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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|    |  | For the quarterly period ended March 31, 2003                                          

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|      |  | For the transition period from____________to____________.                               

Commission File Number 0-23317

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GENE LOGIC INC.
(Exact name of registrant as specified in its charter)

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|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 06-1411336         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

708 Quince Orchard Road
Gaithersburg, Maryland 20878
(Address of principal executive offices)(301) 987-1700
(Registrants phone number, including area code)

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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 o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).   YES x  NO o

The number of shares outstanding of the Registrants Common Stock, $.01
par value, was 31,056,211 as of April 30, 2003.



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GENE LOGIC INC.

TABLE OF CONTENTS

|                                                                                              |  |   
|--------------------------------------------------------------------------------------------- |  | --
|PART I      FINANCIAL INFORMATION                                                             |  |   
|                                                                                             
|Item 1. Financial Statements                                                                  |  |   
|                                                                                             
|Balance Sheets at March 31, 2003 and December 31, 2002                                        |  | 3 
|Statements of Operations for the Three Months Ended March 31, 2003 and 2002                   |  | 4 
|Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002                   |  | 5 
|Notes to Financial Statements                                                                 |  | 6 
|                                                                                             
|Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition |  | 9 
|                                                                                             
|Item 3. Quantitative and Qualitative Disclosure About Market Risk                             |  | 12
|                                                                                             
|Item 4. Controls and Procedures                                                               |  | 13
|                                                                                             
|PART II      OTHER INFORMATION                                                                |  |   
|                                                                                             
|Item 6. Exhibits and Reports on Form 8-K                                                      |  | 13
|                                                                                             
|Signatures                                                                                    |  | 14

2.



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##### 



PART I                      FINANCIAL INFORMATION

Item 1. Financial Statements

GENE LOGIC INC.

BALANCE SHEETS
(in thousands, except share data)

|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |          |         | 
|-------------------------------------- |  | ---------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | ------- | ------------ | ------- | -------- | ------- | 
|                                       |  |                                          |                                                                                                                                                                              |                                            |         | March 31,   |         | December 31,
|                                       |  |                                          |                                                                                                                                                                              |                                            |         | 2003        |         | 2002        
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |             
|                                       |  |                                          |                                                                                                                                                                              |                                            |         | (Unaudited) |         |              |         |         
|ASSETS                                
|Current assets:                        |  |                                          |                                                                                                                                                                              |                                            |         |             |         |             
|                                       |  | Cash and cash equivalents                |                                                                                                                                                                              | $                                          | 121,199 |             |         | $            | 106,957 |         
|                                       |  | Marketable securities available-for-sale |                                                                                                                                                                              |                                            | 36,144  |             |         |              | 60,145  |         
|                                       |  | Accounts receivable                      |                                                                                                                                                                              |                                            | 5,430   |             |         |              | 4,793   |         
|                                       |  | Inventories, net                         |                                                                                                                                                                              |                                            | 7,041   |             |         |              | 8,936   |         
|                                       |  | Prepaid expenses                         |                                                                                                                                                                              |                                            | 2,481   |             |         |              | 1,610   |         
|                                       |  | Other current assets                     |                                                                                                                                                                              |                                            | 1,940   |             |         |              | 1,117   |         
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total current assets                       |         |             | 174,235 |              |         |          | 183,558 | 
|Property and equipment, net            |  |                                          | 13,657                                                                                                                                                                       |                                            |         |             | 14,770  |             
|Long-term investments                  |  |                                          | 5,268                                                                                                                                                                        |                                            |         |             | 5,268   |             
|Notes receivable from employees        |  |                                          | 51                                                                                                                                                                           |                                            |         |             | 50      |             
|Goodwill                               |  |                                          | 2,677                                                                                                                                                                        |                                            |         |             | 2,677   |             
|Intangibles, net                       |  |                                          | 20,544                                                                                                                                                                       |                                            |         |             | 21,094  |             
|Other assets                           |  |                                          | 43                                                                                                                                                                           |                                            |         |             | 43      |             
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total assets                               |         | $           | 216,475 |              |         | $        | 227,460 | 
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|LIABILITIES AND STOCKHOLDERS EQUITY  
|Current liabilities:                   |  |                                          |                                                                                                                                                                              |                                            |         |             |         |             
|                                       |  | Accounts payable                         |                                                                                                                                                                              | $                                          | 3,619   |             |         | $            | 8,225   |         
|                                       |  | Accrued expenses                         |                                                                                                                                                                              |                                            | 5,158   |             |         |              | 5,187   |         
|                                       |  | Current portion of long-term debt        |                                                                                                                                                                              |                                            | 40      |             |         |              | 40      |         
|                                       |  | Deferred revenue                         |                                                                                                                                                                              |                                            | 5,834   |             |         |              | 6,425   |         
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total current liabilities                  |         |             | 14,651  |              |         |          | 19,877  | 
|Deferred revenue                       |  |                                          | 1,110                                                                                                                                                                        |                                            |         |             | 1,363   |             
|Long-term debt, net of current portion |  |                                          | 700                                                                                                                                                                          |                                            |         |             | 710     |             
|Other noncurrent liabilities           |  |                                          | 1,067                                                                                                                                                                        |                                            |         |             | 1,072   |             
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total liabilities                          |         |             | 17,528  |              |         |          | 23,022  | 
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|Commitments and contingencies          |  |                                          |                                                                                                                                                                             |                                            |         |             |        |             
|Stockholders equity:                  |  |                                          |                                                                                                                                                                              |                                            |         |             |         |             
|                                       |  |                                          | Preferred stock, $.01 par value; 10,000,000
shares authorized; no shares issued and
outstanding as of March 31, 2003 and December
31, 2002                                   |                                            |         |            |         |              |         |         |        
|                                       |  |                                          | Common stock, $.01 par value; 60,000,000
shares authorized; 27,128,997 and 27,056,487
shares issued and outstanding as of March 31,
2003 and December 31, 2002, respectively |                                            |         | 271         |         |              |         | 271      |        
|                                       |  |                                          | Additional paid-in capital                                                                                                                                                   |                                            |         | 363,673     |         |              |         | 363,294  |        
|                                       |  |                                          | Accumulated other comprehensive income                                                                                                                                       |                                            |         | 179         |         |              |         | 248      |        
|                                       |  |                                          | Accumulated deficit                                                                                                                                                          |                                            |         | (165,176    | )       |              |         | (159,375 | )      
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total stockholders equity                 |         |             | 198,947 |              |         |          | 204,438 | 
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         
|                                       |  |                                          |                                                                                                                                                                              | Total liabilities and stockholders equity |         | $           | 216,475 |              |         | $        | 227,460 | 
|                                       |  |                                          |                                                                                                                                                                              |                                            |         |             |         |              |         |         

