10-K 1 az10k_dec312008.htm 10-K az10k_dec312008.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
OR
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______

Commission File Number: 0-25356


AZZURRA HOLDING CORPORATION

(Exact Name of Registrant as Specified in its Charter)


DELAWARE
  
77-0289371
(State or Other Jurisdiction of
  
(IRS Employer Identification Number)
Incorporation or Organization)
    

 
6080 CENTRE DRIVE, SUITE 600, LOS ANGELES, CALIFORNIA 90045
(310) 242-5699
(Address and Telephone Number of Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.0001 PAR VALUE


Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No x

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
 
 
 

Check whether the issuer (1) 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 o

Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of “large accelerated filer” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer
o
  
Accelerated Filer
o
Non-Accelerated Filer
(Do not check if a smaller reporting company)
o
  
Smaller Reporting Company
x

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).  Yes x   Noo
 
The aggregate market value of voting stock held by non-affiliates of registrant, based upon the closing price of $0.001 for shares of the registrant’s common stock on June 30, 2008, the last business day of the registrant’s most recently completed second fiscal quarter as reported in the National Quotation Bureau’s “pink sheets.”, was approximately $100.00.  In calculating such aggregate market value, shares of Common Stock held by each officer, director and holder of 5% or more of the outstanding Common Stock (including shares with respect to which a holder has the right to acquire beneficial ownership within 60 days) were excluded because such persons may be deemed to be affiliates.  This determination of affiliate status is not necessarily a conclusive determination for other purposes.
 
Indicate by check mark whether the registrant has filed all documents and reports requird to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes x No o

The number of shares of Common Stock outstanding as of April 7, 2009 was 100,000.
TABLE OF CONTENTS

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The following information contains forward-looking statements, which involve risks and uncertainties. Forward-looking statements are characterized by words such as "plan," "expect," "believe," "intend," "would", "will" and similar words. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under, "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Certain Risk Factors Affecting Azzurra Holding Corporation," and elsewhere in this Annual Report on Form 10-K.

PART 1

ITEM 1. 
DESCRIPTION OF BUSINESS
 
Company Overview

Azzurra Holding Corporation, formerly, Wave Wireless Corporation (“Azzurra”, the “Company,” “we,” “us,” “our”) was incorporated in 1991 as a Delaware Corporation.  Our executive offices are located at 6080 Centre Drive, Suite 600, Los Angeles, California 90045, and our telephone number is 310-242-5699.  

On October 31, 2006, Azzurra filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (“Court”).  During the pendency of the bankruptcy proceedings, and with Court approval, the Company sold substantially all of its assets prior to December 31, 2006.  The Company’s remaining operating assets were sold in August 2007, subsequent to the confirmation by the Court on June 14, 2007 of a Joint Plan of Reorganization.  Because of the sale of all of our operating businesses, the Company has no ongoing operations.   The Board has determined to maintain the Company as a public shell corporation, which will seek suitable business combination opportunities.  The Board believes that a business combination with an operating company has the potential to create greater value for the Company’s stockholders than a liquidation or similar distribution.

During the year ended December 31, 2008, the Company was a non-operating shell company and its business operations were limited to sustaining the public shell, and winding down the affairs of the Company’s wholly-owned subsidiary, WaveRider Communications Corporation.

Employees
 
As of December 31, 2008, we did not have any full- or part-time employees.  Our President and Chief Executive Officer, who also serves as our Chief Financial Officer, works part-time as a consultant to the Company.

ITEM 1A.                                RISK FACTORS

An investment in our common stock is subject to many risks. You should carefully consider the risks described below, together with all of the other information included in this Annual Report on Form 10-K, including the financial statements and the related notes, before you decide whether to invest in our common stock. Our business, operating results and financial condition could be harmed by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you could lose all or part of your investment.


THE COMPANY LACKS OPERATIONS AND HAS LOSSES WHICH ARE EXPECTED TO CONTINUE INTO THE FUTURE.

As a result of the sale of substantially all of the Company’s operating assets, the Company has no operations from which to derive revenue.  The Company’s operating history is not a useful measure upon which an evaluation of its future success or failure can be made.  The Company’s ability to achieve and maintain profitability and positive cash flow is dependent upon its ability to generate revenues, and the ability to raise the capital necessary to acquire an operating entity or engage in a merger or other transaction with an operating entity.

The Company is a “shell” corporation as that is defined under Rule 12b-2.  Based upon current plans, the Company expects to incur operating losses in future periods.  The Company cannot guarantee that it will be successful in generating revenues in the future.

 IF THE COMPANY DOES NOT SUCCESSFULLY CONSUMMATE A BUSINESS COMBINATION, THE COMPANY WILL REQUIRE ADDITIONAL FUNDS

For the Company to once again engage in operations, it will either need to raise additional funds through public or private debt or sale of equity, or it will need to acquire or enter into a merger transaction with an operating entity. The Company is currently seeking to engage in such a merger with an operating entity, but there is no guarantee that this merger will reach a successful completion.   If the merger fails and the Company seeks additional financing, this financing may not be available when needed.  Even if this financing is available, it may be on terms that the Company deems unacceptable or are materially adverse to its interests with respect to dilution of book value, dividend preference, liquidation preference, or other terms.  

THE COMPANY IS NOT AN OPERATING COMPANY AND DOES NOT HAVE ANY SIGNIFICANT CAPITAL.

Because the Company does not have significant capital, it must limit its operations and there is little chance that operations will begin at any time soon, as a result of such limited capital, unless the Company obtains additional funding to acquire an operating entity or enters into a merger transaction with an operating entity.

BECAUSE SDS CAPITAL SPC, LTD. GROUP OWNS MORE THAN 50% OF THE COMPANY’S OUTSTANDING COMMON SHARES AND WILL BE ABLE TO DECIDE WHO WILL BE OUR DIRECTORS, YOU MAY NOT BE ABLE TO ELECT ANY DIRECTORS.

SDS Capital Group SPC, Ltd. (“SDS”) owns 80,000 common shares, constituting 80% of the Company’s outstanding common stock, and controls the Company.  As a result, unless the Company issues more shares to persons other than SDS or SDS sells some of its shares, SDS will be able to elect all of the Company’s directors and control its operations.  If the Company does enter into an acquisition or merger transaction, the Company may issue a significant number of shares in connection with that transaction.  This could result in a reduction in value to the common stock you own because of the ineffective voting power. SDS’ majority ownership could adversely affect the value of your shares and prevent the Company from undergoing a change of control in the future.

