UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-22809
AZUREL LTD.
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 13-3842844
--------------------- --------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
23-F Commerce Road, Fairfield, NJ 07004
(Address of principal executive office) (Zip Code)
(973) 575-9500
(Issuer's telephone number including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of September 30, 2002 was 16,598,534 shares.
Transitional Small Business Disclosure Format (check one)
Yes No X
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AZUREL LTD. AND SUBSIDIARIES
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet 1
Consolidated Statements of Operations 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4-7
Item 2 - Management's Discussion and Analysis 7-10
Item 3 - Controls and Procedures 11
PART II - OTHER INFORMATION
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8k 11
SIGNATURE 12
ITEM 1 FINANCIAL STATEMENTS
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 26,123
Accounts receivable 19,680
Inventories 236,739
Prepaid expenses and other current asset 25,450
----------------
TOTAL CURRENT ASSETS 307,992
OTHER ASSETS 8,704
----------------
$ 316,696
================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 221,602
Taxes payable 430,067
Reorganization liabilities - short term 368,894
----------------
TOTAL CURRENT LIABILITIES 1,020,563
----------------
REORGANIZATION LIABILITIES - LONG TERM 680,564
----------------
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, authorized 4,000,000 shares
Common stock, $.001 par value, authorized 50,000,000 shares,
issued and outstanding 16,598,534 shares 16,599
Additional paid-in-capital 12,364,157
Accumulated deficit (13,765,187)
----------------
TOTAL STOCKHOLDERS' DEFICIT (1,384,431)
----------------
$ 316,696
================
See notes to consolidated financial statements.
1
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2002 2001 2002 2001
------------- ------------- ------------- -------------
NET SALES $ 22,565 $ 47,275 $ 58,006 $ 423,771
COST OF GOODS SOLD 11,317 104,936 29,514 87,443
------------- ------------- ------------- -------------
GROSS PROFIT (LOSS) 11,248 (57,661) 28,492 336,328
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 184,435 107,427 446,733 669,819
------------- ------------- ------------- -------------
LOSS FROM OPERATIONS (173,187) (165,088) (418,241) (333,491)
INTEREST EXPENSE -- -- -- (49,837)
OTHER INCOME (EXPENSE) (6,000) 1,301 54,775 (81,222)
REORGANIZATION COSTS -- -- (12,315) --
------------- ------------- ------------- -------------
LOSS BEFORE EXTRAORDINARY ITEM (179,187) (163,787) (375,781) (464,550)
EXTRAORDINARY ITEMS:
Gain (loss) on extinguishment of debt (21,263) -- 4,728,310 --
------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (200,450) $ (163,787) $ 4,352,529 $ (464,550)
============= ============= ============= =============
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE:
CONTINUING OPERATIONS $ (0.01) $ (0.02) $ (0.03) $ (0.07)
EXTRAORDINARY ITEM (0.00) -- 0.43 --
------------- ------------- ------------- -------------
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE $ (0.01) $ (0.02) $ 0.40 $ (0.07)
============= ============= ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 16,579,244 6,911,796 11,008,657 6,911,796
============= ============= ============= =============
See notes to consolidated financial statements.
2
AZUREL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
--------------------------------
2002 2001
-------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,352,529 $ (464,550)
-------------- ---------------
Adjustments to reconcile net income (loss) to net cash (used in) provided by
operating activities:
Gain on extinguishment of debt (4,728,310) --
Depreciation -- 22,054
Amortization -- 135,197
Gain on disposal of fixed assets -- (8,818)
Decrease in minority interest -- (357)
Non-cash compensation 67,500 --
Changes in assets and liabilities:
Accounts receivable 74,104 478,826
Inventories (42,021) 490,530
Prepaid expenses and other current assets (22,448) 13,247
Other assets -- (6,585)
Accounts payable and accrued expenses 15,220 (633,735)
Taxes payable (11,551) --
Liabilities not subject to compromise (95,500) --
-------------- ---------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (390,477) 25,809
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of property and equipment -- 39,212
-------------- ---------------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in bank loans -- (13,656)
Issuance of common stock per the Plan of Reorganization 345,515 --
-------------- ---------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 345,515 (13,656)
-------------- ---------------
NET (DECREASE) INCREASE IN CASH (44,962) 51,365
CASH, beginning of period 71,085 15,796
-------------- ---------------
CASH, end of period $ 26,123 $ 67,161
============== ===============
See notes to consolidated financial statements.