See accompanying notes.

3.



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GENE LOGIC INC.

STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

|                                                              |                                     |                                    |        |                    |        |      |        |        |        |  
|------------------------------------------------------------- | ----------------------------------- | ---------------------------------- | ------ | ------------------ | ------ | ---- | ------ | ------ | ------ | -
|                                                              |                                     |                                    |        | Three Months Ended
|                                                              |                                     |                                    |        | March 31,         
|                                                              |                                     |                                    |        |                   
|                                                              |                                     |                                    |        | 2003               |        | 2002
|                                                              |                                     |                                    |        |                    |        |     
|Revenue                                                       |                                     | $                                  | 12,724 |                    |        | $    | 11,842 |       
|Expenses:                                                     |                                     |                                    |        |                    |        |      |        |       
|                                                              | Database production                 |                                    |        | 13,611             |        |      |        | 13,515 |       
|                                                              | Research and development            |                                    |        | 597                |        |      |        | 779    |       
|                                                              | Selling, general and administrative |                                    |        | 4,453              |        |      |        | 5,725  |       
|                                                              |                                     |                                    |        |                    |        |      |        |       
|                                                              |                                     | Total expenses                     |        |                    | 18,661 |      |        |        | 20,019 |  
|                                                              |                                     |                                    |        |                    |        |      |        |       
|                                                              |                                     | Loss from operations               |        |                    | (5,937 | )    |        |        | (8,177 | )
|Interest (income), net                                        |                                     |                                    | (662   | )                  |        |      | (839   | )     
|                                                              |                                     |                                    |        |                    |        |      |        |       
|                                                              |                                     | Net loss before income tax expense |        |                    | (5,275 | )    |        |        | (7,338 | )
|Income tax expense                                            |                                     |                                    | 526    |                    |        |      | 195    |       
|                                                              |                                     |                                    |        |                    |        |      |        |       
|                                                              |                                     | Net loss                           |        | $                  | (5,801 | )    |        | $      | (7,533 | )
|                                                              |                                     |                                    |        |                    |        |      |        |       
|Basic and diluted net loss per share                          |                                     | $                                  | (0.21  | )                  |        | $    | (0.28  | )     
|                                                              |                                     |                                    |        |                    |        |      |        |       
|Shares used in computing basic and diluted net loss per share |                                     |                                    | 27,105 |                    |        |      | 26,833 |       
|                                                              |                                     |                                    |        |                    |        |      |        |       

See accompanying notes.

4.



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GENE LOGIC INC.

STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

|                                                                               |                                                                             |                                          |         |                    |        |      |         |        |        |  
|------------------------------------------------------------------------------ | --------------------------------------------------------------------------- | ---------------------------------------- | ------- | ------------------ | ------ | ---- | ------- | ------ | ------ | -
|                                                                               |                                                                             |                                          |         | Three Months Ended
|                                                                               |                                                                             |                                          |         | March 31,         
|                                                                               |                                                                             |                                          |         |                   
|                                                                               |                                                                             |                                          |         | 2003               |        | 2002
|                                                                               |                                                                             |                                          |         |                    |        |     
|Cash flows from operating activities:                                          |                                                                             |                                          |         |                    |        |      |         |       
|Net loss                                                                       |                                                                             | $                                        | (5,801  | )                  |        | $    | (7,533  | )     
|Adjustments to reconcile net loss to net cash flows from operating activities: |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Depreciation and amortization                                               |                                          |         | 3,735              |        |      |         | 2,959  |       
|                                                                               | Loss on abandonment of patent costs                                         |                                          |         | 72                 |        |      |         | 50     |       
|Changes in operating assets and liabilities:                                   |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Accounts receivable                                                         |                                          |         | (637               | )      |      |         | (922   | )     
|                                                                               | Inventory, net                                                              |                                          |         | 1,895              |        |      |         | (734   | )     
|                                                                               | Prepaid expenses                                                            |                                          |         | (871               | )      |      |         | (809   | )     
|                                                                               | Other current assets                                                        |                                          |         | (823               | )      |      |         | 1,680  |       
|                                                                               | Accounts payable                                                            |                                          |         | (4,606             | )      |      |         | (1,820 | )     
|                                                                               | Accrued expenses and other noncurrent liabilities                           |                                          |         | (34                | )      |      |         | (848   | )     
|                                                                               | Deferred revenue                                                            |                                          |         | (844               | )      |      |         | (1,206 | )     
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               |                                                                             | Net cash flows from operating activities |         |                    | (7,914 | )    |         |        | (9,183 | )
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|Cash flows from investing activities:                                          |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Purchases of property and equipment                                         |                                          |         | (172               | )      |      |         | (1,021 | )     
|                                                                               | Purchases of licenses and patent costs                                      |                                          |         | (182               | )      |      |         | (835   | )     
|                                                                               | Software development costs                                                  |                                          |         | (1,791             | )      |      |         | (1,827 | )     
|                                                                               | Database upgrade costs                                                      |                                          |         |                   |        |      |         | (1,068 | )     
|                                                                               | Purchase of marketable securities available-for-sale                        |                                          |         | (30,459            | )      |      |         |       |       
|                                                                               | Proceeds from sale and maturity of marketable securities available-for-sale |                                          |         | 54,391             |        |      |         | 69,528 |       
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               |                                                                             | Net cash flows from investing activities |         |                    | 21,787 |      |         |        | 64,777 |  
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|Cash flows from financing activities:                                          |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Proceeds from issuance of common stock                                      |                                          |         | 379                |        |      |         | 1,277  |       
|                                                                               | Repayments of equipment loans                                               |                                          |         | (10                | )      |      |         | (9     | )     
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               |                                                                             | Net cash flows from financing activities |         |                    | 369    |      |         |        | 1,268  |  
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|Net increase in cash and cash equivalents                                      |                                                                             |                                          | 14,242  |                    |        |      | 56,862  |       
|Cash and cash equivalents, beginning of period                                 |                                                                             |                                          | 106,957 |                    |        |      | 128,273 |       
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|Cash and cash equivalents, end of period                                       |                                                                             | $                                        | 121,199 |                    |        | $    | 185,135 |       
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|Supplemental disclosure:                                                       |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Taxes paid                                                                  |                                          | $       | 362                |        |      | $       | 150    |       
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       
|                                                                               | Interest paid                                                               |                                          | $       | 4                  |        |      | $       | 4      |       
|                                                                               |                                                                             |                                          |         |                    |        |      |         |       

See accompanying notes.

5.



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GENE LOGIC INC.

NOTES TO FINANCIAL STATEMENTS
March 31, 2003
(in thousands, except share and per share data)
(Unaudited)

Note 1  Organization and summary of significant accounting policies

Basis of Presentation

For the three months ended March 31, 2003 and 2002, the unaudited
financial statements include the accounts of Gene Logic Inc. (the Company).
On April 1, 2003, the Company acquired TherImmune Research Corporation
(TherImmune). The accounts of TherImmune will be included in the Companys
consolidated financial statements beginning April 1, 2003. The accompanying
unaudited financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. The balance sheet
as of March 31, 2003, statements of operations for the three months ended March
31, 2003 and 2002 and the statements of cash flows for the three months ended
March 31, 2003 and 2002 are unaudited, but include all adjustments (consisting
of normal recurring adjustments) which the Company considers necessary for a
fair presentation of the financial position, operating results and cash flows
for the periods presented. Although the Company believes that the disclosures
in these financial statements are adequate to make the information presented
not misleading, certain information and footnote information normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission.

Results for any interim period are not necessarily indicative of results
for any future interim period or for the entire year. The accompanying
unaudited financial statements should be read in conjunction with the financial
statements and notes thereto included in the Companys Annual Report on Form
10-K for the year ended December 31, 2002.

