SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest event reported) May 20, 1997
CAMELOT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Colorado 0-8299 84-0681531
(State of Commission (IRS Employer
Incorporation) File Number) Identification No.)
CAMELOT PLACE 17770 Preston Road, Dallas, Texas 75252
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (972) 733-3005
<PAGE>
ITEM 2. Acquisition or Disposition of Assets
Registrant accepted a stock subscription for 53,811,780
restricted Preferred Shares, Series J by Adina, Inc. Adina
paid for the subscription with the transfer of 6,029,921
restricted common shares of Alexander Mark Investments (USA),
Inc. ("AMI"). AMI owns 57% of Meteor Technology plc a
public U.K. Company which has two operating subsidiaries,
DigiPhone International Ltd. and Meteor Payphones, Ltd.
35,688,560 of the Preferred Shares are issued upon closing
and 18,123,220 of the Preferred Shares are issued upon the
issuance of new common shares of the Registrant on a one for
one basis. The Preferred Shares are non-convertible, non-
yielding, have a preference over the common shares but
subordinate to the outstanding Preferred Shares and have one
vote per share voting with the common shares.
ITEM 7. Exhibits
(10) Material Contracts
*a) Subscription Agreement between Camelot
Corporation and Adina, Inc. with Amendment
(28) a) Financial Statements in accordance with
Regulation S-X.
* 1) Financial Statements of Alexander Mark
Investments(USA), Inc. for the period ended
January 31, 1997;
* 2) Financial Statements of Meteor
Technology, PLC for the period ended November
31, 1996
3) Audited Financial Statements of
Alexander Mark Investments (USA) Inc. as
filed with the Form 10-KSB for the year
ended April 30, 1997.
4) Audited Financial Statements of Meteor
Technology PLC for the period ended May
31, 1997
* b) Pro Forma Statements in accordance with
Regulation S-X.
* Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CAMELOT CORPORATION
By:
Jeanette Fitzgerald
Vice President and General Counsel
Dated: March 16, 1998
Item 7. Financial Statement and Supplementary Data
Independent Auditor's Report
Financial Statements for April 30, 1997 and 1996
Balance Sheets
Statement of Operations
Statement of Changes in Stockholders Equity
Statement of Cash Flows
Notes to Financial Statements
MICHAEL W. ZINN, INC.
CERTIFIED PUBLIC ACCOUNTANT
5930 McCommas Blvd., DALLAS, TEXAS 75206
TELEPHONE (214) 821-2369
Board of Directors and Shareholders
Alexander Mark Investments (USA), Inc.
Dallas, Texas
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Alexander Mark
Investments (USA), Inc., as of April 30, 1997, and the related
statements of operations, stockholders' equity (deficit), and cash
flows for the years ended April 30, 1997, and 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 also 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Alexander Mark Investments (USA), Inc., as of April 30, 1997, and the
results of its operations and its cash flows for the two years ending
April 30, 1997 and 1996 in conformity with generally accepted
accounting principles.
Michael Zinn, CPA.
Dallas, Texas
July 18, 1997
ALEXANDER MARK INVESTMENTS(USA), INC.
BALANCE SHEETS
For the year ended April 30, 1996
ASSETS
Cash $ 66
TOTAL ASSETS $ 66
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 4134
Advances from Officer and
Affiliates (Note D) 300
TOTAL LIABILITIES 4434
Stockholders' Equity (Deficit):
Common stock; 75,000,000
Shares authorized
No par value;
749,400 issued and
outstanding on April
30, 1997 95
Additional Paid in Capital 882,602
Retained Earnings (Deficit) (885,932)
Treasury Stock (67,933
shares at cost) (1,133)
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT) (4,368)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 66
The accompanying notes are an integral part of these financial
statements.
ALEXANDER MARK INVESTMENTS(USA), INC.
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C>
For the years ended April 30,
1997 1996
Revenue
Revenue -0- $ -0-
Loan Write-off -0- -0-
Total Revenue -0- -0-
Expenses
General and Administrative --- 4,459
Total Expenses --- 4,459
Income (Loss) Before Provision
for Income Taxes --- (4,459)
Provision for Income Taxes -0- -0-
Net Income (Loss) Before
Extraordinary Items -0- (4,459)
Extraordinary Item
Tax Benefit From Net
Operating Loss Carry forward -0- -0-
Net Income (Loss) From
Operations --- (4,459)
Income (Loss) Per Share --- $ 0.0
Weighted Average Number of
Shares Outstanding 37,507,629 74,940,317
</TABLE>
ALEXANDER MARK INVESTMENTS(USA), INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the two year period ending in April 30, 1997
<TABLE>
<S> <C> <C> <C> <C>
Additional Retained
Common Stock Paid-In Earnings
Shares Amount Capital Deficit
Balance April 30,
1994 74,940,317 $ 9,481 $ 873,216 $ (881,473)
Net Profit for
Year Ended April
30, 1995 - - - (4,459)
Balance April
30, 1995 74,940,317 $ 9,481 $ 873,216 $ (885,932)
Net Profit for
Year Ended April
30, 1996 0 0 0 0
Balance April 30, 1996 74,940,317 $ 9,481 $ 873,216 $ (885,932)
Net Profit for Year
Ended April 30, 1997 0 0 0 0
Balance April 30,
1997 749,400 95 882,602 (885,932)
</TABLE>
The accompanying notes are an integral part of these financial statements.
ALEXANDER MARK INVESTMENTS(USA), INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)
<TABLE>
<S> <C> <C> <C>
Treasury Stock Total
Shares Amount
Balance at April
30, 1994 67933 (1133) $911
Net Profit for the
year ended April
30, 1995 - - 4459
Balance at April
30, 1995 67933 (1133) (4368)
Net Profit for the
year ended April
30, 1996 - - -
Balance at April
30, 1996 67933 (1133) (4368)
Net Profit for the
year ended April
30, 1997 0 0 0
Balance at April
30, 1997 6790 (1133) (4368)
</TABLE>
ALEXANDER MARK INVESTMENTS(USA), INC.
STATEMENTS OF CASH FLOWS
For the years ended April 30,
1997 1996
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (Loss) from Operations $ -0- $ -0-
Increase (Decrease) in Accrued
Expenses -0- -0-
Increase (Decrease) in Current
Assets -0- -0-
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ -0- $ -0-
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES $ --- $ ---
CASH FLOWS FROM FINANCING
RESOURCES
Common Stock Issued --- ---
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES $ --- $ ---
INCREASE (DECREASE) IN CASH --- ---
BEGINNING CASH BALANCE 66 66
ENDING CASH BALANCE 66 66
</TABLE>
The accompanying notes are an integral part of these financial
statements.
ALEXANDER MARK INVESTMENTS(USA), INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1997, and 1996
NOTE A: Summary of Significant Accounting Policies
Organization and Principles of Consolidation
The Company was organized in May, 1980, as part of a
quasi-reorganization of Colspan Environmental
Systems. Activities through April 30, 1985, included
the raising of capital through the private placement
of common stock, the acquisition and sale of its
subsidiaries. At present, the Company has no
subsidiaries and is operating at a reduced level. On
December 23, 1996 the Registrant held a shareholder's
meeting at which the shareholders approved
resolutions to change the Registrant's name to
Alexander Mark Investments (USA), Inc. , approve the
appointment of the auditor, and have a 1 for 100
reverse split of the outstanding shares.
