SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the quarterly period ended June 30, 2002
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from _______________ to _______________
Commission file number 0-27415
The Topaz Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Nevada 91-1762285
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(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization) .
126/1 Krungthonburi Road
Banglampoo Lang, Klongsarn
Bangkok 10600 Thailand
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (425) 392-3144
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- N/A -
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Former Name, Former Address and Former Fiscal Year, 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 X No
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 2001 and June 30, 2002
(Unaudited) 2
Consolidated Statements of Operations for the Three and Six Months Ended June
30, 2001 and 2002 (Unaudited) 3
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and
(Unaudited) 4
Notes to Consolidated Financial Statements (Unaudited) 5
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risks 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Proceeds 12
Item 3. Default Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
The Topaz Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, June 30,
2001 2001
------------ ------------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 351,565 $ 720,901
Accounts receivable, net of allowance of
$788,369 and $857,241 5,891,767 3,745,760
Inventories 19,004,800 24,355,070
Prepaid expenses and deposits 372,285 510,053
------------ ------------
Total current assets 25,620,417 29,331,784
PROPERTY AND EQUIPMENT - NET 2,308,017 2,427,370
OTHER ASSETS 36,928 57,113
------------ ------------
Total assets $27,965,362 $31,816,267
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Lines of credit $ 2,054,698 $ 2,504,401
Accounts payable 2,559,005 5,200,377
Accrued liabilities 1,171,030 763,694
Payables to related party 546,061 2,067,397
------------ ------------
Total current liabilities 6,330,794 10,535,869
REDEEMABLE ORDINARY SHARES 4,736,115 5,039,310
COMMITMENTS - -
STOCKHOLDERS' EQUITY
Class A preferred stock, liquidation preference of
8,130,570 and $7,814,397 3,555,511 3,555,511
Class B preferred stock, liquidation preference of
2,811,193 and $2,701,875 1,007 1,007
Common stock 2,135 2,135
Additional paid in capital 1,673,330 1,673,330
Retained earnings 11,666,470 11,009,105
------------ ------------
16,898,453 16,241,088
------------ ------------
Total liabilities and stockholders' equity $27,965,362 $31,816,267
============ ============
The accompanying notes are an integral part of these statements.
2
The Topaz Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2001 2002 2001 2002
------------- ------------ ------------ ------------
Sales $4,899,963 $ 4,906,225 $9,486,245 $10,531,495
Cost of goods sold 3,386,618 4,722,456 6,666,915 8,878,853
------------- ------------ ------------ ------------
Gross profit 1,513,345 183,769 2,819,330 1,652,642
Selling, general and administrative expenses 1,038,315 1,106,611 1,877,097 2,027,688
------------- ------------ ------------ ------------
Earnings (loss) from operations 475,030 (922,842) 942,233 (375,046)
Other income (expense)
Exchange rate gain (loss) (111,084) (5,782) (17,727) 2,577
Interest expense (13,245) (41,381) (27,848) (58,596)
Gain (loss) on remeasurement 608,779 (226,439) 1,290,444 (295,235)
Other, net 15,789 11,032 30,459 68,935
------------- ------------ ------------ ------------
500,239 (262,570) 1,275,328 (282,319)
------------- ------------ ------------ ------------
NET EARNINGS (LOSS) $ 975,269 $(1,185,412) $2,217,561 $ (657,365)
============= ============ ============ ============
NET EARNINGS (LOSS) PER SHARE:
Basic $ 0.74 $ (0.56) $ 1.78 $ (0.31)
============= ============ ============ ============
Diluted $ 0.16 $ (0.56) $ 0.37 $ (0.31)
============= ============ ============ ============
The accompanying notes are an integral part of these statements.
3
The Topaz Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six months ended June 30,
2002
----------- ------------
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities
Net earnings (loss) $ 2,217,561 $ (657,365)
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities
Depreciation and amortization 74,294 85,727
Remeasurement of redeemable ordinary shares (202,827) 303,195
Changes in assets and liabilities:
Receivables 784,256 2,146,007
Inventories (3,033,915) (5,350,270)
Prepaid expenses and deposits/other assets (347,524) (157,953)
Payables 270,302 4,162,708
Accrued liabilities 322,995 (407,336)
----------- ------------
Net cash provided by operating activities 85,142 124,713
Cash flows from investing activities
Purchases of property and equipment (154,652) (205,080)
----------- ------------
Net cash used in investing activities (154,652) (205,080)
Cash flows from financing activities
Borrowings on line of credit, net 400,989 449,703
----------- ------------
Net cash provided by financing activities 400,989 449,703
----------- ------------
Net decrease in cash and cash equivalents 331,479 369,336
Cash and cash equivalents at the beginning of period 321,734 351,565
----------- ------------
Cash and cash equivalents at the end of period $ 653,213 $ 720,901
=========== ============
Supplemental disclosure of cash flow information:
Cash paid during the period
Interest $ 55,472 $ 70,766
=========== ============
The accompanying notes are an integral part of these statements.