Comprehensive Loss

The Company accounts for comprehensive loss as prescribed by Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income.
Comprehensive income (loss) is the total net income (loss) plus all changes in
equity during the period except those changes resulting from investment by
owners and distribution to owners. Total comprehensive loss was $5,870 and
$7,550 for the three months ended March 31, 2003 and 2002, respectively.

Segment Information

Through March 31, 2003, the Company has been operated and managed as one
business segmentthe development of products and services related to genomic
information. Accordingly, the Company does not prepare financial information
for separate product areas and does not have separate reportable segments as
defined by Statement of Financial Accounting Standards No. 131, Disclosure
about Segments of an Enterprise and Related Information.

The Company had one customer accounting for 10% or more
of revenue for the three months ended March 31, 2002, and that customer accounted for 11% of revenue. Revenue from customers located in
Japan accounted for 42% and 20% of revenue during the three months ended March
31, 2003 and 2002, respectively. Revenue from customers located in the United
Kingdom accounted for 12% of revenue during the three months ended March 31,
2003.

6.



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Stock Option Plans

At March 31, 2003, the Company has two stock-based employee compensation
plans. The Company accounts for those plans under the recognition and
measurement principles of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25), and related
interpretations. Under APB 25, compensation expense is recorded over the
vesting period to the extent that the fair value of the underlying stock on the
date of grant exceeds the exercise or acquisition price of the stock or
stock-based award. The following table illustrates the effect on net loss and
loss per share as if the Company had applied the fair value recognition
provisions of Statement of Financial Accounting Standards No. 123, Accounting
for Stock Based Compensation, to stock-based employee
compensation for the three months ended March 31:

|                                                                                                          |             |   |        |       |      |   |         |       |  
|--------------------------------------------------------------------------------------------------------- | ----------- | - | ------ | ----- | ---- | - | ------- | ----- | -
|                                                                                                          |             |   | 2003   |       | 2002
|                                                                                                          |             |   |        |       |     
|Net loss, as reported                                                                                     |             | $ | (5,801 | )     |      | $ | (7,533  | )    
|Deduct: Stock-based employee compensation
expense determined under fair value based
method for all awards |             |   | (659   | )     |      |   | (4,259  | )    
|                                                                                                          |             |   |        |       |      |   |         |      
|Pro forma net loss                                                                                        |             | $ | (6,460 | )     |      | $ | (11,792 | )    
|                                                                                                          |             |   |        |       |      |   |         |      
|Basic and diluted net loss per share:                                                                     |             |   |        |       |      |   |         |      
|                                                                                                          | As reported |   | $      | (0.21 | )    |   | $       | (0.28 | )
|                                                                                                          | Pro forma   |   | $      | (0.24 | )    |   | $       | (0.44 | )

Reclassifications

Certain reclassifications have been made to the prior years financial
statements to conform to the current year presentation.

New Accounting Pronouncements

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146, Accounting for Costs Associated with
Exit or Disposal Activities (SFAS 146), which addresses accounting for
restructuring and similar costs. SFAS 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force Issue No. 94-3 (Issue No.
94-3). SFAS 146 requires that the liability for costs associated with an exit
or disposal activity be recognized when the liability is incurred. Under Issue
No. 94-3, a liability for exit costs was recognized at the date of a companys
commitment to an exit plan. SFAS 146 also establishes that the liability
should initially be measured and recorded at fair value. Accordingly, SFAS 146
will affect the timing of recognizing exit and restructuring costs, as well as
the amount recognized. The Company does not expect the adoption of this new
standard to have a material impact on its results of operations.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees and Indebtedness of Others. The
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under certain
guarantees that it has issued. The Interpretation also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of the
Interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. The disclosure requirements in this
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. The Company has made no guarantees
subject to the liability recognition provisions of the Interpretation. The
Company adopted the disclosure requirements of the standard for its December
31, 2002 reporting period.

The Emerging Issues Task Force Issue No. 00-21, Accounting for Revenue
Arrangement with Multiple Deliverables (Issue No. 00-21), addresses
circumstances involving the delivery or performance of multiple products,
services, and/or rights to use assets, and for which performance may occur at
different points in time or over different periods of time. The issue also
addresses whether the different revenue-generating activities, or deliverables,
are sufficiently separable, and there exists sufficient evidence of their fair
values to separately account for some or all of the deliverables. The issue
applies to all contractual arrangements under which a vendor will perform
multiple revenue-generating activities. Issue No. 00-21 is effective for all
revenue arrangements entered into in fiscal periods beginning after June

7.



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15, 2003, with early adoption permitted. The
Company adopted this
guidance prospectively for all revenue arrangements entered into after January
1, 2003, which had no material impact on the Company's results of
operations.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities
(Interpretation No. 46). The objective of Interpretation No. 46 is to
improve financial reporting by companies involved with variable interest
entities. The Interpretation requires variable interest entities to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns or both. The Company
currently does not have any variable interest entities and, therefore, will apply
the provisions of Interpretation No. 46 prospectively.

