Use these links to rapidly review the document TANNING TECHNOLOGY CORPORATION TABLE OF CONTENTS

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

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

ý	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
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002 OR

o 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: 0-26795

TANNING TECHNOLOGY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE		84-1381662
(State or Other Jurisdiction Incorporation or Organization)		(I.R.S. Employer Identification No.)

4600 South Syracuse Street, Suite 300
Denver, Colorado 80237
(Address of Principal Executive Offices, Including Zip Code)

(303) 220-9944
(Registrant's Telephone Number, Including Area Code)

4600 South Syracuse Street, Suite 1200, Denver, CO 80237 (Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

As of ~~October~~May 311, ~~2002~~2003 there were 20,~~881~~824,~~729~~954 shares of Common Stock, $.01 par value, outstanding.

TANNING TECHNOLOGY CORPORATION TABLE OF CONTENTS

TABLE OF CONTENTS


PART I.		FINANCIAL INFORMATION
Item 1.		Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002
		Notes to Condensed Consolidated Financial Statements
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.		Qualitative and Quantitative Disclosures About Market Risk
Item 4.		Controls and Procedures
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings
Item 2.		Changes in Securities and Use of Proceeds
Item 3.		Defaults Upon Senior Securities
Item 4.		Submission of Matters to a Vote of Security Holders
Item 5.		Other Information
Item 6.		Exhibits and Reports on Form 8-K
Signatures
Certifications
Exhibit Index

PART I.		FINANCIAL INFORMATION
Item 1.		Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2002 and 2001
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001
		Notes to Condensed Consolidated Financial Statements
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.		Qualitative and Quantitative Disclosures About Market Risk
Item 4.		Controls and Procedures
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings
Item 2.		Changes in Securities and Use of Proceeds
Item 3.		Defaults Upon Senior Securities
Item 4.		Submission of Matters to a Vote of Security Holders
Item 5.		Other Information
Item 6.		Exhibits and Reports on Form 8-K
Signatures
Certifications
Exhibit Index

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

TANNING TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

			September 30, 2002			December 31, 2001
			March 31, 2003			December 31, 2002
			(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	4435,~~321~~225,~~672~~652		$	5740,~~320~~332,~~163~~547
	Accounts receivable—trade, net			24,~~619~~038,~~546~~290			102,~~517~~608,~~262~~884
	Prepaid expenses and other current assets			1,~~816~~699,~~670~~288			2,~~118~~009,~~813~~546
		Total current assets		4840,~~757~~963,~~888~~230			6944,~~956~~950,~~238~~977
	Property and equipment, net			21,~~331~~999,~~211~~428			52,~~217~~229,~~431~~581
	Deferred taxes, net			—			6,518,231
	Deposits and other long-term assets			283,607			215,948
	Long-term receivables—related parties			—			210,000
		Total assets	$	43,246,265		$	47,396,506
	Deposits and other long-term assets			215,761			147,752
		Total assets	$	51,304,860		$	82,049,652
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	~~255~~181,~~486~~037		$	~~641~~239,~~668~~964
	Accrued compensation			21,~~051~~531,~~945~~571			31,~~763~~757,~~745~~631
	Accrued restructuring charges, current portion			32,~~146~~217,~~406~~556			2,~~476~~410,~~069~~205
	Other current liabilities			~~382~~287,~~917~~479			~~544~~594,~~782~~004
		Total current liabilities		54,~~836~~217,~~754~~643			75,~~426~~001,~~264~~804
Accrued restructuring charges, net of current portion				31,~~754~~377,~~986~~960			—3,709,974
Other long-term liabilities				~~678~~606,~~901~~634			~~720~~665,~~058~~307
		Total liabilities		106,~~270~~202,~~641~~237			89,~~146~~377,~~322~~085
Stockholders' equity:
	Common stock, $0.01 par value, 70,000,000 shares authorized; 21,794,501 and 21,785,590 shares issued; and 20,881,729 and 21,166,869 shares outstanding at September 30, 2002 and December 31, 2001			217,946			217,856
	Common stock, $0.01 par value, 70,000,000 shares authorized; 21,794,501 shares issued; and 20,802,305 shares outstanding at March 31, 2003 and December 31, 2002			217,946			217,946
	Additional paid-in capital			91,~~751~~618,~~216~~111			9791,~~433~~618,~~858~~111
	Treasury stock, at cost (912,772 and 618,721 shares as of September 30, 2002 and December 31, 2001)			(1,497,140	)		(1,630,270	)
	Treasury stock, at cost (992,196 shares as of March 31, 2003 and December 31, 2002)			(1,458,515	)		(1,458,515	)
	Stock subscription receivable			(115,002	)		(607,831	)
	Accumulated deficit			(53,313,146	)		(52,344,395	)
	Retained deficit			(49,290,063	)		(21,465,035	)
	Accumulated comprehensive loss			(20,368	)		(13,726	)
	Accumulated comprehensive loss			(32,738	)		(45,248	)
		Total stockholders' equity		37,044,028			38,019,421
		Total stockholders' equity		41,034,219			73,903,330
		Total liabilities and stockholders' equity	$	43,246,265		$	47,396,506
		Total liabilities and stockholders' equity	$	51,304,860		$	82,049,652

See accompanying notes to condensed consolidated financial statements.

TANNING TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

			Three months ended September 30,						Nine months ended September 30,
			Three months ended March 31,
			2002			2001			2002			2001
			2003			2002
Revenues:
	Service revenues		$	23,~~319~~278,~~431~~373		$	122,~~716~~003,~~735~~208		$	~~6,026,455~~		$	~~37,145,428~~
	Reimbursable expenses			~~261~~442,~~292~~008			1117,~~229,126~~503			~~589,005~~			~~3,737,359~~
		Total revenues		23,~~580~~720,~~723~~381			132,~~945~~120,~~861~~711			~~6,615,460~~			~~40,882,787~~
Operating expenses:
	Project personnel costs			2,~~605~~415,~~900~~741			63,~~572~~417,~~689~~698			~~8,788,165~~			~~20,813,731~~
	Reimbursable expenses			~~261~~442,~~292~~008			1117,~~229,126~~503			~~589,005~~			~~3,737,359~~
	Selling, marketing and administrative expenses			42,~~555~~872,~~595~~714			94,~~867~~974,~~389~~046			~~14,434,764~~			~~32,474,468~~
	Restructuring charges			9(906,~~169,476~~827	)		1,~~041~~343,~~438~~127			~~10,139,658~~			~~1,555,008~~
		Total operating expenses		164,~~592~~823,~~263~~636			189,~~710~~852,~~642~~374			~~33,951,592~~			~~58,580,566~~
Loss from operations				(141,~~011~~103,~~540~~255	)		(47,~~764~~731,~~781~~663	)		~~(27,336,132~~	)		~~(17,697,779~~	)
Other income				~~118~~134,~~791~~504			~~498~~224,~~605~~974			~~754,295~~			~~2,739,034~~
Loss before provision for (benefit from) income taxes				(13,892,749	)		(4,266,176	)		(26,581,837	)		(14,958,745	)
Loss before provision for income taxes				(968,751	)		(7,506,689	)
Provision for (benefit from) income taxes				—			(1,229,756	)		1,243,191			(4,343,731	)
Provision for income taxes				—			1,243,191
Net loss			$	(13968,~~892,749~~751	)	$	(38,~~036~~749,~~420~~880	)	$	~~(27,825,028~~	)	$	~~(10,615,014~~	)
Basic and diluted loss per share			$	(0.6605	)	$	(0.1441	)	$	~~(1.32~~	)	$	~~(0.49~~	)
Basic and diluted weighted average shares outstanding				2120,~~066~~802,~~774~~305			21,~~590~~154,~~335~~194			~~21,121,505~~			~~21,569,330~~

See accompanying notes to condensed consolidated financial statements.

