UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition Period from _______________ TO _______________.
333-44747
(Commission File Numbers)
ROSEDALE DECORATIVE PRODUCTS LTD.
(Exact name of registrant as specified in its charter)
Ontario, Canada 5110
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
731 Millway Avenue
Concord, Ontario
Canada L4K 3S8
(Address of principal executive offices)
(905) 669-8909
(Registrants' telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO[ ]
As of September 30, 2003, 2,755,214 shares of Common Stock, no par value
per share, of Rosedale Decorative Products Ltd. were issued and outstanding.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ROSEDALE DECORATIVE PRODUCTS LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
ROSEDALE DECORATIVE PRODUCTS LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
TABLE OF CONTENTS
Interim Consolidated Balance Sheets as of September 30, 2003
and December 31, 2002 (historical and pro-forma) 2 - 3
Interim Consolidated Statements of Operations for the three months ended
September 30, 2003 and September 30,2002 4
Interim Consolidated Statements of Operations for the nine months ended
September 30, 2003 and September 30,2002 5
Interim Pro-forma Consolidated Statements of Operations for the nine
months ended September 30, 2003 6
Interim Consolidated Statements of Cash Flows for the nine months ended
September 30, 2003 and September 30, 2002 7 - 8
Interim Consolidated Statements of Stockholders' Equity for the nine months
ended September 30, 2003 and December 31, 2002 9
Condensed Notes to Interim Consolidated Financial Statements 10
1
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheets
As of September 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
2003 2002 2002
Historical Pro-forma
$ $ $
ASSETS
CURRENT ASSETS
Cash 769,901 1,186,436 1,168,131
Accounts receivable 2,688,104 3,973,605 2,053,310
Inventory 3,955,757 5,886,464 3,553,392
Prepaid expenses and sundry assets 45,428 332,031 80,535
Income taxes recoverable 31,826 - 8,597
----------- ----------- ----------
7,491,016 11,378,536 6,863,965
LOAN RECEIVABLE FROM AFFILIATED COMPANY 82,604 41,975 41,975
MORTGAGES RECEIVABLE 365,567 312,805 312,805
PROPERTY, PLANT AND EQUIPMENT 2,535,500 4,279,689 2,008,906
----------- ----------- -----------
10,474,687 16,013,005 9,227,651
=========== =========== ===========
See condensed notes to the consolidated financial statements
2
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheets
As of September 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
2003 2002 2002
Historical Pro-forma
$ $ $
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness 3,182,828 4,710,636 2,428,689
Accounts payable and accrued expenses 2,739,515 4,575,714 2,704,739
Income tax payable - 6,682 -
Due to stockholders and directors - 919,427 -
----------- ----------- -----------
5,922,343 10,212,459 5,133,428
DEFERRED INCOME TAXES 2,074 410,624 1,775
----------- ----------- -----------
5,924,417 10,623,083 5,135,203
STOCKHOLDERS' EQUITY
COMMON STOCK 5,171,627 5,029,355 5,029,355
ADDITIONAL PAID-IN CAPITAL - 142,314 142,314
ACCCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS) 351,908 (459,997) (462,704)
RETAINED EARNINGS (DEFICIT) (973,265) 678,250 (616,517)
----------- ----------- -----------
4,550,270 5,389,922 4,092,448
----------- ----------- -----------
10,474,687 16,013,005 9,227,651
=========== =========== ===========
See condensed notes to the consolidated financial statements
3
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Operations
For the period ended September 30, 2003 and September 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Three-months Three-months
ended ended
September 30, September 30,
2003 2002
(restated)
$ $
SALES 2,506,181 5,286,780
COST OF SALES 1,356,053 3,460,221
----------- -----------
GROSS PROFIT 1,150,128 1,826,559
OPERATING EXPENSES
General and administrative 285,622 605,699
Selling 402,025 1,407,700