Income (Loss) Per Common Share
Income (Loss) per common share is based on the
weighted average number of shares of the Company's
common stock outstanding during the period. The
weighted average number of common shares outstanding
does not include shares reserved for issuance upon
the exercise of stock options as the effect of such
inclusion would be antidilutive.
Property and Equipment
Property and equipment are carried at cost. Major
additions and betterments are capitalized, whole
replacements and maintenance and repairs which do not
improve or extend the life of the respective assets
are expensed. When the property is retired or
otherwise disposed of, the related costs and
accumulated depreciation are removed from the
accounts and any gain or loss is reflected in
operations.
Depreciation of equipment is provided on the
straight-line method over an estimated useful life of
five years.
Capital Stock
The number of shares authorized are 75,000,000. The
number of shares issued and outstanding are 749,400,
no par value at April 30, 1997 (post reverse split).
Subsequent to the year end the Registrant accepted a
stock subscription for the issuance of 6,787,998
restricted common shares by the President of the
Registrant.
The holders of the Company's stock are entitled to
receive dividends at such time and in such amounts as
may be determined by the Company's Board of
Directors. All shares of the Company's Common Stock
have equal voting rights, each share being entitled
to one vote per share for the election of directors
and for all other purposes.
NOTE B: Income Taxes
From inception through April 30, 1997, the Company
has incurred approximately $885,932 in net operating
losses. Although realization of the tax benefits of
these net operating losses is not assured,
recognition has been given to the current tax
benefits; no taxes have been accrued. The expiration
dates for the net operating loss carry forwards are
from 1997 through 2004. Use of these net operating
loss carry forwards is dependent on future taxable
income.
NOTE C: Stock Options
On May 1, 1986, the officers and directors of the
Company were granted stock options to purchase up to
200,000 newly issued shares of the Company at a price
of $0.1875 per share, expiring no earlier than ten
years from the date of grant. On April 30, 1994, the
options were surrendered to the Company.
NOTE D: Related Party Transactions
Subsequent to the year end the President subscribed
for 6,787,998 common shares and on May 20, 1997 the
President exchanged 6,029,921 of those shares for
common shares in Adina, Inc. Adina exchanged those
shares for Preferred shares in Camelot Corporation
which now has control of the Registrant. Mr.
Wettreich is an officer and director of Camelot and
Adina.
During the year ended April 30, 1995, a company
associated with the President of the Company advanced
$300 to the Company.
For the years ended April 30, 1997 and 1996, the
Company incurred stock transfer fees to a company
associated with the President of the Company in the
amounts of $9,573 and $2,920 respectively.
Item 8. Disagreements on Accounting and Financial Disclosures
Non
PART III
Item 9. Directors and Executive Officers of the Registrant
The following persons serve as Directors and/or Officers of
the Registrant:
Name Age Position Period Served Term
Expires
Daniel Wettreich 45 President, January 1985 Next
Treasurer
Annual
Director
Meeting
Robert Gregory 45 Director, December 23, Next
1996
Annual
Meeting
Jeanette Fitzgerald 36 Director,
January 1991 Next
Secretary
Annual
Meeting
Daniel Wettreich
Daniel Wettreich is President, Treasurer and Director of the
Company since January 1985. Since September 1988, he has been
the Chief Executive Officer, President and Director of Camelot
Corporation(1), a NASDAQ listed public company. Additionally,
he currently holds directors positions in the following public
companies Forme Capital, Inc., Malex, Inc., Adina, Inc.,
Tussik, Inc., and Meteor Technology, plc. In July 1993, he
was appointed a Director of Goldstar Video Corporation(2)
following an investment by Camelot. Mr. Wettreich has a
Bachelor of Arts in Business Administration from the
University of Westminister, London, England.
Robert Gregory
Robert Gregory is a Director of the Company since December
23, 1996. He is a director of Adina, Inc. a public company.
He is also, since July 1996 a Vice President - Finance for
Camelot Corporation. He was previously Director of Finance of
Jenkens & Gilchrist, one of Texas's largest law firms, prior
to which he was controller of Memorex Telex Corporation, a
manufacturer of computer equipment. Previously, from 1985 he
was controller of the communications division of Electronic
Data Systems, an international provider of information
technology. In addition to being a Certified Public
Accountant, he has an MBA from Creighton University and a BS
in Accounting from the University of Nebraska.
Jeanette Fitzgerald
Jeanette Fitzgerald is the Secretary and a Director since January
1991. She is a member of the State Bar of Texas and the Business
Law and Oil, Gas and Mineral Law sections. She is also the
Corporate Secretary and Director of Wettreich Financial
Consultants, Inc. She is also Vice President and General Counsel
and a Director of Camelot Corporation(1). Further, she is a
Director of Malex, Inc., Tussik, Inc., Forme Capital, Inc., and
Alexander Mark Investments (USA), Inc., which are public companies.
In July 1993, she was appointed a Director of Goldstar Video
Corporation(2) following an investment by Camelot. She graduated
from Texas Tech University School of Law receiving both a Doctorate
of Jurisprudence and a Masters of Business Administration in May
1986. Previous to that, she graduated from the University of
Michigan with a Bachelors of Business Administration in December
1982.
(1) A subsidiary, Camelot Entertainment, Inc., filed Chapter
7 liquidation in January 1995.
(2) Goldstar Video filed for protection from creditors
pursuant to Chapter 11 in October 1993, and has converted to
a liquidation proceeding.
Item 10. Executive Compensation
The following table lists all cash compensation paid to
Registrant's executive officers as a group for services
rendered in all capacities during the fiscal year ended April
30, 1997. No individual officer received compensation
exceeding $100,000; no bonuses were granted to any officer,
nor was any compensation deferred.
CASH COMPENSATION TABLE
Name of Individual Capacities in
Cash
or Number in Group Which Served
Compensation
-- --
NONE
Directors of the Registrant receive no salary for their
services as such, but are reimbursed for reasonable expenses
incurred in attending meetings of the Board of Directors.
Registrant has no compensatory plans or arrangements whereby
any executive officer would receive payments from the
Registrant or a third party upon his resignation, retirement
or termination of employment, or from a change in control of
Registrant or a change in the officer's responsibilities
following a change in control.
Item 11. Security Ownership of Certain
Beneficial Owners and Management
The following table shows the amount of common stock, no par
value, ($.002 stated value), owned as of July 18, 1997, by
each person known to own beneficially more than five percent
(5%) of the outstanding common stock of the Registrant, by
each director, and by all officers and directors as a group (3
persons). Each individual has sole voting power and sole
investment power with respect to the shares beneficially
owned.
Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership of Class
Common Danny Wettreich (1) 6,867,998(1)(2) 91.1%
17770 Preston Road
Dallas, Texas 75252
Common Robert Gregory 6,029,921(3) 80.0%
17770 Preston Road
Dallas, Texas 75252
Common Jeanette Fitzgerald 6,043,712(2) 80.0%
17770 Preston Road
Dallas, Texas 75252
Common All Officers and Directors as 6,867,998 91.1%
a group (3 persons) (1)(2)
Common Mick Y. Wettreich 649,000 8.6%
34 Monarch Ct.
Lyttleton Road
London England N2ORA
(1) 80,000 of these shares are in the name of Zara
Wettreich (the wife of Mr. Wettreich), as her separate
property. Mr. Wettreich has disclaimed ownership of
these shares.