TANNING TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			Nine months ended September 30,
			Three months ended March 31,
			2002			2001
			2003			2002
Operating activities
Net loss			$	(27968,~~825,028~~751	)	$	(108,~~615~~749,~~014~~880	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization			1286,~~372,208~~702			2476,~~108,973~~865
	Deferred income taxes			~~1,478,091~~—			(41,~~348~~478,~~243~~091	)
	Minority interest			~~70,703~~—			(84111,~~027~~644	)
	Loss on other receivables			189,057			—
	Non-cash restructuring charge reversals			(906,827	)		—
	Non-cash restructuring charges—asset disposals			1,852,099			—
	Changes in operating assets and liabilities:
		Accounts receivable—trade		7(1,~~911~~429,~~704~~406	)		(18,~~278~~839,~~646~~689	)
		Other assets		30241,~~657~~754			1(604,~~210,863~~057	)
		Accounts payable		(~~390~~58,~~887~~927	)		(1230,~~423,234~~328	)
		Accrued compensation		(1208,~~801,723~~237	)		(41,~~960~~326,~~817~~732	)
		Accrued restructuring charges		4(1,~~510~~617,~~264~~836	)		~~906~~(1,~~491~~368,732	)
		Other liabilities		(~~167~~365,~~781~~141	)		~~695~~(271,~~456~~564	)
Net cash used in operating activities				(125,~~770~~026,~~636~~669	)		(171,~~788~~868,~~198~~292	)
Investing activities
Purchase of property and equipment, net				(~~332~~56,~~367~~549	)		(292,~~554,101~~820	)
Investment in Tanning Technology (India) Private Limited				(160,000	)		—
Net cash used in investing activities				(56,549	)		(92,820	)
Net cash used in investing activities				(492,367	)		(2,554,101	)
Financing activities
Proceeds from exercise of stock options				~~25,840~~—			~~681~~25,~~149~~840
Net proceeds from issuance of common stock				~~526,915~~—			~~371~~492,~~855~~829
Purchase of treasury stock				(286,722	)		(1,373,336	)
Net cash provided by financing activities				—			518,669
Net cash provided by (used in) financing activities				266,033			(320,332	)
Effect of exchange rate on cash				(23,677	)		19,761
Effect of exchange rate on cash				(1,521	)		(192,095	)
Net decrease in cash and cash equivalents				(5,106,895	)		(1,422,682	)
Net decrease in cash and cash equivalents				(12,998,491	)		(20,854,726	)
Cash and cash equivalents at beginning of period				40,332,547			57,320,163
Cash and cash equivalents at beginning of period				57,320,163			82,919,993
Cash and cash equivalents at end of period			$	35,225,652		$	55,897,481
Cash and cash equivalents at end of period			$	44,321,672		$	62,065,267
Supplemental disclosure of non-cash investing and financing transactions
Receipt of common stock as payment on short-term note receivable			$	~~282,486~~—			—282,486
Increase in valuation allowance for deferred tax assets and reduction in additional paid-in capital for previously recorded income tax benefits attributable to stock option exercises and disqualifying dispositions				~~(5,040,367~~—	)		—(5,040,367	)

See accompanying notes to condensed consolidated financial statements.

TANNING TECHNOLOGY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by Tanning Technology Corporation (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, ~~2001~~2002 included in our Annual Report on Form 10-K. The accompanying condensed consolidated financial statements reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three ~~and nine~~ month ~~periods~~period ended ~~September~~ March 3031, ~~2002~~ 2003, or other periods presented, are not necessarily indicative of the results to be expected for any future period or the full fiscal year. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.

(2) EARNINGS PER SHARE

~~Basic~~The ~~earnings~~company ~~(loss)~~has adopted the provisions of SFAS No. 128, Earnings Per Share. SFAS 128 requires entities to present both basic earnings per share ("EPS") and diluted EPS. Basic EPS excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options were exercised, resulting in the issuance of common stock that then shared in the earnings of the Company. Potential dilution of stock options exercisable into common stock was computed using the treasury stock method based on the average fair market value of the stock. The Company has a net loss for the three ~~and nine~~ month periods ended ~~September~~March 3031, ~~2002~~2003 and ~~2001~~2002. Therefore, for these periods, the effect of ~~dilution~~common ~~from~~ stock ~~options~~equivalents is excluded from ~~the~~ the computation of earnings (loss) per share since their effect is anti-dilutive. Under the treasury stock method, if the Company were not in a net loss position, the securities included in in the computation would have been zero shares and ~~338~~ 8,~~707~~170 shares for the three months ended ~~September~~March 3031, ~~2002~~2003 and ~~2001, respectively, and 2,779 shares and 591,584 shares for the nine months ended September 30,~~ 2002 ~~and 2001~~, respectively. The following table reflects the basic and diluted weighted average shares.

	Three months ended September 30,		Nine months ended September 30,
	Three months ended March 31,
	2002	2001	2002	2001
	2003	2002
Weighted-average shares outstanding	2120,~~066~~802,~~774~~305	21,~~590~~154,~~335~~194	~~21,121,505~~	~~21,569,330~~
Dilutive impact of options outstanding	—	—	—	—
Weighted-average shares and potential dilutive shares outstanding	2120,~~066~~802,~~774~~305	21,~~590~~154,~~335~~194	~~21,121,505~~	~~21,569,330~~

(3) CAPITAL STOCK

During the ~~nine months~~third ~~ended~~quarter ~~September~~of 2001, the Company entered into a stock subscription agreement with a key executive who commenced employment on November 301, 2001. This agreement provided that the executive purchase, on various dates from November 2001 to November 2002, a total of 176,788 shares of the Company's ~~issued~~common 36stock at a per share price of $4.10,~~290~~ for an aggregate purchase price of $724,831. During the first quarter of 2002, 120,202 shares of common stock were issued out of treasury in conjunction with ~~purchases~~ this agreement. As of March 31, 2003, all 176,788 shares under ~~its~~this ~~qualified~~agreement ~~employee~~have ~~stock~~been ~~purchase~~purchased ~~plan~~by, and issued to, the key executive.

During the ~~third~~first quarter of ~~2001~~2002, the Company ~~entered~~received ~~into~~151,874 ashares ~~stock~~of ~~subscription~~its ~~agreement~~common ~~with~~stock from a former key executive ~~who~~as ~~commenced~~full ~~employment~~payment on ~~November 1,~~a ~~2001.~~promissory ~~This agreement provides that the executive will purchase~~note, onowed ~~various dates from November 2001~~ to ~~November 2002, a total of 176,788 shares of~~ the Company's ~~common~~by ~~stock~~the former atexecutive, aincluding ~~per~~accrued ~~share price of $4.10~~interest, ~~for~~in anthe ~~aggregate~~amount ~~purchase price~~ of $~~724~~282,~~831~~486. ~~This~~These ~~obligation to purchase common stock is not contingent upon future employment of the key executive. During the first quarter of 2002, 120,202~~ shares ofare ~~common~~included ~~stock~~in ~~were issued out of~~ treasury instock ~~conjunction~~at ~~with~~March 31, ~~this agreement~~2003.

During the first quarter of 2002, the Company received 151,874 shares of its common stock from a former key executive as full payment on a promissory note, owed to the Company by the former executive, including accrued interest, in the amount of $282,486. These shares are included in treasury stock at September 30, 2002.

During the third quarter of 2002, the Company purchased 298,669 shares of its common stock from a key executive. The executive used all proceeds from this transaction to make full payment on a promissory note, owed to the Company by the executive, including accrued interest, in the amount of $286,722. The shares purchased by the Company in this transaction are included in treasury stock at September 30, 2002.

(4) DEFERRED TAXES

The Company's financial statements contain certain deferred tax assets which have arisen primarily as a result of tax benefits recorded against operating losses incurred ~~in 2001~~, as well as tax benefits resulting from the exercise of employee stock options, which benefits were recorded as additional paid-in capital in the period of exercise. Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining the realizability of deferred tax assets, and any valuation allowance recorded against the ~~net~~ deferred tax assets. AsThe aCompany ~~result~~evaluates available ofevidence ~~operating~~to ~~losses~~determine ~~incurred~~whether init ~~2001,~~is more likely than not that some portion or all of the ~~continued operating~~deferred ~~losses~~income intax ~~2002~~will not be realized. As a result of historical operating losses, and uncertainty as to the extent and timing of profitability in future periods, the Company recorded a full valuation allowance against the deferred tax asset of approximately $6.3 million during the quarter ended March 31, 2002, which included tax benefits related to pretax losses through the third quarter of 2001. The increase in the valuation allowance recorded on the Company's statement of operations in the first quarter of 2002 was approximately $1.2 million, with the balance of the valuation allowance adjustment of approximately $5.1 million reflected as a reduction of the Company's additional paid-in capital. Similarly, the Company has recorded a full valuation allowance on the tax benefit associated with all pretax losses ofsince ~~$26.6 million for~~ the ~~nine months~~third ~~ending September 30,~~quarter ~~2002~~of 2001.

If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax asset would increase net income in the period such determination is made. The amount of the deferred tax asset considered realizable is based on significant estimates, and it is at least reasonably possible that changes in these estimates could materially affect the financial condition and results of operations. The Company's effective tax rate may vary from period to period based on changes in estimated taxable income or loss; changes to the valuation allowance; changes to federal, state or foreign tax laws; future expansion into areas with varying country, state, and local income tax rates and rules regarding the deductibility of certain costs and expenses; and as a result of acquisitions.

(5) COMMITMENTS AND CONTINGENCIES

Due to pending decisions from a foreign taxing authority, there is uncertainty surrounding potential corporate and payroll tax liabilities the Company may have to a foreign country in which it has conducted business in the past. The Company believes it has recorded adequate reserves related to these potential liabilities as of ~~September~~March 3031, ~~2002~~2003.