Note 2  Subsequent events

On April 1, 2003, the Company completed its acquisition by merger of
TherImmune, a privately held contract research services company, for total
consideration paid to securityholders, after adjustment, of $51,267. In
connection with the transaction, the Company repaid certain debt of TherImmune,
including $3,517 of bank debt, and incurred approximately $1,000 in
transaction costs. Of the consideration paid to securityholders, the Company
paid $30,405 in cash and issued 3,927,214 shares of Common Stock, with a
value of $20,862, based on the Companys closing price as determined
pursuant to the merger agreement. A portion of the consideration will be held
in escrow to satisfy potential indemnification obligations of the TherImmune
securityholders. The transaction will be accounted for under the purchase
method of accounting.

8.



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Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition

This Quarterly Report contains certain forward-looking statements within
the meaning of the United States Private Securities Litigation Reform Act of
1995, as amended. These statements involve risks and uncertainties that could
cause actual results to differ materially from those expressed in this
Quarterly Report. The risks and uncertainties inherent in such statements
include, but are not limited to, the extent of utilization of genomic
information by the pharmaceutical and biotechnology industry in research and
product development, our ability to retain existing and obtain additional
customers in a timely manner, capital markets and other economic conditions
adversely affecting the purchasing patterns of pharmaceutical and biotechnology
companies, risks relating to the development of genomic information products
and their use by existing and potential customers and ultimate consumers, our
reliance on sole source suppliers, our ability to limit our losses and become
profitable, our ability to timely supply customers with additional data for
existing products and updated or new general and customer-specific products,
our ability to successfully integrate TherImmune Research Corporations
(TherImmune) operations, technology and personnel with ours (including our
ability to adequately manage resources of the joint companies), our ability to
retain and continue to meet the needs of TherImmunes customers, our success in
realizing the anticipated economic benefits of the TherImmune acquisition
(including increased sales of our products and services to present and future
customers of both companies), our ability to comply with regulatory
requirements (including those applicable to TherImmunes business), the
potentially depressive effect of sales of Gene Logic stock issued to the
TherImmune stockholders in the merger, our ability to retain key employees, our
continued access to necessary human and animal tissue samples, the impact of
technological advances and competition, our ability to enforce our intellectual
property rights and the impact of intellectual property rights of others, as
well as other risks and uncertainties included in our filings with the
Securities and Exchange Commission, including our Annual Report on Form 10-K
for the year ended December 31, 2002. We assume no obligation to update any
forward-looking statements contained in this Quarterly Report.

Unless the context requires otherwise, references in this Quarterly Report
to Gene Logic, the Company, we, us, and our refer to Gene Logic Inc.

GeneExpress® and ToxExpress® are registered trademarks of Gene Logic.
BioExpress, Genesis Enterprise System, ToxSuites and ToxScreen are
trademarks of Gene Logic. GeneChip® is a registered trademark of Affymetrix,
Inc.

Recent Development

On April 1, 2003, we completed our acquisition by merger of TherImmune, a
privately held contract research services company, for total consideration paid
to securityholders, after adjustment, of $51.3 million. In connection with the
transaction, we repaid certain debt of TherImmune, including $3.5 million of
bank debt, and incurred approximately $1.0 million in transaction costs. Of
the consideration paid to securityholders, we paid $30.4 million in cash and
issued 3,927,214 shares of Common Stock, with a value of $20.9 million based on
our closing price as determined pursuant to the merger agreement. A portion of
the consideration will be held in escrow to satisfy potential indemnification
obligations of the TherImmune securityholders. The transaction will be
accounted for under the purchase method of accounting.

We expect the acquisition of TherImmune will have a significant impact on
our results of operations, liquidity and capital resources. The following
discussion does not take into account the impact of TherImmune except where otherwise specifically
stated.

Overview

We were incorporated in September 1994 and have devoted substantially all
of our resources to the development, marketing and sales of genomic information
and bioinformatics products and services to pharmaceutical and biotechnology
companies for use in drug discovery and drug development.

We commenced operations in 1996. In 1997, we began developing customized
information products based on proprietary genomic services under collaboration
agreements; these products were designed for our customers internal research
and development programs targeted to specific therapeutic areas of interest.
The skills and competencies acquired in creating such customized information
products became the foundation for developing, in early 1999, the GeneExpress
System, our large-scale reference set of gene expression information. The
GeneExpress System comprises what we believe to be one of the worlds most
comprehensive surveys of gene expression in human and animal tissues related to
disease and drug toxicity. The first commercial version of the GeneExpress
System was launched in late 1999. We sold our first GeneExpress subscription
in December 1999. Currently, we market and sell or license our GeneExpress
line of products and services to pharmaceutical and biotechnology customers
worldwide.