4
The Topaz Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE A - FINANCIAL STATEMENTS
The unaudited consolidated financial statements of the Company and its
subsidiaries have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles of the United
States of America (GAAP) have been condensed or omitted pursuant to such
rules and regulations. The results of operations for interim periods are
not necessarily indicative of the results to be expected for the entire
fiscal year ending December 31, 2002. This Form 10-Q should be read in
conjunction with the Form 10-K that includes audited consolidated financial
statements for the years ended December 31, 2000 and 2001, and the related
consolidated statements of earnings, stockholders' equity and cash flows
for the three years in the period ended December 31, 2001.
NOTE B - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned Thailand subsidiaries, Creative Gems &
Jewelry Limited (Creative), Advance Gems & Jewelry Limited (Advance) and
Advance Gems Manufacturing Co., Ltd (Advance Manufacturing) (collectively,
the Subsidiaries). All significant intercompany accounts and transactions
have been eliminated. Except as otherwise disclosed all amounts are in U.S.
dollars.
NOTE C - INVENTORIES
Inventories consist of the following:
December 31, June 30,
2001 2002
------------ -------------
Raw materials $ 981,139 $ 3,091,016
Finished stones 17,200,314 19,684,384
Finished jewelry 823,347 1,579,670
------------ -------------
$ 19,004,800 $ 24,355,070
============ ============
5
The Topaz Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE D - EARNINGS (LOSS) PER COMMON SHARE
The components of basic and diluted earnings (loss) per share were as follows:
Three months ended June 30, Six months ended June 30,
--------------------------- --------------------------
2001 2002 2001 2002
----------- ------------- ----------- -------------
BASIC
Net earnings (loss) $ 975,269 $ (1,185,412) $ 2,217,561 $ (657,365)
=========== ============= =========== ===========
Weighted average
outstanding
shares of common stock 1,324,886 2,134,886 1,248,643 2,134,886
Net earnings (loss) per share $ 0.74 $ (0.56) $ 1.78 $ (0.31)
=========== ============= =========== ===========
DILUTED
Net earnings (loss) available
to common shareholders $ 975,269 $ (1,185,412) $ 2,217,561 $ (657,365)
=========== ============= =========== ===========
Weighted average
outstanding shares of
common stock 1,324,886 2,134,886 1,248,643 2,134,886
Dilutive effect of preferred
shares (1) 4,727,563 - (2) 4,803,806 - (2)
----------- ------------- ----------- -------------
Common stock and
potentially issuable common
stock 6,052,449 2,134,886 6,052,449 2,134,886
Net earnings (loss) per share $ 0.16 $ (0.56) $ 0.37 $ (0.31)
=========== ============= =========== ===========
(1) The dilutive effect of warrants outstanding during each of the presented
periods was immaterial to these computations.
(2) Excluded from computation due to their anti-dilutive effect.
NOTE E - SUBSEQUENT EVENT
Subsequent to June 30, 2002, the Company borrowed approximately $220,000 from a
company controlled by one of the directors. The borrowing is secured by a 60-day
note payable that bears 15% interest and could be extended at the option of the
Company for an additional 60-day period.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion of the financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and related notes thereto. The following discussion contains certain
forward-looking statements that involve risk and uncertainties. Our actual
results could differ materially from those discussed herein. Factors that could
cause or contribute to such differences include, but are not limited to, risks
and uncertainties related to the need for additional funds, the rapid growth of
the operations and our ability to operate profitably after the initial growth
period is completed. We undertake no obligation to publicly release the results
of any revisions to those forward-looking statements that may be made to reflect
any future events or circumstances.
Six and Three Months Ended June 30, 2002 and June 30, 2001
Sales. Total sales for six months ended June 30, 2002 were $10,531,495
compared to $9,486,245 for the six months ended June 30, 2001, an increase of
11%. The increase in sales is primarily attributed to increased revenues during
the three months ended March 31, 2002. Revenues for the three months ended June
30, 2002 were $4,906,225, which represents a slight increase from $4,899,963
during the comparable year ago quarter. Sales were relatively flat for the
second quarter ended June 30, 2002 compared to the same period of the previous
year as a result of continued softness in the U.S. economy. The retail market
in the U.S. represented approximately 70% of our annual sales for fiscal 2001.
