##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

|[X]                            |  | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2002
|------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                    
|[  ]                           |  | Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from  to                                 
|                               |  |                                                                                                                                    
|Commission file number 0-26192

MakeMusic! Inc.

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(Exact Name of Small Business Issuer as Specified in its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Minnesota                                                      |  | 41-1716250                          
|                                                               |  |                                     
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer
Identification No.)

6210 Bury Drive

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(952) 937-9611

---



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Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes  X   No

As of November 5, 2002, there were 21,680,383 shares of Common Stock
outstanding.

Transitional Small Business Disclosure Format (check one):

Yes     No  X





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TABLE OF CONTENTS



|                                                 |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                                                 |                                                                                               | Condensed Consolidated Balance Sheets               
|                                                 |                                                                                               | Condensed Consolidated Statements of Operations     
|                                                 |                                                                                               | Notes to Condensed Consolidated Financial Statements
|                                                 | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                 | ITEM 3. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION                      
|                                                 | Item 2. Changes in Securities:                                                               
|                                                 | Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                                      
|Certifications                                  
|EXHIBIT INDEX                                   
|EX-99.1 Certification of Chief Executive Officer
|EX-99.2 Certification of Chief Financial Officer



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MakeMusic! Inc.

INDEX

|        |  |                                                                                       |  |                                                                                                                |    |          |    | 
|------- |  | ------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------- | -- | -------- | -- | 
|        |  |                                                                                       |  |                                                                                                                |    | Page No.
|        |  |                                                                                       |  |                                                                                                                |    |         
|        |  |                                                                                       |  | PART I. FINANCIAL INFORMATION                                                                                  |    |          |    | 
|Item 1. |  | Condensed Consolidated Financial Statements                                           |  |                                                                                                                | 3  |         
|        |  |                                                                                       |  | Condensed Consolidated Balance Sheets
September 30, 2002 and December 31, 2001                                 |    |          | 3  | 
|        |  |                                                                                       |  | Condensed Consolidated Statement of Operations
Three- and nine-month periods ended September 30, 2002 and 2001 |    |          | 4  | 
|        |  |                                                                                       |  | Condensed Consolidated Statement of Cash Flows
Nine-month periods ended September 30, 2002 and 2001            |    |          | 5  | 
|        |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements                                                           |    |          | 6  | 
|Item 2. |  | Managements discussion and analysis of financial condition
and results of operations |  |                                                                                                                | 9  |         
|Item 3. |  | Controls and Procedures                                                               |  |                                                                                                                | 12 |         
|        |  |                                                                                       |  | PART II. OTHER INFORMATION                                                                                     |    |          |    | 
|Item 2. |  | Changes in Securities                                                                 |  |                                                                                                                | 14 |         
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                                                                | 14 |         
|        |  |                                                                                       |  | Signatures                                                                                                     |    |          | 15 | 
|        |  |                                                                                       |  | Certifications                                                                                                 |    |          | 16 | 
|        |  |                                                                                       |  | Exhibit Index                                                                                                  |    |          | 18 | 

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MakeMusic! Inc.
Condensed Consolidated Balance Sheets(In thousands of U.S. dollars)

