SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 23, 1996
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AvTel Communications, Inc.
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(Exact name of registrant as specified in its charter)
Commission File No. 0-27580
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Utah 87-0378021
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 Cremona Drive, Santa Barbara, California 93117
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 805-685-0355
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==============================================================
(Former Name or Former Address, if changed since last report)
1
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
This Form 8-K/A amends Item 7 of that certain Form 8-K filed with the
Securities and Exchange Commission on November 7, 1996 by including the
financial information referred to below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
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The following financial statements, pro forma financial information and
exhibits are filed as part of this Report.
(a)Financial Statements of Business Acquired. Registrant hereby
files the audited financial statements of AvTel Holdings, Inc., a
California corporation ("AHI"), for the year ending September 30, 1996,
including the following:
(i) Independent auditors' report.
(ii) Balance Sheet at September 30, 1996.
(iii) Statement of Operations and Accumulated Deficit for
the Period from Inception to September 30, 1996.
(iv) Statement of Changes in Stockholders' Equity for the
Period from Inception to September 30, 1996.
(v) Statement of Cash Flows for Period from Inception to
September 30, 1996.
(vi) Notes to Financial Statements - September 30, 1996.
(b) Pro Forma Financial Information.
(1) Unaudited Pro Forma Condensed Combined Balance Sheet as of
September 30, 1996, reflecting the acquisition of AHI by the Registrant.
This item is incorporated by reference to Note 7 of the Notes to
Consolidated Financial Statements of the Registrant (formerly Hi, Tiger
International, Inc.) contained in the Registrant's Annual Report on Form
10-KSB for the year ended September 30, 1996, which was filed with the
Commission on January 7, 1997.
(2) Unaudited Pro Forma Condensed Combined Statement of
Operations for the year ending September 30, 1996 reflecting the
acquisition of AHI by the Registrant. This item is incorporated by
reference to Note 7 of the Notes to Consolidated Financial Statements of
the Registrant (formerly Hi, Tiger International, Inc.) contained in the
Registrant's Annual Report on Form 10-KSB for the year ended September 30,
1996, which was filed with the Commission on January 7, 1997.
2<PAGE>
(c) Exhibits. Page Number
In Sequential
Numbering
System
(23.1) Consent of MacFarlane, Faletti
& Co. LLP 13
3<PAGE> FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
INDEPENDENT AUDITORS' REPORT
Board of Directors
AvTel Holdings, Inc.
(Formerly AvTel Communications, Inc.)
We have audited the Balance Sheet of AvTel Holdings, Inc.
(Formerly AvTel Communications, Inc.) (a California corporation) as of
September 30, 1996 and the related Statements of Operations and Accumulated
Deficit, Changes in Shareholders' Equity and Cash Flows from inception to
September 30, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of AvTel Holdings,
Inc. (Formerly AvTel Communications, Inc.) as of September 30, 1996, and
the results of its operations and its cash flows for the period then ended,
in conformity with generally accepted accounting principles.
/s/ MACFARLANE, FALETTI & CO. LLP
MACFARLANE, FALETTI & CO. LLP
Santa Barbara, California
October 14, 1997
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<PAGE> AVTEL HOLDINGS INC.
(Formerly AvTel Communications Inc.)
A Development Stage Company
BALANCE SHEET
SEPTEMBER 30, 1996
ASSETS
Cash and cash equivalents $ 985,237
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Total Assets $ 985,237
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable $ 51,381
Accounts payable - officers 40,683
Payroll taxes payable 6,024
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Total Liabilities 98,088
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Shareholders' Equity
Preferred Stock (5,000,000 shares 1,000,000
authorized, 1,000,000 8% cumulative
preferred shares issued and outstanding,
$1 par value)Common Stock (10,000,000
shares authorized, 3,000
4,000,000 shares issued and outstanding,
no par value)Deficit accumulated during
development stage (115,851)
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Total Shareholders' Equity 887,149
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Total Liabilities and Shareholders' Equity $ 985,237
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See accompanying notes
5<PAGE> AVTEL HOLDINGS INC.
(Formerly AvTel Communications Inc.)
A Development Stage Company
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE PERIOD FROM INCEPTION TO SEPTEMBER 30, 1996
Income
Interest $ 4,813
Operating Expenses
Payroll $ 31,250
Employee benefits 1,316
Consultants 10,491
Telephone 3,902
Legal 55,095
Insurance 116
Rent 650
Travel and meals 13,410
Computer supplies 2,488
Office supplies 1,591
Other expenses 355
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Total expenses 120,664
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Accumulated deficit during
development stage $ (115,851)
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See accompanying notes
6<PAGE> AVTEL HOLDINGS INC.
(Formerly AvTel Communications Inc.)
A Development Stage Company
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION TO SEPTEMBER 30, 1996
Preferred Stock Common Stock
Amount Amount Retained
Shares Received Shares Received Deficit
-------- --------- ------- --------- ---------
Balance at July 1,
1996 -- $ -- -- $ -- $ --
July 31, 1996: shares
of Series A preferred
stock issued to two
individuals for cash
at 1.00 per share 1,000,000 1,000,000
July 31, 1996: shares
of common stock issued
to an individual for
cash and labor performed 1,499,950 1,000
July 31, 1996: shares
of common stock issued
to an individual for
cash and labor performed 1,499,950 1,000
July 31, 1996: shares
of common stock issued
to an individual for
cash and labor performed 1,000,100 1,000
Accumulated deficit during
development stage (115,851)
-------- --------- --------- --------- ---------
Balance at September 30,
1996 1,000,000 $1,000,000 4,000,000 $3,000 $(115,851)
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See accompanying notes
7<PAGE> AVTEL HOLDINGS INC.