(2) 6,029,921 of these shares are in the name of Camelot
Corporation of which Mr. Wettreich and Ms. Fitzgerald
are officers and directors. Mr. Wettreich and Ms.
Fitzgerald have disclaimed ownership of these shares.
(3) 6,029,921 of these shares are owned by Camelot. Mr.
Gregory is a director of Adina, Inc. which owns 49% of
the voting shares of Camelot.
Item 12. Certain Relationships and Related Transactions
On May 15, 1997, subsequent to the year end, Daniel Wettreich,
subscribed for 6,787,998 restricted common shares of the Registrant
in exchange for 40,727,988 ordinary shares (57% of the outstanding
shares) of Meteor Technology, ltd a UK public company of which Mr.
Wettreich is an officer and director. Subsequently, 6,029,921 of
the restricted shares were exchanged by Mr. Wettreich for
restricted common shares in Adina, Inc. Adina then subscribed for
53,811,780 Preferred Shares, Series J of Camelot Corporation paying
for them with 6,029,921 common shares of the Registrant Camelot is
now the controlling shareholder of the Registrant. Mr. Wettreich
is an officer and director of Camelot. Form 8-K's were filed with
the Securities and Exchange Commission reflecting these changes.
The Registrant is presently a holding company.
PART IV
Item 13. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
The following financial statements are included in Part II,
Item 8 of this report for the year ended April 30, 1997:
Balance Sheets
Statements of Operations
Statements of Changes in Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and have therefore been
omitted.
Exhibits included herein:
3(a) Articles of
Incorporation: Incorporated by reference to
Registration
Statement filed on Form 10, May 10, 1984;
File No. 0-12122
3(b) Bylaws: Incorporated by Reference as immediately
above
22(a) Subsidiaries: NONE
Reports on Form 8-K
Report dated May 15, 1997 reporting Item 2 and 7 and
amendments.
Report dated May 20, 1997 reporting Item 2 and 7 and
amendments.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALEXANDER MARK INVESTMENTS(USA), INC.
(Registrant)
By: /s/ Daniel Wettreich
Daniel Wettreich, President
Date: July 30, 1997
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 Registrant and in the capacities and
on the dates indicated.
By: /s/ Daniel Wettreich
Daniel Wettreich, Director; President,
(principal executive officer); Treasurer
(principal financial and accounting
officer)
Date: July 30, 1997
By: /s/ Robert Gregory
Robert Gregory, Director
Date: July 30, 1997
By: /s/ Jeanette Fitzgerald
Jeanette Fitzgerald, Director; Secretary
2
<PAGE>
Company No: 3006387
Meteor Technology plc
(formerly Telecom Credit Europe PLC)
Report and Accounts
May 31, 1997
<PAGE>
METEOR TECHNOLOGY PLC
(formerly Telecom Credit Europe PLC)
Directors
D Wettreich (Chairman)
J L Conway
J Fitzgerald (Non-executive)
C J Grant (Non-executive)
S G Holman
J F McLaughlin
Secretary
S G Holman
Auditors
BDO Stoy Hayward
8 Baker Street
London
W1M 1DA
Bankers
National Westminster Bank plc
15 Bishopsgate
London
EC2P 2AP
Solicitors
Nabarro Nathanson
50 Stratton Street
London
W1X 6NX
Registrars
Independent Registrars Group Limited
Balfour House
390-398 High Road
Ilford
Essex
IG1 1NQ
Registered Office
Watson House
54 Baker Street
London
W1M 1DJ
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
Nominated Advisor
Butterfield Securities
being the trading name of:
Seymour Pierce Butterfield Limited
21 Chiswell Street
London
EC1Y 4TY
Company Number
3006387
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
REPORT OF THE AUDITORS TO THE MEMBERS OF METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
We have audited the accounts on pages l 2 to 43, which have been
prepared under the historical cost convention and on the basis of
the accounting policies set out on pages 17 to l9.
Respective responsibilities of directors and auditors
As described on page 8 the company's directors are responsible
for the preparation of the accounts. It is our responsibility to
form an independent opinion, based on our audit, on those
accounts and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards
issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts
and disclosures in the accounts. It also includes an assessment
of the significant estimates and judgements made by the directors
in the preparation of the accounts, and of whether the accounting
policies are appropriate to the group's circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable
assurance that the accounts are free from material misstatement,
whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the
presentation of information in the accounts.
Fundamental uncertainties
In the light of the group's results for the year, we draw your
attention to Note 1 which explains the circumstances and
considerations the directors have taken into account in preparing
the accounts. In view of the significance of the inherent
uncertainty surrounding the future level of trading and
profitability of the group, we consider it should be drawn to
your attention but our opinion is not qualified in this respect.
We also draw to your attention the uncertainty in connection with
the carrying value of investments in and amounts due from,
certain subsidiaries in the company's balance sheet. as explained
in Note 1. If these assets were to be written down, this would
reduce the company's profit for the year and its net assets by
up to British Pounds1,080,000. We consider this uncertainty to be of such
significance to draw it to your attention, but our Opinion is not
qualified in this respect.
As shown in Note 12(a), the carrying value of the group's listed
investment exceeded their market value at the year end by
British Pounds 128,000. Although it is not the directors' intention to dispose
of these shares, we consider the uncertainty surrounding their
carrying value should be brought to your attention. However, our
opinion is not qualified in this respect.
<PAGE>
REPORT OF THE AUDITORS
TO THE MEMBERS OF METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
(continued)
Opinion
In our opinion the accounts give a true and fair view of the
state of affairs of the company and of the group as at May 31,
1997 and of the loss of the group for the year then ended led and
have been properly prepared in accordance with the Companies Act
1985.