(6) SEGMENT REPORTING

Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker(s) of an enterprise. Under this definition, the Company operated as a single business unit for all periods presented.

Information about the Company's service revenues and long-lived assets by geographic area is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	Three months ended March 31,
	2002		2001		2002		2001
	2003		2002
Service revenues from external customers:
North America	$	23,~~319~~278	$	91,~~627~~744	$	~~5,767~~	$	~~25,142~~
Denmark		—		~~2,232~~259		~~259~~		~~8,553~~
Other international		—		858		—		3,450
Total	$	3,278	$	2,003
Total	$	2,319	$	12,717	$	6,026	$	37,145

	September 30, 2002		December 31, 2001
	March 31, 2003		December 31, 2002
Long-lived assets, net:
United States	$	1,~~552~~406	$	31,~~968~~566
Foreign		~~779~~593		~~1,249~~664
Total	$	21,~~331~~999	$	52,~~217~~230

(7) COMPREHENSIVE INCOME

Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The components of comprehensive income are as follows:

		Three months ended September 30,						Nine months ended September 30,
		Three months ended March 31,
		2002			2001			2002			2001
		2003			2002
Net loss		$	(13968,~~892,749~~751	)	$	(38,~~036~~749,~~420~~880	)	$	~~(27,825,028~~	)	$	~~(10,615,014~~	)
Foreign currency translation gain (loss)			—(6,642	)		~~(30~~14,~~777~~489	)		~~12,510~~			~~(148,815~~	)
	Comprehensive loss	$	(13975,~~892,749~~393	)	$	(38,~~067~~735,~~197~~391	)	$	~~(27,812,518~~	)	$	~~(10,763,829~~	)

(8) RESTRUCTURING CHARGES

Since the second quarter of 2001, the Company has executed a series of cost control initiatives in its North American, European and Indian operations, resulting in gross restructuring charges of approximately $15,816,000. These charges include approximately $6,018,000 in severance pay and other costs associated with an aggregate workforce reduction of 253 employees, of which 180 were billable consultants and 73 were sales, marketing and administrative employees (SM&A). The remainder of the restructuring charges relate to lease termination and other costs associated with office closures and consolidations; losses on computer hardware/software, furniture/fixtures and leasehold improvements disposals; and the disposition of cumulative currency translation adjustments. As a result of its cost control initiatives, the Company closed its European office. A history of the Company's gross restructuring charges (in thousands) and work force reductions, by quarter, is as follows:

		Restructuring charges										Employee reductions
		Workforce Reduction		Office Closures		Fixed Assets		Cumulative Translation Adjustment		Total		Project Personnel	SM&A	Total
2nd quarter—2001		$	514	$	—	$	—	$	—	$	514	11	5	16
2nd quarter - 2001		$	514	$	—	$	—	$	—	$	514	11	5	16
3rd quarter—2001			624		580		—		—		1,204	30	7	37
3rd quarter - 2001			624		580		—		—		1,204	30	7	37
4th quarter—2001			2,536		564		167		322		3,589	48	22	70
4th quarter - 2001			2,536		564		167		322		3,589	48	22	70
1st quarter—2002			1,300		40		—		—		1,340	75	23	98
1st quarter - 2002			1,300		40		—		—		1,340	75	23	98
3rd quarter—2002			1,044		6,378		1,747		—		9,169	16	16	32
3rd quarter - 2002			1,044		6,378		1,747		—		9,169	16	16	32
	Total	$	6,018	$	7,562	$	1,914	$	322	$	15,816	180	73	253

Approximately $~~163,000~~1.7 million ~~and $373,000~~ of previously recorded restructuring charges were reversed during the ~~third~~first quarter of ~~2001~~2003 ~~and~~as a result of a negotiated lease termination associated with office space previously abandoned, at terms more favorable to those originally anticipated at the ~~second~~time ~~quarter~~the restructuring charge related to the office closure was taken. This restructuring charge reversal was partially offset by a $0.8 million decrease in assumed sublease income on certain other office space previously abandoned. The aggregate impact of ~~2002,~~these ~~respectively~~two adjustments was a $0.9 million reversal of previously recorded restructuring charges during the first quarter of 2003.

Approximately $63,~~901~~596,000 in restructuring charges, primarily related to future office lease obligations, net of assumed future sublease income, remain unpaid and are included in total liabilities as of ~~September~~March 3031, ~~2002~~2003.

Original restructuring charges occurring during ~~the last three quarters of~~ 2001 and ~~the first nine months of~~ 2002, additional charges, reversals and utilization, both cash and non-cash, as of ~~September~~March 3031, ~~2002~~2003, are as follows (in thousands):

									Utilization
		Original Charges		Additional Charges (Reversals)			Total Charges								Unpaid Balance
									Cash			Non-cash
Workforce reduction costs		$	6,018	$	(~~431~~592	)	$	5,~~587~~426	$	(5,~~110~~254	)	$	~~(22~~—	)	$	~~455~~172
Office closures/consolidations			7,562		(~~175~~1,101	)		76,~~387~~461		(~~941~~3,031	)		—(6	)		63,~~446~~424
Fixed assets			1,914		(62	)		1,852		—			(1,852	)		—
Cumulative translation adjustment			322		~~132~~159			~~454~~481		—			(~~454~~481	)		—
	Total restructuring costs	$	15,816	$	(~~536~~1,596	)	$	1514,~~280~~220	$	(68,~~051~~285	)	$	(2,~~328~~339	)	$	63,~~901~~596

(9) ~~REIMBURSABLE~~RECENT ~~EXPENSES~~ACCOUNTING PRONOUNCEMENTS

~~The~~In ~~Company~~July 2002, ~~has~~the ~~adopted~~Financial ~~the~~Accounting ~~Emerging~~Standards ~~Issues~~Board ~~Task~~issued ~~Force~~Statement ~~(EITF)~~of ~~Issue~~Financial Accounting Standards No. ~~01-14~~146, "~~Income~~Accounting ~~Statement~~for ~~Characterization~~Costs ofAssociated with ~~Reimbursements~~Exit ~~Received for~~or Disposal Activities,"~~Out-of-Pocket"~~ ~~Expenses Incurred.~~("SFAS 146"). SFAS 146 ~~This pronouncement~~ requires that ~~reimbursements~~a ~~received~~liability for ~~"out-of-pocket"~~a ~~expenses~~cost ~~should~~that beis ~~characterized~~associated ~~as revenue~~with ~~and~~an ~~corresponding~~exit ~~expense~~or indisposal activity be recognized when the ~~Statement~~liability ofis ~~Operations~~incurred. ~~Prior~~It tonullifies the ~~adoption~~guidance ofin ~~this~~ EITF Issue No. 94-3, ~~the~~"Liability ~~Company~~Recognition ~~reflected~~for ~~the~~Certain ~~reimbursement~~Employee ofTermination ~~out-of-pocket~~Benefits ~~expenses~~and asOther ~~an offsetting~~Costs ~~reduction~~ to ~~operating~~Exit ~~expenses.~~an ~~The~~Activity ~~Company~~(including ~~incurs~~Certain ~~incidental~~Costs ~~expenses~~Incurred in ~~the~~a ~~delivery of services to its clients~~Restructuring). ~~These~~ "~~out-of-pocket"~~ ~~expenses~~Under ~~include~~EITF 94-3, ~~but~~an ~~are not~~entity ~~limited~~recognized ~~to,~~a ~~travel,~~liability ~~lodging and~~for ~~related~~an ~~charges.~~exit ~~Accordingly,~~cost on the ~~Company~~date ~~has~~that ~~adjusted~~the ~~all~~entity ~~periods~~committed ~~reported~~itself to ~~reflect~~ an ~~increase~~exit inplan. ~~revenue~~Under SFAS 146, ~~and~~ an ~~equal~~entity's commitment ~~and~~to ~~offsetting~~a ~~increase~~plan indoes ~~operating~~not, ~~expenses~~by itself, ~~related~~create toa ~~reimbursable expenses.~~present ~~This~~obligation ~~change~~to inother ~~classification~~parties ~~has~~that ~~not~~meets ~~had~~the andefinition ~~effect~~of ona ~~current~~liability. orSFAS 146 ~~previously~~is ~~reported~~effective ~~net~~for ~~loss,~~exit or ~~net~~disposal ~~loss~~activities ~~per~~that ~~share.~~are initiated ~~Total~~after ~~reimbursable out-of-pocket expenses~~December 31, ~~which~~ ~~are~~2002. ~~required~~The toCompany behas ~~reclassified~~not byadopted the ~~adoption~~provisions of ~~EITF~~SFAS 146 ~~01-14, are as follows~~ for ~~each~~any ofexit ~~the~~or ~~first~~disposal ~~three~~activities ~~fiscal~~occurring ~~quarters~~prior ofto December 31, 2002. ~~and 2001 (in thousands):~~

		1st Quarter						2nd Quarter						3rd Quarter
		2002			2001			2002			2001			2002			2001
Reimbursable expenses		$	118		$	1,215		$	210		$	1,293		$	261		$	1,229

During 2002, the Company adopted the Emerging Issues Task Force (EITF) Issue No. 01-14, "Income Statement Characterization of Reimbursements Received for "Out-of-Pocket" Expenses Incurred." This pronouncement requires that reimbursements received for "out-of-pocket" expenses should be characterized as revenue and corresponding expense in the Statements of Operations. Prior to the adoption of this EITF, the Company reflected the reimbursement of out-of-pocket expenses as an offsetting reduction to operating expenses. The Company incurs incidental expenses in the delivery of services to its clients. These "out-of-pocket" expenses include, but are not limited to, transportation, lodging and related charges. Accordingly, the Company has adjusted all periods reported to reflect an increase in revenue, and an equal and offsetting increase in operating expenses, related to reimbursable expenses. This change in classification has not had an effect on current or previously reported net loss, or net loss per share. Total reimbursable out of pocket expenses are reflected on our statements of operations.