Design studio 97,332 141,458
Book development costs 54,252 31,745
Amortization 181,091 324,345
----------- -----------
TOTAL OPERATING EXPENSES 1,020,322 2,150,947
----------- -----------
OPERATING INCOME (LOSS) 129,806 (324,388)
Interest expense (38,325) (73,692)
Exchange gain (loss) on foreign exchange contracts 5,896 (200,046)
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 97,377 (598,126)
Income taxes - 221,930
----------- -----------
NET INCOME (LOSS) 97,377 (376,196)
=========== ===========
Basic and Diluted Net Income (Loss) Per Share 0.04 (0.14)
=========== ===========
Weighted average number of common shares
outstanding 2,755,214 2,755,514
=========== ===========
See condensed notes to the consolidated financial statements
4
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Operations
For the period ended September 30, 2003 and September 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Nine-months Nine-months
ended ended
September 30, September 30,
2003 2002
(restated)
$ $
SALES 10,164,375 16,540,607
COST OF SALES 6,007,300 10,181,356
----------- -----------
GROSS PROFIT 4,157,075 6,359,251
----------- -----------
OPERATING EXPENSES
General and administrative 1,466,718 1,995,175
Selling 1,521,548 2,594,474
Design studio 404,724 577,925
Book development costs (recovery) 157,409 (41,943)
Amortization 720,008 991,624
----------- -----------
TOTAL OPERATING EXPENSES 4,270,407 6,117,255
----------- -----------
OPERATING INCOME (LOSS) (113,332) 241,996
Interest expense (143,428) (182,047)
Exchange gain (loss) on foreign exchange contracts 81,491 (73,941)
Loss on sale of subsidiary (1,476,246) -
----------- -----------
LOSS BEFORE INCOME TAXES (1,651,515) (13,992)
Income taxes - -
----------- -----------
NET LOSS (1,651,515) (13,992)
----------- -----------
Basic and Diluted Net Loss Per Share (0.60) (0.01)
=========== ===========
Weighted average number of common shares
outstanding 2,755,370 2,755,514
=========== ===========
See condensed notes to the consolidated financial statements
5
ROSEDALE DECORATIVE PRODUCTS LTD.
Pro-Forma Interim Consolidated Statements of Operations For the period ended
September 30, 2003 and September 30, 2003 Pro-forma (Amounts Expressed in US
Dollars) (Unaudited)
Nine-months Nine-months
ended ended
September 30, Pro-forma September 30,
2003 Adjustments 2003
Unaudited (note 2) Pro-forma
--------------- ---------------- ---------------
$ $ $
SALES 10,164,375 (2,050,522) 8,113,853
COST OF SALES 6,007,300 (1,325,357) 4,681,943
--------------- ---------------- ---------------
GROSS PROFIT 4,157,075 (725,165) 3,431,910
OPERATING EXPENSES
General and administrative 1,466,718 (259,526) 1,207,192
Selling 1,521,548 (100,665) 1,420,883
Design studio 404,724 (91,729) 312,995
Book development costs 157,409 - 157,409
Amortization 720,008 (204,671) 515,337
--------------- ---------------- ---------------
TOTAL OPERATING EXPENSES 4,270,407 (656,591) 3,613,816
OPERATING LOSS (113,332) (68,574) (181,906)
Interest expense (143,428) 24,323 (119,105)
Exchange gain on foreign
exchange contracts 81,491 - 81,491
Loss on sale of subsidiary (1,476,246) 1,476,246 -
--------------- ---------------- ---------------
LOSS BEFORE
INCOME TAXES (1,651,515) 1,431,995 (219,520)
Income taxes - - -
================ ================ ===============
NET LOSS (1,651,515) 1,431,995 (219,520)
================ ================ ===============
Net loss per Common
share, basic and diluted (0.60) (0.08)
================ ===============
Weighted average number
of Common shares
outstanding 2,755,370 2,755,370
================ ===============
See condensed notes to the consolidated financial statements
6
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
For the period ended September 30, 2003 and September 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Nine-months Nine-months
ended ended
September 30, September 30,
2003 2002
(restated)
$ $
Cash flows from operating activities:
Net Loss (1,651,515) (13,992)
----------- -----------