|                                                  |                                                |   |               |         |              |   |        |         |  
|------------------------------------------------- | ---------------------------------------------- | - | ------------- | ------- | ------------ | - | ------ | ------- | -
|                                                  |                                                |   | September 30, |         | December 31,
|                                                  |                                                |   | 2002          |         | 2001        
|                                                  |                                                |   |               |         |             
|                                                  |                                                |   | (unaudited)   |         | (Note)      
|Assets                                            |                                                |   |               |         |              |   |        |        
|Current assets:                                   |                                                |   |               |         |              |   |        |        
|                                                  | Cash and cash equivalents                      |   | $             | 1,794   |              |   | $      | 3,258   |  
|                                                  | Accounts receivable                            |   |               | 457     |              |   |        | 640     |  
|                                                  | Inventories                                    |   |               | 416     |              |   |        | 391     |  
|                                                  | Value added tax receivable                     |   |               | 27      |              |   |        | 172     |  
|                                                  | Prepaid expenses and other current assets      |   |               | 167     |              |   |        | 341     |  
|                                                  |                                                |   |               |         |              |   |        |         |  
|Total current assets                              |                                                |   | 2,861         |         |              |   | 4,802  |        
|Property and equipment, net                       |                                                |   | 788           |         |              |   | 1,099  |        
|Goodwill, net                                     |                                                |   | 5,830         |         |              |   | 17,330 |        
|Intangible assets, net                            |                                                |   | 3,167         |         |              |   | 4,380  |        
|Other non-current assets                          |                                                |   | 937           |         |              |   | 981    |        
|                                                  |                                                |   |               |         |              |   |        |         |  
|Total assets                                      |                                                | $ | 13,583        |         |              | $ | 28,592 |        
|                                                  |                                                |   |               |         |              |   |        |         |  
|Liabilities and shareholders equity              |                                                |   |               |         |              |   |        |        
|Current liabilities:                              |                                                |   |               |         |              |   |        |        
|                                                  | Accounts payable                               |   | $             | 469     |              |   | $      | 749     |  
|                                                  | Accrued expenses and other current liabilities |   |               | 1,015   |              |   |        | 1,095   |  
|                                                  | Revolving note payable                         |   |               | 67      |              |   |        |        |  
|                                                  | Current portion of long-term debt              |   |               | 471     |              |   |        | 254     |  
|                                                  | Current portion of capital lease obligations   |   |               | 43      |              |   |        | 172     |  
|                                                  | Reserve for product returns                    |   |               | 249     |              |   |        | 167     |  
|                                                  | Deferred revenue                               |   |               | 116     |              |   |        | 63      |  
|                                                  |                                                |   |               |         |              |   |        |         |  
|Total current liabilities                         |                                                |   | 2,430         |         |              |   | 2,500  |        
|Long-term debt, net of current portion            |                                                |   | 535           |         |              |   | 354    |        
|Capital lease obligations, net of current portion |                                                |   | 18            |         |              |   | 10     |        
|Shareholders equity:                             |                                                |   |               |         |              |   |        |        
|                                                  | Common stock                                   |   |               | 217     |              |   |        | 209     |  
|                                                  | Additional paid-in capital                     |   |               | 58,081  |              |   |        | 57,686  |  
|                                                  | Subscription shares receivable                 |   |               | (6      | )            |   |        | (73     | )
|                                                  | Accumulated deficit                            |   |               | (46,727 | )            |   |        | (31,067 | )
|                                                  | Accumulated other comprehensive income         |   |               | (329    | )            |   |        | (277    | )
|                                                  | Deferred compensation                          |   |               | (636    | )            |   |        | (750    | )
|                                                  |                                                |   |               |         |              |   |        |         |  
|Total shareholders equity                        |                                                |   | 10,600        |         |              |   | 25,728 |        
|                                                  |                                                |   |               |         |              |   |        |         |  
|Total liabilities and shareholders equity        |                                                | $ | 13,583        |         |              | $ | 28,592 |        
|                                                  |                                                |   |               |         |              |   |        |         |  

NOTE:The Balance Sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not reflect all of the information
and footnotes required by accounting principles generally accepted in the
United States for complete financial statements.

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MakeMusic! Inc.
Condensed Consolidated Statements of Operations(In thousands of U.S. dollars, except per share data)
(Unaudited)

|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |       |  
|------------------------------------------------------------- | ---------------------------------------- | - | ----------------------- | ----- | --------------------------- | - | ---------- | ----- | ---- | - | ---------- | ----- | - | - | ---------- | ----- | -
|                                                              |                                          |   | Quarter Ended Sept. 30, |       | Nine Months Ended Sept. 30,
|                                                              |                                          |   |                         |       |                            
|                                                              |                                          |   | 2002                    |       | 2001                        |   | 2002       |       | 2001
|                                                              |                                          |   |                         |       |                             |   |            |       |     
|NET REVENUE                                                   |                                          | $ | 2,347                   |       |                             | $ | 1,950      |       |      | $ | 5,573      |       |   | $ | 5,027      |      
|COST OF REVENUES                                              |                                          |   | 304                     |       |                             |   | 354        |       |      |   | 900        |       |   |   | 1,064      |      
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|GROSS PROFIT                                                  |                                          |   | 2,043                   |       |                             |   | 1,596      |       |      |   | 4,673      |       |   |   | 3,963      |      
|OPERATING EXPENSES:                                           |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|                                                              | Website development expenses             |   |                         | 274   |                             |   |            | 55    |      |   |            | 810   |   |   |            | 599   |  
|                                                              | Content and product development
expenses |   |                         | 504   |                             |   |            | 644   |      |   |            | 1,649 |   |   |            | 1,959 |  
|                                                              | Selling and marketing expenses           |   |                         | 836   |                             |   |            | 898   |      |   |            | 2,761 |   |   |            | 3,635 |  
|                                                              | General and administrative expenses      |   |                         | 1,112 |                             |   |            | 2,151 |      |   |            | 3,420 |   |   |            | 6,502 |  
|                                                              | Restructuring charges                    |   |                         |      |                             |   |            | 386   |      |   |            |      |   |   |            | 1,031 |  
|                                                              | Impairment of long-lived assets          |   |                         | 193   |                             |   |            | 796   |      |   |            | 193   |   |   |            | 796   |  
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|Total operating expenses                                      |                                          |   | 2,919                   |       |                             |   | 4,930      |       |      |   | 8,833      |       |   |   | 14,522     |      
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|LOSS FROM OPERATIONS                                          |                                          |   | (876                    | )     |                             |   | (3,334     | )     |      |   | (4,160     | )     |   |   | (10,559    | )    
|                                                              | Interest (expense)/income, net           |   |                         | (5    | )                           |   |            | 21    |      |   |            | 6     |   |   |            | 109   |  
|                                                              | Foreign exchange loss                    |   |                         | (1    | )                           |   |            | (2    | )    |   |            | (4    | ) |   |            | (1    | )
|                                                              | Other (expense)/income, net              |   |                         | (1    | )                           |   |            | 55    |      |   |            |      |   |   |            | 25    |  
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|Net loss before income tax                                    |                                          |   | (883                    | )     |                             |   | (3,260     | )     |      |   | (4,158     | )     |   |   | (10,426    | )    
|Income tax                                                    |                                          |   |                        |       |                             |   |           |       |      |   | (2         | )     |   |   | (1         | )    
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|Net loss before cumulative effect of
accounting change        |                                          |   | (883                    | )     |                             |   | (3,260     | )     |      |   | (4,160     | )     |   |   | (10,427    | )    
|Cumulative effect of change in
accounting principle (FAS 142) |                                          |   |                        |       |                             |   |           |       |      |   | (11,500    | )     |   |   |           |      
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|Net loss                                                      |                                          | $ | (883                    | )     |                             | $ | (3,260     | )     |      | $ | (15,660    | )     |   | $ | (10,427    | )    
|                                                              |                                          |   |                         |       |                             |   |            |       |      |   |            |       |   |   |            |      
|Basic and diluted loss per common share                       |                                          | $ | (0.04                   | )     |                             | $ | (0.16      | )     |      | $ | (0.68      | )     |   | $ | (0.50      | )    
|Weighted average common shares
outstanding                    |                                          |   | 23,167,995              |       |                             |   | 20,985,799 |       |      |   | 23,167,995 |       |   |   | 20,935,574 |      