~~(10)~~ In December ~~RECENT~~2002, ~~ACCOUNTING~~the ~~PRONOUNCEMENTS~~ FASB issued SFAS No. 148, "Accounting for Stock Based Compensation—Transition and Disclosure." SFAS 148 provides two additional transition methods for entities that adopt the preferable method of accounting for stock based compensation. Further, the statement requires disclosure of comparable information for all companies regardless of whether, when, or how an entity adopts the preferable, fair value based method of accounting. These disclosures are now required for interim periods in addition to the traditional annual disclosure. SFAS 148 is effective for fiscal periods ending after December 15, 2002. The Company adopted the provisions of SFAS 148 during the first quarter of 2003. See Footnote 10 for the quarterly disclosure requirements under SFAS 148.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS 146 requires that a liability for a cost that is associated with an exit or disposal activity be recognized when the liability is incurred. It nullifies the guidance in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (~~including Certain Costs Incurred in a Restructuring~~10)~~." Under EITF 94-3, an entity recognized a liability for an exit cost on the date that the entity committed itself to an exit plan. Under SFAS~~ ~~146,~~STOCK anBASED entity's commitment to a plan does not, by itself, create a present obligation to other parties that meets the definition of a liability. SFAS 146 will be effective for exit or disposal activities that are initiated after December 31, 2002. The Company has not adopted the provisions of SFAS 146 in its September 30, 2002 financial statements, or for any prior periods. COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), and related interpretations in accounting for its employee stock options. Under APB 25, because the exercise price of the Company's employee stock options are equal to or greater than the market price of the underlying stock on the date of grant, no compensation expense is recorded.

The following table illustrates the effect on net loss, and net loss per share, had the Company applied the fair value recognition provisions of SFAS No. 123:

		Three months ended March 31,
		2003			2002
Net loss, as reported		$	(968,751	)	$	(8,749,880	)
Less: total stock-based employee compensation benefit (expense) determined under fair value based methods for all awards, net of related tax effects			72,595			(2,650,260	)

Pro forma net loss		$	(896,156	)	$	(11,400,140	)

Net loss per share:
	Basic and diluted, as reported	$	(0.05	)	$	(0.41	)
	Basic and diluted, pro forma	$	(0.04	)	$	(0.54	)

(11) SUBSEQUENT EVENTS

On April 21, 2003, the Company announced that it had entered into a definitive merger agreement pursuant to which Tiger Holding Corporation, a subsidiary of Platinum Equity, LLC, agreed to acquire all outstanding shares of the Company for $24,000,000 in cash. This transaction is still subject to the approval of the Company's stockholders and other customary closing conditions. It is expected that this transaction will close within 60 to 90 days of the announcement.

In connection with this merger transaction, the Company terminated the Tanning Technology Corporation 1999 Employee Stock Purchase Program effective as of April 25, 2003. In addition, on April 18, 2003 the Company's Board of Directors resolved to terminate the Tanning Technology Corporation 2002 Stock Option Plan concurrent with the effective date of the merger transaction.

For more detail regarding this merger transaction, see the Company's Current Report on Form 8-K filed with the Commission on April 21, 2003.

On April 23, 2003, one of the Company's stockholders filed a purported class action lawsuit in the Court of Chancery of the State of Delaware against the Company, its board of directors, and Platinum Equity alleging claims of breach of fiduciary duty. The complaint seeks an injunction preventing the Company's merger with Tiger Holding Corporation, rescission of the merger, in the event the merger is completed, compensatory damages, and an award of costs and attorneys' fees. The Company believes the claims are without merit, and intends to defend vigorously against these claims.

On May 1, 2003, the Company implemented further cost reduction initiatives in its North American operations, which will result in a workforce reduction of 15 employees, and an estimated restructuring charge of $0.8 million, to be recorded and paid during the second quarter of 2003. The Company expects future quarterly savings of approximately $0.5 million as a result of these cost reduction measures. As per the terms of its definitive merger agreement, the Company has received the consent of Tiger Holding Corporation regarding the execution of these cost reduction initiatives.

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

Certain statements contained in this Quarterly Report on Form 10-Q, including information with respect to our future business plans, constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the "safe harbor" created by those sections. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "plans," "expects," "anticipates" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties, many of which are beyond our control. Actual results could differ materially from the forward-looking statements and our expectations as a result of various factors, including those set forth in Exhibit 99.1 to our Securities and Exchange Commission filings, as well as factors discussed elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

We are an information technology services provider that develops, deploys and optimizes IT systems that reduce cost, improve performance and drive competitive advantage for leading companies worldwide. We focus on mission-critical business systems that are engineered to integrate, perform and scale, reliably and predictably. Our years of experience in pushing system performance limits has resulted in a unique family of Powering Performance™ solutions that are at the core of everything we do. Our solutions are focused on industries in which mission-critical high-performance IT systems provide competitive advantage, including financial services, logistics, travel and transportation, insurance and healthcare.

On April 21, 2003, we announced that we had entered into a definitive merger agreement pursuant to which Tiger Holding Corporation, a subsidiary of Platinum Equity, LLC, agreed to acquire all of our outstanding shares for $24,000,000 in cash. This transaction is still subject to the approval of our stockholders and other customary closing conditions. We expect the transaction to close within 60 to 90 days of the announcement.

The demand for the services that we provide is sensitive to a variety of factors, including industry trends and economic conditions. Throughout 2001, 2002 and continuing in 2003, poor general economic conditions and industry-specific shifts in demand have caused and could continue to cause existing and/or potential clients to reduce or eliminate their investment in the types of services we provide, and make it more difficult to replace any principal clients of ours that have reduced their level of investment in our services. Further, competitive and pricing pressures have increased. Our ability to maintain and grow our revenues will continue to be adversely affected by these factors.

Our service revenue is comprised of fees generated for professional services. We generally provide services to clients on a time and materials or a fixed-fee basis. Under time and materials contracts, we recognize revenue as services are provided. Under fixed-fee contracts, we recognize revenue on a percentage of completion basis. We are generally reimbursed for reasonable expenses under our contracts. These expenses and reimbursements are reflected on our statements of operations.

Historically, a large portion of our service revenues has been derived from a limited number of clients. Our top five customers accounted for 8897% and 8198% of service revenues during the ~~third~~first quarter of ~~2002~~ 2003 and ~~2001~~2002, respectively. To the extent we are unable to mitigate this revenue concentration through new business development, any cancellation, reduction or deferral in work performed for our principal clients will have an adverse effect on us. Many factors can result in a cancellation, reduction or deferral of services requested by our customers, including budget constraints, perceived project progress, perceived project success or value, industry shifts and consolidation, and economic factors. ~~For example, as a result of projects ending and client budget pressure, our work for a~~ ~~number~~ ~~of clients who were among our five largest in 2001 has sharply declined, significantly adversely affecting our revenue at the end of 2001 and continuing into 2002.~~

~~Revenue~~Service revenues from foreign operations represents revenue for professional services performed for clients outside North America. Foreign operations represented 40% of service revenues in the first ~~nine~~three months of ~~2002~~2003, and 3213% of service revenues for the same period in ~~2001~~2002. Given the closure of our European facilities, we do not anticipate significant revenue from foreign operations in the foreseeable future.