BDO Stoy Hayward
Chartered Accountants
Registered Auditors
London
October 30, 1997
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED MAY 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C>
British Pounds '000
Restated Period
May 31,
Continuing operations 1997 1996
Ongoing Acquisitions
Total Total Notes
Turnover 22,766 1,123 3,889 25
Cost of sales 330 1,024 1,354 19
Cost of sales -
exceptional items
4 1,379 -1,379 207
------------------------------
Gross profit/(loss) 1,057 99 1,156 (201)
__________________________________
Distribution and administrative
expenses 834 624 1,458 170
Distribution and administrative
expenses
- exceptional items 4 -- - 666
----------------------------
834 624 1,458 836
--------------------------------
Operating profit/(loss)
3 223 (525) (302) (1,037)
----------------
Interest receivable
28 2
Interest payable
6 (48) (4)
----------------
(20) (2)
----------------
Loss on ordinary activities before
taxation
(322) (1,039)
Taxation on ordinary
activites 7 ---- -----
(322) (1,039)
Loss per ordinary share 8 0.53 pence 11.56 pence
</TABLE>
The notes on pages 17 to 43 form part of these accounts
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED MAY 31, 1997
<TABLE>
<S> <C> <C>
Restated period to
May 31, 1997 1996
Pounds '000 Pounds '000
Total recognised loss for the
financial year 322 1,039
Prior year adjustment as explained in
note 4(d) (603)
--------
Total loss recognised since last annual
report
925
</TABLE>
The notes on pages 17 to 43 form part of these accounts
<PAGE>
METEOR TECHNOLOGY PLC
(formerly Telecom Credit Europe PLC)
GROUP BALANCE SHEET AT MAY 31, 1997 [British pounds '000]
<TABLE>
<S> <C> <C> <C> <C>
Restated Notes 1997 1996
Fixed assets
Tangible assets 11 238 30
Investments 12 500 -
------ ------
738 30
Current assets:
Stocks 13 69 80
Debtors 14 221 48
Cash at bank and in hand 829 153
--------
1,119
Creditors: amounts falling
due within one year 15 (1,230) (242)
-------- --------
Net current (liabilities)/assets (111) 39
----- --------
Total assets less current liabilities 627 69
Creditors: amounts falling due after
more than one year 16 (535) (12)
----- -------
92 57
Capital and reserves:
Called up equity share capital: 20
Issued 714 113
Committed but unissued
- 18
Share premium account: 21
Issued 2,122 756
Committed but unissued - 837
Other reserves 21 (1,383) (628)
Profit and loss account 21 (1,361) (1,039)
-------- -------
Equity shareholders' funds 21 92 57
</TABLE>
Approved by the Board on October 30, 1997
and signed on its behalf by
D Wettreich
Director
The notes on pages 17 to 43 form part of these accounts
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
British pounds '000
<TABLE>
BALANCE SHEET AT MAY 31, 1997
<S> <C> <C> <C>
Restated
Notes 1997 1996
Fixed assets:
Tangible assets 11 2 -
Investments 12 1,913 650
------ ------
1,915 650
Current assets:
Debtors 408 38
Cash at bank and in hand 14 816 152
-------- --------
1,224 190
Creditors: amounts falling due
within one year 15 (247) (138)
-------- --------
Net current (liabilities)/assets 977 52
------ --------
Total assets less current liabilities 2,892 69
Creditors: amounts falling due
after more than one year 16 (500) (12)
----- --------
2,392 702
Capital and reserves:
Called up equity share capital: 20
Issued 714 113
Committed but unissued - 18
Share premium account: 21
Issued 2,122 756
Committed but unissued - 837
Other reserves 21 - (628)
Profit and loss account 21 (444) (1,022)
------ -------
Equity shareholders' funds 21 2,392 702
</TABLE>
Approved by the Board on October 30, 1997
and signed on its behalf by
D Wettreich
Director
The notes on pages 17 to 43 form part of these accounts
<PAGE>
METEOR TECHNOLOGY PLC plc
(formerly Telecom Credit Europe PLC)
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MAY 31, 1997
[British pounds '000]
<TABLE>
<S> <C> <C> <C>
Notes 1997 1996
Net cash outflow for operating activities 3(c) (1,687) (148)
Returns on investments and servicing of finance:
Interest received 28 2
Interest paid 6 (5) (3)
Interest element of finance lease
rental payment 6 (2) (1)
--------------
Net cash outflow for returns on investments
and servicing of finance 21 (2)
Capital expenditure and financial investment:
Purchase of current asset investment - (363)
Purchase of tangible fixed assets (106) -
Receipts from sale of tangible fixed assets (4)
Purchase of distribution agreement - (7)
-------- ---------
Net cash outflow for capital expenditure and
financial investment (102) (370)
Acquisitions and disposals:
Purchase of subsidiary undertakings 23(a) (220) -
Net cash balances acquired with subsidiaries 23(a) 1,046 (17)
Net cash outflow for acquisitions and disposals 826 (17)
Financing
Issue of ordinary share capital 20(c) 155 669
Issue of loan stock 18(b) 1,500 -
Repayments of capital elements of finance
lease rentals 17(b) (9) -
Repayment of long term loan (6) -
--------- ------
Net cash inflow from financing 1,640 669
--------- -------
Increase in cash in the period 26 698 132
</TABLE>
The impact of the purchase of subsidiary undertakings on cash
flow, reconciliation to net funds and details of material
non-cash transactions are set out at notes 23, 26, and 27
respectively.
The notes on pages 17 to 43 form pan of these accounts
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31,1997
1. Accounting policies
Accounting convention
The accounts are prepared under the historical cost convention
and in accordance with applicable accounting standards.
Despite the losses sustained during the year, particularly in the
payphones business, the directors are confident that the new
DigiPhone products, together with the reorganization of the
payphones businesses so that their trading performance can be
improved will provide the group with an opportunity to
demonstrate its profitability. They consider the group has
sufficient cash resources to enable this stage to be reached,
and accordingly have prepared the accounts on a going concern
basis.
Accordingly, and despite the level of losses that certain
subsidiaries have sustained which has resulted in them having net
liabilities at May 31, 1997, the directors consider that any
reduction in the British Pounds 700K value of the investments in, and the
British Pounds 380K due from, those subsidiaries in the company's balance
sheet is of a temporary nature, and that it is thus not appropriate for them
to be written down.
Basis of consolidation
The group accounts consolidate the accounts of Meteor Technology
plc and all its subsidiary undertakings drawn up to May 31. No
profit and loss account is presented for Meteor Technology plc as
permitted by section 230 of the Companies Act 1985.
The subsidiary undertakings acquired during the period have been
included in the group accounts using the acquisition method of
accounting. Accordingly, the group profit and loss account and
cash flow statement include the results and cash flow of
DigiPhone Europe Limited and Paragon Investment Holdings Limited
and its subsidiary undertakings from their acquisition on August
12, 1996 and August 15, 1996 respectively. The purchase
consideration has been allocated to assets and liabilities on the
basis of fair value at the date of the acquisition.
Advantage has been taken of the merger relief offered by section
131 of the Companies Act 1985 in respect of consideration
received in excess of the nominal value of the shares issued in
connection with the acquisition of DigiPhone Europe Limited and
Paragon Investment Holdings Limited.
Telecredit Telekommunications GmbH, a wholly owned subsidiary
undertaking incorporated in Germany has not been consolidated, as
it was held for resale and on July 10, 1996 it was sold in
exchange for a 10% shareholding in RC Telecom Limited, a company
incorporated in the Isle of Man.
Goodwill
Purchased and consolidation goodwill is charged directly against
reserves. This is a change in accounting policy for the group in
1997 to give a fairer presentation of the results and of the
financial position of the group.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
1. Accounting policies
(continued)
In the May 31, 1996 accounts, goodwill was capitalised and was
being amortised over 4 years. The impact of the change in
accounting policy is to reduce the loss for the period to May 31,
1996 by writing back British Pounds 25K of amortisation to the profit and loss
account offset by the creation of another reserve (see note
4(d)). The impact of this change in accounting policy on the
accounts for the year to May 31, 1997, assuming an estimated
useful life of 20 years for the subsidiaries acquired, is to
reduce the loss by British Pounds 1,047K.
If a subsidiary, associate or business is subsequently sold or
closed, any goodwill arising on acquisition that was written off
directly to reserves or that has not been amortised through the
profit and loss account is taken into account in determining the
profit or loss on sale or closure.
Depreciation
Depreciation is provided on all tangible fixed assets at rates
calculated to write off the cost, less estimated residual value,
of each asset evenly over its expected useful life, as follows:
Payphones - over length of contract, up to five
years
Computer equipment - 3 years straight line
Fixtures and fittings - 20% reducing balance
Motor vehicles - 25% reducing balance
Stocks
Stocks are stated at the lower of cost incurred in bringing each
product to its present location and condition and net realisable
value, as follows:
Goods for resale - purchase cost on a first-in,
first-out basis
Net realisable value is based on estimated selling price less any
further costs expected to be incurred to completion and disposal.