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MakeMusic! Inc.
Condensed Consolidated Statements of Cash Flows(In thousands of U.S. dollars)
(Unaudited)

|                                                                            |                                                         |                                           |         |                                 |      |      |         |       |      |  
|--------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------------------------------- | ------- | ------------------------------- | ---- | ---- | ------- | ----- | ---- | -
|                                                                            |                                                         |                                           |         | Nine months ended September 30,
|                                                                            |                                                         |                                           |         |                                
|                                                                            |                                                         |                                           |         | 2002                            |      | 2001
|                                                                            |                                                         |                                           |         |                                 |      |     
|Operating activities                                                        |                                                         |                                           |         |                                 |      |      |         |      
|Net loss                                                                    |                                                         | $                                         | (15,660 | )                               |      | $    | (10,427 | )    
|Adjustments to reconcile net loss to net cash used in
operating activities: |                                                         |                                           |         |                                 |      |      |         |      
|                                                                            | Impairment of license rights                            |                                           |         | 193                             |      |      |         | 796   |     
|                                                                            | Amortization of intangible assets                       |                                           |         | 1,180                           |      |      |         | 2,961 |     
|                                                                            | Depreciation and amortization of property and equipment |                                           |         | 515                             |      |      |         | 625   |     
|                                                                            | Amortization of deferred compensation                   |                                           |         | 123                             |      |      |         | 99    |     
|                                                                            | Impairment of goodwill                                  |                                           |         | 11,500                          |      |      |         |      |     
|                                                                            | Restructuring                                           |                                           |         | (136                            | )    |      |         | 483   |     
|                                                                            | Issuance of stock options and warrants for services     |                                           |         | 11                              |      |      |         | 291   |     
|                                                                            | Increase (decrease) in cash from:                       |                                           |         |                                 |      |      |         |       |     
|                                                                            |                                                         | Accounts receivable                       |         |                                 | 391  |      |         |       | 778  |  
|                                                                            |                                                         | Inventories                               |         |                                 | (25  | )    |         |       | (83  | )
|                                                                            |                                                         | Prepaid expenses and other current assets |         |                                 | 159  |      |         |       | (123 | )
|                                                                            |                                                         | Accounts payable                          |         |                                 | (306 | )    |         |       | (774 | )
|                                                                            |                                                         | Accrued expenses and other liabilities    |         |                                 | 158  |      |         |       | (395 | )
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Net cash used in operating activities                                       |                                                         |                                           | (1,897  | )                               |      |      | (5,769  | )    
|Net cash (used) provided by investing activities                            |                                                         |                                           |         |                                 |      |      |         |      
|Capitalized
development and purchases of property &
equipment               |                                                         |                                           | (274    | )                               |      |      | (410    | )    
|Net redemptions of short-term investments                                   |                                                         |                                           |        |                                 |      |      | 917     |      
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Net cash (used) provided in investing activities                            |                                                         |                                           | (274    | )                               |      |      | 507     |      
|Net cash provided (used) by financing activities                            |                                                         |                                           |         |                                 |      |      |         |      
|Issuance of shares                                                          |                                                         |                                           |        |                                 |      |      | 258     |      
|Collections of notes receivables from issuance of shares                    |                                                         |                                           | 64      |                                 |      |      |        |      
|Proceeds from revolving note payable, net                                   |                                                         |                                           | 67      |                                 |      |      |        |      
|Proceeds from bridge loan financing                                         |                                                         |                                           | 708     |                                 |      |      |        |      
|Payments on long-term debt and capital leases                               |                                                         |                                           | (154    | )                               |      |      | (553    | )    
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Net cash provided (used) by financing activities                            |                                                         |                                           | 685     |                                 |      |      | (295    | )    
|Effect of exchange rate changes on cash                                     |                                                         |                                           | 22      |                                 |      |      | (240    | )    
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Net decrease in cash and cash equivalents                                   |                                                         |                                           | (1,464  | )                               |      |      | (5,797  | )    
|Cash and cash equivalents, beginning of period                              |                                                         |                                           | 3,258   |                                 |      |      | 9,090   |      
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Cash and cash equivalents, end of period                                    |                                                         | $                                         | 1,794   |                                 |      | $    | 3,293   |      
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      
|Supplemental disclosure of cash flow information                            |                                                         |                                           |         |                                 |      |      |         |      
|Interest paid                                                               |                                                         | $                                         | 10      |                                 |      | $    | 43      |      
|Notes Receivable on share subscriptions in September 2002                   |                                                         |                                           | 10      |                                 |      |      | 1,169   |      
|                                                                            |                                                         |                                           |         |                                 |      |      |         |      