3
AZUREL LTD. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2002
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements as of September 30,
2002 have not been audited by independent auditors, but in the opinion
of management, such unaudited statements include all adjustments
consisting of normal recurring accruals necessary for a fair
presentation of the financial position, the results of operations and
cash flows for the nine months ended September 30, 2002.
The consolidated unaudited financial statements should be read in
conjunction with the financial statements and related notes concerning
the Company's accounting policies and other matters contained in the
Company's annual report on Form 10-KSB. The results for the three and
nine months ended September 30, 2002 are not necessarily indicative of
the results expected for the full year ending December 31, 2002.
As discussed in Note 2 below, the Company filed for voluntary
protection under Chapter 11 of the U.S. Federal Bankruptcy Code. On
September 17, 2002, the bankruptcy court issued a final decree, thereby
closing the bankruptcy case, resulting in the Company's emergence as a
going concern. The financial statements as of September 30, 2001, and
for the three and nine months then ended, were not reviewed by the
Company's independent accountants.
2. BANKRUPTCY FILING AND GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. On February 2, 2001, the
Company, due to substantial recurring losses and working capital
deficiencies, voluntarily filed for protection under Chapter 11 of the
U.S. Federal Bankruptcy Code. Under such protection, a Plan of
Reorganization ("the Plan") was formed to allow the Company to
restructure its debt with various creditors. On February 13, 2002, the
Plan was confirmed by the bankruptcy court, which became effective on
February 27, 2002. As part of the Plan, the Company received
approximately $300,000 from various investors in exchange for 3,000,000
shares of the Company's common stock. The Company received
approximately $280,000 of these funds in the first quarter and the
balance in the second quarter of 2002. The 3,000,000 shares (10 shares
for each dollar contributed) were issued in May 2002. On March 27,
2002, the Company signed a letter of intent to merge with an entity
that manufactures and distributes high-end women's sleepwear and
daywear. On July 1, 2002, the merger agreement was signed, pending
proxy approval by the Company's shareholders (See Note 6). On September
17, 2002, the United States Bankruptcy Court District of New Jersey
issued a final decree closing the bankruptcy case, thereby removing the
company from Chapter 11 proceedings. The Company is also actively
seeking to raise funds through the sale of additional shares of its
common stock. The accompanying financial statements do not include any
adjustments that might be necessary should the Company be unable to
continue as a going concern.
4
3. RECENT ACCOUNTING PRONOUNCEMENTS
FASB 145
On April 30, 2002, the FASB issues SFAS No. 145, "Rescission of FASB
Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections". The rescission of SFAS No. 4, "Reporting Gains
and Losses from Extinguishments", and SFAS No. 64, "Extinguishments of
Debt made to Satisfy Sinking Fund Requirements", which amended SFAS No.
4, will affect income statement classification of gains and losses from
extinguishment of debt. SFAS No. 4 requires that gains and losses from
extinguishment of debt be classified as an extraordinary item, if
material. Under SFAS No. 145, extinguishment of debt is now considered
a risk management strategy by the reporting enterprise and the FASB
does not believe it should be considered extraordinary under the
criteria in APB Opinion No. 30, "Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events
and Transactions", unless the debt extinguishment meets the unusual in
nature and infrequency of occurrence criteria in APB Opinion No. 30.
SFAS No. 145 will be effective for fiscal years beginning after May 15,
2002. Upon adoption, extinguishments of debt shall be classified under
the criteria in APB Opinion No. 30.
FASB 146
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullified Emerging Issues Task Force 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)". SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the
liability is incurred. A fundamental conclusion reached by the FASB in
this statement is that an entity's commitment to a plan, by itself,
does not create a present obligation to others that meets the
definition of a liability. SFAS No. 146 also establishes that fair
value is the objective for initial measurement of the liability. The
provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early
application encouraged. The Company has not yet determined the impact
of SFAS No. 146 on its financial position and results of operations, if
any.
