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 January 31, 1998
?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.)
2415 Midway Road, Suite 121, Carrollton, Texas 75006
(Address of Principal Executive Offices)
(972) 733-3005
(Issuer's Telephone Number, Including Area Code)
17770 Preston Road, Dallas, Texas 75252
(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.
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
ALEXANDER MARK INVESTMENTS (USA), INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED BALANCE SHEETS
(In Thousands)
ASSETS
<TABLE>
<S> <C> <C>
January 31, 1998 April 30, 1997
(Unaudited) (Audited/Adjusted)
Current Assets:
Cash $ 1,352.7 $ 1,450.4
Securities held for sale 815.9 812.1
Accounts & Notes Receivable 112.6 358.9
Inventory 360.6 112.1
Total Current Assets $ 2,641.8 $ 2,733.5
Property and Equipment:
Net of $132,910 and
$131,157 accumulated depreciation
at October 31, 1997 and April 30,
1997, respectively 388.3 386.6
Total Assets $ 3,030.1 $ 3,120.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts & notes payable $ 2,010.3 $ 2,133.4
Total current liabilities 2,010.3 2,133.4
Notes payable 873.0 867.6
Minority interest 64.5 53.1
Total liabilities $ 2,947.8 $ 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 5,445.5 5,488.7
Less treasury stock, 684 shares
at cost (1.1) (1.1)
Retained Earnings (5,362.2) (5,421.7)
82.3 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)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1998 1997
Sales $ 5,529.8 $ 38.2
Cost of Sales 3,699.0 29.0
Gross Profit 1,830.8 9.2
Operating Expenses:
Administrative expenses 1,278.1 259.6
Interest Expense 42.4 3.1
Total Operating Expenses 1,320.5 262.7
Discontinued Operations - (412.3)
Net Income (Loss) $ 510.3 $ (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)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 510.3 $ (665.8)
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization 87.0 -
(Gain) loss on disposal of assets 17.2 -
Non cash transactions for services (4,040.0) -
Write-off of Distribution Rights 2,107.3 -
Change in assets and liabilities
Accounts receivables 191.2 (113.0)
Inventory 183.3 (122.2)
Accounts payable and accrued expenses 439.6 238.2
Net cash used by operating
activities (504.1) (662.8)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment 12.63 (965.1)
Purchases of marketable securities - (458.1)
Net cash used by investing activities 12.63 (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 (516.7) 233.6
CASH AT BEGINNING OF PERIOD 1,869.4 -
CASH AT END OF PERIOD $ 1,352.7 $ 233.6
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 71.1 $ 6.1
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
ALEXANDER MARK INVESTMENTS (USA), INC.
SCHEDULE OF NONCASH ACTIVITIES
(UNAUDITED)
(IN THOUSANDS)
Nine Months Ended
January 31,
1998 1997
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) -
<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 nine-month period ended January
31, 1998 are not necessarily indicative of the operating results for
the fiscal year ending April 30, 1999.
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 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
January 31, 1998 and April 30, 1997, one pound equals $1.63 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. For the nine months ended January 31, 1998, revenues
were $5,529,800 ($38,200 in 1997) and income before tax was $510,300
compared to a $665,800 loss for the nine months ended January 31,
1997. 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 nine months
ended January 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 nine months
was $504,100 ($662,800 in 1997). Net cash used by investing
activities was $12,630 ($1,423,200 in 1997) and by financing
activities was $0 ($2,319,600 in 1997).
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 12, 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
Date: March 16, 1998
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