10QSB 1 purw10q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 -------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ___________ to ___________ Commission File No.: 0-10566 ------- Pure World, Inc. ---------------- (Exact name of small business issuer as specified in its charter) Delaware 95-3419191 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 376 Main Street, Bedminster, New Jersey 07921 --------------------------------------------- (Address of principal executive offices) (908) 234-9220 -------------- (Issuer's telephone number) N/A --- (Former name, former address and former fiscal year, if changed since last report) 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 [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of April 30, 2005, the issuer had 8,005,494 shares of its common stock, par value $.01 per share, outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] PART I. - FINANCIAL INFORMATION ------ --------------------- ITEM 1. - Financial Statements ------ -------------------- PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 2005 (in $000's) (UNAUDITED) ASSETS ------ Current assets: Cash and cash equivalents $ 1,003 Accounts receivable, net of allowance for uncollectible accounts and returns and allowances of $305 4,120 Inventories 8,764 Other current assets 737 --------- Total current assets 14,624 Plant and equipment, net 5,360 Investment in unaffiliated natural products company 1,510 Notes receivable from affiliates 164 Goodwill 1,144 Other assets 249 --------- Total assets $ 23,051 ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 1,875 Short-term borrowings 443 Accrued expenses and other 1,944 --------- Total current liabilities 4,262 Long-term debt 1,447 --------- Total liabilities 5,709 --------- Stockholders' equity: Common stock, par value $.01; 30,000,000 shares authorized; 8,082,093 shares issued and outstanding 81 Additional paid-in capital 43,152 Accumulated deficit ( 25,891) --------- Total stockholders' equity 17,342 --------- Total liabilities and stockholders' equity $ 23,051 ========= See accompanying notes to consolidated financial statements. 2 PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in $000's, except per share data) (UNAUDITED) Three Months Ended March 31, ---------------------- 2005 2004 -------- -------- Revenues: Sales $ 7,729 $ 7,613 Interest income 5 2 ------- ------- Total revenues 7,734 7,615 ------- ------- Expenses: Cost of goods sold 5,693 6,082 Selling, general and administrative 1,315 1,305 ------- ------- Total expenses 7,008 7,387 ------- ------- Income before income taxes 726 228 Provision for income taxes 25 26 ------- ------- Net income $ 701 $ 202 ======= ======= Basic and diluted net income per common share $ .09 $ .03 ======= ======= See accompanying notes to consolidated financial statements. 3 PURE WORLD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in $000's) (UNAUDITED) Three Months Ended March 31, ----------------------- 2005 2004 -------- -------- Cash flows from operating activities: Net income $ 701 $ 202 Adjustments: Depreciation 414 438 Change in inventories 219 ( 108) Change in receivables 575 ( 1,486) Change in accounts payable and other accruals ( 105) 507 Other, net 124 ( 65) -------- -------- Net cash provided by (used in) operating activities 1,928 ( 512) -------- -------- Cash flows from investing activities: Purchase of plant and equipment ( 61) ( 116) Repayment of loans to affiliates and others 2 14 -------- -------- Net cash used in investing activities ( 59) ( 102) -------- -------- Cash flows from financing activities: Repurchase of common stock ( 9) ( 2) Issuance of common stock in connection with the exercise of stock options - 11 Term loan borrowings - 58 Term loan repayments ( 114) ( 114) Net revolving line of credit borrowings (repayments) ( 1,373) 280 -------- -------- Net cash provided by (used in) financing activities( 1,496) 233 -------- -------- Net increase (decrease) in cash and cash equivalents 373 ( 381) Cash and cash equivalents at beginning of period 630 1,200 -------- -------- Cash and cash equivalents at end of period $ 1,003 $ 819 ======== ======== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 52 $ 56 ======== ======== Income taxes $ 10 $ 18 ======== ======== See accompanying notes to consolidated financial statements. 4 PURE WORLD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 AND 2004 (UNAUDITED) 1. General ------- The accompanying unaudited consolidated financial statements of Pure World, Inc. and subsidiaries ("Pure World" or the "Company") as of March 31, 2005 and for the quarters ended March 31, 2005 and 2004 reflect all material adjustments consisting of only normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004 as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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. Actual results could differ from those estimates. The results of operations for the quarters ended March 31, 2005 and 2004 are not necessarily indicative of the results to be expected for the entire year or any other period. 