~~The~~Project ~~demand~~personnel ~~for~~costs ~~the~~represent ~~services that we provide is sensitive to~~ a ~~variety~~significant ofexpense ~~factors, including industry trends~~ and ~~economic~~consist ~~conditions.~~primarily ~~Throughout~~of ~~2001 and continuing in 2002~~salaries, ~~poor~~bonuses ~~general economic conditions~~ and ~~industry-specific~~employee ~~shifts~~benefits infor ~~demand~~company ~~have~~personnel ~~caused~~dedicated ~~and~~for ~~could~~client ~~continue~~assignments, ~~to cause existing~~ and~~/or~~ ~~potential clients to reduce or eliminate their investment in the types of services we~~fees ~~provide,~~paid ~~and make it more difficult~~ to ~~replace~~subcontractors ~~any~~for ~~principal~~work ~~clients~~performed ofon ~~ours that have reduced their level of investment in~~ our ~~services~~projects. ~~Further,~~Non-billable ~~competitive~~time ~~and~~incurred ~~pricing~~by ~~pressures~~our ~~have~~project ~~increased.~~personnel ~~Our~~resulting ~~ability~~from toexcess ~~maintain~~resource ~~and~~capacity ~~grow our revenues will continue to be~~ adversely ~~affected~~affects bygross ~~these factors~~margins.

~~Project~~Selling, ~~personnel~~marketing ~~costs~~and ~~represent~~administrative aexpenses ~~significant expense and~~ consist primarily of salaries, bonuses, commissions and employee benefits for ~~company personnel dedicated for client assignments, and fees paid to subcontractors for work performed on our projects. Non~~non-~~billable time incurred by our~~ project personnel, ~~resulting~~occupancy ~~from excess resource capacity adversely affects gross margins. During the third quarter of 2001~~costs, ~~we eliminated 30 project personnel positions in our North American operation to more closely align needed skill sets with market demand. The closure of our European~~travel ~~facilities~~expenses, ~~which~~depreciation ~~commenced during the fourth quarter of 2001~~expense, ~~resulted~~bad indebt ~~the~~expense ~~elimination of 48 European project personnel positions. During the first quarter 2002, we executed further global reorganization initiatives in our North American~~ and ~~Indian~~other ~~operations,~~professional ~~which resulted in the elimination of 75 project personnel positions~~fees. ~~During the third quarter of 2002, we implemented additional reductions in force in our North American operation, which resulted in the elimination of 16 project personnel positions.~~

~~Selling,~~Since ~~marketing~~the ~~and~~second ~~administrative~~quarter ~~expenses~~of ~~consist~~2001, ~~primarily~~we have executed a series of ~~salaries,~~cost ~~bonuses~~control initiatives in our North American, ~~commissions~~European and ~~employee~~Indian ~~benefits~~operations, ~~for~~resulting ~~non-project~~in ~~personnel,~~gross ~~occupancy~~restructuring ~~costs,~~charges ~~travel~~of ~~expenses,~~approximately ~~depreciation~~$15.8 million. ~~expense,~~These ~~bad~~charges ~~debt~~include ~~expense~~approximately $6.0 million in severance pay and ~~promotional~~other costs. associated ~~During~~with ~~the~~an ~~third~~aggregate ~~quarter~~workforce reduction of ~~2001~~253 employees, weof ~~eliminated~~which 7180 ~~selling~~were billable consultants, and 73 were sales, marketing ~~and~~or administrative ~~positions~~employees. inThe ~~our~~remainder ~~North~~of ~~American~~the restructuring ~~operation~~charges relate to lease termination and other costs associated with office closures and consolidations, losses on computer hardware/software, furniture/fixtures and leasehold improvements disposals, and the disposition of cumulative currency translation adjustments. ~~The~~As ~~closure~~a result of these initiatives, we closed our European ~~facilities~~office. Based on our best estimate of existing liabilities related to these restructuring initiatives, ~~which~~as ~~commenced~~well as the termination of previously accrued office lease obligations during the ~~fourth~~first quarter of ~~2001~~2003, ~~resulted~~we inreversed ~~the~~previously ~~elimination~~recorded ofrestructuring 22charges ~~European~~of approximately ~~selling~~$163,000, ~~marketing~~$527,000, and ~~administrative~~$907,000 ~~positions.~~during ~~During the~~2001, ~~first~~2002 ~~quarter~~and of2003 ~~2002~~respectively. On May 1, 2003, we ~~executed~~implemented further ~~global~~cost ~~reorganization~~reduction initiatives in our North American ~~and Indian~~ operations, which will ~~resulted~~result in ~~the~~a ~~elimination~~workforce reduction of 2315 ~~selling~~employees, ~~marketing~~ and ~~administrative~~ ~~positions~~an estimated restructuring charge of $0.8 million, ~~During~~to be recorded and paid during the ~~third~~second quarter of ~~2002,~~2003. We expect future wequarterly ~~implemented~~savings ~~additional~~of ~~reductions~~approximately in$0.5 million ~~force~~as ina ~~our~~result ~~North~~of ~~American~~these ~~operation,~~cost ~~which~~reduction ~~resulted~~measures. inFor ~~the~~more ~~elimination~~detail ofregarding 16these ~~selling~~charges, ~~marketing~~see Footnote 8—Restructuring Charges, to the Condensed Consolidated Financial Statements and ~~administrative~~Footnote ~~positions~~11—Subsequent Events.

Since the second quarter of 2001, we have executed a series of cost control initiatives in our North American, European and Indian operations, resulting in gross restructuring charges of approximately $15.8 million. These charges include approximately $6.0 million in severance pay and other costs associated with an aggregate workforce reduction of 253 employees, of which 180 were billable consultants, and 73 were sales, marketing or administrative employees. The remainder of the restructuring charges relate to lease termination and other costs associated with office closures and consolidations, losses on computer hardware/software, furniture/fixtures and leasehold improvements disposals, and the disposition of cumulative currency translation adjustments. As a result of these initiatives, we closed our European office. For more detail regarding these charges, see Footnote 8—Restructuring Charges, to the Condensed Consolidated Financial Statements.

Based on our best estimate of existing liabilities related to these restructuring initiatives, we reversed approximately $163,000 of previously recorded restructuring charges during the first nine months of 2001, and $373,000 of previously recorded restructuring charges during the first nine months of 2002.

In July 2002 we completed the acquisition of the remaining 24% minority interest in our Indian subsidiary, Tanning Technology (India) Private Limited, for $160,000. Consequently, Tanning Technology (India) Private Limited has become a wholly-owned subsidiary of Tanning.

InWe ~~anticipation of long-term business growth, we~~ expect to incur costs and expend capital. Our ability to generate revenues fluctuates from quarter to quarter as a result of a number of factors, and we can give no assurances that we will grow, or that our growth will support these costs and expenditures. To the extent revenues are inadequate to support our costs and expenditures, our results of operations and liquidity would be materially and adversely affected.

On October 1, 2002, we received notification from the Nasdaq Stock Market, Inc. that our stock had traded below the $1.00 minimum per share price required for continued listing on the Nasdaq National Market for more than 30 consecutive trading days. On December 31, 2002, we received notification from the Nasdaq that our stock would be delisted because of such deficiency. On February 13, 2003, and pursuant to the procedures set forth in the Nasdaq Marketplace Rule 4800 Series, we appeared before a Nasdaq Listing Qualifications Panel to appeal the Nasdaq's delisting determination. On March 4, 2003, we received notice from the Nasdaq Listing Qualifications Panel that we had received a temporary exemption from the $1.00 minimum per share price requirement. As such, our common stock will remain listed on the Nasdaq National Market provided that, on or before June 4, 2003, we demonstrate a closing bid price of at least $1.00 per share; and immediately thereafter we must evidence a closing bid price of $1.00 per share for a minimum of ten consecutive trading days. The Nasdaq Listing Qualifications Panel may, in its discretion, modify or terminate this exception based on developments in the SEC and Nasdaq rule making process or for other reasons. We can give no assurance that we will be able to comply with the $1.00 minimum bid requirement in the requisite time frames.

Summary of Critical Accounting Policies; Significant Judgments and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include expected future earnings and cash flows used to evaluate the recoverability of deferred tax assets, the adequacy of the allowances for bad debts, the percentage of completion on fixed-fee projects, and the nature, timing and amount of charges associated with our restructurings. Actual results could differ from those estimates.

Significant management judgment is required to determine the realizability of our deferred tax assets, and any valuation allowance recorded against the deferred tax assets. We evaluate the available evidence to determine whether it is more likely than not that some portion or all of the deferred income tax will not be realized. As a result of ~~operating~~historical ~~losses incurred in 2001, the continued~~ operating losses ~~in 2002~~, incurred and uncertainty as to the extent and timing of profitability in future periods, we recorded a valuation allowance against the deferred tax asset of approximately $6.3 million during the quarter ended March 31, 2002, which included tax benefits related to pretax losses through the third quarter of 2001. The increase in the valuation allowance recorded on our statement of operations in the first quarter of 2002 was $1.2 million, with the balance of the valuation allowance adjustment of $5.1 million reflected as a reduction of our additional paid-in capital. Similarly, we have recorded a full valuation allowance on the tax benefit associated with ~~combined~~all pretax losses ofsince ~~$19.1 million for~~ the ~~second and~~ third ~~quarters~~quarter of ~~2002~~2001. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the valuation allowance would increase net income in the period such determination is made. Since the amount of the deferred tax asset ~~considered~~ considered realizable is based on significant estimates, it is at least reasonably possible that changes in the estimates could materially affect our financial conditions and results of operations.