Recognition of profits on leased payphones
Certain subsidiary undertakings have entered into agreements with
finance houses in respect of payphones which are subleased by the
finance house to customers. Net income from the leasing
agreements is credited to the profit and loss account so as to
spread any profit arising equally over the period of the lease
between the customer and the finance house.
Deferred taxation
Deferred taxation is provided using the liability method on all
timing differences which are expected to reverse in the future
without being replaced, calculated at the rate at which it is
estimated that the timing differences will reverse. Advance
corporation tax which is expected to be recoverable in the future
is deducted from the deferred taxation balance.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
1. Accounting policies
(continued)
Software distribution rights
The values of software distribution rights purchased are reviewed
periodically. Provision is made where there has been a permanent
diminution in the value of these rights.
Foreign currencies
Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction or at the contracted rate
if the transaction is covered by a forward exchange contract.
Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance
sheet date or if appropriate at the forward contract rate. All
differences are taken to the profit and loss account.
Leasing and hire purchase commitments
Assets held under finance leases and hire purchase contracts are
capitalised in the balance sheet and are depreciated over their
useful lives. The interest element of the rental obligations is
charged to the profit and loss account over the period of the
lease and represents a constant proportion of the balance of
capital repayments outstanding.
Rentals paid under operating leases are charged to income on a
straight line basis over the lease term.
2. Turnover
Turnover represents the amounts derived from the provision of
goods and services which fall within the group's ordinary
activities, all of which are continuing, stated net of value
added tax.
The group operates in the telecommunications market and an
analysis of its turnover by geographical market is as follows:
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
USA 2,500 -
UK 1,370 25
Rest of Europe 19 -
------- -------
3,889 25
</TABLE>
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
3. Operating loss
(a) This is stated after charging:
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
Auditors' remuneration - audit services 40 2
Auditors' remuneration - non-audit services 6 -
Directors' remuneration (see below) 165 57
Depreciation of owned fixed assets 60 5
Depreciation of assets held under finance leases and
hire purchase contracts 6 1
Operating lease rentals
- plant and machinery 184 1
- land and buildings 65 11
</TABLE>
The auditors also received fees of British Pounds 17K in respect of the
circular on the reversal of DigiPhone Europe Limited into the
company. These costs have been included as part of the investment
cost and not expensed to the profit and loss account.
b) Directors' remuneration
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
Fees 78 57
Other emoluments 87 -
---- ----
165 57
Full details of the share options held by the directors are set
out in the directors' report. No options were exercised by the
directors during the period.
There are no long term incentive schemes in place for directors.
The company has made no contributions to directors' pension
scheme.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
3. Operating loss
(continued)
(c) Reconciliation of operating loss and net cash outflow from
operating activities:
</TABLE>
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
Operating loss (302) (1,037)
Depreciation 66 6
Loss on disposal of
tangible fixed assets 9 1
Exceptional write off (non-cash
transaction - see note 27(i) 1,304 845
Sale of rights (non-cash transaction
- see note 27(ii)) (2,500) -
Decrease/(increase) in debtors 23 (11)
(Decrease)/increase in creditors (322) 46
Decrease in stocks 35 2
------- ---------
Net cash outflow from operating
activities (1,687) (148)
</TABLE>
4. Exceptional items
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
Cost of sales:
Write off of distribution rights
purchased (see notes (a) and (b)) 1,379 207
---------- ------
Distribution and administrative expenses:
Provision for diminution in value
of German subsidiary (see note c)) - 63
Restatement for fundamental errors
(see note (d)) - 603
-------- -------
- 666
</TABLE>
(a) Exceptional item current year
During the year Meteor Technology plc acquired the rights to
distribute DigiPhone internet telephony software in the UK,
Ireland and the Rest of the World (i.e. excluding the USA, Canada
and Rest of Europe) for British Pounds 1.379M. These costs have been written
off in full during the year as part of cost of sales.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS A T MAY 31, 1997
(continued)
4. Exceptional items
(continued)
The rights to distribute this software in Europe were acquired by
DigiPhone Europe Limited prior to its acquisition by the company
and therefore the group now holds the distribution rights for the
software on a worldwide basis excluding the USA and Canada.
(b) Exceptional item prior year
In December 1995, 400,000 ordinary shares were allotted for British Pounds
200,000 at 5p per share, fully paid, upon the company entering
into a distribution agreement with Firecrest Group Plc. The costs
incurred in obtaining the distribution agreement have been
written off to the profit and loss account.
(c ) Exceptional item prior year
The company owned the whole of the issued share capital of
Telecredit Telekommunications GmbH, a company incorporated in
Germany. A provision of British Pounds63K was made for diminution in value at
May 31, 1996.
(d) Prior year adjustments - restatement for fundamental errors
<TABLE>
<S> <C> <C> <C>
Profit and
Other
loss
account
reserves
Provision for further
diminution in
value of German
subsidiary (i) (300) -
Provision for rent guarantee
omitted in error (ii) (70) -
Provision for professional fees
omitted in error (iii) (205) -
Other (53) -
Change in accounting policy for
goodwill (iv) 25 (628)
---------------
(603) (628)
</TABLE>
(i) As referred to in (c) above the company owned the whose of
the issued share capital of Telecredit Telekommunications
GmbH. This investment was exchanged for 100,004 ordinary
shares in RC Telecom Limited on July 10, 1996. Following
enquiry by the new directors it became apparent that this
investment, which represents 10 per cent of that company's
share capital, was worthless at the date or acquisition.
Accordingly a further provision for diminution in value of
British Pounds300K has been included in the restated figures.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
4. Exceptional items
(continued)
(ii) The company provided a rent guarantee to the landlord of the
premises occupied by Telecredit Telekommunications GmbH. These
premises were vacated in early 1996 leaving rent arrears and
therefore the landlord called the tent guarantee. No
provision for these costs was accrued at May 31, 1996. A
settlement of British Pounds70K has been reached with the landlord and a
provision for this amount has been included in the restated
figures.
(iii) A fee of British Pounds205K was payable to Vivian Gray Nominees in
respect of a fee relating to Telecredit Telekommunications GmbH. While
shares in settlement of this fee had been committed but not
issued at May 31, 1996, this was not recorded in the company's
accounts.
(iv) The accounting policy for goodwill arising on acquisition or
on consolidation has been changed to a policy of charging it
against reserves. Accordingly amortisation, British Pounds25K expensed in
the period to May 31, 1996 has been written back to the profit
and loss account for that period and British Pounds628K charged to
reserves.
5. Staff costs
<TABLE>
<S> <C> <C>
1997 1996
British Pounds'000
Wages and salaries 287 73
Social security costs 28 1
Other pension costs 2 1
_______ ___________
317 75
The average number of employees, including executive directors, during the
year was as follows:
1997 1996
No. No.
Sales and
marketing 10 2
Management and
administration 10 6
--------------
20 8
</TABLE
<PAGE>
METEOR TECHNOLOGY pIc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
6. Interest payable
</TABLE>
<TABLE>
<S> <C> <C>
1997 1996
Bank loans and overdrafts and other loans 5 3
Loan stock interest 41 -
Finance charges payable under finance
leases and hire purchase contracts 2 1
--- --
48 4
</TABLE>
7. Taxation on ordinary activities
Subject to agreement with the Inspector of Taxes, losses of
approximately British Pounds 4m were available as at May 31, 1997 to carry
forward against future profits.