2. Stock Options ------------- The Company applies Accounting Principles Board (APB) Opinion 25 and related interpretations in accounting for its options. Accordingly, no compensation cost has been recognized for stock options issued. Had compensation cost for the issued stock options been determined based upon the fair values at the dates of awards under those plans 5 consistent with the method of FASB Statement 123, the Company's net income and net income per share would have been reduced to the pro forma amounts indicated below: Three Months Ended March 31, ------------------ 2005 2004 ------ ------ Net income (in $000's): As reported $ 701 $ 202 Pro forma compensation expense ($ 18 ($ 29) Pro forma net income $ 683 $ 173 Basic and diluted net income per share: As reported $ .09 $ .03 Pro forma $ .08 $ .02 3. Inventories ----------- At March 31, 2005, inventories are comprised of the following (in $000's): Raw materials $ 1,505 Work-in-progress 1,298 Finished goods 5,961 -------- Total inventories $ 8,764 ======== 4. Investment in Unaffiliated Natural Products Company --------------------------------------------------- In May 1996, the Company purchased 500 shares of common stock representing a 25% interest in Gaia Herbs, Inc. ("Gaia") for approximately $1 million. In June 1997, the Company purchased an additional 200 shares of common stock for $500,000, increasing its equity ownership to 35% of Gaia's outstanding shares of common stock ("Pure World's Gaia Stock"). Pure World's Gaia Stock is non-voting. The Company loaned Gaia $200,000 in July 1997 payable interest only on a quarterly basis for the first four years and 36 monthly payments of principal and interest thereafter (the "Pure World Loan"). The Pure World Loan bears interest at 6.49% which was the imputed rate required under the Internal Revenue Code and is classified within other current assets in the consolidated balance sheet. Gaia has not kept strict adherence to the agreed upon 36 month payment schedule, but continues to make payments. The Pure World Loan balance is approximately $41,000 at March 31, 2005. The parties also agreed that if any other party acquired voting shares, Pure World's Gaia Stock would become voting stock. 6 Additionally, the parties agreed that Gaia and the principal stockholder of Gaia (the "Principal Stockholder") would have a right of first refusal to acquire any Gaia stock sold by Pure World and that Pure World would have a right of first refusal to acquire any Gaia stock sold by Gaia or the Principal Stockholder. The Company is monitoring its Gaia Investment and discusses its position with Gaia from time to time. Gaia manufactures and distributes fluid botanical extracts for the high-end consumer market. Gaia is a privately held company. The Company is accounting for this investment by the cost method, as the Company does not have the ability to influence the operating or financial decisions of Gaia. 5. Borrowings ---------- Borrowings consisted of the following at March 31, 2005 (in $000's): Revolving line of credit to a bank, pursuant to a $5 million secured line of credit bearing annual interest at Prime plus .5% (6.25% at March 31, 2005) maturing in December 2006 $ - Loan payable to a bank, collateralized by certain property and equipment, bearing annual interest at Prime plus .75% (6.5% at March 31, 2005) maturing in December 2009 1,643 Lease payable for equipment for gross assets of $300,000 with imputed interest at approximately 5.9% maturing in October 2006 157 Leases payable for equipment 90 ------- Total 1,890 Less: Current portion of borrowings 443 ------- Long-term debt $ 1,447 ======= At March 31, 2005, the Company was in compliance with the covenants of its loan agreements. 7 Interest expense was $52,000 and $56,000 for the three months ended March 31, 2005 and 2004, respectively. Interest expense is included in selling, general and administrative expenses on the consolidated statements of operations. 6. Common Stock ------------ Stock Repurchase ---------------- In connection with the Company's common stock repurchase plans, 5,886 shares of common stock were purchased for approximately $9,053 in the three months ended March 31, 2005. All shares repurchased were canceled. 7. Net Income Per Common Share --------------------------- Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per common share is computed by dividing net income by the sum of the weighted-average number of common shares outstanding plus the dilutive effect of shares issuable through the exercise of stock options. The shares used for basic net income per common share and diluted net income per common share are reconciled below. (Shares in Thousands) 2005 2004 ---- ---- Weighed average shares outstanding for basic net income per common share 8,085 7,516 Dilutive effect of stock options 206 285 ----- ----- Average shares outstanding for diluted income per common share 8,291 7,801 ===== ===== Excluded from the calculation of diluted net income per common share for the quarters ended March 31, 2005 and 2004 are 587,950 and 629,650 common stock options, respectively, which, if included, would have an anti-dilutive effect. 8 8. Income taxes ------------ The components of income tax expense for the three months ended March 31, 2005 and 2004 are as follows ($000 Omitted): Three Months Ended March 31, ------------------- 2005 2004 -------- -------- Federal-Current $ 5 $ 7 State-Current 20 19 ----- ----- Total $ 25 $ 26 ===== ===== 9. Recent Accounting Standards --------------------------- In November 2004, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides guidance on determining other-than-temporary impairments and its application to marketable equity and debt securities accounted for under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," as well as investments accounted for under the cost method of accounting. In September 2004, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") EITF Issue 03-1-1, which delayed the effective date for the measurement and recognition guidance contained in EITF 03-1 pending finalization of the draft FSP EITF Issue 03-1-a, "Implementation Guidance for the Application of Paragraph 16 of EITF 03-1." The disclosure requirements of EITF 03-1 remain in effect. The Company adopted the disclosure requirements of EITF 03-1 as of December 31, 2004. The adoption of the recognition and measurement provisions of EITF 03-1 when finalized are not expected to have a material impact on the Company's results of operations, financial position or cash flows. In November 2004, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs, an amendment of Accounting Research Bulletin ("ARB") No. 43, Chapter 4" ("SFAS No. 151"). SFAS No. 151 amends ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current-period charges. In addition, SFAS No. 