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MakeMusic! Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 1 | Accounting Policies.The information furnished in this report is
unaudited but reflects all adjustments that are necessary, in the opinion
of management, for a fair statement of the results for the interim period.
The operating results for the nine months ended September 30, 2002 are
not necessarily indicative of the operating results to be expected for the
full fiscal year. These statements should be read in conjunction with the
Companys most recent Annual Report on Form 10-KSB.                                                                                                
|      
|       | Certain amounts as presented in the 2001 financial statements, as
previously reported, have been reclassified to conform to the 2002
presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      
|Note 2 | Impairment of Long Lived Assets.In September 2001, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standard No. 141, Business Combinations, and No. 142, Goodwill and Other
Intangible Assets, effective for the first quarter of fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and
intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance
with the Statements. Other intangible assets will continue to be
amortized over their useful lives.
|      
|       | The Company completed its analysis of the required transitional
impairment test for goodwill upon adoption of FAS 142 and has recorded
$11,500,000 goodwill impairment in the income statement in the
Cumulative effect of change in accounting principle in the first
quarter 2002.                                                                                                                                                                                                                                                                                                              
|      
|       | Goodwill resulting from the reverse merger with Coda in 2000 consists of
the following (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                              |  |               |       |              |  |   |        | 
|----------------------------- |  | ------------- | ----- | ------------ |  | - | ------ | 
|                              |  | September 30, |       | December 31,
|                              |  | 2002          |       | 2001        
|                              |  |               |       |             
|Goodwill                      |  | $             | 8,190 |              |  | $ | 19,690 | 
|Less accumulated amortization |  |               | 2,360 |              |  |   | 2,360  | 
|                              |  |               |       |              |  |   |        | 
|                              |  | $             | 5,830 |              |  | $ | 17,330 | 
|                              |  |               |       |              |  |   |        | 

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| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | With the adoption of FAS 142 the Company ceased amortization of goodwill
as of January 1, 2002. The following table presents the results of the
Company for all periods presented on a comparable basis (in thousands):

|                                                                          |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | --------------------------- | ----- | ------------------------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                          |  | Quarter Ended September 30, |       | Nine Months Ended September 30,
|                                                                          |  |                             |       |                                
|                                                                          |  | 2002                        |       | 2001                            |  | 2002 |        | 2001
|                                                                          |  |                             |       |                                 |  |      |        |     
|Reported net loss
before cumulative
effect of accounting
change           |  | $                           | (883  | )                               |  | $    | (3,260 | )    |  | $ | (4,160 | ) |  | $ | (10,427 | )
|Add back goodwill
amortization                                            |  |                             |      |                                 |  |      | 492    |      |  |   |       |   |  |   | 1,477   |  
|                                                                          |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  
|Adjusted net loss
before cumulative
effect of accounting
change           |  | $                           | (883  | )                               |  | $    | (2,768 | )    |  | $ | (4,160 | ) |  | $ | (8,950  | )
|                                                                          |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  
|Basic and diluted net
loss per share:                                     |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  
|Reported net loss per
share before
cumulative effect of
accounting change |  | $                           | (0.04 | )                               |  | $    | (0.16  | )    |  | $ | (0.18  | ) |  | $ | (0.50   | )
|Goodwill                                                                  |  |                             |      |                                 |  |      | 0.02   |      |  |   |       |   |  |   | 0.07    |  
|                                                                          |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  
|Adjusted net loss per
share before cumulative
effect of accounting
change |  | $                           | (0.04 | )                               |  | $    | (0.14  | )    |  | $ | (0.18  | ) |  | $ | (0.43   | )
|                                                                          |  |                             |       |                                 |  |      |        |      |  |   |        |   |  |   |         |  



|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 3 | Restructuring Charges.In 2001, the Company announced restructuring
plans to eliminate redundant responsibilities and cut excess costs and
reduce the digital sheet music operations in its European and Madagascar
locations. As a result of these plans to reduce operating costs,
MakeMusic! recorded a restructuring charge of $1,172,000 in 2001. The
remaining accrual relating to the restructure charge is $25,000 of which
all are New York lease accruals. The following table displays a
roll-forward of the liabilities for restructuring charges from December
31, 2001 to September 30, 2002.

