its shareholders ability to sell, or
obtain quotations of the market value of, shares of the Companys common stock would
be severely limited. In addition, the delisting of the Companys common stock from
Nasdaqs SmallCap Market would significantly impair the Companys ability to
raise capital in the public markets in the future.


Item 3. Controls and
Procedures.


(a) Evaluation
of disclosure controls and procedures. Under the supervision           and with the
participation of its management, including its President and Chief           Executive
Officer and Chief Financial Officer, the Company evaluated the           effectiveness of
the design and operation of its disclosure controls and           procedures (as defined
in Rule 13a-14(c) under the Exchange Act) as of a date           (the Evaluation
Date) within 90 days prior to the filing date of           this report. Based upon
that evaluation, the President and Chief Executive           Officer and Chief Financial
Officer concluded that, as of the Evaluation Date,           the Companys
disclosure controls and procedures were effective in timely           alerting them to
the material information relating to the Company (or its           consolidated
subsidiaries) required to be included in our periodic SEC filings.           In designing
and evaluating the disclosure controls and procedures, management           recognized
that any controls and procedures, no matter how well designed and           operated, can
provide only reasonable assurance of achieving the desired control           objectives,
and management necessarily was required to apply its judgment in           evaluating the
cost-benefit relationship of possible controls and procedures.


(b)
          Changes in internal controls. There were no significant changes made in the
          Companys internal controls during the period covered by this report or,
to           the Companys knowledge, in other factors that could significantly
affect           these controls subsequent to the date of their evaluation.


13
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Part II  Other
Information


Item 1. Legal
Proceedings


A suit
was filed on June 4, 2001 in Hennepin County, Minnesota District Court by Leaf
Industries, seeking to pierce the corporate veil and hold the Company responsible for the
debts of a former ChoiceTel subsidiary, Advants, Inc. Tomato Land Displays was also a
plaintiff in this action, as it filed cross claims against the Company. In October
2002, the Company settled the suit with the plaintiffs for $210,000.


Based on ChoiceTels activities
in the public payphone market in Puerto Rico, in August 2002, Sontra Medical Corporation
has filed a lawsuit against GTE International Telecommunications, Inc. and Puerto Rico
Telephone Company in the United States District Court for the District of Puerto Rico for
violations of federal and Commonwealth antitrust laws, among others. Sontras
lawsuit is joined by two other Puerto Rican payphone providers, Pan American Telephone
Co., Inc. and In Touch Telecommunications, Inc. The lawsuit alleges that Puerto Rico
Telephone Company and its operating company, GTE International Telecommunications, Inc.,
engaged in a pattern of unlawful exclusionary acts in order to maintain its monopoly
position in the market for the provision of payphones to payphone location owners in
Puerto Rico. The defendants are expected to file a motion to dismiss.


Item 6. Exhibits and
Reports on Form 8-K
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | Exhibits
|--- |  | --------

|Exhibit
      Number |  | Description of
      Document                                                                                                     
|-------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                   
|                     |  |                                                                                                                                   
|99.1                 |  | Certification Pursuant
      to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.
|                     |  |                                                                                                                                   
|99.2                 |  | Certification Pursuant
      to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.

|(b) |  | Reports
on Form 8-K.
|--- |  | --------------------

| | On
July 3, 2002, during the quarter ended September 30, 2002, the Company filed a report on
Form 8-K with the SEC, which announced, among other things, (i) the consummation of the
merger (the Merger) between the Company (formerly known as ChoiceTel
Communications, Inc.) and Sontra Medical, Inc. on June 20, 2002, (ii) the engagement of
Arthur Andersen LLP (Andersen) as the Companys independent accountants
following the consummation of the Merger, and the dismissal of Schechter Dokken Kanter
Andrews & Selcer Ltd., the Companys former independent accountant, and (iii)
that the Nasdaq SmallCap had notified the Company that the consummation of the Merger
constituted a reverse merger under Nasdaq Marketplace Rule 4330(f) and, therefore, the
Company would be required to meet the initial listing requirements of the Nasdaq SmallCap
Market. The Company also filed as Exhibit 99.3 its Unaudited Pro Forma Condensed
Consolidated Balance Sheet as of May 31, 2002, which reflected the consummation of the
Merger.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
August 19, 2002, the Company filed a report on Form 8-K with the SEC, which announced (i)
the dismissal of Andersen, and the engagement of Wolf & Company, P.C. as its new
independent auditors effective immediately, and (ii) that, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the Company
had submitted to the SEC the certification of its chief executive officer and chief
financial officer with respect to the Companys report on Form 10-QSB for the period
ending June 30, 2002 filed on August 19, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company did not file any other reports on Form 8-K during the quarter ended September 30,
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 the undersigned thereunto duly
authorized.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        | SONTRA MEDICAL
      CORPORATION
|----------------------- | --------------------------------
|Date: November 11, 2002 |                                 
|Date: November 11, 2002 |                                 

|14
|--

|CERTIFICATIONS


I, Thomas W. Davison, President and
Chief Executive Officer of Sontra Medical Corporation (the Company), certify
that:


1.           I have reviewed this
quarterly report on Form 10-QSB of the Company;


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


3.           Based on my knowledge,
the financial statements, and other financial information           included in this
quarterly report, fairly present in all material respects the           financial
condition, results of operations and cash flows of the Company as of,           and for
the periods presented in this quarterly report;


4.           The Company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 Company and have:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | Designed
such disclosure controls and procedures to ensure that material           information
relating to the Company, 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 Company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 Companys
other certifying officer and I have disclosed, based on our           most recent
evaluation, to the Companys auditors and the audit committee           of the
Companys board of directors (or persons performing the equivalent
          functions):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | All
significant deficiencies in the design or operation of internal controls           which
could adversely affect the Companys ability to record, process,           summarize
and report financial data and have identified for the Company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 Companys internal controls; and
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.           The Companys
other certifying officer and 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: November 11, 2002
By:       
/s/ Thomas W. Davison
President and Chief Executive Officer


15
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CERTIFICATIONS


I, Sean Moran, Chief Financial
Officer of Sontra Medical Corporation, certify that:


1.           I have reviewed this
quarterly report on Form 10-QSB of the Company;


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


3.           Based on my knowledge,
the financial statements, and other financial information           included in this
quarterly report, fairly present in all material respects the           financial
condition, results of operations and cash flows of the Company as of,           and for
the periods presented in this quarterly report;


4.           The Company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 Company and have:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | d) |  | Designed
such disclosure controls and procedures to ensure that material           information
relating to the Company, 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;
| |  | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | e) |  | Evaluated
the effectiveness of the Company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
| |  | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | f) |  | 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 Companys
other certifying officer and I have disclosed, based on our           most recent
evaluation, to the Companys auditors and the audit committee           of the
Companys board of directors (or persons performing the equivalent
          functions):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c) |  | All
significant deficiencies in the design or operation of internal controls           which
could adversely affect the Companys ability to record, process,           summarize
and report financial data and have identified for the Companys           auditors
any material weaknesses in internal controls; and
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | d) |  | Any
fraud, whether or not material, that involves management or other employees           who
have a significant role in the Companys internal controls; and
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.           The Companys
other certifying officer and 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: November 11, 2002
By:       
/s/ Sean F. Moran
Chief Financial Officer



16
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|EXHIBIT INDEX
|-------------

|Exhibit
      Number |  | Description
      of Document                                                                                                     
|-------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                   
|                     |  |                                                                                                                                   
|99.1                 |  | Certification Pursuant
      to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.
|                     |  |                                                                                                                                   
|99.2                 |  | Certification Pursuant
      to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.

|17
|--