THE COMPANY HAS NOT PAID DIVIDENDS AND NONE ARE ANTICIPATED.

To date, the Company has paid no cash dividends on its common stock.  For the foreseeable future, the Company expects that earnings generated from the Company’s operations, if any, will be retained for use in its business and not to pay dividends.


"PENNY STOCK" RULES MAY MAKE BUYING OR SELLING THE COMPANY’S COMMON STOCK DIFFICULT.

Trading in the Company’s securities is subject to the “Penny Stock” Rules.

The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker- dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s regulations concerning the transfer of penny stock. These regulations require broker-dealers to:
 
·  
Make a suitability determination prior to selling a penny stock to the purchaser;

·  
Receive the purchaser’s written consent to the transaction; and

·  
Provide certain written disclosures to the purchaser.

These requirements may restrict the ability of broker-dealers to sell the Company’s common stock and may affect your ability to resell our common stock.

ITEM 1B.        UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. 
DESCRIPTION OF PROPERTY 
 
We do not own any real property.  The Company’s corporate headquarters are located in the offices of our President and Chief Executive Officer, located in Los Angeles, California.  The Company is not obligated under the terms of the lease, which continues through April 2009.

ITEM 3. 
LEGAL PROCEEDINGS 
 
None.

ITEM 4. 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
 
None.


PART II 

ITEM 5. 
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
There is currently no established public trading market for the Company’s common stock, which is quoted in the National Quotation Bureau’s “pink sheets.”  The following table sets forth the range of high and low sale prices of our common stock, as quoted in the National Quotation Bureau’s “pink sheets”.  These quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.   

On April 9, there were three stockholders of record of our common stock.
   
PRICE RANGE OF COMMON STOCK
  
             
   
HIGH
    
LOW
  
Year Ended December 31, 2008:
            
First Quarter
   $ 0. 001     $ 0. 001  
Second Quarter
     0. 001       0. 001  
Third Quarter
     0. 001       0. 001  
Fourth Quarter
     0. 001       0. 001  
                 
Year Ended December 31, 2007:
                
First Quarter
   $ 0.001     $ 0.001  
Second Quarter
     0.001       0.001  
Third Quarter
     0.001       0.001  
Fourth Quarter
     0.001       0.001  
 
DIVIDENDS

To date, we have not paid any cash dividends on shares of our common stock. We do not anticipate that funds will be legally available to make the required dividend payments in the foreseeable future, and such obligations therefore will accrue in arrears until such time as we have legally available funds to make the required distributions.

EQUITY COMPENSATION PLANS

The Company does not currently have any equity compensation plans for which equity securities are authorized to be issued.

ITEM 6.                      SELECTED FINANCIAL DATA

Not Applicable.

 
ITEM 7. 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Management's discussion and analysis of financial condition and results of operations contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the section entitled "Risk Factors" beginning on Page _ of this Annual Report on Form 10-K.  

See also the Notes to the Consolidated Financial Statements in the accompanying financial statements starting at F-2.

RESULTS OF OPERATIONS (in Thousands)

On June 28, 2007, the Joint Plan was declared effective.  Pursuant to Fresh Start Accounting, the Company will discuss in the results of operation below, the results for the year ended December 31, 2008, and the six months ended December 31, 2007, as the Successor Company and the results for the six months ended June 30, 2007, as the Predecessor Company.

During the six months ended December 31, 2007, the Company sold all of its remaining assets and ceased operations.

Sales

During the year ended December 31, 2008 (Successor) and the six months ended December 31, 2007 (Successor) the Company had no sales.  During the six months ended June 30, 2007 (Predecessor), the Company’s sales are included in Discontinued Operations due to discontinuation of all of its product lines.  See “Discontinued Operations” discussion below.  Because the Company has ceased all operations, and is currently a “shell” company, no sales are expected in the future, pending the acquisition of an operating business.

Gross Profit (Loss)

During year ended December 31, 2008 (Successor) and the six months ended December 31, 2007 (Successor), the Company had no gross profit (loss) as it did not have sales during the periods.  During  the six months ended June 30, 2007 (Predecessor), the Company’s gross profits are included in Discontinued Operations, due to the discontinuation of its product lines.  See “Discontinued Operations” discussion below.
 
General and Administrative
 
During the year ended December 31, 2008 (Successor), and the six months ended December 31, 2007 (Predecessor), general and administrative expenses were approximately $131,000 and $272,000, respectively.  During the six months ended June 30, 2007 (Predecessor), general and administrative expenses were approximately $601,000.  General and administrative expenses during the period reported consist principally of legal, auditing, and related costs associated with the preparation of the Company’s financial statements, the administration of the bankruptcy proceeding, and related costs and expenses.  The decrease in general and administrative expenses during the 2008 periods relates primarily to the discontinuation of operations and reduction of general and administrative support.  Ongoing general and administrative costs relate to public company compliance, preparation of and filing of tax returns, and related costs and expenses.


Interest Expense

During the six months ended June 30, 2007 (Predecessor), interest expense was $738,000 related to outstanding debt which was retired in the Joint Plan.  

Gain on Settlement of Accrued Liabilities

For the six months ended June 30, 2007, we recorded gains on the settlement of accrued liabilities of approximately $602,000.  These gains are the result of negotiations with vendors to reduce amounts owed and settle claims outside of those discharged as a result of the confirmation of the Joint Plan.

Other Income

During the year ended December 31, 2008 (Successor), the six months ended December 31, 2007 (Successor) and six months ended June 30, 2007 (Predecessor), other income consisted of the following:

   
SUCCESSOR
    
SUCCESSOR
    
PREDECESSOR
  
   
Year Ended December 31, 2008
    
Three Months Ended December 31, 2007
    
Six Months Ended June 30, 2007
  
Collection of amounts previously considered bad debts
   $ -     $ -     $ 61,000  
Interest income
                     36,000  
Proceeds from the sale of office equipment, with no book value
                     13,000  
Other income (expense), net
     9,000       39,000       37,000  
                         
Total other income, net
   $ 9,000     $ 39,000     $ 147,000  

Bankruptcy Expense

During the year ended December 31, 2008, the Company did not incur any material expenses related to the Joint Plan.  During the six months ended December 31, 2007 (Predecessor), the Company incurred expenses related to the Joint Plan of $116,000.  During the six months ended June 30, 2007 (Predecessor), the Company incurred expenses related to the Joint Plan of $255,000.  The Company has no material ongoing expenses related to the Joint Plan.
 