9.



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##### 



The GeneExpress System products and services can be divided into three
solution groups:



| |  |  | BioExpress Solutions, which consist of the BioExpress System,
BioExpress Suites and BioExpress Services, including BioExpress Reports,
Sample Processing Services and Bioinformatics Services;                       
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | ToxExpress Solutions, which consist of the ToxExpress Predictive
System, ToxSuites and ToxExpress Services, including ToxScreen Reports,
Molecular Mechanism of Toxicity Services and Custom ToxExpress Services;
and
|
| |  |  | Other Products and Services Solutions, which consist of proprietary
bioinformatics resources (the Genesis Enterprise System), data
integration services and other custom software and database products and
services.

Typically, GeneExpress System products, other than Reports, the Genesis
Enterprise System and other software and product-related services, are accessed
under multi-year term subscription agreements with current pricing depending
upon a variety of factors, including the product accessed, the scope of access,
the level and type of information available, the number and type of users, the
application of the product to our customers development efforts, additional
services required and other factors. Pricing for BioExpress Reports depends on
the number of genes and/or tissue samples surveyed and other services provided.
Pricing for ToxScreen Reports depend upon the scope and the number of
compounds analyzed. Pricing for a license to the Genesis Enterprise System
depends upon which elements of the system and services are provided. Pricing
for BioExpress, ToxExpress and software services depends upon the level and
type of the services to be rendered. Pricing for customized information
products based on proprietary genomic services under collaboration agreements
are determined on a case-by-case basis and typically include annual access
fees, research support and milestone payments.

Subscription fees for GeneExpress database products are recognized ratably
over the term of the subscription. Fees from customized information products
and services are recognized when custom services are performed or costs are
incurred. Some of our business agreements provide a right under certain
circumstances for early termination without penalty to our customers.

Our future profitability will depend in part on the continued successful
commercialization of our GeneExpress products and services through the
establishment of agreements with additional customers, as well as renewal of
agreements with, and agreements for additional products and services for,
existing customers. Payments to access our GeneExpress products and services
continue to be our primary source of revenue. We have not received, and do not
expect to receive, significant royalty or other revenue from the development
and commercialization of products by our customers using our information
products. Revenue from our customers may be subject to significant fluctuation
in both timing and amount; therefore, our results of operations for any period
may not be comparable to the results of operations for any other period.

We have incurred operating losses in each year since our inception. At
March 31, 2003, we had an accumulated deficit of $165.2 million. Our losses
have resulted principally from costs incurred in the development of our genomic
information products and services and selling, general and administrative costs
associated with our operations. These costs have exceeded our revenue, which
to date has been generated principally from subscriptions to our GeneExpress
products and services and agreements for our customized information products
and services. We expect to incur additional operating losses in the future.

Results of Operations

Three Months Ended March 31, 2003 and 2002

Revenue increased $0.9 million or 7% to $12.7 million for the three months
ended March 31, 2003 from $11.8 million for the same period in 2002. The
increase in revenue resulted from higher sales for GeneExpress products and
services. No one customer contributed 10% or more of our revenue for the three
months ended March 31, 2003; however, revenue from UCB Research accounted for
greater than 10% of our revenue for the three months ended March 31, 2002.
During the quarter ended March 31, 2003 we concluded all of our obligations
under the terms of the GeneExpress subscription agreements with Aventis
Pharmaceuticals, Inc., Wyeth and NeuralStem, Inc. and were notified of
Morphochem AGs intent to allow the GeneExpress subscription agreement to
conclude under its own terms during the second quarter of 2003. Currently,
negotiations are continuing with each of these customers, except NeuralStem,
Inc., for renewal of the expired GeneExpress subscriptions. There can be no
assurance that these negotiations will result in renewal of the GeneExpress
subscriptions or under what terms such renewals might occur. Due to current
economic uncertainty, we continue to experience delays in purchasing decisions
among a number of our existing and potential customers. We expect these
factors to slow our rate of revenue growth for the foreseeable future. We
expect no growth or a slight decline in revenue from our GeneExpress System
products and services for the quarter ending June 30, 2003 as compared to the
same period in 2002, although we will have substantial additional revenue from
sales of TherImmune services.

Database production expenses include costs to populate and maintain our
existing core database product, the GeneExpress System, and other genomic
information products. Database production expenses increased to $13.6 million
for the three months ended March 31, 2003 from $13.5 million for the same
period in 2002, reflecting higher employee and depreciation and amortization
costs, offset by lower expenses for database content generation resulting from
more focused content development of our database. For the remainder of 2003,
database production expenses are expected to be lower than those in 2002 due to
our continued effort to focus on content development in areas of most interest
to our customers.

10.