8. Loss per ordinary shares
The loss per share of 0.53 pence has been calculated by dividing
the loss after tax of British Pounds322K by 60,394,391 shares being the
weighted average number of shares in issue during the year.
The restated 1996 loss per share of 11.56 pence has been
calculated by dividing the restated loss after tax of British Pounds1,039K by
8,986,406 shares, being the weighted average number of shares in
issue during that year.
9. Profit/(loss) attributable to the members of the parent
company
The profit dealt with in the accounts of the parent company was
British Pounds 578K (restated 1996: loss British Pounds 1,022K).
10. Dividends
No dividends were paid during the year nor have been recommended.
<PAGE>
METEOR TECH NOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
11. Tangible fixed assets
<TABLE>
<S> <C> <C> <C> <C> <C>
[British pounds '000]
Fixtures Motor Computer
and vehicles equipment Payphones Total
fittings
Cost:
At June 1, 1996 24 10 125 22 181
Acquisition of
subsidiaries - 27 141 36 204
Additions 13 29 63 44 149
Disposals (5) (11) (27) (22) (65)
------------------------------------------------------
At May 31,
1997 32 55 302 80 469
------------------------------------------------------
Depreciation:
At June 1, 1996 6 6 125 14 151
Acquisition of
subsidiaries - - 54 - 54
Additions 8 14 34 10 66
Disposals (4) (7) (14) (15) (40)
------------------------------------------------------
At May 31,
1997 10 131 9 99 231
------------------------------------------------------
Net book value:
At May 31,
1997 22 42 103 71 238
At June 1,
1996 18 4 - 8 30
</TABLE>
The net book value of tangible fixed assets includes British Pounds 40K (1996:
British Pounds 18K) in respect of assets held under finance leases and hire
purchase contracts.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
11. Tangible fixed assets
(continued)
<TABLE>
<S> <C> <C>
Company
Computer
Equipment Total
British Pounds'000
Cost:
At June 1, 1996 - -
Additions 2 2
----------- ----------
At May 31 1997 2 2
----------- ----------
Depreciation
At June 1,
1996 and May 31,1997 - -
----------- ----------
Net book value:
At May 31, 1997 2 2
At June 1, 1996 - -
</TABLE>
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
12. Investments
(a) Group
<TABLE>
<S> <C> <C>
1997 1996
British Pounds'000
Fixed asset investments
500 -
Listed on the
US NASDAQ Unlisted Total
Cost:
At June 1, 1996 - 363 363
Additions 500 - 500
--------- -------- ------
At May 31, 1997 500 363 863
----------------------------
Amounts
provided:
At June 1, 1996 - 63 63
Restatement - 300 300
-----------------------------
As restated - 363 363
Provided during the year - - -
-----------------------------
At May 31, 1997 - 363 363
------------------------------
Net book value:
At May 31, 1997 500 - 500
At June 1, 1997 as
restated - - -
</TABLE>
The market value of the listed investments at May 31, 1997 was
British Pounds 372,139. If they had been sold
at this value there would have been no liability to corporation
tax as there would be no capital gain arising from the sale.
The unlisted investment is in respect of an investment in 10 per
cent. of the issued share capital of RC Telecom Limited.
<PAGE>
METEOR TECHNOLOCY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
12. Investments
(continued)
(b) Company
<TABLE>
<S> <C> <C> <C> <C>
Other Other Subsidiary
investments investments undertakings Total
(listed)(unlisted)
British Pounds'000
Cost:
At June 1,
1996 650 - 363 1,013
Additions 763 500 - 1,263
---------------------------------
At May 31, 1997 1,413 500 - 2,276
---------------------------------
Amounts
provided:
At June 1, 1996 and May 31,
1997 - - 363 363
-----------------------------------
Net book value:
At May 31, 1997
1,413 500 - 1,913
At June 1, 1997 as
restated 650 - - 650
</TABLE>
See further details of the listed and unlisted other investments
in the group investment note.
(b) Subsidiary undertakings acquired in the period
On August 12, 1996 DigiPhone Europe Limited ("DigiPhone") was
acquired in exchange for consideration of British Pounds21,626,326 payable by
way of issuing 52,285,714 ordinary 1 pence shares at a fully paid
price of 41 pence each and cash of British Pounds189K (See not 23(a)).
On August 15, 1996 Paragon Investment Holdings Limited
("Paragon") was acquired in exchange for consideration of
British Pounds790,334 payable by way of issuing 2,000,000 ordinary 1 pence
shares at a fully paid price of 38 pence each and cash of British Pounds30K.
(See note 23(a)).
During the year the company invested in 4 new subsidiary
companies for cash of British Pounds1K. These companies were dormant
throughout the year.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
12. Investments
(continued)
(c) Details of the principal operating subsidiaries are:
<TABLE>
<S> <C> <C> <C> <C>
Name of Country of Type of Proportion
Company Registration shares held of voting Nature of
rights business
and operation
DigiPhone International
Limited England Ordinary 100% Software
and Wales shares distribution
DigiPhone Europe
Limited England Ordinary 100% Software
and Wales shares distribution
The Public
Telephone England Ordinary 100% Software
Company Limited and Wales shares distribution
Paragon
Investments
Holdings England Ordinary 100% Software
Limited and Wales shares distribution
Paragon
Payphones
Limited England Ordinary 100% Software
and Wales shares distribution
Paragon
Leasing
Limited England Ordinary 100% Software
and Wales shares distribution
Meteor Payphones
Limited England Ordinary 100% Software
and Wales shares distribution
</TABLE>
Held by a subsidiary undertaking
13. Stocks
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
69 80 - -
</TABLE>
The difference between the purchase price of stocks and their
replacement cost is not material.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
14. Debtors
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
British Pounds'000
Trade debtors 42 18 - -
Amounts due from subsidiary
undertakings - - 380 20
Other debtors 81 24 9 13
Prepayments and accrued income 98 6 19 5
-------------------------------------
221 48 408 38
</TABLE>
Included within debtors are amounts of British Pounds 60K in the group accounts
and British Pounds 380K in the company accounts due after one year. The amount
in the group accounts includes an amount of British Pounds 39K over which a
charge exists.
15. Creditors amounts falling due within one year
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
British Pounds'000
Bank overdraft - 22 - -
Other loans 10 - - -
Trade creditors 376 60 - -
Corporation tax - - - -
Amounts due to subsidiary
undertakings - - 123 -
Other taxes and social security
costs 80 7 36 -
Obligations under finance leases
and hire purchase contracts (note
17) 14 5 - -
Other creditors 117 - - -
Accruals and deferred
income 633 148 88 138
---------------------------------------
1,230 242 247 138
</TABLE>
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
16. Creditors: amounts falling due after more than one year
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
British Pounds'000
Other loans 10 - - -
Obligations under finance leases
and hire purchase contract (note
17) 25 12 - -
10% unsecured loan stock
1997-2007 (note 18) 500 - 500 -
---------------------------------------
535 12 500 -
</TABLE>
17. Obligations under finance leases and hire purchase contracts
(a) The maturity of these amounts is as follows:
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
British Pounds'000
Amounts payable:
within one year 18 7 - -
between two to five
years 27 14 - -
-------------------------------------------
45 21 - -
Less: Finance charges
allocated
to future periods (6) (4) - -
---------------------------------------------
39 17 - -
Finance leases are analysed as
follows:
Current obligations
(note 15) 14 5 - -
Non-current obligations (note
16) 25 12 - -
------------------------------------------
39 17 - -
</TABLE>
The outstanding lease and hire purchase obligations are secured
on the assets the financing relates
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
17. Obligations under finance leases and hire purchase contracts
(b) Analysis of changes in finance leases and hire purchase
contracts during the current and previous years:
<TABLE>
<S> <C> <C> <C> <C>
Group Company Restated Restated
1997 1996 1997 1996
British Pounds '000
At June 1 17 - - -
Inception of finance lease
contracts 31 17 - -
Capital element of finance lease
contracts (9) - - -
-------------------------------------------
39 17 - -
</TABLE>
18. Unsecured loan stock
(a) British Pounds 500,000 of unsecured loan stock was issued for cash on May
20, 1997. It bears interest at 10 per cent per annum accruing
on a day to day basis but payable annually in arrears. The
principal sum will be redeemed by or on May 21, 2007.