Gain (Loss) from Discontinued Operations

During the year ended December 31, 2008, the Company had no losses from discontinued operations.

During the six months ended December 31, 2007 and the and six months ended June 30, 2007, gain (loss) on discontinued operations primarily relates to the sale of the Company’s SPEEDLAN product line on August 10, 2007.  During the six months ended June 30, 2007, the Company received $438,000 on the settlement of a royalty agreement with WaveRider Australia, which was sold during 2006.


Following is a summary of discontinued operations for the six months ended December 31, 2007 (Successor) and six months ended June 30, 2007 (Predecessor):
 
SUCCESSOR
  
PREDECESSOR
  
Six Months Ended
  
Six Months Ended
  
 
December 31,
  
June 30,
  
2007
  
2007
  
SPEEDLAN Revenues
  
$
11
    
$
344
  
SPEEDLAN Cost of Sales
    
33
      
91
  
SPEEDLAN Gross Profit
    
(22
)
    
253
  
Proceeds from the sale of Wave Rider
    
-
      
438
  
                 
Gain (Loss) from discontinued operations
  
$
(22
)
  
$
691
  
 
LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2008, the Company had cash of approximately $66,000, compared to approximately $139,000 in cash at December 31, 2007.  During the twelve month period ended December 31, 2008, overall cash decreased by approximately $73,000, primarily due to losses incurred in the period and payments of accounts payable, partially offset by the recovery of $70,000, representing cash balances recovered from a former subsidiary of WaveRider, representing cash balances maintained in a closed account owned by WaveRider, and recovery of $11,000 from certain escrows maintained by the Company in connection with the administration of the Joint Plan, and collection of certain accounts receivable previously deemed uncollectable.  These receipts have been accounted for as an increase in Additional Paid-in Capital in the accompanying condensed consolidated financial statement.

The Company currently has no operations and intends to locate and combine with an existing, privately-held company that is profitable or which, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company, which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.

Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue.  To continue as a going concern, pending consummation of a transaction, the Company intends to either seek additional equity or debt financing.  No assurances can be given that such equity or debt financing will be available to the Company nor can there be any assurance that a combination transaction will be consummated.  Should the Company need to incur any significant liabilities prior to a combination transaction, including those associated with the current minimal level of general and administrative expenses, it may not be able to satisfy those liabilities in the event it was unable to obtain additional equity or debt financing.

ITEM 7A.                                QUANTITATIVE AND QUALITATIVE DISLOSURES ABOUT MARKET RISK

Not Applicable.


ITEM 8. 
FINANCIAL STATEMENTS 
 
The information required hereunder in this Annual Report on Form 10-K is set forth in the financial statements and the notes thereto beginning on Page __.
 
ITEM 9. 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.

ITEM 9A(T).
CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. The Company's management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making the assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. Based upon this assessment, management identified the following material weakness in the Company's internal control over financial reporting.
 
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or quarterly financial statements will not be prevented or detected on a timely basis.
  
Following the filing of the Bankruptcy Petition on October 31, 2006, the Company terminated substantially all of its accounting personnel.  In addition, we changed our accounting software systems.  These factors resulted in the delayed preparation and timely filing of our financial statements.  Each of these factors contributed to a material weakness in our entity level control environment.  While the Company is now current in its reporting with the Securities and Exchange Commission, the weaknesses in our entity level control environment arguably persist.
  
All internal control systems have inherent limitations, including the possibility of circumvention and overriding the control. Accordingly, even effective internal control can provide only reasonable assurance as to the reliability of financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.
  
 
As discussed above, as a result of the filing of the Bankruptcy Petition on October 31, 2006, we terminated the employment of a substantial portion of our accounting staff, including our Chief Financial Officer, and changed our accounting software systems.  Each of these factors resulted in a substantial change in our internal controls over our financial reporting, and resulted in a material weakness in our entity level control environment.


Our management has discussed the material weakness described above with our Audit Committee. In an effort to remediate the identified material weakness, we have initiated and/or undertaken the following actions:
 
Management has retained, and will continue to retain, additional personnel with technical knowledge, experience, and training in the application of generally accepted accounting principles commensurate with our financial reporting and U.S. GAAP requirements.
 
Where necessary, we will supplement personnel with qualified external advisors.

OTHER INFORMATION
 
None.

PART III 

ITEM 10. 
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 
 
 Directors and Executive Officers

The following table sets forth information concerning our executive officers and directors as of April 9, 2009:

Name
  
Age
  
Position
Daniel W. Rumsey
  
48
  
President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors
Mark Schaftlein
  
47
  
Director
Richard Reiss
  
52
  
Director

Daniel W. Rumsey.   Mr. Rumsey was appointed Chief Restructuring Officer on March 10, 2005, and to the Board of Directors on May 13, 2005. Mr. Rumsey resigned from his position as Chief Restructuring Officer and was reappointed in October 2006 upon the filing of the Bankruptcy Petition.  Mr. Rumsey is currently serving as a consultant to the Company in the capacity of President, Chief Executive Officer and Chief Financial Officer.  Prior to his appointment as Chief Restructuring Officer in March 2005, he served as the Company’s Vice President, Chief Financial Officer and General Counsel. Mr. Rumsey currently is the President and Founder of SEC Connect, LLC, an EDGAR filing agent, and is Managing Partner of the Disclosure Law Group.  He also serves as a director of World Racing Group, Inc. and XELR8 Holdings, Inc.  Mr. Rumsey received his J.D. from the University of Denver College of Law in 1985, and his B.S. from the University of Denver in 1983.
 
Richard Reiss. Mr. Reiss has served as director of the Company since March 2005. Mr. Reiss is currently a director of Glowpoint, Inc., where he has served since May 2000. He served as the Chief Executive Officer of Glowpoint from May 2000 to April 2002, and as President from May 2000 to April 2002. Mr. Reiss served as Chairman of the Board of Directors, President and Chief Executive Officer of All Communications Corporation from its formation in 1991 until the formation of Glowpoint's predecessor pursuant to a merger of All Communications Corporation and View Tech, Inc. in May 2000.