|                                         |  |              |         |       |  |      |         |               |  |   |        | 
|---------------------------------------- |  | ------------ | ------- | ----- |  | ---- | ------- | ------------- |  | - | ------ | 
|                                         |  | December 31, |         |       |  |      |         | September 30,
|                                         |  | 2001         |         | Usage |  | 2002
|                                         |  |              |         |       |  |     
|Severance and related
personnel expenses |  | $            | 67,000  |       |  | $    | 67,000  |               |  | $ |       | 
|Lease Termination                        |  |              | 94,000  |       |  |      | 69,000  |               |  |   | 25,000 | 
|                                         |  |              |         |       |  |      |         |               |  |   |        | 
|Total                                    |  | $            | 161,000 |       |  | $    | 136,000 |               |  | $ | 25,000 | 
|                                         |  |              |         |       |  |      |         |               |  |   |        | 



| |                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On September 30, 2002 the Company announced the closure of its digital
sheet music operations at www.net4music.com, which resulted in the
revaluation of the
license rights for
digital sheet music and capitalized development costs
for the digital store. Management concluded from its evaluation that a
full impairment of $193,000 was required in the quarter ended September
30, 2002.

7



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|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 4 | Revolving Note Payable.On August 5, 2002, the Company signed an
agreement for a one-year asset-based discretionary revolving note
of $500,000. The agreement allows the Company an advance of 75% of
domestic accounts receivable at an interest rate of prime + 4.75%
with a minimum interest charge of $3,000 per month. The Company
received its first advance on this line of credit on September 5,
2002 and as of September 30, 2002 has a balance on the revolving
note of $67,000.                                                                                                                                                                     
|      
|Note 5 | Debt  Bridge Loans.On September 30, 2002, the Company issued
$750,000 of 10% convertible, subordinated bridge loans. If the Company
completes a private placement of up to $1.0 million, including the
$750,000 convertible bridge loans, by March 31, 2003, the loan
automatically converts into common stock at a 25% discount from the
price set in the private placement. Also, holders of stock
converted from the loan amount will receive warrants (Conversion
Warrants) to purchase one additional share of common stock for
each converted share at the lower of $0.05 or the per share price
in the private placement.                            
|      
|       | If a private placement financing is not completed by March 31, 2003, in
lieu of the Conversion Warrants, investors in the bridge loan will
receive warrants (Initial Warrants) to purchase three shares of common
stock per $1.00 of principal at per share price of $0.01. Fifty percent
(50%) of the loan comes due in four equal monthly installments beginning
September 30, 2003 and the remaining fifty percent (50%) comes due in
four equal monthly installments beginning September 30, 2004 at an
annual interest rate of 10%.                                                                                                                     
|      
|       | The Initial Warrants have been assigned a value of approximately
$395,000, representing the discount on the bridge loans. The fair value
of these warrants was established using the Black-Scholes option-pricing
model with the following weighted average assumptions; risk free
interest rate 5.0%, dividend yield 0.00, volatility factor 123.6 and
average expected life 5 years. The $395,000 value assigned to the
Initial Warrants is included on the balance sheet in additional paid-in
capital and is also netted against the long-term note payable,
resulting in a net balance in long-term notes payable related to the
bridge loans of $355,000.
|      
|       | The Company will record interest expense as the debt discount of
$395,000 is accreted over the term of these bridge loans. In the event
that the Company completes a private placement prior to March 31, 2003,
any unamortized discount will be charged to interest expense. At the
time of such conversion, the Company will also record approximately
$355,000 of interest expense and additional paid-in capital to reflect
the beneficial conversion features of these bridge loans.                                                                                                                                                                      
|      
|Note 6 | Loss Per Common Share.Basic and diluted net loss per common share was
computed by dividing the net loss by the weighted average number of shares of
Common Stock outstanding plus 1,487,612 and 2,315,773 shares for the quarter
ended September 30, 2002 and 2001, respectively. These shares are issuable
under the put and call agreement from the Companys reverse acquisition and
deemed outstanding for purposes of loss per share.                                                                                                                                                                                                                     

8



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|       |                                                                                                                                                                                                                                                                                                                                                                                 
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | The common share equivalents applicable to potentially dilutive warrants
issuable in relation with the Companys convertible bridge loans were 2,191,753
for the three and nine-month periods ended September 30, 2002.                                                                                                                                                         
|      
|Note 7 | Income Tax Benefit.Due to the uncertainty regarding the realization of
our Federal deferred income tax assets and specifically our net operating loss
carry forwards, we have recorded a valuation allowance against our income tax
benefit for 2002 and 2001.                                                                                                                  
|      
|Note 8 | Comprehensive Income (Loss).The effect of foreign currency translation
is $52,000 of other comprehensive income for the nine months ended September
30, 2002.                                                                                                                                                                                                                   
|      
|Note 9 | Subsequent Event.Subsequent to the end of the quarter, the Company has
made plans to reduce website development and administrative expenses in its
French operations and move them to its Minneapolis, Minnesota location. The
plan is expected to include a reduction of employees in France. The cost of
the restructure and the resulting savings are not known at this time.




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

MakeMusic! Inc. (MakeMusic! or the Company), a Minnesota corporation, is a
global supplier of software, services and integrated solutions for musicians.
Providing music notation software and intelligent accompaniments, the Company
enhances music publishing, education, distribution and performance for
musicians across the globe.