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company is currently assessing the impact that SFAS No. 151 will have on the results of operations, financial position or cash flows. 9 In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R addresses the accounting for share-based payments to employees, including grants of employee stock options. Under the new standard, companies will no longer be able to account for share-based compensation transactions using the intrinsic method in accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees". Instead, companies will be required to account for such transactions using a fair-value method and recognize the related expense associated with share-based payments in the consolidated statement of operations. SFAS 123R will be effective as of the beginning of the first fiscal year beginning after June 15, 2005. The Company is currently assessing the impact that SFAS 123R will have on the results of operations, financial positions and cash flows. 10 ITEM 2. - Management's Discussion and Analysis of Financial Condition and ------- -------------------------------------------------------------------- Results of Operations --------------------- This Form 10-QSB contains forward-looking statements which may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future periods or performance suggested by these statements. Liquidity and Capital Resources ------------------------------- At March 31, 2005, the Company had cash and cash equivalents of approximately $1 million. Cash equivalents of $696,000 consisted of U.S. Treasury bills with an original maturity of less than three months with yields ranging between 2.1% and 2.8%. The Company had working capital of $10.4 million at March 31, 2005. At March 31, 2005 the Company was in compliance with the covenants of its loan agreements. The management of the Company believes that its financial resources and anticipated cash flows will be sufficient for future operations for the next twelve months. Net cash of $1.9 million was provided by operations in the quarter ended March 31, 2005. The net income of $701,000 adjusted for depreciation of $414,000, combined with decreases in receivables of $575,000 and inventories of $219,000 were the primary reasons for the cash provided in operations. Net cash of $512,000 was used in operations in the quarter ended March 31, 2004. The net income of $202,000 adjusted for depreciation of $438,000 combined with the increase in accounts payable and other accruals of $507,000, offset by the increase in receivables of $1,486,000 were the primary reasons for the cash used in operations. Net cash of $59,000 and $102,000 was used in investing activities in the three months ended March 31, 2005 and 2004, respectively, due primarily to the purchase of equipment. Cash used in financing activities in the first quarter of 2005 was $1,496,000 compared to net cash provided by financing activities of $233,000 in the same period in 2004. In the first quarter of 2005, $1,487,000 was used to pay down debt and $9,000 was used to repurchase common stock. In the first quarter of 2004, $114,000 used to pay down debt and $2,000 used to repurchase common stock was offset by $280,000 of net revolving line of credit borrowings, $58,000 of term loan borrowing and $11,000 received in connection with the issuance of common stock in connection with the exercise of stock options. For more information on borrowings, see Note 5 of Notes to Consolidated Financial Statements. 11 Results of Operations --------------------- The Company's operations resulted in net income of $701,000, or $.09 basic and diluted income per common share, for the three months ended March 31, 2005 compared to net income of $202,000, or $.03 basic and diluted income per common share, for the comparable period in 2004. The increase in net income for the quarter ended March 31, 2005, compared to the quarter ended March 31, 2004 was due primarily to a higher gross profit on the mix of the products that were sold in the quarter. The Company, through its wholly-owned subsidiary, Pure World Botanicals, Inc. had sales of $7.7 million in the quarter ended March 31, 2005, compared to sales of $7.6 million in the comparable quarter of 2004, an increase of approximately 2%. For the three months ended March 31, 2005 and 2004, the gross margin (sales less cost of goods sold) was $2,036,000, or 26% of sales and $1,531,000, or 20% of sales, respectively. Pure World offers a wide range of products and the gross profit can vary greatly based upon such factors as the cost of raw material, production time, and processes used. Interest income was $5,000 for the three month period ended March 31, 2005, compared to $2,000 for the three month period ended March 31, 2004. Higher yields on investments was the primary reason for the increase. Selling, general and administrative expenses (consisting of personnel, professional and all other expenses) were $1,315,000 for the quarter ended March 31, 2005 compared to $1,305,000 for the comparable period in 2004. Personnel expenses were $679,000 in the first quarter of 2005, compared to $567,000 in the first quarter of 2004, an increase of $112,000 or 20%. Increases in headcount were the primary reasons for the increase. Professional fees, consisting of legal, accounting and consulting fees were $103,000 in the first quarter of 2005, compared to $179,000 in the first quarter of 2004, a decrease of $76,000 or 42%. Lower legal fees were the primary reason for the decrease. All other expenses were $533,000 in the first quarter of 2005, compared to $559,000 in the first quarter of 2004, a decrease of $26,000 or 5%. Off-Balance Sheet Arrangements ------------------------------ The Company has no off-balance sheet arrangements. 