Mark Schaftlein.  Mr. Schaftlein has served as a director of Azzurra Holding Corporation since June 28, 2007.  Mr. Schaftlein is currently Chief Executive Officer of Epicus Communications Group, Inc., and is President of GlobalNet Corporation and Pacificap Entertainment Holdings, Inc.  Mr. Schaftlein is also a consultant with Ocean Avenue Advisors, focusing on corporate finance, restructuring and management consulting.  At Ocean Avenue Advisors, he concentrates on small and microcap companies with an emphasis on telecommunications, technology and finance.  Mr. Schaftlein is a member of the Board of Directors of GlobalNet Corporation, Pacificap Entertainment Holdings, Inc. and Epicus Communications Group, Inc.

BOARD COMMITTEES AND MEETINGS

Each member of the Board of Directors serves for annual terms or until his successor is elected.  The Board of Directors currently has an Audit Committee.

Audit Committee. The Audit Committee currently consists of two directors, Messrs. Reiss and Schaftlein. The Audit Committee is primarily responsible for approving the services performed by the Company’s independent registered public accounting firm and reviewing their reports regarding the Company’s accounting practices and systems of internal accounting controls. The Board of Directors has determined that Mr. Reiss is a financial expert in that Mr. Reiss has (i) an understanding of generally accepted accounting principles and financial statements; (ii) has the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) has experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; and (iv) an understanding of internal control over financial reporting; and an understanding of audit committee functions.  
 
CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to the Company’s Chief Executive Officer and Chief Financial Officer, or persons performing similar functions. A copy of the Company’s Code of Ethics is filed as Exhibit 14.1 hereto. The Company will provide to the public, free of charge, a copy of the code of ethics upon request in writing to the Company’s Chief Executive Officer at Azzurra Holding Corporation at 6080 Centre Drive, Suite 600, Los Angeles, California 90045.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the Common Stock, to file with the SEC initial reports of beneficial ownership ("Form 3") and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company ("Form 4"). Officers, directors and greater than 10% stockholders of the Company are required by SEC rules to furnish to the Company copies of all Section 16(a) reports that they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with for fiscal 2008.


EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE

The following table sets forth certain information about the compensation paid or accrued during the fiscal year converted by this Annual Report to our Chief Executive Officer and our Chief Financial Officer, along with our former Chief Executive Officers, and Chief Financial Officer.
 
Name and Principal Position
Year
Salary
($)
Bonus
($)
All Other
Compensation
($)
Total
($)
Daniel W. Rumsey(1)
Chief Executive Officer and Chief Financial Officer
 
 
2008
    
15,000(2)
 
  15,000
 
2007
110,638
20,000
45,000(3)
175,638
 
2006
191,442
-
15,000(3)
206,442

(1)                   Mr. Rumsey’s employment was terminated on April 1, 2006 as a result of the WaveRider Merger; however, Mr. Rumsey continued to receive severance payments under his employment agreement until September 2007.  Mr. Rumsey assumed the position of Chief Restructuring Officer upon the filing of the Bankruptcy Petition.  Mr. Rumsey is currently a consultant to the Company, serving in the capacity as President and Chief Executive Officer, and Chief Financial Officer.

(2)                   Mr. Rumsey was paid $15,000 for consulting services to the Company during 2008.  In addition, the Company reimburses Mr. Rumsey $1,000 per month for expenses incurred in maintaining the books and records of the Company, among other expenses.

(3)                   From November 2006 to January 1, 2007, WaveRider paid Mr. Rumsey $7,500 per month for administrative services relating to the liquidation of WaveRider, and paid Mr. Rumsey $45,000 for his services to WaveRider during 2007.

DIRECTOR COMPENSATION

During 2007, Richard Reiss was paid $16,500 in consideration for his service to the Board of Directors.  No other director received any consideration for service to the Board during 2008 or 2007, due to the deteriorating financial condition of the Company.  In is not intended that non-employee directors will receive cash compensation for their service as directors in the immediate future.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT ARRANGEMENTS AND CHANGE OF CONTROL AGREEMENTS

None.


ITEM 12. 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
Under the terms and conditions of the Joint Plan, as confirmed by the Court, holders of our equity interests, including common stock and preferred stock, as of the effective date of the Joint Plan, June 28, 2007, have terminated.  The following table presents information concerning the beneficial ownership of all shares of common stock of the Company issued in connection with the Joint Plan, as of December 1, 2007.  The Company has no other shareholders at December 1, 2008.

Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, the Company believes that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as being beneficially owned by that stockholder. The percentage of beneficial ownership is based on 100,000 shares of common stock outstanding as of December 31, 2008.

Name and Address of Beneficial Owner
  
Common
Stock
    
Percentage of
Shares Outstanding
  
SDS Capital Group SPC, Ltd.
113 Church Street
P.O. Box 134GT
Grand Canyon, Cayman Islands
         80,000           80 %
CGA Resources LLC
c/o Cass G. Adelman
30 E. 72nd Street, 5th Floor
New York, NY 10021
         10,000           10 %
Smithfield Fiduciary LLC
c/o Highbridge Capital Management
1350 Avenue of the Americas
33rd Floor
New York, NY 10019
           10,000             10 %

 
ITEM 13. 
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 
 Not applicable.

ITEM 14. 
PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
AUDIT FEES

Cherry, Bekaert & Holland, L.L.P. ("Cherry Bekaert") has been retained by the Audit Committee as the independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2008. The aggregate fees Cherry Bekaert billed us in 2008 for audit services, including for review of our interim financial statements, post-report review procedures and the issuance of consents in connection with the filing of registration statements, was approximately $29,000.


TAX FEES

The Company engaged Cherry Bekaert for preparation of the Company’s 2007 Federal and state tax returns in 2008, for which Cherry Bekaert billed us $4,500.  Cherry Bekaert did not perform any other non-audit related services in 2008.

AUDIT COMMITTEE PRE-APPROVAL POLICIES

The Audit Committee has adopted an Audit Committee Charter, which sets forth the procedures and policies pursuant to which services to be performed by the independent auditor are to be pre-approved. Under the Charter, proposed services either may be pre-approved by agreeing to a framework with descriptions of allowable services with the Audit Committee ("general pre-approval"), or require the specific pre-approval of the Audit Committee. Unless a type of service has received general pre-approval, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent registered public accounting firm.