The Company has incurred losses from operations since inception and has an
accumulated deficit of $46,727,000 as of September 30, 2002.

In our Form 10KSB filed with the Securities and Exchange Commission for the
year ended December 31, 2001, we identified critical accounting policies and
estimates for our business.

Results of operations

For the periods ended September 30, 2002 compared to the periods ended
September 30, 2001

Net Revenues.Net revenues of $2,347,000 for the quarter ended September
30, 2002 were $397,000 or 20% higher than for the quarter ended September 30,
2001. Net revenues of $5,573,000 for the nine months ended September 30, 2002
were $546,000 or 11% higher than for the nine months ended September 30, 2001.
The significant increase in sales over prior years is related to the June 2002
release of Finale 2003 and increased sales of PrintMusic!, offset by lower
sales in Allegro and SmartMusic Studio software and accompaniment sales, which
have not been promoted by the Company while launching the SmartMusic Studio
subscription service.

9



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The SmartMusic subscription service for music educators, launched in
November 2001, has been purchased by more than 1000 schools with more than
2,780 subscriptions as of the end of the third quarter 2002. These schools
subscriptions correspond to recurring annual
subscription revenue of $89,000 to be recognized over the subscription
period, of which $17,000 was recorded in the financial statements in the third
quarter. The home subscription program was launched in June 2002. As of
September 30, 2002 the Company had 258 active home subscription users resulting
in revenues of $5,578 and $6,491 for the quarter and year to date periods ended
September 30, 2002. The Companys school sponsored home subscription product
was introduced September 19, 2002 with the initial marketing campaign beginning
in October 2002.

Gross Profit.Gross profit of $2,043,000 for the quarter ended September
30, 2002 was $447,000 or 28% higher than for the quarter ended September 30,
2001. Gross profit of $4,673,000 for the nine months ended September 30, 2002
was $710,000 or 18% higher than for the nine months ended September 30, 2001.
The increase in gross profit is attributed to the early release of Finale 2003
products and an overall shift in revenue away from SmartMusic packaged good
products and digital sheet music, which are lower margin percentage products,
toward our higher margin SmartMusic subscription service.

Selling and Marketing Expenses.Selling and marketing expenses were
$836,000 for the third quarter ended September 30, 2002, a 7% decrease from
selling and marketing expenses of $898,000 for the quarter ended September 30,
2001. Selling and marketing expenses were $2,761,000 for the first nine months
of 2002, a 24% decrease from selling and marketing expenses of $3,635,000 for
the nine months ended September 30, 2001. The year-to-date decrease is largely
due to the full impact of the reduced workforce relating to the sheet music
operations announced in the first and third quarter of 2001. The quarterly
decrease is largely due to selling and marketing increases in the second
quarter of 2002 related to the early release of Finale 2003, which resulted in
lower selling and marketing expenses in the third quarter.

During the second quarter of 2002 the Company analyzed the sales generated from
its first quarter SmartMusic subscription customer acquisition marketing
campaign and determined that it could acquire new school subscription accounts
for direct costs of less than $250 per school. This customer acquisition cost,
while higher than originally estimated, still allows for profitable customer
acquisition on the basis of the Companys stated goal of obtaining more than
$600 per year of revenues from each subscribing school through school and
student subscription fees.

Website Development Expenses.Website development expenses were $274,000
for the quarter ended September 30, 2002, a 219% increase over website
development expense of $55,000 for the quarter ended September 30, 2001. For
the nine months ended September 30, 2002, website development expenses of
$810,000 were $211,000 or 35% higher than for the nine months ended September
30, 2001. The quarter ended September 30, 2001 included a $234,000
year-to-date reduction in expenses to capitalize development of the SmartMusic
web site. After adding back the effects of all non-cash adjustments
in 2002 and 2001, website development expenses for the quarter ended
September 30, 2002 and would be $39,000, or 13%, less than the quarter
ended September 30, 2001.

10



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Content and Product Development Expenses.Content and product development
expenses of $504,000 for the quarter ended September 30, 2002 were $140,000 or
22% lower than the quarter ended September 30, 2001. For the nine months ended
September 30, 2002, content and product development expenses of $1,649,000 were
$310,000 or 16% lower than the nine months ended September 30, 2001. The
decrease is largely due to the discontinued digital sheet music content
operations in Lyon and Madagascar in 2001, partially offset by additional
personnel and related costs for Finale 2003 development and for software and
repertoire development in support of the SmartMusic Studio subscription
service.

General and Administrative Expenses.General and administrative expenses
were $1,112,000 for the quarter ended September 30, 2002, a $1,039,000 or 48%
decrease from the quarter ended September 30, 2001. General and administrative
expenses of $3,420,000 for the nine months ended September 30, 2002 decreased
$3,082,000 or 47% from the nine months ended September 30, 2001. The decrease
relates to actual expense reductions as a result of the 2001 restructurings,
the reduction of amortization of license rights due to the write-off of $1.3
million license rights in the third and fourth quarter of 2001, and the
non-amortization of goodwill resulting from the adoption of FAS 142, Goodwill
and Other Intangible Assets (See Note 2 to the financial statements).