Cost of Goods Sold. Cost of goods sold for the six months ended June 30, 2002
was $8,878,853 representing 84.3% of sales, compared to $6,666,915 for the six
months ended June 30, 2001, which represented 70.3% of sales. Cost of goods
sold for the three months ended June 30, 2002 was $4,722,456 or 96.3% of sales
as compared to $3,386,618 or 69.1% of sales during the three months ended June
30, 2001. The increase in cost of goods sold was due to a combination of the
following factors: the recovery of the Thai Baht currency, an increase in the
price of gold, an increase in the cost per unit of jewelry, an increase in the
consumption of gold in our products, and a shift in product mix.
- Recovery of the Thai Baht Currency. We bill 70% of our sales in U.S.
dollars. U.S. sales are not affected by fluctuations in the Thai currency.
However, we maintain direct and indirect overhead and administrative costs
in the Thai currency. As a result, conversions from Thai Baht transactions
into U.S. dollars are performed at a higher current rate, as compared to
the previous period, because of the increased value of the Baht.
- Increase in the Price of Gold. At the time we quote our customer's orders,
we typically estimate gold price fluctuations for the period of time in
which our customer's orders are in a material procurement, production, and
quality inspection stage prior to shipping. However, gold prices
unexpectedly increased for orders placed during the six months ending June
30, 2002. Specifically, from the period commencing approximately March 15,
2002 and ending June 30, 2002, gold prices increased approximately $50.00
per ounce. As a result, certain orders were exposed to higher gold prices
and resulted in lower margins.
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- An Increase in the Cost Per Unit of Jewelry. We maintain two specific
revenue streams: stone production and jewelry manufacturing. Stones
typically represent approximately 40% of total sales and jewelry typically
represent approximately 60% of total sales. The overhead costs of stone
production is primarily comprised of piecework (labor) and, therefore,
direct labor per piece remains the constant per unit production cost. We
use salaried skilled labor for jewelry manufacturing. Our sales are highly
seasonal so that the fourth quarter of each year can represent as much as
40% of total sales. A reduction in the number of skilled workers during the
slower months would significantly adversely impact our production output
during our busy months. Jewelry sales for the quarter ended June 30, 2002
decreased by 13% as compared to sales during the quarter ended March 31,
2002, while overhead costs remained constant. As a result, cost per unit of
jewelry production rose during the quarter ended June 30, 2002 causing a
erosion in our gross margin.
- Increase in the Consumption of Gold. We allocate overhead costs to jewelry
sales based upon grams of gold consumed in the quarter. Profit margins for
gold jewelry products are significantly lower than profit margins for stone
or diamond products. Gold consumption in the first and second quarter of
the year ending December 31, 2002 was approximately $700,000 and
$1,100,000, respectively. Jewelry sales during the three months ended June
30, 2002 as compared to the three months ended March 31, 2002, were
relatively flat. However, applied overhead increased by 67% due to an
increase in consumption of gold. Over an extended period of time gold
consumption should average normal production levels for costing purposes.
To address this issue, we are planning to change the method of overhead
allocation to allocation on the basis of direct labor hours starting with
January 1, 2003.
- Shift in Product Mix. We allocate production costs of goods sold based upon
the average cost of certain types of stones. Significant shifts in demand
to smaller stones cause actual gross margins to fluctuate. We apply an
average costing method due to the significant number of product codes we
employ which, over an extended period of time, should represent the actual
results of the overall flow of costs. Effective July 1, 2002, we
implemented the use of codes for sub-groups within stone categories. The
sub-groups should improve our overall accuracy in precious gems and
semi-precious gems costing when product mix varies significantly. We
implemented sub-grouping for diamonds prior to the end of the second
quarter. The net effect increased diamond ending inventory values for the
quarter ended June 30, 2002 by $356,146 and correspondingly increased net
income by the same amount.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $1,106,611, or 22.6% of sales, and $2,027,688, or
19.3% of sales, respectively, for the three and six months ended June 30, 2002,
as compared to $1,038,315, or 21.2% of sales, and $1,877,097 or 19.8% of sales,
respectively, for the three and six months ended June 30, 2001. The increase is
primarily attributed to an increase in administrative salaries.