The loan stock is unsecured; however, it becomes immediately
repayable on the appointment of a receiver, a winding up
resolution or if the company becomes unable to pay its debts as
they fall due.
(b) Details of loan stock and convertible loan stock issued and
redeemed during the year are as follows:
(C )
<TABLE>
<S> <C> <C> <C>
Loan Convertible
stock loan stock Total
British Pounds'000
Issued in exchange for
distribution rights - 1,304 1,304
Issued in exchange for
cash 500 1,000 1,500
Cancelled as part
consideration for sale
of software - (2,000) (2,000)
rights (see note 27
(ii))
Converted to share capital (see
note 27 (iii)) - (304) (304)
-----------------------------------------
Outstanding at May 31,
1997 500 - 500
</TABLE
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
19. Provisions for liabilities and charges
There was no requirement for a provision for deferred taxation in
the accounts for 1997 or 1996
and there were no amounts not provided for.
20. Called up share capital
(a)
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Restated
1997 1996 1997 1996
No. No. 000 000
Authorised:
Ordinary shares of 1p
each 100,000,000 20,000,000 1,000 200
Allotted, called up and
fully paid:
Ordinary shares of 1p
each 71,426,223 11,317,612 714 113
Committed but unissued share
capital:
Ordinary shares of 1p
each - 1,800,000 - 18
714 131
</TABLE>
On August 5, 1996, the authorised share capital of the company
was increased from 20 million 1 pence shares to 100 million 1
pence shares.
During the year the following issues of share capital took place:
(i) In July 1996 the committed but unissued shares at May 31,
1996 were issued as follows
*500,000 committed but unissued ordinary 1 pence shares were
issued at 41 pence per share as deferred consideration for the
purchase of Telecredit Telekommunications GmbH
*1,300,000 committed but unissued ordinary 1 pence shares were
issued at 50 pence per share to Global Telecom Overseas
Incorporated, 500,000 a the initial purchase consideration and
800,000 as the deferred consideration for the purchase of The
Public Telephone Company Limited.
(ii) In July 1996, 1,374,440 warrants were exercised, 1,374,440
or ordinary 1 pence shares were
issued for cash at 4.929 pence each.
(iii) In August 1996, 52,285,714 ordinary 1 pence shares were
issued at 41 pence per share on
the acquisition of DigiPhone Europe Limited (see notes 11 (b) and
23(a)).
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
20. Called up share capital
(continued)
(iv) In August 1996, 2,000,000 ordinary 1 pence shares were issue at 38 pence
per share on the acquisition of Paragon Investments Holdings Limited
(see notes 11 (b) and 23(a)).
(v) In November 1996, 800,000 ordinary 1 pence shares were issued d at 38
pence per share in exchange for the conversion of loan stock issued to
Camelot ( Corporation (see note 27(iii)).
(vi) In March 1997, 1,498,457 ordinary 1 pence shares were issued at 8.5
pence per share in payment of interest and other expenses amounting in
total to British Pounds127K due to Camelot Corporation.
(vii) In March 1997, 350,000 ordinary 1 pence shares were issued 20 pence per
share in settlement of a provision for rent arrears and an ongoing
premises obligation claim by the landlords of the property previously
occupied by Telecredit Telekommunications GmbH.
All share issues took place at the market value of the shares on the day of
issue of the share accept for (ii) and (vii). The market value per share on
the date that he warrants were issued was 51 pence and the market value on
the date that the shares were issue in settlement of the rent arrears was
8.5 pence.
After the year end, on June 25, 1997, the issued share capital of 71,
26,223 ordinary share of 1 pence each was consolidated into 7,142,622
ordinary shares of 10 pence each.
(b) Options
At May 31, 1997, options granted over ordinary shares outside any approved
or unapproved schemes were outstanding as shown below:
<TABLE>
<S> <C> <C> <C>
Number of shares Price per share Exercise period
(British Pounds)
362,500 0.20 Between April 1, 1995 and March 31, 1998
571,428 0.2625 Between May 23, 1998 and April 23, 2003
150,000 0.21 Between November 12, 1998 and
November 11, 2003
</TABLE>
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
20. Called up share capital
(continued)
(c) Analysis of changes in share capital (including share premium) during
the current and previous years:
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds'000
At June 1 1,724 -
Net cash inflow from
financing 155 669
Shares issued for non-cash
consideration 957 200
Shares committed but unissued - 855
------------------
At May 31 2,836 1,724
</TABLE>
(d) Warrants
During the year 1,374,440 warrants were exercised leaving 1,930,060
warrants in issue. Each warrant entitles the holder to subscribe for one
ordinary share at a price of 4.929p per ordinary share at any time from
July 1 to July 31 in any of the years 1996 to 2001 inclusive.
Since the year end, the warrants have been revised to reflect the
consolidation of the shares. 193,006 warrants are in issue with a share
price of 49.2 pence per ordinary share.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
21. Reconciliation of equity shareholders' funds and movements on reserves
Company
<TABLE>
<S> <C> <C> <C> <C> <C>
Profit Total
Share Share Other and loss shareholders'
capital premium reserve account funds
British Pounds000
As previously
reported 126 1,393 - (436) 1,083
Prior year restatement
adjustments (see note
4(d)) 5 200 (628) (603) (1,026)
-----------------------------------------------
Restated balance at May
31, 1996 131 1,593 (628) (1,039) 57
Profit attributable to
members of the company
- - - (322) (322)
Exercise of warrants 14 54 - - 68
Shares issued on
acquisition 543 - 21,654 - 22,197
Less merger
relief - - (22,409) - (22,409)
Arising on share
issues 18 179 - - 197
Loan stock
converted 8 296 - - 304
-------------------------------------------------
Balance at May 31,
1997 714 2,122 (1,383) (1,361) 92
</TABLE>
Included in the movement on other reserves is goodwill written off during
the year of British Pounds 22,409K (Restated 1996: British Pounds628K).