We evaluate the collectibility of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer's inability or unwillingness to meet its financial obligations to us, we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. If circumstances change (i.e. higher or lower than expected defaults or the unexpected material change in a major customer's ability or willingness to meet its financial obligations to us), our estimates of the recoverability of amounts due could increase or decrease by a material amount.

Under fixed-fee contracts, we recognize revenue on a percentage of completion basis, which relies on estimates of total expected contract revenues and costs. We follow this method because we believe we can make reasonably dependable estimates of the revenue and costs applicable to various stages of a contract. Because the financial reporting of these contracts depends on estimates, which are assessed on a regular basis during the contract term, recognized revenues and profits are subject to revisions as the contract progresses to completion. Losses on fixed-fee contracts, if any, are provided for in full in the period when first determined.

~~In accordance with Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for~~ Certain ~~Employee Benefits and Other Costs to an Exit Activity," we have~~ ~~recorded specific charges associated with each~~ of the ~~restructuring~~our ~~activities~~contracts ~~that~~include ~~have~~provisions ~~taken~~whereby ~~place~~our ~~since~~customer ~~the~~is ~~second~~entitled ~~quarter~~to ofwithhold ~~2001.~~a Atpre-defined ~~the~~payment ~~time~~amount ~~each~~until ~~restructuring~~final isacceptance ~~approved,~~testing wehas ~~record~~been acompleted ~~liability~~by ~~for~~ the ~~estimated costs associated with that restructuring plan. The consolidation or abandonment of office facilities requires us to make estimates~~customer, ~~including contractual rental commitments for~~or ~~office~~ until ~~space~~certain ~~being~~time ~~vacated~~passage ~~and~~requirements ~~related~~have ~~costs, offset by estimated future sublease income~~transpired. WeIn ~~review,~~these ~~on a regular basis~~circumstances, ~~our~~we ~~future~~completely ~~sublease~~defer ~~income~~revenue ~~assumptions.~~recognition Ifassociated ~~the~~with ~~rental~~these ~~markets~~pre-defined ~~change,~~amounts ~~our sublease~~until ~~income~~all ~~assumptions may not be accurate, and it is possible that changes in the estimates could materially affect our financial condition and results of~~acceptance ~~operations.~~testing ~~Gross~~or ~~future~~time ~~lease~~passage ~~payments~~criteria ~~associated~~have ~~with~~been ~~abandoned office space totaled approximately $10~~met.~~8 million~~ ~~at September 30, 2002.~~

In accordance with Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Benefits and Other Costs to an Exit Activity," we have recorded specific charges associated with each of the restructuring activities that have taken place since the second quarter of 2001. At the time each restructuring is approved, we record a liability for the estimated costs associated with that restructuring plan. The consolidation or abandonment of office facilities requires us to make estimates, including contractual rental commitments for office space being vacated and related costs, offset by estimated future sublease income. We review, on a regular basis, our future sublease income assumptions. If the rental markets change, our sublease income assumptions may not be accurate, and it is possible that changes in the estimates could materially affect our financial condition and results of operations. Gross future lease payments associated with abandoned office space totaled approximately $5.3 million at March 31, 2003.

If, in the future, we terminate office leases at terms more or less than the estimated net future obligation, the difference could materially impact our financial condition and results of operations. During the first quarter of 2003 we terminated a certain office lease for approximately $1.7 million less than the estimate of net future lease payments that were previously accrued as a restructuring charge. Also during the first quarter of 2003, as a result of our review of the future sublease income assumptions related to previously abandoned office space, we recorded additional restructuring charges of approximately $0.8 million. The aggregate impact of these two adjustments was a $0.9 million reversal of previously recorded restructuring charges during the first quarter of 2003.

RESULTS OF OPERATIONS

The following table sets forth the percentage of revenues of certain items included in our consolidated statements of operations.

		Three months ended September 30,				Nine months ended September 30,
		Three months ended March 31,
		2002		2001		2002		2001
		2003		2002
Total revenues		100	%	100	%	~~100~~	%	~~100~~	%
Project personnel costs, including reimbursable expenses		~~111~~77		56167		~~142~~		60
	Gross profit margin	~~(11~~23	)	44(67	)	~~(42~~	)	40
Selling, marketing and administrative		~~177~~77		71235		~~218~~		79
Restructuring charges		~~355~~(24	)	763		~~153~~		4
	Income (loss) from operations	(543	)	(34	)	(413	)	(43	)
	Loss from operations	(30	)	(365	)
Interest income and other, net		54		311		11		6
	Income (loss) before income taxes	(538	)	(31	)	(402	)	(37	)
	Loss before income taxes	(26	)	(354	)
Income tax provision (benefit)		0		(9	)	19		(11	)
Income tax provision		0		59
	Net income (loss)	(538	)%	(22	)%	(421	)%	(26	)%
	Net loss	(26	)%	(413	)%

Comparison of three months ended ~~September~~March 3031, ~~2001~~2002 and ~~2002~~2003

Service revenues

Our service revenues ~~decreased~~increased $101.43 million, or 8264%, to $23.3 million for the ~~third~~first quarter of ~~2002~~2003 from $122.70 million for the ~~third~~first quarter of ~~2001~~of 2002. The ~~decrease~~increase in service revenues is primarily attributable to aan increase ~~decline~~ in the number and size of projects being worked on for certain existing clients, and the ~~conclusion~~addition of ~~our relationship with certain clients, as well as difficulty in generating significant revenue from~~ new clients. We served a total of 15nine clients during the ~~third~~first quarter of ~~2002~~2003, as compared to 19six clients during the ~~third~~ first quarter of ~~2001~~2002. We served only two of these clients during the ~~third~~first quarter of both ~~2002~~2003 and ~~2001~~2002. During the ~~third~~first quarter of ~~2002~~2003, our five largest clients accounted for approximately 8897% of service revenues, compared to 8198% of service revenues for the ~~third~~first quarter of ~~2001~~2002. The uncertainty in the economy has reduced IT spending for many of our existing and targeted clients, which has made developing new business, both with existing and potential clients, difficult in recent quarters.

Project personnel costs

Our project personnel costs decreased $41.0 million, or 6029%, to $2.64 million for the ~~third~~first quarter of ~~2002~~2003 from $63.64 million for the ~~third~~first quarter of ~~2001~~2002. This decrease was primarily due to a ~~$3.0 million~~ reduction in salary, payroll tax and benefit costs associated with fewer project personnel during the ~~third~~first quarter of ~~2002~~2003, as compared to the first ~~third~~ quarter of ~~2001~~2002. Employee project personnel decreased from ~~306~~178 at ~~September~~March 3031, ~~2001~~2002 to ~~146~~109 at ~~September~~March 3031, ~~2002~~2003, primarily as a result of aworkforce ~~series~~reductions ofexecuted ~~restructuring plans that were implemented~~ during ~~the~~this ~~fourth quarter of 2001~~time ~~and~~period, ~~the~~as ~~first~~well ~~and third quarters of 2002. Also contributing to this overall decrease was a $0.9 million reduction in costs associated with subcontractors used during the third quarter of 2002,~~ as ~~compared~~voluntary toemployee ~~the third quarter of 2001~~turnover.

Selling, marketing and administrative

Our selling, marketing and administrative expenses decreased $52.31 million, or 5442%, to $42.69 million for the ~~third~~first quarter of ~~2002~~2003 from $95.90 million for the ~~third~~first quarter of ~~2001~~2002. This decrease was primarily due to a $20.38 million reduction in salary, payroll tax and benefit costs associated with fewer selling, marketing and administrative employees during the ~~third~~first quarter of ~~2002~~2003, as compared to the ~~third~~first quarter of ~~2001~~2002, and a decrease in guaranteed compensation to a key executive of $0.4 million during the first quarter of 2003. Our selling, marketing and administrative staff decreased from ~~115~~60 employees at ~~September~~ March 3031, ~~2001~~2002, to 4031 employees at ~~September~~March 3031, ~~2002.~~2003, ~~These~~primarily as a result of workforce reductions ~~resulted~~executed ~~from~~during athis ~~series~~time ofperiod, ~~restructuring~~as ~~plans~~well ~~that~~as ~~were~~voluntary ~~implemented~~employee ~~during~~turnover. ~~the~~Also ~~third~~contributing to this overall decrease in selling, marketing and ~~fourth~~administrative ~~quarter~~expenses ofwas a ~~2001~~$0.5 million ~~and~~reduction ~~the~~in ~~first~~facilities ~~and~~cost, related to office space closures undertaken as part of our restructuring efforts during the third ~~quarters~~quarter of 2002. The remaining decrease of $3.0.4 million is attributable to reductions in ~~facilities costs~~, ~~human resource/recruiting costs,~~ marketing costs, travel and entertainment costs, and other administrative costs.