Adjustments to reconcile net loss to net cash used in operating
activities:
Loss on sale of subsidiary 1,476,245 -
Amortization of property, plant and equipment 720,008 991,624
Exchange gain on foreign exchange contracts (55,816) 73,941
Increase in accounts receivable (444,762) (712,437)
Decrease in inventory 719,622 890,884
Decrease in prepaid expenses and sundry assets 53,952 47,323
Decrease in accounts payable and accrued expenses (942,726) (863,331)
Increase (decrease) in income taxes payable (20,567) 22,350
----------- -----------
Total adjustments 1,505,956 450,354
----------- -----------
Net cash provided by (used in) operating activities (145,559) 436,362
----------- -----------
Cash flows from investing activities:
Proceeds from sale of subsidiary 366,414 -
Purchase of property, plant and equipment (832,595) (1,123,145)
----------- -----------
Net cash used in investing activities (466,181) (1,123,145)
----------- -----------
See condensed notes to the consolidated financial statements
7
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
For the period ended September 30, 2003 and September 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Nine-months Nine-months
ended ended
September 30, September 30,
2003 2002
(restated)
$ $
Cash flows from financing activities:
Proceeds from bank indebtedness 439,876 78,148
Loans to affiliated company (31,683) -
Purchase of Treasury Stock (42) -
Repayment of loans to stockholders & directors (378,779) (224,512)
----------- -----------
Net cash provided by (used in) financing activities 29,372 (146,364)
----------- -----------
Effect of foreign currency exchange rate changes 165,833 15,462
----------- -----------
Net decrease in cash and cash equivalents (416,535) (817,685)
----------- -----------
Cash and cash equivalents, beginning of year 1,186,436 1,897,453
----------- -----------
End of nine month period ended September 30 769,901 1,079,768
=========== ===========
Income taxes paid - -
=========== ===========
Interest paid 168,428 316,464
=========== ===========
See condensed notes to the consolidated financial statements
8
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of changes in Stockholders' Equity
For the period ended September 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
Common Accumulated
Stock Common Additional Other
Number of Stock Paid-in Retained Comprehensive Comprehensive
Shares Amount Capital Earnings(deficit) Income (loss) Income (loss)
------------ ----------- ------------- ----------------- ------------------- --------------
$ $ $ $ $
Balance as of December 31,
2001 2,755,514 5,029,355 142,314 513,892 - (509,109)
Foreign currency translation - - - - 49,112 49,112
Net income for the year - - - 164,358 164,358 -
------------ ----------- ------------- ----------------- ------------------- --------------
Balance as of December 31,
2002 2,755,514 5,029,355 142,314 678,250 213,470 (459,997)
===================
Foreign currency translation - - - - 811,905 811,905
Purchase of Treasury Stock (300) (42) - - - -
Expiration of Stock Warrants - 142,314 (142,314) - - -
Net loss for the
nine-month period to
September 30, 2003 - - - (1,651,515) (1,651,515) -
------------ ----------- ------------- ----------------- ------------------- --------------
Balance as of September 30,
2003 2,755,214 5,171,627 - (973,265) (839,610) 351,908
See condensed notes to the consolidated financial statements
9
ROSEDALE DECORATIVE PRODUCTS LTD.
Condensed Notes to Consolidated Financial Statements
As of September 30, 2003
(Amounts expressed in US dollars)
(Unaudited)
1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of all recurring accruals)
considered necessary for fair presentation have been included. Operating
results for the interim periods are not necessarily indicative of the
results that may be expected for the year ended December 31, 2003. Interim
financial statements should be read in conjunction with the Company's
annual audited financial statements.