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
22. Share premium account
Company
<TABLE>
<S> <C> <C>
Restated
1997 1996
British Pounds000
At June 1 1,593 -
Premium on shares issued
529 883
Premium on shares committed but unissued
- 637
Share issue
costs - (127)
Restatement adjustments - 200
---------------------------
At May 31
2,122 1,593
</TABLE>
23. Acquisition of subsidiary undertakings
(a) Fair value of assets acquired
The net assets of DigiPhone at the date of acquisition were as follows:
<TABLE>
British Pounds
<S> <C> <C> <C>
Fair Book Fair Value
value value
adjustments
Fixed assets 63 - 63
Debtors 52 - 52
Cash 1,041 - 1,041
--------------------------------------------
1,156 - 1,156
Creditors due within one
year (144) - (144)
--------------------------------------------
Net assets on
acquisition 1,012 - 1,012
Goodwill arising 20,614
Less merger
relief (20,914)
-----------
712
Satisfied by:
Shares allotted - at nominal
value 523
Cash 189
-----------
712
</TABLE
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
23. Acquisition of subsidiary undertakings
(continued)
The net assets of Paragon at the date of acquisition were as follows:
</TABLE>
<TABLE>
<S> <C> <C> <C>
Fair value Book Fair Value
value
adjustments
British Pounds'000
Fixed assets 142 (55) 87
Stock 24 - 24
Debtors 144 - 144
Cash 5 - 5
------------------------------------
315 (55) 260
Creditors due within one
year (986) (263) (1,249)
Creditors due in more than one
year (16) - (16)
---------------------------------------
Net assets on
acquisition (687) (318) (1,005)
Goodwill arising 1,795
Less merger relief (740)
-------
50
Satisfied by:
Shares allotted - at nominal
value 20
Cash 30
-------
50
</TABLE>
The fair value adjustments arose due to adjustments to the carrying value
of fixed assets and a change in accounting policy for the recognition of
profit on the sale of payphones to finance houses, which is now spread
evenly over the period to which the finance contract relates.
Details of the consideration given are shown in note 12(a).
(b) Cash flow impact
The subsidiary undertaking acquired during the year utilised British Pounds
826K of the group's net operating cash flows, contributed British Pounds 9K
in respect of net returns on investments and servicing of finance, utilised
British Pounds96K in respect of capital expenditure and financial investment
and utilised British Pounds9K in respect
of financing.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
23. Acquisition of subsidiary undertakings
(continued)
( c) Profitability of acquired subsidiaries
DigiPhone made a net loss for the 14 month period May 31, 1997 of British Pounds
5,614K (period to March 31, 1996: dormant) of which British Pounds5,200K arose
in the period from April 1, 1996 to August 12, 1996. The summarised profit and
loss account for the period from April 1, 1996 to the date of acquisition is as
follows:
British Pounds'000
Turnover -
Operating loss 5,200
Loss before and
after taxation 5,200
There were no recognised gains or losses in the period ended August 12,
1996 other than the net loss of British Pounds5,200K.
Paragon made a net loss for the 14 month period ended May 31, 1997 of British
Pounds556K (year to March 31, 1996 restated loss British Pounds360K) of which
British Pounds 501K arose in the period from April 1, 1996 to August 15, 1996.
The summarised profit and loss account for the period from April 1, 1996 to
the date of acquisition is as follows:
British Pounds'000
Turnover 412
Operating loss (535)
Loss before and
after taxation (501)
There were no recognised gains or losses in the period ended August 15,
1996 other than the net loss of British Pounds501K
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
24. Other financial commitments
At May 31, 1997 annual commitments under non-cancellable operating leases
were as set out below:
Group
<TABLE>
<S> <C> <C> <C> <C>
Land and
buildings Other
1997 1996 1997 1996
British Pounds'000
Operating leases which
expire:
within one
year - - 90 -
in the second to fifth years
inclusive 83 - 149 -
after five
years 18 - - -
----------------------------------------
101 - 239 -
</TABLE>
Company
<TABLE>
<S> <C> <C> <C> <C>
Land and
buildings Other
1997 1996 1997 1996
British Pounds'000
Operating leases which
expire:
within one year - - 1 -
in the second to fifth years
inclusive - - 14 -
after five years 19 - - -
-----------------------------------
19 - 15 -
</TABLE>
25. Contingent liabilities
Company
There is a group VAT registration in place covering the company, Paragon
Payphones Limited and The Public Telephone Company Limited.
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
26. Reconciliation of net cash flow to movement in net funds
<TABLE>
<S> <C> <C>
1997 1996
British Pounds'000
period 698 131
Cash inflow from icrease in debt
and lease financing 1485 -
-----------------------------
Change in net funds resulting
from cash flows (787) 131
Loans and finance leases acquired
with subsidiary undertakings (26) (17)
New finance leases (31) -
Loan stock cancelled in non-cash
transaction 1,000 -
-----------------------------
Movement in net funds in the
period 156 114
Net funds at June 1 114 -
----------------------------
Net funds at May 31 270 114
Analysis of net
funds:
AtJune 1,
Non-cash
May 31,1996
Cash
flow
Acquisitions*
transactions
1997
British Pounds'000
Cash at Bank 153 676 - - 829
Overdrafts (22) 22 - - -
---------------------------------------------------------
131 698 - - 829
Debt due after
one year - (1,494) (16) 1,000 (510)
Debt due within
one year - - (10) - (10)
Finance leases (17) 9 - (31) (39)
-----------------------------------------------------------
114 (787) (26) 969 270
* excluding cash and
overdraft
</TABLE
<PAGE>
METEOR TECHNOLOGY plc
(formerly Telecom Credit Europe PLC)
NOTES TO THE ACCOUNTS AT MAY 31, 1997
(continued)
27. Major non-cash transactions
(i) During the year Meteor Technology plc acquired the rights to distribute
DigiPhone internet telephony software in the UK, Ireland and the rest of
the world (i.e. excluding the USA, Canada and the Rest of Europe) from
Camelot Corporation for British Pounds1.379 million. Of this consideration,
British Pounds75K was paid in cash, the remainder of British Pounds1,3041
was settled by the issue of convertible loan stock.
(ii) During the year Meteor Technology plc sold the USA and Canadian rights
t o its PCAMS and telephone software to Camelot Corporation for British Pounds
2.5 million. The consideration for these rights was satisfied by the
cancellation of British Pounds2 million of convertible loan stock and British
Pounds0.5 million by the issue to the company of 3,238,400 new common shares in
Camelot Corporation.
(iii) During the year Meteor Technology plc converted British Pounds304K of
convertible loan stock held by Camelot Corporation into 800,000 ordinary I
pence shares at. price of 38 pence each.
(iv) During the year Meteor Technology plc issued 300,000 ordinary 1 pence
shares at a price of approximately 23 pence each in settlement of the
provision or the rent arrears and rent guarantee called by the landlord
of the premises previously occupied by Telecredit Telekommunications
GmbH.
(v) Part of the consideration for the purchases of subsidiary undertakings
that occurred during the year comprised shares. (See notes 12(b) and
23(a)).
28. Related party transactions
The company's immediate parent undertaking is Alexander Mark Investments
(USA) Inc., which s incorporated and publicly listed in the United States
of America. It has included the company in its group accounts, copies of
which may be obtained from 17770 Preston Road, Dallas, Texas, United States
of America.
During the year the transactions set out in notes 18(a), 27(i), (ii) and
ii) took place with Camelot Corporation, which during the year became the
immediate parent of Alexander Mark Investment (USA) Inc..
In the directors' opinion the company's ultimate parent company and
Controlling party is Adina Inc., which is incorporated and publicly listed
in the United States of America. Copies of its group accounts, which
include the company, are available from 17770 Preston Road, Dallas, Texas,
United States of America. D Wettreich is the Chairman and a Director of
Adina Inc.
</TABLE>