12 Item 3. - Controls and Procedures ------- ----------------------- As of the end of the period covered by this report, the Company carried out, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended March 31, 2005 that have materially affected or are reasonably likely to materially affect the company's internal controls over financial reporting evaluation. Compliance with Section 404 of Sarbanes-Oxley Act ------------------------------------------------- In order to achieve compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (the "Act") by December 31, 2006, the Company expects to begin, in fiscal 2005, the system and process documentation and evaluation needed to comply with Section 404. 13 PART II. OTHER INFORMATION ------- ----------------- ITEM 1. Legal Proceedings ------- ----------------- None. ITEM 2. Unregistered Sale of Equity Securities and Use of Proceeds ------ ---------------------------------------------------------- Purchase of Equity Securities ----------------------------- In May 2002, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 1,000,000 shares of its common stock. This program has no expiration date. The following table sets forth certain information about the Company's repurchase of shares under this plan during the quarter ended March 31, 2005. SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES (COMMON STOCK) (c) Total Number of (d) Maximum Shares Number of Purchased as Shares that Part of May Yet Be (a) Total Publicly Purchased Number of (b) Announced Under the Shares Average Price Plans or Plans or Period Purchased Paid per Share Programs Programs -------------------------------------------------------------------------------- January 1, 2005 - January 31, 2005 147 $ 1.51 147 825,098 February 1, 2005 - February 28, 2005 5,701 1.54 5,701 819,397 March 1, 2005 - March 31, 2005 38 1.33 38 819,359 Total 5,886 $ 1.54 5,886 819,359 ITEM 3. Defaults Upon Senior Securities ------- ------------------------------- None. ITEM 4. Submission of Matters to a Vote of Security Holders ------- --------------------------------------------------- None. 14 ITEM 5. Other Information ------- ----------------- None. Item 6. - Exhibits and Reports on Form 8-K ------- -------------------------------- The following exhibits are filed as part of this report: Exhibit Number Exhibit Method of Filing ------ ------- ---------------- 3.1 (a) Restated Certificate of Incorporated by reference to Incorporation of the Company Computer Memories Incorporated Form 10-K for the year ended March 31, 1987. (b) Certificate of Amendment Incorporated by reference to of Restated Certificate of Exhibit A to Computer Memories Incorporation of the Company Incorporated Proxy Statement dated February 16, 1990. (c) Certificate of Amendment of Incorporated by reference to Restated Certificate of Incor- American Holdings, Inc. poration of the Company Form 10-KSB for the year ended December 31, 1992. (d) Certificate of Amendment of Incorporated by reference to Restated Certificate of Incor- Pure World, Inc. Form 10-KSB poration of the Company for the year ended December 31, 1996. 3.2 By-laws, as amended Incorporated by reference to American Holdings, Inc. Form 10-KSB for the year ended December 31, 1992. 31.1 Certification pursuant to Section Filed herewith. 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to Section Filed herewith. 302 of the Sarbanes-Oxley Act of 2002 32 Certification pursuant to Section Filed herewith. 906 of the Sarbanes-Oxley Act of 2002 15 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. PURE WORLD, INC. Dated: May 13, 2005 By: /s/ Sue Ann Merrill ---------------------------- Sue Ann Merrill Chief Financial Officer, Vice President & Treasurer (Principal Financial and Accounting Officer, and officer duly authorized to sign on behalf of the small business issuer) 16 EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Paul O. Koether, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Pure World, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. May 13, 2005 /s/ Paul O. Koether ---------------------------------- Paul O. Koether Chairman EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Sue Ann Merrill, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Pure World, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. May 13, 2005 /s/ Sue Ann Merrill ---------------------------------- Sue Ann Merrill Chief Financial Officer Exhibit 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. 1350, as adopted), Paul O. Koether, the Chairman of Pure World, Inc., (the "Company"), and Sue Ann Merrill, the Chief Financial Officer, Treasurer and Assistant Secretary of the Company each hereby certifies that, to the best of their knowledge: 1. The Company's Quarterly Report on Form 10-QSB for the period ended March 31, 2005, to which this Certification is attached as Exhibit 32 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 13, 2005 /s/ Paul O. Koether ----------------------------------- Paul O. Koether Chairman /s/ Sue Ann Merrill ----------------------------------- Sue Ann Merrill Chief Financial Officer