U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13, or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended October 31, 1997
Transition report under Section 13 or 15 (d) of the Exchange
Act
For the transition period from ___________to __________
Commission file number 0-12122
ALEXANDER MARK INVESTMENTS (USA), INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Colorado 84-0601802
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
17770 Preston Road, Dallas, Texas 75252
(Address of Principal Executive Offices)
(972) 733-3005
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Ch
anged Since Last Report)
Check whether the issuer: (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for past 90 days.
X Yes __ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13, or 15 (d) of the Exchange
Act after the distribution of securities under a plan confirmed by
a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date: 7,537,398 common stock, no par value.
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ALEXANDER MARK INVESTMENTS (USA), INC.
I N D E X
Page No.
Part I FINANCIAL INFORMATION:
Item 1. Condensed Balance
Sheets 3
Condensed Statements of
Operations 4
Condensed Statements of
Cash Flows 5
Notes to Condensed
Financial Statements
(unaudited) 6
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 6
Part II OTHER INFORMATION 7
<PAGE>
ALEXANDER MARK INVESTMENTS (USA), INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED BALANCE SHEETS
(In Thousands)
ASSETS
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October 31,1997 April 30, 1997
(Unaudited)
(Audited/Adjusted)
Current Assets:
Cash $ 1,383.3 $ 1,450.4
Securities held for sale 834.3 812.1
Accounts & Notes Receivable 368.8 358.9
Inventory 115.1 112.1
Total Current Assets $ 2,701.5 $ 2,733.5
Property and Equipment:
Net of $132,910 and
$131,157 accumulated
depreciation at October 31,
1997 and April 30, 1997,
respectively 397.1 386.6
Total Assets $ 3,098.6 $ 3,120.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts & notes payable $ 2,055.3 $ 2,133.4
Total current liabilities 2,055.3 2,133.4
Notes payable 892.7 867.6
Minority interest 66.0 53.1
Total liabilities $ 3,014.0 $
3,054.1
Stockholders' Equity (Deficit):
Common stock no par value, 75,000,000
shares authorized; 7,536,680 and
749,400 shares issued at October
31, 1997 and April 30, 1997,
respectively .1 .1
Additional paid in capital 5,614.7 5,488.7
Less treasury stock, 684 shares
at cost (1.1) (1.1)
Retained Earnings (5,529.1) (5,421.7)
84.6 66.0
$ 3,098.6 $3,120.1
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
ALEXANDER MARK INVESTMENTS (USA), INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except for Share and Per Share Data)
(UNAUDITED)
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Six Months Ended
October 31,
1997 1996
Sales $ 5,605.4 $ 38.2
Cost of Sales 3,749.6 29.0
Gross Profit 1,855.8 9.2
Operating Expenses:
Administrative expenses 1,295.3 259.6
Interest Expense 43.0 3.1
Total Operating Expenses 1,338.3 262.7
Discontinued Operations - (412.3)
Net Income (Loss) $ 517.5 $ (665.8)
Net Income (Loss) per share $ 0.07 $ (.89)
Weighted Average Number of
Shares outstanding 7,536,660 749,400
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
ALEXANDER MARK INVESTMENTS (USA), INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In Thousands)
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Six Months Ended
October 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 517.5 $ (665.8)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization 72.7 -
(Gain) loss on disposal of assets 14.5 -
Non cash transactions for services (4,040.0) -
Write-off of Distribution Rights 2,107.3 -
Change in assets and liabilities
Accounts receivables 195.5
(113.0)
Inventory 187.5 (122.2)
Accounts payable and accrued
expenses 429.5 238.2
Net cash used by operating
activities (515.5) (662.8)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment (12.9) (965.1)
Purchases of marketable securities - (458.1)
Net cash used by investing
activities (12.9) (1,423.2)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock - 2,319.6
Net cash provided (used) by
financing activities - 2,319.6
NET INCREASE (DECREASE) IN CASH (528.4) 233.6
CASH AT BEGINNING OF PERIOD 1,911.7 -
CASH AT END OF PERIOD $ 1,383.3 $ 233.6
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 71.1 $ 6.1
</TABLE>
See accompanying notes to these financial statements.
ALEXANDER MARK INVESTMENTS (USA), INC.
SCHEDULE OF NONCASH ACTIVITIES
(UNAUDITED)
(IN THOUSANDS)
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Six Months Ended
October 31,
1997 1996
During the period, Meteor
expensed the Distribution Rights
to DigiPhone 2,107.3 -
During the period, Meteor
sold software in exchange
for common stock and long-term note (4,040.0) -
During the period, Meteor
issued shares in settlement
for rent obligations for
property previously occupied
by Telecredit Telekommunicaitons
GmbH (318.4) -
</TABLE>
<PAGE>
ALEXANDER MARK INVESTMENTS (USA), INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Financial Statements
The accompanying unaudited financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. These statements should be read
in conjunction with the audited financial statements and notes
thereto included in the Registrant's annual Form 10-KSB for the
year ended April 30, 1997. The results of the operations for the
six-month period ended October 31, 1997 are not necessarily
indicative of the operating results for the fiscal year ending
April 30, 1998.