Earnings (Loss) from Operations. Net loss from operations for the three and
six months ended June 30, 2002 was ($922,842) and ($375,046), respectively,
compared to net earnings from operations of $475,030 and $942,233, respectively,
for the three and six months ended June 30, 2002. The losses are primarily due
to an increase in the cost of sales.
8
Other Income (Expenses). Other income (expense) was ($262,570) and
($282,319), respectively, for the three and six months ended June 30, 2002, as
compared to $500,239 and $1,275,328, respectively, for the three and six months
ended June 30, 2001, or a decrease of 152.5% and 122.1%, respectively. The
change is primarily due to gains (losses) resulting from currency fluctuations.
The remeasurement gain (loss) was ($226,439) and ($295,235), respectively, for
the three and six months ended June 30, 2002, compared to $608,779 and
$1,290,444, respectively, for the three and six months ended June 30, 2001. The
reduced effect of currency fluctuations was principally due to our using U.S.
Dollars for a majority of our sales transactions. We implemented a new software
package in June 2001 to record the Baht transactions in U.S. dollars as they
occur. Recording the transactions as they occur in U.S. dollars is intended to
reduce our exposure to currency remeasurement gains and losses. Remeasurement of
the ordinary shares for the six months ended June 30, 2002 represents a currency
loss on remeasurement of ($295,235).
Net Earnings (Loss). Net loss for the three and six months ended June 30,
2002 was ($1,185,412) and ($657,365), respectively, compared to earnings of
$975,269 and $2,217,561, respectively, for the three and six months ended June
30, 2001. The difference is largely attributed to an increase in cost of sales
and effects of foreign currency fluctuations.
Liquidity and Capital Resources
Our principal source of working capital is income from operations,
borrowings under our revolving credit facilities and short-term loans from a
company affiliate. As of June 30, 2002, we had a cash and cash equivalent
balance of $720,901 and working capital of $18,795,915.
Our operating activities provided cash of $124,713 for the six months ended
June 30, 2002 as compared to $85,412 for the six months ended June 30, 2001. The
increase in cash provided by operating activities resulted primarily from
increases in accounts payable. Our accounts payable balance increased as a
result of delayed vendor payments caused by negative operating profits and
increases in inventory balances.
The net cash provided by financing activities for the six months June 30,
2002 was $449,703 compared to $400,989 for the six months ended June 30, 2001.
This net increase is due to new borrowings on our lines of credit.
We have line-of-credit arrangements with two Thai financial institutions
and a line of credit arrangement with a U.S. financial institution entered into
in October 1999, April 2000 and October 2001, respectively. The Thai lines are
renewable automatically on a yearly basis and the U.S. line expires in September
2002; the lines are also subject to the banks' periodic reviews resulting in
adjustment of our credit limit. The Thai lines bear interest at a rate equal to
Thai LIBOR plus two percent (9.25%-10% as of June 30, 2002); the U.S. line bears
interest at prime plus 1.25% (6% as of June 30, 2002). The 1999 line is
personally guaranteed by two of our directors and collateralized by various real
estate properties belonging to us and one of our directors. The 2000 line is
also guaranteed by two of our directors and secured by a deed on a real estate
property owned by a related party. The U.S. line is secured personally by one of
our directors, our U.S. receivables and inventory and by a lien on various Thai
real estate properties and fixed assets of a related party. As of June 30,
9
2002, approximately $2,192,910 was available for commercial draft borrowing
under both the 1999 and 2000 lines. As of June 30, 2002, the outstanding
balance under the Thai lines of credit and the US line of credit were $559,012
and $1,939,517, respectively. The effects on liquidity of carrying large values
of inventory can be referenced by days of sales in inventory. On average, for
the twelve months ended June 30, 2002 and 2001, inventory would remain on the
books for 419 days and 378 days, respectively, until sold. The inventory is
classified as a current asset on the balance sheet but restricts the use of
working capital until the inventory is sold. The increase in inventory days was
caused by the build up of inventories to support the replenishment of
inventories with wholesalers and retailers.
Inventory is valued by applying a moving average method for valuation.
Under this method of valuation, generally, the finished stone inventory does not
progressively devalue with age and the prices per carat remain relatively
stable. The average cost includes the raw cost of the product plus any
additional costs to bring it to its current condition including processing,
transportation, insurance and holding costs. Variances in valuation under the
moving average cost method occur when stone prices, overhead cost and other
related costs, which make up the value of the inventory, vary significantly up
or down within the fiscal period. As such, material variances in the inventory
costs are identified and valued separately to reflect true value.