Impairment of long-lived assets.The Companys intangible assets included
license rights for digital sheet music and capitalized development for the
digital store www.net4music.com. During the quarter ended September 30, 2002,
the Company announced the closure of its digital sheet music operations, which
resulted in the revaluation of the recoverability of the license rights and
capitalized development as described in Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Management concluded that a full impairment of these
assets had occurred and recorded a $193,000 non-cash impairment charge.

Interest Income, Net.The Company had interest income of $1,000, net of
$5,000 interest expense for the quarter ended September 30, 2002. Net interest
income decreased $26,000 or 124% when compared to the quarter ended September
30, 2001. For the first nine months of 2002, the Company had a net interest
income of $6,000 as compared to $109,000 for the same period a year ago.
Decreased interest income relates to lower cash investments.

Net Loss Before Cumulative Effect of Accounting Principle. The Company
recorded a net loss before cumulative effect of accounting principle of
$883,000 for the quarter ended September 30, 2002, compared with a net loss of
$3,260,000 for the quarter ended September 30, 2001. For the first nine months
ended September 30, 2002, the Company recorded a net loss before cumulative
effect of accounting principle of $4,160,000, compared to $10,427,000 for the
nine months ended September 30, 2001. The reduced level of net loss is
attributed to factors that affect revenues and expenses as described above.

Cumulative Effect of Accounting Principle. The Company recorded in the
first quarter of 2002 a cumulative effect of accounting principle charge of
$11,500,000 relating to the goodwill generated from the reverse merger of Coda
and Net4Music on October 19, 2000 (See Note 2).

11



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##### Table of Contents



Net Loss. The Company recorded a net loss of $883,000 or $0.04 per basic
and diluted share for the quarter ended September 30, 2002 compared to a net
loss of $3,260,000 or $0.16 per basic and diluted share for the quarter ended
September 30, 2001. For the nine months ended September 30, 2002, the
Companys recorded a net loss of $15,660,000 or $0.68 per
basic and diluted share as compared to a net loss $10,427,000 or $0.50
basic and diluted share for the same period last year. This loss is
attributable to the changes in revenues and expenses described above.

Liquidity and Capital Resources.Net cash used in operating activities
totaled $1,940,000 for the nine months ended September 30, 2002 as compared to
$5,769,000 of cash used for operating activities in the nine months ended
September 30, 2001. The significant reduction in cash usage is attributed to
increased gross margins from higher revenues and higher margin products; the
full impact of closing the New York facility and reduction of European
operations, which included sales and marketing expense reductions; personnel
reductions for sales and marketing, website development and content development
reductions; and general administrative expense reductions. Actual operating
cash usage for the third quarter was close to break even at ($98,000), this
reduced level of cash usage in operations, compared to previous quarters,
results from the successful launch of Finale 2003 and the Companys continued
expense reductions.

Cash usage of $1,900,000 is significantly less than the net loss reported
because $13,511,000 of such net loss was attributed to depreciation,
amortization, and impairment of intangible assets. In addition, accounts
receivable decreased by $237,000 due to collection efforts, $154,000 of value
added tax has been received, and $117,000 of prepaid expenses and other current
assets have been expensed, offset by a pay-down of accounts payable and accrued
expenses of $148,000. The Company made capital expenditures of $274,000 and
paid down long-term debt and capital leases of $154,000. In September 2002,
the Company secured bridge loans from investors of $750,000 of which $708,000
of cash had been received by the end of the quarter based on the terms
explained in Note 5 to the financial statements.

The Company has continued to experience operating losses and a resulting
reduction in cash resources. The Company has taken steps to reduce
costs, is planning further cost reductions and
believes the existing cash, together with funds generated by the recent bridge
financing and product sales, will be sufficient to finance operations
into the second quarter of 2003. While management is actively seeking additional funds to achieve all
goals, if additional financing is not attainable, further expense reductions
will be initiated to operate within projected cash availability.




ITEM 3. CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures. Our chief executive
officer and chief financial officer, after evaluating the effectiveness of the
Companys disclosure controls and procedures (as defined in the Securities
Exchange Act of 1934 Rules 13a-14c and 15-d-14(c)) as of a date (the 
Evaluation Date) within 90 days before the filing date of this quarterly
report, have concluded that as of the Evaluation Date, our disclosure controls
and procedures were adequate and designed to ensure that material information
relating to us and our consolidated subsidiary would be made known to them by
others within those entities.

(b)  Changes in internal controls. There were no significant changes in our
internal controls or to our knowledge, in other factors that could
significantly affect our internal controls and procedures subsequent to the
Evaluation Date.