The unaudited consolidated financial statements include the accounts of
Rosedale Decorative Products Ltd. ("the company") and its wholly owned
subsidiary, Ontario Paint and Wallpaper Limited ("Ontario").
All material inter-company accounts and transactions have been eliminated.
2. SALE OF SUBSIDIARY
In July 2002, the Company filed a proxy statement with the Securities and
Exchange Commission for the approval by shareholders of the sale of a
wholly owned subsidiary, Rosedale Wallcoverings & Fabrics Inc. ("Rosedale")
to the Chariman of the Board and Chief Executive Officer, Alan Fine. The
sale received shareholder approval on March 14, 2003 and was finalized on
March 24, 2003. Consequently, these consolidated financial statements
include Rosedale's results of operations up to March 24, 2003. In
accordance with Section 210 of Regulation S-X, a pro-forma balance sheet
and statement of operations showing the impact of this transaction have
been included. In summary, the transaction is as follows:
Selling price $ 856,303
Obligation assumed by Rosedale (769,727)
Forgiveness of loan (207,376)
Cost of investment (1,355,445)
----------------
Loss on sale $ (1,476,245)
3. CONTINGENCIES
a) The company has guaranteed the mortgages of 1217576 Ontario Inc. and
1216748 Ontario Inc. in the amount of $630,000 through general
security agreements ranking behind the National Bank of Canada. These
affiliated companies are rental properties owned by a director and
stockholder. As at September 30, 2003, the indebtedness of the
affiliated companies amounted to approximately $395,000.
b) The company has issued a guarantee secured by a general security
agreement for the loan made by the Laurentian Bank of Canada to
1369597 Ontario Inc. As at period end, the indebtedness of this
company amounted to $700,000. This loan was made to purchase life
insurance, a portion of which represents the keyman life insurance
policy for which the company is beneficiency.
c) The company has issued standby letters of credit in favour of the
Laurentian Bank of Canada in the amount of $189,000 to guarantee the
debt of a related party.
10
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements as
defined by the Private Securities Legislation Reform Act of 1995.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements, which are other than statements of historical facts. These
statements are subject to uncertainties and risks including, but not limited to,
product and service demand and acceptance, changes in technology, economic
conditions, the impact of competition and pricing, government regulation, and
other risks defined in this document and in statements filed from time to time
with the Securities and Exchange Commission. All such forward looking statements
are expressly qualified by these cautionary statements and any other cautionary
statements that may accompany the forward-looking statements. In addition,
Rosedale Decorative Products Limited disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the date
thereof.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In July 2002, the Company filed a proxy statement with the Securities and
Exchange Commission for the approval by Shareholders of the sale of a wholly
owned subsidiary, Rosedale Wallcoverings & Fabrics Inc. ("Rosedale") to the
Chairman of the Board and Chief Executive Officer, Alan Fine. The sale received
shareholder approval on March 14, 2003 and was finalized on March 24, 2003.
Results of Operation
Three months ended September 30, 2003 as compared to three months ended
September 30, 2002.
Revenues for the three months ended September 30, 2003 were $2,506,181, a 52.6%
decrease over prior year revenues of $5,286,780. This decrease resulted mainly
from the sale of the Rosedale subsidiary on March 24, 2003 and there were no
sales reported for the third quarter for this subsidiary. Also, the third
quarter showed a significant decline in wallpaper sales for the whole industry
in North America.
Gross profits as a percentage of revenue for the three months ended September
30, 2003 was 45.9%, as compared to the same period one-year ago of 34.5%. This
increase in gross profit margins can be attributed to a change in the sales mix
relating to the sale of the Rosedale subsidiary as well as higher sales volume
from the retail store.
Selling expenses have decreased by 71.4% to $402,025 for the three-month period
ended September 30, 2003 as compared to $1,407,700 for the same period last
year. This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary.