Our business can be classified into two major groups including sale of
finished jewelry and finished stones, to a lesser degree. Most of our finished
jewelry is made to order and is shipped when completed. Inventory valuations
include the lesser of manufactured cost or market valuation per unit times the
quantities on hand. Lower of cost or market is referenced by recent sale prices
of the finished stones compared to the cost to produce or acquire such stones.
If recent sales of an existing stone are not available, current market price
samples in the selling market will dictate the lower of cost or market for
valuation purposes.
Management believes we have the ability to meet our current and anticipated
financing needs for the next twelve months with the facilities in place and
funds from operations, however, given our growth prospects, we may need to seek
increases in our credit facilities during the upcoming year to sustain further
revenue growth.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Currency Fluctuations
1. Forward-Looking Statements
From time to time, we may make certain statements that contain
"forward-looking" information. Words such as "anticipate", "estimate",
"project", "believe" and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements may be made by
management orally or in writing, including, but not limited to, in press
releases, as part of the Financial Information or Management's Discussion and
Analysis or Plan of Operations and as part of other sections of this
registration statement.
Such forward-looking statements are subject to certain risks, uncertainties
and assumptions, including without limiting those identified below. Should one
or more of these risks or uncertainties materialize, or should any of the
underlying assumptions prove incorrect, actual results of current and future
operations may vary materially from those anticipated, estimated or projected.
10
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their respective dates.
2. Exchange Rate Information
Our Consolidated Financial Statements are prepared in U.S. dollars. The
financial statements of our foreign subsidiaries are remeasured into U.S.
dollars in accordance with Statement of Financial Accounting Standards No. 52.
Fluctuations in the value of foreign currencies cause U.S. dollar amounts to
change in comparison with previous periods and, accordingly, we cannot quantify
in any meaningful way, the effect of such fluctuations upon future income. This
is due to the constantly changing exposure in the Thai Baht for our Thai
subsidiaries.
As of June 30, 2002, the average daily interbank exchange rate for the Baht
was trading at 41.58 Baht to one US dollar. The exchange rate in Thailand has
shown signs of recovery in early 2002 and we anticipate this to stabilize
through the latter part of 2002. Weakening in the Baht may come from the gap
between the U.S. and Thai interest rates giving a further boost to exports.
Regions of Thailand continue to promote exports to strengthen their economies.
We are unable to predict whether the trends noted above would have a material
effect on our future financial condition or the results of operations and, if
so, whether such an effect will be positive or negative.
3. Exchange Rate Fluctuation
Thai Baht
-----------------------------------------------------------
First Qtr Second Qtr Third Qtr Fourth Qtr
2002
High 44.57 43.82
Average 43.80 42.85
Low 43.00 41.26
2001
High 45.00 45.85 45.87 45.07
Average 43.29 45.45 44.98 44.40
Low 42.19 44.68 43.92 43.37
2000
High 38.30 39.45 42.77 44.49
Average 37.96 38.67 40.97 43.44
Low 36.71 37.72 39.10 41.88
Future volatility in the Baht may come from the continued strength in the
Thai exports. Other Asian countries are showing overall weakness in exports and
large technology industries, with the exception of Japan. Japan's problems are
primarily domestic. Asian countries overall will weaken with some support
domestically by China and India. We do not anticipate Thailand to be effected by
Japan's economic downturn and that of surrounding Asian region's, however; there
can be no assurance of this.
11
We anticipate the cost of raw materials, which includes precious and
non-precious metals, to show moderate cost decreases in the short-term.
4. Foreign Currency Risk
As of June 30, 2001, we had no open forward-contracts. Our Thai
subsidiaries keep their books in the Thai Baht currency. As a result, the Thai
balances are exposed to currency gains and losses depending upon the currency
rate fluctuations when compared to the US dollar for the respective periods.
The currency and remeasurement gains and (losses) for the three and six months
ended June 30, 2002 and 2001, were ($226,439), ($295,235), $1,290,444, and
$608,779, respectively.
5. Interest Rate Fluctuations
Our interest expenses and income are sensitive to changes in interest
rates. As of June 30, 2002, we had $5,269,931 in interest bearing obligations
at various rates, and any fluctuation in the interest rate will have a direct
impact on our interest expenses, cash flow and results of operations.
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.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
99: Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
11
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended
June 30, 2002
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 19, 2002 THE TOPAZ GROUP, INC.
By: /s/ Terrance C. Cuff
----------------------------------
Name: Terrance C. Cuff
Title: Chief Financial Officer
13