The Audit Committee will annually review and pre-approve the services that may be provided by the independent auditor that are subject to general pre-approval. Under the Charter, the Audit Committee may delegate pre-approval authority one or more designated members of the Audit Committee the authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to the full Audit Committee at its scheduled meetings. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next meeting.    
 
PART IV
 
ITEM 15. 
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
We have listed the exhibits filed as part of this Annual Report on Form 10-K in the accompanying exhibit index, which follows the signature page to this Annual Report. The exhibits marked with an asterisk (*) are included with and filed as part of this Annual Report on Form 10-K.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors
Azzurra Holding Corporation

We have audited the accompanying consolidated balance sheets of Azzurra Holding Corporation and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Azzurra Holding Corporation and subsidiaries as of December 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

As more fully discussed in Notes 2 and 3, the Company reorganized under Chapter 11 of the U.S. Bankruptcy Code under a plan of reorganization that was confirmed by the Bankruptcy Court on June 28, 2007.  Additionally, during 2007 the Company discontinued its remaining operations.  As a result, the Company is exploring opportunities to effect an acquisition of the Company by merger, exchange or issuance of securities.  The discontinuance of all the Company's remaining operations in 2007 raises substantial doubt about the Company’s ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/ Cherry, Bekaert & Holland, L.L.P.
    
 
Tampa, Florida
April 9, 2009
  
 



AZZURRA HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

   
December 31,
2008
    
December 31,
2007
  
             
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 66     $ 139  
Accounts receivable
     -       9  
                 
Total current assets
     66       148  
                 
Total assets
   $ 66     $ 148  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Current liabilities:
                
Accounts payable
     31       56  
Other accrued liabilities
     6       22  
                 
Total current liabilities and total liabilities
     37       78  
                 
Commitments and contingencies
     -       -  
                 
Stockholders' equity:
                
Common stock, par value $0.01 per share; 250,000 shares authorized; 100,000 shares issued and outstanding
     1       1  
Additional paid-in capital
     521       440  
Accumulated deficit
     (493 )     (371 )
                 
Total stockholders' equity
     29       70  
                 
Total liabilities and stockholders' equity
   $ 66     $ 148  

The accompanying notes are an integral part of these consolidated financial statements.
AZZURRA HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

   
SUCCESSOR
    
PREDECESSOR
  
   
Year Ended
December 31,
2008
    
Six Months Ended
December 31,
2007
    
Six Months Ended
June 30,
2007(1)
  
Sales
   $ -     $ -     $ -  
Cost of sales
     -       -       -  
                         
Gross profit (loss)
     -       -       -  
                         
OPERATING EXPENSES:
                        
General and administrative
     131       272       601  
                         
Total operating expenses
     131       272       601  
                         
LOSS FROM OPERATIONS:
     (131 )     (272 )     (601 )
                         
OTHER INCOME (EXPENSE):
                        
Interest expense
     -       -       (738 )
Gain on settlement of accrued liabilities
     -       -       602  
Other income, net
     9       39       147  
                         
LOSS FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS
     (122 )     (233 )     (590 )
Bankruptcy expenses
     -       (116 )     (255 )
Gain on settlement of liabilities subject to compromise and recapitalization
     -       -       6,207  
Gain from fresh start adjustments
     -       -       243  
                         
INCOME (LOSS) FROM CONTINUTING OPERATIONS
     (122 )     (349 )     5,605  
Gain (loss) from discontinued operations
     -       (22 )     691  
                         
Net income (loss)
     (122 )     (371 )     6,296  
                         
                         
Basic and diluted loss per common share
                        
  Income (loss) from continuing operations
   $ (1.22 )   $ (3.49 )   $ 0.08  
  Income (loss) from discontinued operations
   $ (0.00 )   $ (0.22 )   $ 0.00  
Basic and diluted loss per common share
   $ (1.22 )   $ (3.71 )   $ 0.08  
                         
Shares used in basic and diluted per share computation(1)
     100       100       75,111  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
(1)  
On June 28, 2007, the Joint Plan (see Note 1) was declared effective.  The Company is reporting the periods ended June 30, 2007, as the Predecessor Company.  The Company determined that the days following June 28, 2007 were non-business days, and accordingly, results through June 28 are identical to the results through June 30, 2007.


AZZURRA HOLDING CORPORATION AND SUBSIDIARIES
STATEMENTS STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2008
(In thousands)

   
Preferred Stock
    
Common Shares
    
Common Stock
    
Additional Paid-in Capital
    
Treasury Stock
    
Accumulated Deficit
    
Total
  
Balance at December 31, 2006
     20,380       75,111       8       391,660       (74 )     (417,859 )     (5,885 )
Net income
     -       -       -       -       -       6,296       6,296  
Reorganization pursuant to Joint Plan
     (20,380 )     (75,111 )     (8 )     (391,249 )     74       411,563       -  
Issuance of new common stock
     -       100       1       29       -       -       30  
                                                         
Balance at June 30, 2008 (1)
     -       100       1       440       -       -       441  
                                                         
Net loss
     -       -       -       -       -       (371 )     (371 )
                                                         
Balance at December 31, 2007
   $ -       100     $ 1     $ 440     $ -     $ (371 )   $ 70  
                                                         
Recovery of predecessor funds
                             70                       70  
Recovery of funds from bankruptcy court
                             11                       11  
Net loss
                                             (122 )     (122 )
Balance at December 31, 2008
   $ -       100     $ 1     $ 521     $ -     $ (493 )   $ 29  

The accompanying notes are an integral part of these consolidated financial statements

(1)  
On June 28, 2007, the Joint Plan (see Note 1) was declared effective.  The Company is reporting the periods ended June 30, 2007, as the Predecessor Company.  The Company determined that the days following June 28, 2007 were non-business days, and accordingly, results through June 28 are identical to the results through June 30, 2007.