Restructuring charges

During ~~the~~January 2002, ~~third~~we ~~quarter~~executed ofcost ~~2001~~control measures in our North American and Indian operations, weresulting ~~implemented~~in a ~~plan~~workforce toreduction ~~accelerate~~of ~~cost~~98 ~~savings~~employees, inas well ~~North~~as ~~America~~certain office closures. The aggregate financial impact of ~~this~~these ~~plan~~measures was a charge of approximately $1.23 million., ~~This~~taken ~~charge~~during ~~consists~~the ~~primarily~~first quarter of ~~severance~~2002, ~~pay~~primarily ~~associated~~consisting ~~with a workforce reduction~~ of severance 37pay ~~employees in our North American operation~~ and lease termination costs ~~associated with office closures~~. ~~Approximately $163,000 of restructuring charges recorded during the second quarter of 2001 were reversed during the third quarter of 2001.~~

During the ~~third~~first quarter of ~~2002~~2003, weapproximately ~~implemented further cost reduction initiatives in North America~~$907,000 ~~resulting~~of inpreviously arecorded restructuring ~~charge~~charges ofwere ~~approximately $9~~reversed.~~2 million~~ ~~during~~This ~~the quarter.~~reversal ~~The~~was ~~charge~~attributable ~~includes~~to ~~approximately $1.0 million in severance pay and other costs associated with~~ a ~~workforce~~negotiated ~~reduction of 32 employees. The charge also includes approximately $6.4 million related to~~ lease termination ~~and other costs~~ associated with office ~~closures, and office~~ space ~~consolidation.~~previously ~~The~~abandoned, ~~remaining~~at ~~charge~~terms ofmore ~~approximately~~favorable ~~$1.8 million relates~~ to ~~non-cash~~ ~~write-offs~~those oforiginally ~~leasehold~~anticipated ~~improvements~~at ~~and~~the ~~furniture/fixtures.~~time ~~There~~the ~~were no~~ restructuring charge ~~reversals~~related ~~during~~to ~~the~~this ~~third~~office ~~quarter~~closure ofwas ~~2002~~taken.

Other income

Other income decreased 7640% to $0.1 million for the ~~third~~first quarter of ~~2002~~2003 from $0.52 million for the ~~third~~first quarter of ~~2001~~2002. This decrease was attributable to a decrease in interest income, partially offset by a decrease in foreign currency translation losses. The decrease in interest income was a result of both a decline in interest rates during the ~~third~~first quarter of ~~2002~~2003, as well as a decrease in cash and equivalents during the ~~third~~first quarter of ~~2002~~2003, as compared to the ~~third~~first quarter of ~~2001~~2002. All cash has been invested in short-term, interest bearing, investment grade obligations.

Provision for (benefit from) income taxes

Income tax expense (benefit) represents combined federal, state, and foreign taxes. Our ~~income tax benefit was $1.2 million on pre-tax losses of $4.3 million for the third quarter of 2001. Our~~ ability to realize tax benefits is contingent upon our ability to generate taxable income in the future. As a result of ~~operating~~historical ~~losses incurred in 2001, the continued~~ operating losses ~~in 2002~~incurred, and uncertainty as to the extent and timing of profitability in future periods, we recorded a ~~full~~ valuation allowance against the deferred tax asset of approximately $6.3 million during the quarter ended March 31, 2002, which included tax benefits related to pretax losses through the third quarter of 2001. The increase in the valuation allowance recorded on the our statement of operations in the first quarter was $1.2 million, with the balance of the valuation allowance adjustment of $5.1 reflected as a reduction of our additional paid-in capital. Similarly, we have recorded a full valuation allowance on the tax benefit associated with ~~pretax~~all pre-tax losses ofsince ~~$13.9 million for~~ the third quarter ~~ended~~of ~~September 30, 2002~~2001.

Comparison of nine months ended September 30, 2001 and 2002

Service revenues

Our service revenues decreased $31.1 million, or 84%, to $6.0 million for the first nine months of 2002 from $37.1 million for the first nine months of 2001. The decrease in service revenues is primarily attributable to a decline in the number and size of projects being worked on for certain existing clients, the conclusion of our relationship with certain clients, as well as difficulty in generating significant revenue from new clients. We served at total of 21 clients during the first nine months of 2002, as compared to 29 clients during the first nine months of 2001. We served only five of these clients during the first nine months of both 2002 and 2001. During the first nine months of 2002, our five largest clients accounted for approximately 81% of service revenues, compared to 67% of service revenues for the first nine months of 2001. The uncertainty in the economy has reduced IT spending for many of our existing and targeted customers, which has made developing new business, both with existing and potential clients, difficult in recent quarters.

Project personnel costs

Our project personnel costs decreased $12.0 million, or 58%, to $8.8 million for the first nine months of 2002 from $20.8 million for the first nine months of 2001. This decrease was primarily due to a $9.9 million reduction in salary, payroll tax and benefit costs associated with fewer project personnel during the first nine months of 2002, as compared to the first nine months of 2001. Employee project personnel decreased from 306 at September 30, 2001 to 146 at September 30, 2002, primarily as a result of a series of restructuring plans that were implemented during the fourth quarter of 2001, and the first and third quarters of 2002. Also contributing to this overall decrease was a $2.0 million reduction in costs associated with subcontractors used during the first nine months of 2002, as compared to the first nine months of 2001.

Selling, marketing and administrative

Our selling, marketing and administrative expenses decreased $18.0 million, or 56%, to $14.4 million for the first nine months of 2002 from $32.4 million for the first nine months of 2001. This decrease was primarily due to a $10.5 million reduction in salary, payroll tax and benefit costs associated with fewer selling, marketing and administrative employees during the first nine months of 2002, as compared to the first nine months of 2001. Our selling, marketing and administrative staff decreased from 115 employees at September 30, 2001, to 40 employees at September 30, 2002. These reductions resulted from a series of restructuring plans that were implemented during the fourth quarter of 2001 and the first and third quarters of 2002. The remaining decrease is attributable to reductions in facilities costs, human resource/recruiting costs, marketing costs, travel costs, and other administrative costs.

Restructuring charges

During the first nine months of 2001, we implemented a series of cost reduction measures in our North American and European operations, resulting in a total workforce reduction of 53 employees. The aggregate restructuring charge associated with these measures was approximately $1.7 million, consisting of severance pay and lease termination costs. Approximately $163,000 of restructuring charges recorded during the second quarter of 2001 were reversed during the first nine months of 2001.

During the first nine months of 2002, we implemented further cost reduction measures in our North American and Indian operations, resulting in a total workforce reduction of 130 employees. The aggregate restructuring charge associated with these measures was approximately $10.5 million, consisting of severance pay, lease termination costs, and losses on leasehold improvement and furniture/fixtures dispositions. Approximately $373,000 of restructuring charges recorded during the third and fourth quarters of 2001 were reversed during the first nine months of 2002.

Other income

Other income decreased $2.0 million to $0.7 million for the first nine months of 2002 from $2.7 million for the first nine months of 2001. This decrease was attributable to a decrease in interest income, as well as decreases in foreign currency translation gains. The decrease in interest income was a result of both a decline in interest rates during the first nine months of 2002, as well as a decrease in cash and equivalents during the first nine months of 2002, as compared to the first nine months of 2001. All cash has been invested in short-term, interest bearing, investment grade obligations.

Provision for (benefit from) income taxes

Income tax expense (benefit) represents combined federal, state, and foreign taxes. Our income tax benefit was $4.3 million on pre-tax losses of $15.0 million for the first nine months of 2001. Our ability to realize tax benefits is contingent upon our ability to generate taxable income in the future. As a result of operating losses incurred in 2001, the continued operating losses in 2002, and uncertainty as to the extent and timing of profitability in future periods, we recorded a full valuation allowance against the deferred tax asset of approximately $6.3 million during the quarter ended March 31, 2002. The increase in the valuation allowance recorded on the our statement of operations in the first quarter was $1.2 million, with the balance of the valuation allowance adjustment of $5.1 reflected as a reduction of our additional paid-in capital. Similarly, we have recorded a full valuation allowance on the tax benefit associated with pretax losses of $26.6 million for the first nine months of 2002.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded operations and investments in property and equipment primarily from cash on hand, through cash generated from operations, and the sale of common stock. We had no outstanding debt as of ~~September~~March 3031, ~~2002~~2003.