General and administrative expenses for the Company decreased by 52.8%, to
$285,622 for the three months period ended September 30, 2003 from $605,699 for
the three months ended September 30, 2002. Reductions were achieved due to the
sale of Rosedale plus additional cut backs made to support the profitability of
the Company.
11
The Company develops wallpaper sample books, which are created for each
collection and sold through distributors. The majority of expenditures for the
creation of sample books are incurred in the quarter before the introduction of
a collection. Some expenditures are incurred as early as nine to eight months in
advance. Revenues generated from the sales of sample books are netted from the
costs incurred in the same period and the net amount is shown on the income
statement. Because expenditures are made in the quarter before the launch of a
collection, there is not always a matching of revenues and expenses e.g. costs
for a January launch would be recorded in the previous year. The Company ensures
that there are firm orders in place from customers before significant
expenditures are incurred to produce the sample books. Therefore, there is
little speculative risk in their production. Book development costs for the
three-month period ended September 30, 2003 was $54,252 compared to revenue of
$31,745 for the same period last year. This increase in expenses can be
attributed to the additional subsidy required to place our books in the
marketplace. The market is very competitive and retailers are looking for more
concessions, especially on books. As these sample books are our silent
salesperson, it is imperative that we keep our books in the marketplace and on
top of the counters.
Design studio expenses for the Company decreased by 31.2% to $97,332 for the
three months ended September 30, 2003 versus $141,458 for the same period last
year. This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary.
Operating income for the three months ended September 30, 2003 was $129,806 as
compared to an operating loss of $324,388 for the three months ended September
30, 2002. This relates to the reduction in expenses and increased margins for
the quarter.
Interest expense for the Company for the three months ended September 30, 2003
decreased to $38,325 from $73,692 for the three months ended September 30, 2002.
This decrease in interest expense is attributable to the reduction in debt
resulting from the sale of the Rosedale subsidiary.
The net income for the three months ended September 30, 2003 was $97,377 as
compared to net loss of $376,196 for the three months ended September 30, 2002.
The profit for the period is attributable to the reduction in expenses and
higher margins.
Basic and diluted income per share for the three months ended September 30, 2003
were $0.04 compared to a loss of $0.14 for the same period last year. Earnings
per share were calculated based on the weighted average number of common shares
as of September 30, 2003 of 2,755,214 and September 30, 2002 of 2,755,514
shares.
Nine months ended September 30, 2003 as compared to nine months ended September
30, 2002.
Revenues for the nine months ended September 30, 2003 were $10,164,375, a 38.5%
decrease over prior year revenues of $16,540,607. This decrease resulted mainly
from the sale of the
12
Rosedale subsidiary on March 24, 2003 and there were no sales reported for the
second and third quarter for this subsidiary. The wallcovering industry in North
America has experienced a significant decline in 2003.
Gross profits as a percentage of revenue for the nine months ended September 30,
2003 was 40.9%, as compared to the same period one-year ago of 38.4%. This
increase in gross profit margins can be attributed to higher sales volume in
retail and sales mix.
Selling expenses have decreased by 41.4% to $1,521,548 for the nine-month period
ended September 30, 2003 as compared to $2,594,474 for the same period last
year. This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary and implemented cost reductions to improve the profitability of the
Company.
General and administrative expenses for the Company decreased by 26.5%, to
$1,466,718 for the nine month period ended September 30, 2003 from $1,995,175
for the nine months ended September 30, 2002. Once again, reductions were
achieved due to the sale of Rosedale.
Book development costs for the nine-month period ended September 30, 2003 was
$157,409 compared to revenue of $41,943 for the same period last year. This
increase in expenses can be attributed to the additional subsidy required to
place our catalogues in the marketplace. As the Ontario division is a
distributor as well as a converter of wallpaper, it is imperative that we
maintain our collections in the field. The market is very competitive and
retailers are looking for more concessions, especially on the cost of books. The
Rosedale division generated the majority of previous year revenues on book
development.