The consolidated financial statements include the accounts of the
Company and the majority owned company, Meteor Technology, plc.
("Meteor") The April 30, 1997 adjusted balance sheet consolidates
numbers from the April 30, 1997 Audited Financial Statements of
the Company and the May 31, 1997 adjusted Audited Financial
Statements of Meteor Technology, plc. Adjustments were made to
eliminate intercompany transactions and for the conversion of
Meteor's numbers from pounds to US Dollars. The accumulated
deficit increase represents the portion of earnings recognized in
the current period and the currency translation adjustment.
The Meteor financial presentation is based on the accounting rules
of the United Kingdom. The balance sheet reflects adjustments to
present financial statements per US GAAP accounting rules. The
adjustments included presenting current assets first on the
balance sheet, reclassing creditors payable due within one year to
the liability section from the current asset section, reclassing
creditors payable greater than one year to notes payable, and
combining reserve amount and profit and loss account into retained
earnings. The assets and liability amounts were not changed.
The accounting rules of the United Kingdom only require financial
statements of public companies to be published every six months.
Meteor's fiscal year end is May 31 and their last six month
Interim Financials were issued for November 30, 1996. The six
month results for the period ending October 31, 1996 and 1997
include the published six month results of Meteor for periods
commencing on December 1, 1995 and 1996 and ending on May 31, 1996
and 1997, respectively.
The financial statements reflect the 43 per cent minority interest
in the outstanding voting share capital of Meteor not owned by
the Company. The minority interest is based on the proportioned
share of the consolidated net assets of Meteor on a historical
basis.
Meteor's financial statements were converted from British Pounds
to US Dollars based on US accounting guidelines. The conversion
rate for the balance sheet was based on the published exchange
rate at October 31, 1997 and April 30, 1997, one pound equals
$1.67 and $1.62, respectively. The conversion used for the
statement of operations was based on an average exchange rate for
the six months ended May 31, 1997 and 1996. This conversion rate
was one pound equals $1.65 for period ended May 31, 1997 and $1.53
for period ended May 31, 1996.
Item 2. Management Discussion and Analysis of Financial
Condition and Results of Operations
This is the second quarter which includes the operating results
arising from the investment in Meteor Technology, plc ("Meteor")
completed and announced in May, 1997. The financials reflect
this transaction as a pooling of interest.
The financials reflect activities as if the transaction had
occurred on May 1, 1997 and operating revenues were received
during the six months ended October 31, 1997 and 1996 except as
noted above. For the six months ended October 31, 1997, revenues
were $5,605,400 ($38,200 in 1996) and income before tax was
$517,500 compared to a $665,800 loss for the six months ended
October 31, 1996. This includes a sale of the US and Canadian
software rights for $4,040,000 and a write-off of DigiPhone
distribution rights for $2,107,300 as a part of the cost of sales
by Meteor.
Revenues consist primarily of activities of Meteor subsidiaries,
the Meteor Payphone and DigiPhone International. Expenses relate
to the associated costs of running these operations.
The financial activities of Meteor as reported for the three
months ended July 31 versus the six months ended October 31 are
the same as Meteor does not have another report due until May 1998
for U.K. purposes.
The Company has investigated and concluded that it has no Year
2000 issues. It uses software that is Year 2000 compliant and
does not require any future adjustments.
Subsequent to the end of the period Camelot, which owns eighty
percent of the outstanding share capital of the Registrant, will
acquire all the outstanding shares of DigiPhone International,
Ltd. from Meteor. As a result of this transaction Camelot will
own all the rights to its subsidiaries products and AMI will have
no further interest in DigiPhone International. This agreement is
conditional on shareholder approval of both Camelot and Meteor.
The financial impact on the Registrant is specifically reflected
in a Form 8-K filed with the Securities and Exchange Commission
which is incorporated by reference.
Liquidity and Capital Resources
The Registrant has met its shortfall of funds from operations
during prior periods by the sale of its majority owned
subsidiaries assets, and by borrowing from its Directors and
companies affiliated with its Directors. Net cash used by
operating activities for the six months was $515,500 ($662,700) in
1996). Net cash used by investing activities was $12,900
($1,423,200 in 1996) and by financing activities was $0
($2,319,600 in 1996).
The Registrant's present needs for liquidity principally relates
to its obligations for its SEC reporting requirements and the
minimal requirements for record keeping. The Company conducts its
activities through Meteor Technology plc which it expects to be
able to fund its liquidity needs from its operations. The
Registrant has limited liquid assets available for its continuing
needs. In the absence of any additional liquid resources, the
Registrant will be faced with cash flow problems.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
(1) Articles of Incorporation: Incorporated by
reference to
Registration Statement filed
on Form 10, May 10, 1984;
File No. 0-12122
(2) Bylaws: Incorporated by reference as
immediately above.
(b) Reports on Form 8-K
Report dated May 15, 1997 with amendments.
Report dated May 20, 1997 with amendments.
Report dated December 3, 1997.
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 thereto duly authorized.
ALEXANDER MARK INVESTMENTS (USA),
INC.
(Registrant)
By: /s/ Daniel Wettreich
DANIEL WETTREICH, PRESIDENT
Chief Financial Officer
Date: December 3, 1997
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<EPS-PRIMARY> (.042)
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