AZZURRA HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

   
SUCCESSOR
    
PREDECESSOR
  
   
Year Ended  December 31, 2008
    
July 1, 2007
to December 31, 2007
    
January 1, 2007
to June 30, 2007(1)
  
Cash flows from operating activities:
                  
Net income (loss)
   $ (122 )   $ (371 )   $ 6,296  
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
                        
Gain on sale of equipment
     -               (13 )
Gain on settlement of accounts payable
     -               (602 )
Gain on settlement of liabilities subject to compromise
     -               (6,207 )
Gain on fresh start accounting
     -               (243 )
Gain (loss) on disposal of discontinued operations
     -       22       (438 )
Changes in operating assets and liabilities:
                        
Current assets
     9       26       368  
Current liabilities
     (41 )      26       133  
                         
Net cash provided by (used in) operating activities
     (154 )     (297 )     706  
                         
Cash flows from investing activities:
                        
Proceeds from the sale of discontinued operations
     -       70       864  
Proceeds from the sale of property and equipment
     -       -       29  
                         
Net cash provided by investing activities
     -       70       893  
                         
Cash flows from financing activities:
                        
Proceeds from the sale of common stock
     -       -       30  
Proceeds from recovered bank account
     70       -       -  
    Proceeds recovered from bankruptcy court
     11       -       -  
Repayment of debt pursuant to the Joint Plan
     -       -       (1,700 )
Net cash provided by (used in) financing activities
     81       -       (1,670 )
                         
Net decrease in cash and cash equivalents
     (73 )     (227 )     (1,483 )
                         
Cash and cash equivalents at beginning of the period
     139       366       1,849  
                         
Cash and cash equivalents at end of the period
   $ 66     $ 139     $ 366  

On June 28, 2007, in accordance with the Joint Plan, the Company issued 70,000 shares of new AHC common Stock, $0.01 par value, to SDS in consideration for relief of debt obligations (see Note 1).

The accompanying notes are an integral part of these consolidated financial statements.

(1)  
On June 28, 2007, the Joint Plan (see Note 1) was declared effective.  The Company is reporting the periods ended June 30, 2007, as the Predecessor Company.  The Company determined that the days following June 28, 2007 were non-business days, and accordingly, results through June 28 are identical to the results through June 30, 2007.
 
1.
BACKGROUND AND ORGANIZATION

Azzurra Holding Corporation, formerly known as Wave Wireless Corporation (“Old AHC”), became Azzurra Holding Corporation (“New AHC”), subsequent to the consummation of the transactions contemplated by the Joint Plan of Reorganization, as amended (the “Joint Plan”), of Old AHC, pursuant to Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) on June 28, 2007.  Since the days following June 28, 2007 through the end of that quarter were non-business days, the “Effective Date” of June 30, 2007 is used throughout these consolidated financial statements.  In these notes to the consolidated financial statements, references to the “Company” in respect to time periods preceding the Effective Date are references to Old AHC and its consolidated subsidiaries (collectively, the “Predecessor”), while such references in respect to time periods commencing with the Effective Date shall refer to New AHC and its consolidated subsidiaries (collectively, the “Successor”).

Bankruptcy Proceedings under Chapter 11 of the Bankruptcy Code and Reorganization

On October 31, 2006 (“Petition Date”), Old AHC filed a voluntary petition for reorganization under Chapter 11 of the Code in the United States Bankruptcy Court for the District of Delaware (“Court”) (the “Bankruptcy Petition”).  The Company’s significant operating losses, working capital deficit, defaults on certain outstanding debentures, together with the significant cash required to maintain operations, delays in commercializing next-generation products, and the loss of a key executive, precipitated the need to seek protection under Chapter 11 of the Code.

On April 5, 2007, the Company and the Committee of Unsecured Creditors (“Creditors Committee”) filed a Joint Plan of Reorganization, which Joint Plan was amended and restated and filed with the Court on May 2, 2007.  The Joint Plan was confirmed by the Court on June 14, 2007 and became effective June 28, 2007.  Under the terms and conditions of the Joint Plan, as confirmed by the Court, holders of our equity interests as of the effective date of the Joint Plan, have terminated.  The Joint Plan contained the following additional major provisions:

SDS Capital Group SPC, Ltd. ("SDS"), the secured creditor, became the owner of 80% of the issued and outstanding shares of common stock, which includes 70% received under the terms of the Joint Plan, and an additional 10% as a result of SDS’s participation in the Equity Financing, described below.   In addition, all priority unsecured claims and administrative claims were paid in full, through either: (i) payment on the effective date of the Joint Plan; (ii) payment through an escrow account established with a Plan Administration Trust (“Trust”); or (iii) payment from the reorganized Company following the allowance of a claim. The initial funding for the Trust was $250,000 less certain professional fees and other charges set forth in more detail in the Joint Plan.  The payment to the Trust was recorded as a reduction of gain on settlement of liabilities subject to compromise and recapitalization in the accompanying 2007 Predecessor statement of operations. This initial funding was provided from funds that were otherwise distributable to SDS. The Trust is responsible for, among other things, objecting to general unsecured claims and making distributions, as appropriate, to holders of general unsecured claims. The Company has no future rights to any Trust assets.  The Joint Plan also permitted general unsecured claimants and preferred shareholders to participate in an equity financing ("Equity Financing"), pursuant to which each party was permitted to purchase a portion of 30,000 shares of new common stock at $1.00 per share, based upon the terms and conditions set forth in the Joint Plan. As a result of the Equity Financing, three preferred shareholders each acquired 10,000 shares of common stock.


The Joint Plan required that the Company issue a Contingent Promissory Note in favor of the trust (“Contingent Note”). The Contingent Note provides for a further recovery to the Trust under the terms of the Joint Plan in the event SDS receives a distribution under the Joint Plan that exceeds $2,476,658, plus all fees and expenses accrued under the Contingent Note (the “Maximum Amount”). Under the terms of the Contingent Note, if SDS receives an amount in excess of the Maximum Amount, the Company will pay to the Trust an amount equal to 50% of any cash that remains or has accrued after (i) satisfying the Maximum Amount and all other distributions or dividends required under the Joint Plan, (ii) reserving cash sufficient to satisfy, in full, all obligations of, and claims against, the Company that have accrued during the one year period following the effective date of the Joint Plan, and (iii) reserving reasonably sufficient cash, in the Company's sole discretion, to fund ongoing business operations. No amounts became payable under the Contingent Note and the Contingent Note terminated on June 28, 2008.  On June 28, 2007, SDS received $1.7 million under the terms of the Joint Plan.  No further payments have been made to SDS, and no payments are currently contemplated.

BASIS OF PRESENTATION SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As discussed in Note 1, the Company filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code and, accordingly, the accompanying consolidated financial statements of the Predecessor have also been prepared in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code (“SOP 90-7”) which requires an entity to distinguish pre-petition liabilities subject to compromise from post-petition liabilities on its balance sheets.
 