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##### 



Research and development expenses include the costs associated with our
efforts to improve the processes currently used in the production of our
database products as well as research on additional technology platforms.
Research and development expenses decreased to $0.6 million during the three
months ended March 31, 2003 from $0.8 million for the same period in 2002, due
primarily to lower employee costs and laboratory supplies.

Selling, general and administrative expenses include the costs of
corporate operations, sales and marketing, finance and accounting, legal, human
resources and other general operations. Selling, general and administrative
expenses decreased to $4.5 million during the three months ended March 31, 2003
from $5.7 million for the same period in 2002, due primarily to lower
employee-related costs, including travel, as well as a general reduction of
administrative expenses due to the implementation of cost control strategies.
For the remainder of 2003, selling, general and administrative expenses are
not expected to change significantly from 2002.

Net interest income decreased to $0.7 million during the three months
ended March 31, 2003 from $0.8 million for the same period in 2002, primarily
due to a decrease in the rates of return for our investments in, and to a
lesser degree a decline in our balance of, cash, cash equivalents and
marketable securities available-for-sale.

Income tax expense increased to $0.5 million for the three months ended
March 31, 2003 from $0.2 million for the same period in 2002, due to tax
withholdings on certain payments by our Japanese customers. We expect income
tax expense to increase in 2003 as compared to 2002 as we recognize a full year
of activity from such customers.

Liquidity and Capital Resources

From inception through March 31, 2003, we have financed our operations
through the sale of equity securities and payments from customers. In February
2000, we completed a follow-on public offering of 4,680,000 shares of our
Common Stock, generating net proceeds of approximately $247.5 million. As of
March 31, 2003, we had approximately $157.3 million in cash, cash equivalents
and marketable securities available-for-sale, compared to $167.1 million as of
December 31, 2002. As a result of the TherImmune acquisition, we expect to have used
approximately $37.4 million in cash for payment to securityholders, the discretionary
retirement of bank debt and transaction costs.

Net cash used in operating activities was $7.9 million for the three
months ended March 31, 2003 and $9.2 million during the same period in 2002 due
primarily to the continued funding of our operating losses.

During the three months ended March 31, 2003 and 2002, our investing
activities, other than purchases, sales and maturities of available-for-sale
securities, consisted primarily of capital expenditures and software
development and database upgrade costs. Capital expenditures for the three
months ended March 31, 2003 and 2002 amounted to $0.2 million and $1.0 million,
respectively. For the three months ended March 31, 2002, approximately $0.9
million of these expenditures related to the purchases of computer equipment
needed to expand the content of our GeneExpress product line. We expect
capital expenditures in 2003 to continue at a rate similar to that in 2002, as
we expand the content of, and the products derived from, the GeneExpress
System. However, as a result of the TherImmune acquisition, we expect to incur
additional expenditures in connection with the integration and build-out of
facilities.

We have capitalized software development costs of $1.8 million for each of
the three months ended March 31, 2003 and 2002. These costs relate to ongoing
efforts to enhance the software platform of our GeneExpress System. During the
three months ended March 31, 2002, we capitalized $1.1 million of costs related
to the upgrade of the content in the BioExpress System, as a result of
Affymetrixs release of their GeneChip Human Genome U-133 Set. Software
development and database upgrade costs are being amortized over their expected
useful lives of three and two years, respectively. Additional software
development costs are expected to continue as a result of ongoing efforts to
further enhance the software platform of our GeneExpress System.

Our financing activities primarily consisted of cash provided from the
exercise of stock options and participation in our employee stock purchase
plan.

In January 1999, we entered into a three-year agreement with Affymetrix,
pursuant to which Affymetrix supplied its microarrays to us for the development
of gene expression databases. During 2001, we renegotiated and extended this
agreement for two years, subject to renewal, commencing January 2002. Under
the terms of the new agreement, we continue to pay Affymetrix subscription fees
for access to the microarrays, purchase the microarrays and related
instrumentation and software and expect to record royalty expense, payable to
Affymetrix beginning in 2004, upon meeting certain GeneExpress subscription
revenue thresholds. Our commitments under other research and license
agreements do not represent significant expenditures in relation to our total
database production expense.

We believe that existing cash, cash equivalents and marketable securities
available-for-sale and anticipated payments from customers will be sufficient
to support our operations for the foreseeable future. These estimates are
forward-looking statements that involve risks and uncertainties. Our actual
future capital requirements and the adequacy of our available funds will depend
on many factors, including those discussed under BusinessRisk Factors in our
Annual Report on Form 10-K for the year ended December 31, 2002.

11.