5
4. EXTRAORDINARY ITEM
In accordance with the confirmed Plan, creditors had the option to
receive cash or common stock as settlement of their claims. For those
creditors who elected to receive cash, the Company will pay 45% of the
dollar amount owed. For creditors who elected to receive stock, the
Company will issue one share of common stock for each dollar owed and,
in addition, pay such creditors cash equal to 20% of their outstanding
dollar amount. Settlement of these claims are payable over a defined
period as disclosed in the Plan. At September 30, 2002, the total
amount owed to such creditors was approximately $1,049,000.
The Company had recorded pre-petition liabilities that were in excess
of the submitted claim amounts. Upon finalization of the claim
agreements referred to above, the Company wrote off such liabilities in
its financial statements. Accordingly, for the nine months ended
September 30, 2002, the Company recorded a gain on the extinguishment
of debt of approximately $4,728,000.
5. STOCKHOLDERS' DEFICIT
a. The Company adjusted its outstanding common stock by 20,000 in
the first quarter of 2002 to reflect shares issued to a certain
individual in October 2000 that was not previously recorded in
the Company's financial statements.
b. In May 2002, the Company sold 225,000 shares to an individual at
$0.20 per share for an aggregate of $45,000. Additionally, The
Company issued 150,000 shares of its stock for non-cash
compensation of $68,000 to an entity that provided management
services through July 2002.
c. As referred to in Note 2 above, the Company issued an aggregate
of 3,000,000 shares of its common stock totaling $300,000 to
various investors as part of an agreement to fund the Company's
Plan of Reorganization.
d. As part of the Company's Plan of Reorganization, The Company
issued the following shares of Common stock to its prepetition
creditors in 2002: May, 575,000 shares; July 5,689,961 shares;
August, 28,000 shares; and September, 30,995. Additionally,
33,619 shares were retired in August.
e. In August 2002, The Company converted all of its preferred
stock to 1,500 shares of common stock as part of the Company's
Plan of Reorganization.
6. SUBSEQUENT EVENTS
On July 1, 2002, the Company entered into a merger agreement to acquire
all the shares of Romantic Moments, Inc. (Romantic), a wholly owned
subsidiary of RM Enterprises International, Ltd., in exchange for
9,500,000 shares of the Company's common stock. As part of the merger
agreement, Romantic is dissolved and Flo Weinberg Inc. would become a
newly formed, wholly-owned subsidiary of the Company. The Company's
shareholders approved the merger at the annual shareholders' meeting
held on October 17, 2002. The merger was consummated effective November
1, 2002.
6
The shareholders also approved increasing the number of authorized
shares of common stock to 50,000,000 at the annual meeting.
On July 26, 2002, the Company announced that its public warrants, due
to expire on July 29, 2002, will be extended three years. The new
expiration date is July 29, 2005.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS
This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The Company's actual results could differ
materially from those set forth in the forward-looking statements.
The following discussion should be read in conjunction with the attached
consolidated financial statements and notes thereto and with the Company's
audited financial statements and notes thereto for the fiscal year ended
December 31, 2001.
CRITICAL ACCOUNTING POLICIES
The Securities and Exchange Commission (SEC) recently issued proposed guidance
for disclosure of critical accounting policies. The SEC defines "critical
accounting policies" as those that require application of management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effects of matters that are inherently uncertain and
may change in subsequent periods. The company plans to adopt the disclosure
requirements regarding critical accounting policies once the final rules are
required to be adopted.
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Azurel, Ltd., hereinafter "Azurel" or "the Company", through its wholly-
owned subsidiaries, markets, and sells private label cosmetics and
fragrances.
In February, 2001, the Company filed for protection under the federal bankruptcy
laws (Chapter 11). On February 13, 2002, subsequent to the ratification of the
First Modified Plan, the Order of Confirmation was issued by the Bankruptcy
Court, and became effective February 27, 2002. The Plan provided two options to
the unsecured creditors: One is a combination of one share of stock for each
dollar of liability plus a 20% cash payout over 4 years. The other is a 45% cash
payout over 3 years. Each unsecured creditor that filed a claim was permitted to
select either of the two options.