The accompanying consolidated financial statements have been prepared in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code ("SOP 90-7") which requires an entity to distinguish pre-petition liabilities subject to compromise from post-petition liabilities.  In addition, SOP 90-7 requires that charges and credits resulting from the reorganization and restructuring of the organization be reported separately in the statements of operations as reorganization items, except those required to be reported as discontinued operations.  The Company’s emergence from bankruptcy resulted in a new reporting entity with no retained earnings or accumulated losses as of June 28, 2007 (for presentation purposes, June 30, 2007).  Accordingly, the Company’s consolidated financial statements for periods prior to June 30, 2007 will not be comparable to subsequent periods.

The Company implemented “fresh start” accounting and reporting in accordance with SOP 90-7 upon its emergence from bankruptcy.  Assets and liabilities were adjusted, as necessary, to their fair values. The determination of fair values of assets and liabilities is subject to significant estimation and assumptions.
 
The following table reflects the debt and equity restructuring, reorganization adjustments and the adoption of fresh start accounting to the Company’s consolidated balance sheet as of June 28, 2007.
 
   
Predecessor
                          
Successor
  
   
June 28, 2007
    
Debt and Equity Restructuring
      
Reorganization Adjustments
      
Fresh Start Adjustments
    
June 28, 2007
  
ASSETS
                                  
Current assets:
                                  
Cash and cash equivalents
  
$
2,036
    
$
-
      
$
(1,670
 )
(a)
  
$
-
    
$
366
  
Accounts receivable
    
27
      
-
        
-
        
-
      
27
  
Prepaid taxes
    
-
      
-
        
-
        
-
      
-
  
Total current assets
    
2,063
      
-
        
(1,670
 )
 
    
-
      
393
  
                                             
Goodwill
    
100
      
-
        
-
        
-
      
100
  
                                             
Total assets
  
$
2,163
    
$
-
      
$
(1,670
 )
 
  
$
-
    
$
493
  
                                             
LIABILITIES AND STOCKHOLDERS' DEFICIT
                                            
Current liabilities (subject to compromise):
                                            
Accounts payable
  
$
864
    
$
(834
 )
(b)
    
-
      
$
-
    
$
30
  
Other accrued liabilities
    
2,607
      
(2,342
 )
(b)
    
-
        
(243)
 (e)
    
22
  
Deferred revenue
    
1,322
      
(1,322
 )
(b)
    
-
        
-
      
-
  
Derivative liability for excess shares
    
30
      
(30
 )
(b)
    
-
        
-
      
-
  
Current maturities of long-term debt
    
3,379
      
(1,679
 )
(b)
    
(1,700
 )
(a)
    
-
      
-
  
                                             
Total current liabilities and total liabilities
    
8,202
      
(6,207
 )
 
    
(1,700
 )
 
    
(243
)
    
52
  
                                             
Stockholders' equity (deficit):
                                            
Preferred Stock
    
20,380
      
(20,380
 ) 
 (c)(1)
    
-
        
-
      
-
  
Common Stock
    
8
      
(7
 )
(c)
    
-
  
(d)
            
1
  
Treasury Stock
    
(74
)
    
74
  
(c)
    
-
        
-
      
-
  
Additional paid-in capital
    
391,660
      
20,313
  
(b)(c)
    
30
  
(a)(d)
    
(411,563)
(f)
    
440
  
Accumulated deficit
    
(418,013
)
    
6,207
        
-
        
411,806
(e)(f)
    
-
  
                                             
Total stockholders' equity (deficit)
    
(6,039
)
    
6,207
        
30
        
243
      
441
  
                                             
Total liabilities and stockholders' equity (deficit)
  
$
2,163
    
$
-
      
$
(1,670
 )
 
  
$
-
    
$
493
  
 
-21-


 
(a)
To record payment of $1,700,000 to SDS on June 28, 2007, subject to the Joint Plan, and receipt of $30,000 from the Equity Financing.
 
 
(b)
To record the discharge of subject to compromise liabilities as described in the Joint Plan.

 
(c)
To record the discharge/termination of all outstanding Series E, Series G, Series J and Series J-1 Preferred Stock. Common Stock, and Treasury Stock of Old AHC in accordance with the Joint Plan.
 
 
(d)
To record issuance of 30,000 shares of common stock, $0.01 par value, under the Equity Financing valued at $1.00 per share.

 
(e)
During prior periods management had recorded estimated liabilities for inventory and other services for which they estimated the Company was obligated but for which the Company was never invoiced.  In connection with fresh start accounting, the Company’s management evaluated certain of these estimates and has adjusted the accrual to estimated fair value.
 
 
(f)
To close out the remaining equity balances of Old AHC in accordance with the recapitalization provisions of fresh start accounting.

During the year ended December 31, 2008, the Company was a non-operating shell company and its business operations were limited to sustaining the public shell, and winding down the affairs of the Company’s wholly-owned subsidiary, WaveRider Communications Corporation.

Accounting Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expense during the reporting period. Actual results could differ from those estimates.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.  All significant inter-company accounts and transactions have been eliminated.

Income Tax

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and federal income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Net Income (Loss) per Share

Basic and diluted income (loss) per common share are computed by dividing the net income (loss) by the weighted average common shares outstanding.  No options or warrants with an exercise price below market were outstanding for any period.  Any such shares issuable subject to those option and warrant agreements were not considered in the determination of net income or loss per share because their effect would have been anti-dilutive.  All options were cancelled in 2006 and warrants were cancelled upon the effective date of the Joint Plan in 2007.

Discontinued Operations

As a result of the sale of all of the Company’s operating businesses in 2007, no continuing operations exist other than on-going continuing general and administrative expenses relating to sustaining the public shell and winding down the affairs of the Company’s wholly-owned subsidiary.  As such, all operations other than on-going general and administrative expenses are presented as discontinued operations in the accompanying statement of operations.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements which would have any impact on the Company.

3.
GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The Company currently has no operations and intends to locate and combine with an existing, privately-held company that is profitable or which, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company, which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.

Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue.  To continue as a going concern, pending consummation of a transaction, the Company intends to either seek additional equity or debt financing.  No assurances can be given that such equity or debt financing will be available to the Company nor can there be any assurance that a combination transaction will be consummated.  Should the Company need to incur any significant liabilities prior to a combination transaction, including those associated with the current minimal level of general and administrative expenses, it may not be able to satisfy those liabilities in the event it was unable to obtain additional equity or debt financing.