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##### 



New Pronouncements

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146, Accounting for Costs Associated with
Exit or Disposal Activities (SFAS 146), which addresses accounting for
restructuring and similar costs. SFAS 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force Issue No. 94-3 (Issue No.
94-3). SFAS 146 requires that the liability for costs associated with an exit
or disposal activity be recognized when the liability is incurred. Under Issue
No. 94-3, a liability for exit costs was recognized at the date of a companys
commitment to an exit plan. SFAS 146 also establishes that the liability
should initially be measured and recorded at fair value. Accordingly, SFAS 146
will affect the timing of recognizing exit and restructuring costs, as well as
the amount recognized. We do not expect the adoption of this new standard to
have a material impact on our results of operations.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees and Indebtedness of Others. The
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under certain
guarantees that it has issued. The Interpretation also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of the
Interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. The disclosure requirements in this
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. We have made no guarantees subject to
the liability recognition provisions of the Interpretation. We adopted the
disclosure requirements of the standard for our December 31, 2002 reporting
period.

The Emerging Issues Task Force Issue No. 00-21, Accounting for Revenue
Arrangement with Multiple Deliverables (Issue No. 00-21), addresses
circumstances involving the delivery or performance of multiple products,
services, and/or rights to use assets, and for which performance may occur at
different points in time or over different periods of time. The issue also
addresses whether the different revenue-generating activities, or deliverables,
are sufficiently separable, and there exists sufficient evidence of their fair
values to separately account for some or all of the deliverables. The issue
applies to all contractual arrangements under which a vendor will perform
multiple revenue-generating activities. Issue No. 00-21 is effective for all
revenue arrangements entered into in fiscal periods beginning after June 15,
2003, with early adoption permitted. We adopted this guidance prospectively
for all revenue arrangements entered into after January 1, 2003,
which did not have a material impact on our results of operations.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities
(Interpretation No. 46). The objective of Interpretation No. 46 is to
improve financial reporting by companies involved with variable interest
entities. The Interpretation requires variable interest entities to be
consolidated by a company if that company is subject to a majority of the risk
loss from the variable interest entitys activities or is entitled to receive a
majority of the entitys residual returns or both. We currently do not have
any variable interest entities and, therefore, will apply the provisions of
Interpretation No. 46 prospectively.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

We have limited exposure to financial market risks, including changes in
interest rates. At March 31, 2003, we had cash and cash equivalents of
approximately $121.2 million and marketable securities available-for-sale of
$36.1 million. We invest our excess cash primarily in money market funds,
obligations of the United States government and its agencies and marketable
debt securities of companies with strong credit ratings. These instruments
have maturities of twenty-four months or less when purchased. We do not utilize
derivative financial instruments, derivative commodity instruments or other
market risk sensitive instruments, positions or transactions in any material
fashion. Accordingly, we believe that, while the instruments we hold are
subject to changes in the financial standing of the issuer of such securities,
we are not subject to any material risks arising from changes in foreign
currency exchange rates, commodity prices, equity prices or other market
changes that affect market risk sensitive instruments. Based on our cash and
cash equivalents and marketable securities available-for-sale balances at March
31, 2003, a 100 basis point adverse movement in interest rates would have
resulted in an increase in the net loss for the three months ended March 31,
2003 by approximately $0.4 million. Actual changes in rates may differ from
the hypothetical assumptions used in computing this exposure.

12.



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##### 



Item 4. Controls and Procedures

As of March 31, 2003, an evaluation was performed under the supervision
and with the participation of our management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on that evaluation,
our management, including the Chief Executive Officer and Chief Financial
Officer, concluded that our disclosure controls and procedures were effective
as of March 31, 2003.

In connection with the integration of TherImmune, we are evaluating
whether any significant changes in our internal controls will be required subsequent to March 31, 2003.

PART II                      OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

A)         Exhibits:



| | 99.1 |  | Certification of Principal Executive Officer Pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 99.2 |  | Certification of Principal Financial Officer 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:



| |                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Current Report on Form 8-K, filed on February 26, 2003, with
respect to the proposed acquisition of TherImmune Research Corporation was
the only report on Form 8-K filed during the three months ended March 31,
2003.

13.



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##### 



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.

|                   |  |                                                                                                                                              
|------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|                   |  | GENE LOGIC INC.                                                                                                                              
|                  
|Date: May 14, 2003 |  | By: /s/ Philip L. Rohrer, Jr.
       Philip L. Rohrer, Jr.
       Chief Financial Officer
       (Principal Financial and Accounting Officer)

I, Philip L. Rohrer, Jr., certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Gene Logic
Inc.;                                                                                                                                                                                                                                                        
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         





| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                                                          
|------------------ |  | -----------------------------------------------------------------------------------------
|Date: May 14, 2003 |  | By: /s/ Philip L. Rohrer, Jr.
       Philip L. Rohrer, Jr.
       Chief Financial Officer

14.



---



##### 



CERTIFICATIONS

I, Mark D. Gessler, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Gene Logic
Inc.;                                                                                                                                                                                                                                                        
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |                                                                              
|------------------ |  | -----------------------------------------------------------------------------
|Date: May 14, 2003 |  | By: /s/ Mark D. Gessler
       Mark D. Gessler
       Chief Executive Officer

15.