(Formerly AvTel Communications Inc.)
A Development Stage Company
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION TO SEPTEMBER 30, 1996
Cash flows from operating activities:
Net Loss $ (115,851)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Increase/(decrease) in:
Accounts payable 51,381
Accounts payable - officers 40,683
Accrued expenses 6,024
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Net cash used by operating activities (17,763)
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Cash flows from financing activities:
Issuance of preferred stock 1,000,000
Issuance of common stock 3,000
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Net cash provided by financing activities 1,003,000
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Increase in cash 985,237
Cash at beginning of period --
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Cash at end of period $ 985,237
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See accompanying notes
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<PAGE> AVTEL HOLDINGS, INC.
(Formerly AvTel Communications, Inc.)
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
NOTE 1:ORGANIZATION
AvTel Communications, Inc., (the Company) was formed July 16, 1996 under
the laws of the State of California. After September 30, 1996, the Company
changed its name to AvTel Holdings, Inc.. The Company is in its development
stages. The Company is intended to be a holding company of non-facilities
based telecommunications carriers, providing a comprehensive array of
broadband network services, focused primarily on the business customer.
The Company's current management consists of key executives from the
telecommunications industry who are developing and implementing a business
strategy to integrate voice, data and video internetworking solutions for
small and mid-size offices and select vertical markets.
NOTE 2:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
All cash on hand and in bank checking accounts and certificates of deposits
with maturities of 90 days or less are considered to be cash and cash
equivalents.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amount of revenues
and expenses during the reporting period.
NOTE 3: CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of the following:
Demand deposit accounts $ 181,555
30 day certificate of deposit 203,682
60 day certificate of deposit 400,000
90 day certificate of deposit 200,000
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Total $ 985,237
9<PAGE>
AVTEL HOLDINGS, INC.
(Formerly AvTel Communications, Inc.)
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
NOTE 4:AUDIT PERIOD
This audit covers the time period from inception (July 16, 1996) to
September 30, 1996.
NOTE 5:PREFERRED STOCK
The preferred shareholders are entitled to receive preferred and cumulative
annual dividends at a rate of $.08 per share and are entitled to a
preference, in liquidation, in the amount of $1 per share plus accrued and
unpaid dividends declared. As of September 30, 1996 there were no
cumulative preferred stock dividends in arrears.
NOTE 6:INCOME TAXES
The Company has a net operating loss carryforward of approximately $118,000
which will expire in 15 years.
Income tax benefit / expense consists of the following:
Deferred tax benefit arising
from net operating loss carryforward $18,400
Less valuation allowance (18,400)
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$ 0
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NOTE 7:RELATED PARTY TRANSACTIONS
The Company is indebted to two shareholder/officers of the Company for the
reimbursement of operating expenses and accrued wages totaling $40,683.
Another shareholder in the Company paid for operating expenses for the
company for which the Company owes the shareholder $1,858.
10 <PAGE> AVTEL HOLDINGS, INC.
(Formerly AvTel Communications, Inc.)
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
NOTE 8:CONCENTRATION OF CREDIT RISK
During the current period, the Company had more than $100,000 on deposit
with one financial institution. The Federal Deposit Insurance Corporation
(FDIC) insures only the first $100,000 on deposit at any one financial
institution.
NOTE 9:CONTRACTS
The Company has executed employment agreements with its two executive
officers. The term of employment is from August 1, 1996 to July 31, 1999
and may be extended at that time. The agreements set forth the executives'
compensation packages and incentive packages.
NOTE 10:SUBSEQUENT EVENTS
On October 23, 1996, the Company completed a merger transaction (the
"Merger") in which it was acquired by Hi,Tiger International, Inc., a Utah
Corporation. (Hi, Tiger was then renamed AvTel Communications Inc..) The
transaction included the cancellation of the 4,000,000 outstanding shares
of common stock and 1,000,000 Series A preferred shares. The shares were
exchanged for 4,252,508 shares of the Hi, Tiger (AvTel Communications Inc.)
$.001 par value common stock, comprising approximately 61% of the issued
and outstanding common stock after giving effect to the Merger, and
1,000,000 shares of newly authorized shares of the AvTel Communications'
Inc. Series A Convertible Preferred Stock.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AVTEL COMMUNICATIONS, INC.
By: /s/ ANTHONY E. PAPA Date: October 17, 1997
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Anthony E. Papa
President and Chief Executive Officer
By: /s/ JAMES P. PISANI Date: October 17, 1997
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James P. Pisani
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (Registration No. 333-30725) filed by
AvTel Communications, Inc. of our report dated October 14, 1997, with
respect to the financial statements of AvTel Holdings, Inc. at and for the
period from inception (July 16, 1996) to September 30, 1996.
/s/ MACFARLANE, FALETTI & CO. LLP
MACFARLANE, FALETTI & CO. LLP
Santa Barbara, California
October 16, 1997
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