4.
STOCKHOLDERS’ EQUITY

At December 31, 2008, the authorized shares of Azzurra Holding Corporation consist of 250,000 shares of common stock, $0.01 par value and 100,000 shares were issued and outstanding.
 
Activity with respect to the various equity instruments for the period from January 1, 2007 through June 28, 2007 is as follows:

·  
Series E and G Convertible Preferred Stock – The Company had designated 2,000 and 10,000 shares of its Preferred Stock as Series E and G, respectively, Convertible Preferred Stock.  Both issuances had a liquidation preference amount equal to $1,000 per share and were convertible into a number of shares of common stock equal to the liquidation preference amount divided by the conversion price of $0.50.  All outstanding shares were discharged in accordance with the Joint Plan.
·  
Series J and J-1 Convertible Preferred Stock – The Company had designated 10,000 and 300 shares of its Preferred Stock as Series J and J-1, respectively, Convertible Preferred Stock.  Both issuances had a liquidation preference amount equal to $7,500 per share and were convertible into a number of shares of common stock equal to the liquidation preference amount divided by the conversion price of $0.075.  All outstanding shares were discharged in accordance with the Joint Plan.
·  
At January 1, 2007, 51,351,000 common stock warrants were outstanding at prices ranging from $0.0001 to $1,275 per share.  All outstanding common stock warrants were discharged in accordance with the Joint Plan.
·  
The Company had a Stockholder Rights Agreement that was terminated under the Joint Plan.

5.
CONTINGENCIES

In connection with the liquidation of a former subsidiary during 2007, the Company has recovered approximately $70,000 related to a lockbox account.  Had the account been recorded on the Company's books when fresh-start accounting was adopted, the adjustment to Additional Paid-in Capital would have been impacted.  As such, the Company has recorded the recovery as Additional Paid-in Capital.  While management believes the cash is rightfully the assets of the Company, any liability which could subsequently be raised regarding this recovery will be recorded when and if asserted and the amount is estimable.

6.
INCOME TAXES

Deferred tax assets consist of the following (in thousands):
 
December 31,
  
    2008     
2007
  
Net operating loss carry-forwards
   $  134,790     $ 134,721  
Credit carry-forwards
      3,888       4,028  
Reserves and other
      82       82  
Total deferred tax assets
   $  138,760     $ 138,831  
Valuation allowance
      (138,760 )      (138,831 )
Net deferred tax asset
   $  --     $ --  

The Federal and state net operating loss carryforward for tax purposes is approximately $362.4 million and $138.3 million, respectively, at December 31, 2008, which begin to expire in 2012.  The Company's ability to utilize these carryforwards may be severely limited or lost pursuant to Section 382 of the Internal Revenue Code as a result of the change in control of the Company under the Joint Plan confirmed by the Court on June 14, 2007.  Other limitations may apply as well.  The Company has made no determination as to what these limitations may be.
 
Deferred income taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their bases for financial reporting purposes. In addition, future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of such benefits is more likely than not. The Company has assessed its ability to realize future tax benefits, and concluded that as a result of the history of losses, it was more likely than not, that such benefits would not be realized. Accordingly, the Company has recorded a full valuation allowance against future tax benefits.

 
Reconciliation of the staturory Federal income tax rate to its effective tax rate is as follows:

   
December 31,
  
   
2008
    
2007
  
             
Income tax benefit at federal statutory rate
    
-35.0
%
  
-35.0
%
State income taxes net of federal benefit
    
-5.8
%
  
-5.8
%
Expiring credits and other
    
-15.9
%
  
-5.8
%
Change in valuation allowance
    
56.7
%
  
46.6
%
               
Total
    
0.0
%
  
0.0
%

7.
DISCONTINUED OPERATIONS

During the six months ended December 31, 2007 and the and six months ended June 30, 2007, gain (loss) on discontinued operations primarily relates to the sale of the Company’s SPEEDLAN product line on August 10, 2007.  During the six months ended June 30, 2007, the Company received $438,000 on the settlement of a royalty agreement with WaveRider Australia, which was sold during 2006.

Following is a summary of discontinued operations for the six months ended December 31, 2007 (Successor) and six months ended June 30, 2007 (Predecessor):

 
SUCCESSOR
  
PREDECESSOR
  
Six Months Ended
  
Six Months Ended
  
 
December 31,
  
June 30,
  
2007
  
2007
  
SPEEDLAN Revenues
  
$
11
    
$
344
  
SPEEDLAN Cost of Sales
    
33
      
91
  
SPEEDLAN Gross Profit
    
(22
)
    
253
  
Proceeds from the sale of Wave Rider
    
-
      
438
  
                 
Gain (Loss) from discontinued operations
  
$
(22
)
  
$
691
  
 


 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
     
   
     
Date: April 13, 2009
By:  
/s/  Daniel W. Rumsey
 
 
Daniel W. Rumsey
 
Chief Executive Officer
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Signature
  
Title
  
Date
         
/s/ Daniel W. Rumsey
  
Chief Executive Officer
    
Daniel W. Rumsey
  
(Principal Executive Officer)
  
April 13, 2009
         
/s/ Daniel W. Rumsey 
  
(Principal Financial Officer and
    
Daniel W. Rumsey
  
Principal Accounting Officer)
  
April 13, 2009
         
/s/ Richard Reiss
  
Director of the Company
  
April 13, 2009
Richard Reiss
        
         
/s/ Mark Shaftlein
  
Director of the Company
  
April 13, 2009
Mark Shaftlein
        
         
         
 


 INDEX OF EXHIBITS
 
2.3 (1)
Joint Plan of Reorganization
3.1 (1)
Amended and Restated Articles of Incorporation
3.2 (1)
Amended and Restated Bylaws
10.5 (1)
Contingent Unsecured Promissory Note of the Registrant in Favor of the Plan Trust.
10.6 (1)
Secured Promissory Note in Favor of SDS Capital Group SPC, Ltd.
10.7 (1)
Security Agreement in Favor of SDS Capital Group SPC, Ltd.
31.1
Rule 13a-14(a)/15d-14(a) Certification
31.2
Rule 13a-14(a)/15d-14(a) Certification
32.1
Section 1350 Certification
32.2
Section 1350 Certification

(1)
Incorporated by reference to Exhibits 3.1 and 3.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 5, 2007.