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Cautionary Statements

This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
discuss current expectations or
forecasts of future events and can be identified by the use of terminology such
as believe, estimate, expect, intend, may, could, will, and
similar words or expressions. Our forward-looking statements in this release
generally relate to our growth strategy and expectations, our business goals,
the future of the SmartMusic Studio program, sufficiency of and ability to
obtain additional capital, product development, market introductions, and sales
efforts. Any statement that is not a historical fact, including estimates,
projections, future trends and the outcome of events that have not yet
occurred, are forward-looking statements. Forward-looking statements cannot be
guaranteed and actual results may vary materially due to the uncertainties and
risks, known and unknown, associated with such statements. We caution
investors that many important factors have affected, and in the future could
affect, our actual results of operations and cause such results to differ
materially from those anticipated in forward-looking statements made in this
release and elsewhere by us or on our behalf. These factors include, but are
not limited to, our need for and ability to obtain additional capital; the
market acceptance of our products; our dependence upon new product development
efforts, the success of our Internet business and accompaniment sales efforts;
maintaining license agreements with a limited number of publishers; the limited
and fluctuating sales of certain of our products; the intense competition we
face; the rapid technological changes and obsolescence in our industry; the
changing governmental regulation we may face; the risks of doing business
internationally; our dependence on key personnel and the proprietary nature of
our technology; our expected continuing operating losses; the market volatility
of our stock; potential market delisting; other general business and economic
conditions; and those risks described from time to time in our reports to the
Securities and Exchange Commission (including our Annual Report on Form
10-KSB). It is not possible to foresee or identify all factors that could
cause actual results to differ from expected or historic results. As such,
investors should not consider any list of such factors to be an exhaustive
statement of all of the risks, uncertainties or potentially inaccurate
assumptions that investors should take into account when making investment
decisions. Shareholders and other readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the date on
which they are made. We undertake no obligation to update publicly or revise
any forward-looking statements.

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PART II. OTHER INFORMATION






|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2. | Changes in Securities:As more fully described in Note 5
to the financial statements, on September 30, 2002 we
issued $750,000 in 10% convertible bridge notes in reliance
upon exemptions from registration set forth in Section 4(2)
of the Securities Act of 1933, as amended (the Act), and
Regulation D adopted pursuant to the Act. If the Company
completes a private placement of up to $1.0 million,
including the $750,000 convertible bridge loans, by March
31, 2003, the bridge notes automatically convert into
common stock at a 25% discount from the price set in the
private placement. If a private placement financing is not
completed by March 31, 2003, fifty percent (50%) of the
loan comes due in four equal monthly installments beginning
September 30, 2003 and the remaining fifty percent (50%)
comes due in four equal monthly installments beginning
September 30, 2004. We intend to use the aggregate
proceeds from the bridge notes for general working capital
purposes.
|       
|        | If the convertible bridge notes are converted into common stock, we
will issue to each holder of bridge loans warrants (Conversion
Warrants) to purchase one additional share of common stock for each
converted share at the lower of $0.05 or the per share price in the
qualifying private placement. If a qualifying private placement
financing is not completed, in lieu of the Conversion Warrants, we
will issue holders of bridge loans warrants to purchase three shares
of common stock per $1.00 of principal at a per share price of $0.01.                                                                                                                                                                                                                                                                                                                                                                                                                                                    




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



| |                                             
| | --------------------------------------------
| | (a) Exhibits:See the attached exhibit index.

(b)  Reports on Form 8-K:On August 13, 2002, we filed a Current Report
on Form 8-K under Item 9 announcing that our chief executive officer and chief
financial officer had submitted correspondence to the Securities and Exchange
Commission (SEC) pursuant to 18 U.S.C. Section 1350, as adopted to pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

14



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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.

|                        |  |                |  |                                             
|----------------------- |  | -------------- |  | --------------------------------------------
|Date: November 14, 2002 |  | MAKEMUSIC INC.
|                        |  |                |  |                                             
|                        |  | By:            |  | /s/ Philip Sean Lafleur                     
|                        |  |                |  |                                             
|                        |  |                |  | Philip Sean Lafleur, Chief Executive Officer
|                        |  |                |  |                                             
|                        |  | And:           |  | /s/ Barbara S. Remley                       
|                        |  |                |  |                                             
|                        |  |                |  | Barbara S. Remley, Chief Financial Officer  

15



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Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Philip Sean Lafleur, Chief Executive Officer, certify that:

1.     I have reviewed this quarterly report on Form 10-QSB of MakeMusic!
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 the quarterly report, fairly present in all material
respects the financial condition, results of operation and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
|
| | b) Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filling 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 officers 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 officers 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 14, 2002 |  | By: |  | /s/ Philip Sean Lafleur
Chief Executive Officer

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Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Barbara S. Remley, Chief Financial Officer, certify that:

1.     I have reviewed this quarterly report on Form 10-QSB of MakeMusic!
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 the quarterly report, fairly present
in all material respects the financial condition, results of operation
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;

4.     The registrants other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
|
| | b) Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filling 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 officers 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 officers 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 14, 2002 |  | By: |  | /s/ Barbara S. Remley
Chief Financial Officer

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EXHIBIT INDEX

Form 10-QSB

Quarter ended September 30, 2002

|            |  |                                                                              |  |  |  | 
|----------- |  | ---------------------------------------------------------------------------- |  |  |  | 
|Exhibit No. |  | Description                                                                  |  |  |  | 
|            |  |                                                                              |  |  |  | 
|99.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350.
|            |  |                                                                             
|99.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350.

18