On July 1, 2002, the Company entered into a merger agreement to acquire all of
the shares of Romantic Moments, Inc. ("Romantic"), a wholly owned subsidiary of
RM Enterprises International, Ltd., in exchange for 9,500,000 shares of the
7
Company's common stock. As part of the merger agreement, Romantic would be
dissolved and Flo Weinberg Inc. would become a newly formed, wholly-owned
subsidiary of the Company. The merger is contingent upon shareholder approval,
which was forthcoming at the annual shareholders meeting held on October 17,
2002. The merger was consummated effective November 1, 2002 (see Note 6 of the
Notes to the consolidated financial statements). In addition, Azurel's
investment banker will seek to raise approximately $300,000 to fund working
capital. The Company expects the merger to result in expansion into new retail
markets.
As a result of the extinguishments of debt, the Company realized a gain of
approximately $4,728,000 for the nine months ended September 30, 2002 (see Note
4 of the Notes to the consolidated unaudited financial statements). The gain
reflects the difference between existing liabilities at the time of the filing
for bankruptcy protection under Chapter 11 of the federal bankruptcy laws in
February 2001 and claims filed and ratified under the First Modified Plan in
February 2002 (see Note 2 of the Notes to the consolidated financial
statements).
On July 26, 2002, the Company announced that its public warrants, due to expire
on July 29, 2002, will be extended three years. The new expiration date is July
29, 2005.
Results of Operations
Total revenues for the three and nine months ended September 30, 2002 were
$22,565 and $58,006 compared to $47,275 and $423,771 for the three and nine
months ended September 30, 2001. The $365,765 nine month decrease is largely
attributable to the following factors: 1) The 2001 Period contained one month of
sales prior to filing for protection under Chapter 11 of the Federal Bankruptcy
Law; 2) The 2001 Period contained substantial close-out sales, and 3) The
Company was in the process of seeking additional distribution sources in the
2002 Period.
Cost of goods sold were $11,317 and $29,514 for the three and nine months ended
September 30, 2002, respectively, and $104,936 and $87,443 for the respective
periods ended September 30, 2001. Cost of goods sold for the nine months ended
September 30, 2001 reflects a net inventory reserve reduction of approximately
$141,000. During the quarter ended September 30, 2001, the company reduced its
inventory by $86,000, in order to reflect the inventory's fair market value. The
gross profit as a percentage of revenue was 49.9% and 49.1% for the three and
nine months ended September 30, 2002 as compared to (122.0%) and (79.4% for the
corresponding periods ended September 30, 2001. Excluding the aforementioned
adjustment, the gross profit for the nine months ended September 30, 2001 would
have been approximately $195,000 or 46.0%. The lower margin percentage in 2001
is the result of selling a higher percentage of closeout products.
Selling, general and administrative (S,G&A) expenses for the three and nine
months ended September 30, 2002 were $184,435 and $446,733 compare to $107,427
and $669,819 for the three and nine months ended September 30, 2001,
respectively. The $77,000 increase (72.0%) for the three month period is largely
the result of merger-related expenditures (approximately $52,000). The $223,086
decrease (34.8%) for the nine month period is primarily a reflection of lower
payroll and rent costs. The Company significantly downsized in February 2001
upon filing for protection under Chapter 11. Thus, 2001 contained one month of
significantly higher payroll costs. Furthermore, the Company moved into a lower
cost facility toward the end of the first quarter in 2001, resulting in
substantial rent savings in 2002.
8
Interest expense was zero and $49,837 for the three and nine months ended
September 30, 2001 and there was no interest for the corresponding 2002 periods.
Interest obligations were frozen at the time of the bankruptcy filing in
February 2001.
RECENT ACCOUNTING PRONOUNCEMENTS
FASB 145
On April 30, 2002, the FASB issues SFAS No. 145, "Rescission of FASB
Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections". The rescission of SFAS No. 4, "Reporting Gains
and Losses from Extinguishments", and SFAS No. 64, "Extinguishments of
Debt made to Satisfy Sinking Fund Requirements", which amended SFAS No.
4, will affect income statement classification of gains and losses from
extinguishment of debt. SFAS No. 4 requires that gains and losses from
extinguishment of debt be classified as an extraordinary item, if
material. Under SFAS No. 145, extinguishment of debt is now considered
a risk management strategy by the reporting enterprise and the FASB
does not believe it should be considered extraordinary under the
criteria in APB Opinion No. 30, "Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events
and Transactions", unless the debt extinguishment meets the unusual in
nature and infrequency of occurrence criteria in APB Opinion No. 30.