Design studio expenses for the Company decreased by 30% to $404,724 for the nine
months ended September 30, 2003 versus $577,925 for the same period last year.
This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary offset by an increase in expenses in the Ontario studio.
Operating loss for the nine months ended September 30, 2003 was $113,332 as
compared to an operating income of $241,996 for the nine months ended September
30, 2002. This relates to the reduction in revenues and increased book
development costs.
Interest expense for the Company for the nine months ended September 30, 2003
decreased to $143,428 from $182,047 for the nine months ended September 30,
2002. This decrease in interest expense is attributable to the reduction in debt
resulting from the sale of the Rosedale subsidiary and increased borrowings
required for working capital.
A loss on the sale of Rosedale Wallcoverings & Fabrics Inc. was recorded in the
first quarter in the amount of $1,476,246. The transaction was approved by the
shareholders on March 14, 2003 and finalized on March 24, 2003. As part of the
transaction, the Company discharged its liability for Alan Fine's severance
package in the amount of approximately $770,000 upon his subsequent resignation
as disclosed to the shareholders in the proxy statement.
The net loss for the nine months ended September 30, 2003 was $1,651,515 as
compared to $13,992 for the nine months ended September 30, 2002. This loss for
the period is attributable to the reduction in sales and the loss on the sale of
the Rosedale subsidiary.
13
Basic and diluted loss per share for the nine months ended September 30, 2003
were $0.60 (proforma $0.08 loss per share) compared to $0.01 for the same period
last year. Loss per share were calculated based on the weighted average number
of common shares as of September 30, 2003 of 2,755,370 and September 30, 2002 of
2,755,514 and shares.
Liquidity and Capital Resources
The Company had a negative net change in cash of $416,535 for the nine months
ended September 30, 2003, which was created by the agreement to sell the
subsidiary. However the proceeds from the sale were $366,414.
Cash flows used in investing activities for the nine months ending September 30,
2003 were $466,181. This reflected proceeds from the sale of Rosedale as well as
planned capital addition for cylinders, designs and engravings for new
collections. The purchase of cylinders was partially offset by the proceeds from
the sale of the subsidiary. It is the Company's intention to continue to utilize
a good portion of these funds to develop new product lines of wallpaper.
Item 3. CONTROLS AND PROCEDURES.
(a) The President and the Chief Financial Officer of the Company have
evaluated the effectiveness of the design and operation of the Company's system
of disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the Exchange Act) as of a date within 90 days prior to the
filing of this Form 10-QSB. As a result of that evaluation, they have concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed in the Company's reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.
(b) There have been no significant changes in the Company's system of
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of their evaluation. There were no discoveries
of any significant deficiencies or material weaknesses in such controls that
would require the Company to take corrective actions.
14
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On March 14, 2003, the Company held its annual shareholders' meeting.
The following actions were taken:
o The shareholders elected Sidney Ackerman, Alan Fine, Norman Maxwell, Ken
Page and Janet Hendry to serve as directors until the next annual meeting;
o The shareholders approved the sale of the Company's wholly-owned
subsidiary, Rosedale Wallcoverings & Fabrics Inc. to Alan Fine, the
Company's Chief Executive Officer and Chairman of the Board; and
o The shareholders ratified the Board of Directors' selection of Schwartz
Levitsky Feldman as the Company's independent auditors for the fiscal year
ending December 31, 2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 31.1 - Certification of CEO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 31.2 - Certification of CFO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.1 - Certification of CEO pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.2 -Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on September 6, 2003.
15
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.
ROSEDALE DECORATIVE PRODUCTS LTD.
Date: December 10, 2003 By: /s/Sidney Ackerman
------------------
Sidney Ackerman
President
Date: December 10, 2003 By: /s/Norman G. Maxwell
--------------------
Norman G. Maxwell
Chief Financial Officer
16