U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
Quarterly report under Section 13, or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended July 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 Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for past 90 days.
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
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ALEXANDER MARK INVESTMENTS (USA), INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED BALANCE SHEETS
(In Thousands)
ASSETS
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July 31, 1997 April 30,1997
(Unaudited) (Audited/Adjusted)
Current Assets:
Cash $ 1,465.3 $ 1,450.4
Securities held for sale 820.4 812.1
Accounts & Notes Receivable 362.7 358.9
Inventory 113.2 112.1
Total Current Assets $ 2,761.6 $ 2,733.5
Property and Equipment:
Net of $132,910 and
$131,557 accumulated
depreciation at July 31,
1997 and April 30, 1997,
respectively 390.5 386.6
Total Assets $ 3,152.1 $ 3,120.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts & notes payable $ 2,153.9 $ 2,133.4
Total current liabilities 2,153.9 2,133.4
Notes payable 876.2 867.6
Minority interest 53.6 53.1
Total liabilities $ 3,083.7 $ 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 July 31, 1997 and
April 30, 1997, respectively .1 .1
Additional paid in capital 5,536.1 5,488.7
Less treasury stock, 684 shares
at cost (1.1) (1.1)
Retained Earnings (5,466.6) (5,421.7)
68.5 66.0
$ 3,152.1 $3,120.1
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See accompanying notes to these financial statements.
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ALEXANDER MARK INVESTMENTS (USA), INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except for Share and Per Share Data)
(UNAUDITED)
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Three Months Ended
July 31,
1997 1996
Sales $ 5,605.4 $ 38.2
Cost of Sales 3,743.0 29.0
Gross Profit 1,862.4 9.2
Operating Expenses:
Administrative expenses 1,352.9 259.6
Interest Expense 43.0 3.1
Total Operating Expenses 1,395.9 262.7
Discontinued Operations - (412.3)
Net Income (Loss) $ 466.5 $ (665.8)
Net loss per share $ 0.06 $ (.89)
Weighted Average Number of
Shares outstanding 7,536,660 749,400
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See accompanying notes to these financial statements.
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ALEXANDER MARK INVESTMENTS (USA), INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In Thousands)
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Three Months Ended
July 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss) $ 466.5 $ (665.8)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization 98.6 -
(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 536.6 238.2
Net cash used by operating
activities (433.5) (662.7)
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 (446.4) 233.6
CASH AT BEGINNING OF PERIOD 1,911.7 -
CASH AT END OF PERIOD $ 1,465.3 $ 233.6
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 71.1 $ 6.1
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See accompanying notes to these financial statements.
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ALEXANDER MARK INVESTMENTS (USA), INC.
SCHEDULE OF NONCASH ACTIVITIES
(UNAUDITED)
(IN THOUSANDS)
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Three Months Ended
July 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) -
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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
three-month period ended July 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 first quarter 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 three
month results for the period ending July 31, 1997 and 1996 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 July 31, 1997 and April 30, 1997, one pound equals $1.64
and $1.62, respectively. The conversion used for the statement of
operations was based on an average exchange rate for the six
months ended July 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 first quarter which includes the operating results
arising from the investment in Meteor Technology, plc 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 three months ended July 31, 1997 and 1996 except as
noted above. For the three months ended July 31, 1997, revenues
were $5,605,400 ($382,000 in 1996) and income before tax was
$466,500 compared to a $665,800 loss for the three months ended
July 31, 1996. This includes a sale of software rights for
$4,040,000 and a write-off of DigiPhone distribution rights for
$2,107,300.
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 quarter was $751,800 ($662,700) in
1996). Net cash used by investing activities was $12,900
($1,423,200 in 1996) and by financing activities was $318,400
($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.
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
Date: September 15, 1997
[ARTICLE] 5
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[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] APR-30-1998
[PERIOD-END] JUL-31-1997
[CASH] 1465300
[SECURITIES] 820400
[RECEIVABLES] 362700
[ALLOWANCES] 0
[INVENTORY] 113200
[CURRENT-ASSETS] 2761600
[PP&E] 390500
[DEPRECIATION] 132910
[TOTAL-ASSETS] 3152100
[CURRENT-LIABILITIES] 2153900
[BONDS] 00
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 100
[OTHER-SE] 68400
[TOTAL-LIABILITY-AND-EQUITY] 3152100
[SALES] 5605400
[TOTAL-REVENUES] 5605400
[CGS] 3743000
[TOTAL-COSTS] 3743000
[OTHER-EXPENSES] 1395900
[LOSS-PROVISION] 466500
[INTEREST-EXPENSE] 43000
[INCOME-PRETAX] 466500
[INCOME-TAX] 466500
[INCOME-CONTINUING] 466500
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 466500
[EPS-PRIMARY] (.06)
[EPS-DILUTED] (.06)
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