SFAS No. 145 will be effective for fiscal years beginning after May 15,
2002. Upon adoption, extinguishments of debt shall be classified under
the criteria in APB Opinion No. 30.
FASB 146
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullified Emerging Issues Task Force Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit In June 2002, the FASB issued SFAS No. 146,
"Accounting for Costs Associated with Exit or an Activity (including
Certain Costs Incurred in a Restructuring)". SFAS No. 146 requires that
a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. A fundamental conclusion
reached by the FASB in this statement is that an entity's commitment to
a plan, by itself, does not create a present obligation to others that
meets the definition of a liability. SFAS No. 146 also establishes that
fair value is the objective for initial measurement of the liability.
The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early
application encouraged. The Company has not yet determined the impact
of SFAS No. 146 on its financial position and results of operations, if
any.
9
Liquidity and Capital Resources
The Company's primary source of liquidity is cash and inventory of $26,123 and
$236,739, respectively.
The Company has funded its operations to date primarily through a combination of
debt and equity financing. The Company recorded a loss before extraordinary
items of approximately $376,000 for the nine months ended September 30, 2002,
offset by extraordinary gain on extinguishments of debt of approximately
$4,728,000 related to the settlement of debt, consistent with the ratification
of the First Modified Plan (see Note 2).
The Company anticipates funding its future operations primarily through the
equity financing obtained through the merger with Romantic (see Notes 2 and 6 of
the Notes to the consolidated unaudited financial statements). As part of the
merger, approximately $750,000 of equity has been committed to provide funding
for the Company's operations. Fragrance sales are expected to improve with the
addition of approximately 300 new (Romantic) customers. Romantic sales
representatives are currently presenting fragrance products at shows and are
receiving favorable responses, with orders to follow. In addition, Romantic
operations are being streamlined for greater efficiency and cost savings. Over
$300,000 in costs have been eliminated. It is anticipated that initial capital
infusion, coupled with the aforementioned cost savings, will provide sufficient
liquidity in both the short and long term.
Net cash used in operating activities for the nine months ended September 30,
2002 was $390,477, which was primarily related to the Company's loss before
extraordinary item of $375,781.
Cash flow provided by financing activities amounted to $345,515 for the nine
months ended September 30, 2002, resulting from the issuance of common stock as
part of the Plan of Reorganization.
The Company does not plan to undertake any capital expenditures. Consistent with
the Company's downsizing, outside contractors will be utilized to provide the
necessary services such as product filling and product assembly.
10
ITEM 3 CONTROLS AND PROCEDURES
The Company's Vice President of Operations has evaluated the Company's
disclosure controls and procedures (as such term is defined in Rule 13a-14 (c)
under the Exchange Act) as of a date within 90 days of the date of filing of
this Form 10-QSB. Based upon such evaluation, the Company's Vice President of
Operations has concluded that such controls and procedures are effective to
ensure that the information required to be disclosed by the Company in the
reports it files under the Exchange Act is gathered, analyzed and disclosed with
adequate timeliness. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of the evaluation described above.
PART II - OTHER INFORMATION
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Reports on Form 8-K:
Report on Form 8-K was filed on July 31, 2002.
(b) Exhibits 99.1 and 99.2
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AZUREL LTD.
/s/ Edward Adamcik
Edward Adamcik
Vice President, Operations
Dated : November 19, 2002
12
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Azurel Ltd. and Subsidiaries
(the "Company") on Form 10-QSB for the quarter ended September 30, 2002
filed with the Securities and Exchange Commission (the "Report"), I,
Edward Edamcik, Vice President of Operations, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) The Report fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934;and
(2) The information contained in the Report fairly presents, in all material
respects, the consolidated financial condition of the Company as of the
dates presented and consolidated result of operations of the Company for the
period presented.
Dated: November 19, 2002
By: /s/ Edward Adamcik
Edward Adamcik, VP of Operations
This certification has been furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.2
I, Edward Adamcik, certify that
1. I have reviewed this quarterly report on Form 10-Q of Azurel Ltd. and
Subsidiaries;
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 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
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 19, 2002
By: /s/Edward Adamcik
Edward Adamcik, Vice President of Operations