Cash and cash equivalents decreased to $4435.32 million at ~~September~~March 3031, ~~2002~~2003 from $5740.3 million at December 31, ~~2001~~2002. The decrease was due primarily to a $125.80 million net decrease in cash from operating activities, awhich ~~$0.3 million~~includes ~~investment~~approximately ~~in property and equipment, a~~ $01.2 million ~~investment~~paid inunder Tanning Technology (India) Private Limited, $0.3 million in purchases of treasury shares, partially offset by $0.5 million in proceeds from the issuance of common stock, primarily in conjunction with a ~~stock subscription~~lease ~~agreement~~termination ~~entered into with a key executive~~settlement. We currently have no material commitments for capital expenditures.

During the third quarter of 2002, we purchased 298,669 shares of our common stock from a key executive. The executive used all proceeds from this transaction to make full payment on a promissory note, owed to us by the executive, including accrued interest, in the amount of $286,722. The shares we purchased in this transaction are included in treasury stock at September 30, 2002. We may purchase additional shares under our stock repurchase program in the future.

Item 3. Qualitative and Quantitative Disclosures About Market Risk

We have provided our services to customers primarily in the United States, Canada, the United Kingdom and Denmark. During the first quarter of 2002, we completed the closure of our European office. Accordingly, risk associated with foreign currency translation has been significantly reduced.

To the extent Tanning Technology Europe and Tanning Technology (India) Private Limited have monetary assets and liabilities denominated in foreign currencies, our financial results could be affected by changes in foreign currency exchange rates. Historically, we have not experienced material fluctuations in our results due to foreign currency exchange rates.

WeAlthough we continue to pursue new clients across the globe, we are not currently providing a significant level of services to clients outside North America. ~~We will continue to serve our international clients from our North American and Indian facilities.~~ If we expand our business with foreign clients, risks associated with foreign currencies will increase.

Our cash has been invested in short-term, interest-bearing, investment-grade obligations. As such, our interest income could be affected by fluctuations in prevailing interest rates.

Item 4. Controls and Procedures

Based on their evaluation of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) as of a date within 90 days of the filing date of this quarterly report, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~Not~~On ~~applicable~~April 23, 2003, one of our stockholders filed a purported class action lawsuit in the Court of Chancery of the State of Delaware against Tanning, our board of directors, and Platinum Equity alleging claims of breach of fiduciary duty. The complaint seeks an injunction preventing Tanning's merger with Tiger Holding Corporation, rescission of the merger, in the event the merger is completed, compensatory damages, and an award of costs and attorneys' fees. We believe the claims are without merit, and intend to defend vigorously against these claims.

Item 2. Changes in Securities and Use of Proceeds

Not applicable

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits and Reports on Form 8-K

(a): Exhibits

Exhibit		Description
3.1		Certificate of Incorporation of Tanning, as amended and restated*
2.1		Agreement and Plan of Merger dated April 18, 2003, among Tiger Holding Corporation, Tiger Merger Subsidiary and Tanning(2)
3.2		Bylaws of Tanning, as amended and restated*
3.1		Certificate of Incorporation of Tanning, as amended and restated(1)
10.1		Confidentiality, Proprietary Rights and Non-Competition Agreement between Tanning and Barrett L. Sweet, dated July 29, 2002
3.2		Bylaws of Tanning, as amended and restated(1)
10.2		Letter Agreement dated August 13, 2002 between Tanning and Larry G. Tanning, regarding transfer of Tanning shares and loan repayment
10.1		Tanning Technology Corporation Change in Control Plan
10.3		Letter Agreement dated September 3, 2002 between Tanning and Frederick H. Fogel confirming separation terms
10.2		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Gregory A. Conley and Tanning
10.4		Letter Agreement dated September 3, 2002 between Tanning and Henry F. Skelsey confirming separation terms
10.3		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Larry G. Tanning and Tanning
10.4		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Katherine L. Scherping and Tanning
10.5		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Mark S. Teflian and Tanning
10.6		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Adesh K. Gupta and Tanning
99.1		Cautionary Statement for the Purpose of the "Safe Harbor" Provisions of The Private Securities Litigation Reform Act of 1995
99.2		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1): Incorporated herein by reference from the Company's Registration Statement on Form S-1 (SEC File No. 333-78657) filed with the Commission on July 22, 1999.
(2): Incorporated herein by reference from the Company's Current Report on Form 8-K filed with the Commission on April 21, 2003.
(b): Reports on Form 8-K.

OnWe ~~August 15,~~did ~~2002,~~not wefile ~~filed~~any aReports ~~Current Report~~ on Form 8-K ~~regarding~~during the ~~certifications~~quarter ofended ~~our Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section~~March ~~1350~~31, ~~as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~2003.

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.

	TANNING TECHNOLOGY CORPORATION
Date: October 31, 2002	By:	/s/ GREGORY A. CONLEY
Date: May 1, 2003	By: /s/ GREGORY A. CONLEY Name: Gregory A. Conley Title: Chief Executive Officer and Director
	Name:	Gregory A. Conley
Date: May 1, 2003	By: /s/ KATHERINE L. SCHERPING Name: Katherine L. Scherping Title: Chief Financial Officer (Principal Financial and Accounting Officer)
	Title:	Chief Executive Officer and Director
Date: October 31, 2002	By:	/s/ KATHERINE L. SCHERPING
	Name:	Katherine L. Scherping
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

CERTIFICATIONS

I, Gregory A. Conley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tanning Technology Corporation;

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 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 we 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 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 function):

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: ~~October 31~~ May 1, ~~2002~~2003 ~~/s/ GREGORY A. CONLEY Gregory A. Conley Director, Chief Executive Officer, President and Chief Operating Officer~~

/s/ GREGORY A. CONLEY

Gregory A. Conley
Director, Chief Executive Officer,
President and Chief Operating Officer

I, Katherine L. Scherping, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tanning Technology Corporation;

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;

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

Date: ~~October 31~~ May 1, ~~2002~~2003 ~~/s/ KATHERINE L. SCHERPING Katherine L. Scherping Chief Financial Officer,~~

~~I, Gregory~~/s/ AKATHERINE L. ~~Conley,~~SCHERPING ~~Chief~~Katherine ~~Executive Officer of Tanning Technology Corporation (the "Registrant"), do hereby certify, pursuant to 18 U~~L.~~S.C.~~ ~~Section 1350~~Scherping asChief ~~adopted~~Financial pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to this Quarterly Report on Form 10-Q for the period ended September 30, 2002 of the Registrant (the "Report"), that, to the best of my knowledge: Officer

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

This certification is made solely for purposes of 18 U.S.C. Section 1350 and not for any other purpose.

By: /s/ GREGORY A. CONLEY Gregory A. Conley Chief Executive Officer

I, Katherine L. Scherping, Chief Financial Officer of Tanning Technology Corporation (the "Registrant"), do hereby certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Quarterly Report on Form 10-Q for the period ended September 30, 2002 of the Registrant (the "Report"), that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

This certification is made solely for purposes of 18 U.S.C. Section 1350 and not for any other purpose.

By: /s/ KATHERINE L. SCHERPING Katherine L. Scherping Chief Financial Officer

TANNING TECHNOLOGY CORPORATION

Exhibit Index to Quarterly Report On Form 10-Q for the Quarterly Period Ended ~~September~~March 3031, ~~2002~~ 2003

Exhibit		Description
3.1		Certificate of Incorporation of Tanning, as amended and restated*
2.1		Agreement and Plan of Merger dated April 18, 2003, among Tiger Holding Corporation, Tiger Merger Subsidiary and Tanning(2)
3.2		Bylaws of Tanning, as amended and restated*
3.1		Certificate of Incorporation of Tanning, as amended and restated(1)
10.1		Confidentiality, Proprietary Rights and Non-Competition Agreement between Tanning and Barrett L. Sweet, dated July 29, 2002
3.2		Bylaws of Tanning, as amended and restated(1)
10.2		Letter Agreement dated August 13, 2002 between Tanning and Larry G. Tanning, regarding transfer of Tanning shares and loan repayment
10.1		Tanning Technology Corporation Change in Control Plan
10.3		Letter Agreement dated September 3, 2002 between Tanning and Frederick H. Fogel confirming separation terms
10.2		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Gregory A. Conley and Tanning
10.4		Letter Agreement dated September 3, 2002 between Tanning and Henry F. Skelsey confirming separation terms
10.3		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Larry G. Tanning and Tanning
10.4		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Katherine L. Scherping and Tanning
10.5		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Mark S. Teflian and Tanning
10.6		Tanning Technology Corporation Change in Control Plan Notice of Participation dated March 21, 2003 between Adesh K. Gupta and Tanning
99.1		Cautionary Statement for the Purpose of the "Safe Harbor" Provisions of The Private Securities Litigation Reform Act of 1995
99.2		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1): Incorporated herein by reference from the Company's Current Report on Form 8-K filed with the Commission on April 21, 2003.
(2): Incorporated herein by reference from the Company's Registration Statement on Form S-1 (SEC File No. 333-78657) filed with the Commission on July 22, 1999.

Filing Compare · TANNING TECHNOLOGY CORP