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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A-2
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 1996
EDUDATA CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-12850 13-3152648
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(Commission File Number) (IRS Employer
Identification No.)
200 N. Westlake Boulevard, Suite 202
Westlake Village, California 91362
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 381-2700
376 Main Street, PO Box 74, Bedminster, New Jersey 07921
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(Former address, if changed since last report)
Total number of pages in this document: 16
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS............................... 3
SIGNATURES ............................................................... 16
</TABLE>
2
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K dated
March 1, 1996 and filed on March 18, 1996, as set forth in the pages attached
hereto.
ITEM 7(a). FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
Included herein are the following report and combined financial statements of
Dental/Medical Diagnostic Systems, LLC and Bavarian Dental Instruments, Inc.
that were acquired by Edudata Corporation on March 1, 1996.
Index To Financial Statements
Page
----
Report of Independent Accountants . . . . . .. . . . . . . . . . . . . . 5
Combined Balance Sheet at February 29, 1996 . . . . . . . . . . . . . . . 6
Combined Statement of Operations from Inception (October 23, 1995) to
February 29, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Combined Statement of Shareholders' and Members' Deficit
from Inception (October 23,1995) to February 29, 1996 . . . . . . . . . 8
Combined Statement of Cash Flows from Inception (October 23, 1995)
to February 29,1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Notes to Combined Financial Statements . . . . . . . . . . . . . . . . . 10
Item 7 (b) Unaudited Pro Forma Information
As previously disclosed, Edudata Corporation ("the Company" or "Edudata
Corporation") acquired all the outstanding securities of Dental/Medical
Diagnostic Systems, LLC ("DMD") and Bavarian Dental Instruments, Inc. ("BDI") in
exchange for 5,000,000 shares of newly issued restricted Edudata common stock,
consisting of 66.7% of the Company's then outstanding common stock. Also,
as part of the transaction, all of the prior board members resigned and were
replaced by four members designated by DMD and BDI (whose names and business
backgrounds were previously disclosed in this Form 8-K) and the existing
management and security holders of both DMD and BDI also assumed management
control of Edudata.
For accounting purposes, the acquisition has been treated as a recapitalization
of DMD and BDI, with DMD and BDI as the acquiror (reverse acquisition). As a
result, the combined historical financial statements of DMD and BDI will become
the financial statements of Edudata.
Further, since Edudata's assets consisted solely of approximately $660,000 in
cash and cash equivalents and has had no operations in the last five years, for
accounting purposes this transaction will be recorded by DMD and BDI as the
issuance of common stock for cash held by Edudata. Therefore, no proforma
information is presented.
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Dental/ Medical Diagnostic Systems, LLC and
Bavarian Dental Instruments, Inc.
Combined Audited Financial Statements
As Of February 29, 1996 And For The Period From
Inception (October 23, 1995) To February 29, 1996
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REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Members of
Dental/Medical Diagnostic Systems, LLC and
Board of Directors and Shareholders of
Bavarian Dental Instruments, Inc.
We have audited the accompanying combined balance sheet of Dental/Medical
Diagnostic Systems, LLC (a California Limited Liability Company) and Bavarian
Dental Instruments, Inc.. (a California Corporation) (collectively referred to
as "the Company") as of February 29, 1996, and the related combined statements
of operations, shareholders' and members' deficit and cash flows from inception
(October 23, 1995) to February 29, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of Dental/Medical
Diagnostic Systems, LLC and Bavarian Dental Instruments, Inc. as of February 29,
1996, and the combined results of their operations and their cash flows from
inception (October 23, 1995) to February 29, 1996 in conformity with generally
accepted accounting principles.
The accompanying combined financial statements have been prepared assuming that
the Company will continue as a going concern. As further discussed in Note 2 to
the combined financial statements, the Company has incurred start-up losses, has
a combined working capital deficit of approximately $1,100,000 and has a
combined total deficit of approximately $849,000 at February 29,1996. This
raises substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 2. The combined financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
May 10, 1996
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, LLC
AND
BAVARIAN DENTAL INSTRUMENTS, INC.
COMBINED BALANCE SHEET
AS AT FEBRUARY 29, 1996
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 6,733
Accounts receivable, less allowances for
bad debts and sales returns of $28,280 51,192
Inventories 1,057,588
Prepaid expenses and other 151,924
-----------
Total current assets 1,267,437
Property and equipment, net 248,170
Other assets 36,040
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Total assets $ 1,551,647
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LIABILITIES AND SHAREHOLDERS' AND
MEMBERS' DEFICIT
Current liabilities:
Book overdraft $ 24,686
Accounts payable 1,585,433
Accrued salaries and wages 71,950
Other accrued expenses 102,316
Customer deposits 236,345
Current portion of capital lease obligations 15,505
Notes payable to related parties 277,015
-----------
Total current liabilities 2,313,250
Capital lease obligations 74,836
Other long term liabilities 12,629
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Total liabilities 2,400,715
Commitments and contingencies
SHAREHOLDERS' AND MEMBERS' DEFICIT:
Dental/Medical Diagnostic Systems, LLC
membership interests issued 610,261
Bavarian Dental Instruments, Inc.
common stock, no par value; 25,000 shares
authorized, 3,000 outstanding 149,091
Accumulated deficit (1,608,420)
-----------
Total shareholders' and members' deficit (849,068)
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Total liabilities and shareholders' and members' deficit $ 1,551,647
===========
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, LLC
AND
BAVARIAN DENTAL INSTRUMENTS, INC.
COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (OCTOBER 23 ,1995) TO FEBRUARY 29, 1996
<TABLE>
<CAPTION>
<S> <C>
Net sales $ 219,118
Cost of sales (201,465)
-----------
Gross profit 17,653
Operating expenses
Selling, general and administrative expenses 1,093,743
Research and development expenses 528,426
Interest expense 3,904
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Net loss ($1,608,420)
===========
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, LLC
AND
BAVARIAN DENTAL INSTRUMENTS, INC.
COMBINED STATEMENT OF SHAREHOLDERS' AND MEMBERS' DEFICIT
FOR THE PERIOD FROM INCEPTION (OCTOBER 23,1995) TO FEBRUARY 29, 1996
<TABLE>
<CAPTION>
Bavarian Dental Dental/Medical
Instruments, Inc. Diagnostic Systems, LLC
Common Stock Membership Interests
------------------ -----------------------
Number of Percentage Accumulated
Shares Amount Interest Amount Deficit Total
--------- ------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Issuance of stock for 1,650 $ 82,000 $82,000
cash
Issuance of stock for 1,350 67,091 67,091
services
Issuance of membership 90% $549,235 549,235
interests for cash
Issuance of membership 10% 61,026 61,026
interests for services
Net loss $(1,608,420) $(1,608,420)
----- -------- --- -------- ----------- -----------
Balance at February 29,
1996 3,000 $149,091 100% $610,261 $(1,608,420) $ (849,068)
===== ======= === ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, LLC
AND
BAVARIAN DENTAL INSTRUMENTS, INC.
COMBINED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (OCTOBER 23, 1995) TO FEBRUARY 29, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $(1,608,420)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 9,219
Allowances for bad debts and sales returns 28,280
Inventory write down 91,556
Deferred rent 12,629
Shares and membership interests issued for services 128,117
Changes in operating assets and liabilities:
Increase in:
Accounts receivable (79,472)
Inventories (1,149,144)
Prepaid expenses and other (151,924)
Other assets (36,040)
Increase in:
Accounts payable 1,506,216
Accrued expenses 158,283
Customer deposits 236,345
-----------
Net cash used by operating activities (854,355)
-----------
Cash flows from investing activities:
Purchase of property and equipment (144,537)
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Cash flows from financing activities:
Increase in book overdraft 24,686
Accounts payable to related party in excess of terms 79,218
Net proceeds from issuance of common stock 82,000
Net proceeds from issuance of membership interests 549,235
Proceeds from borrowings from related parties 377,015
Principal payments on borrowings from related parties (100,000)
Principal payments on capital lease obligations (6,529)
-----------
Net cash provided by financing activities 1,005,625
-----------
Net increase in cash and cash equivalents 6,733
Cash and cash equivalents, beginning of period --
-----------
Cash and cash equivalents, end of period $ 6,733
===========
Supplemental cash flow information:
Capital lease obligations incurred $ 96,870
Property and equipment not paid for at period end $ 15,983
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, LLC
AND
BAVARIAN DENTAL INSTRUMENTS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION
(OCTOBER 23, 1995) TO FEBRUARY 29, 1996
1. Description of Business
Dental/Medical Diagnostics Systems LLC ("DMD") designs, develops,
manufactures and sells an intraoral camera (the "TeliCam Intraoral Camera
System") exclusively for the dental market place, and Bavarian Dental
Instruments, Inc. ("BDI") distributes high quality reusable diamond dental
burs. Collectively, DMD and BDI are referred to as the Company.
DMD was formed in October 1995 and has been primarily involved in designing,
developing, manufacturing, marketing and selling the TeliCam Intraoral Camera
System. The first shipments to customers of the TeliCam System commenced in
early February 1996. DMD holds the exclusive, worldwide rights to market the
Teli camera and frame grabber circuitry to the dental market and has the
rights to use the "TeliCam" trademark, both through an agreement with Boston
Marketing Company, Ltd., a related party described below. The majority of
the TeliCam System sales to date have been in the United States.
BDI was formed in November 1995, and from that time , has been primarily
involved in negotiating a distribution agreement to import from Russia and to
distribute and market dental burs in the United States and elsewhere. The
first sales of the burs commenced in early March 1996. The dental burs are
imported pursuant to two exclusive distribution agreements for the United
States, Canada, Mexico, Central and South America. The agreements expire in
December 1998 and can be terminated if no orders are placed for six months.
All bur sales to date have been in the United States.
DMD and BDI buy certain key components from one supplier or from a limited
number of suppliers. Although there are a limited number of suppliers of the
key components, management believes that other suppliers could provide
similar components on comparable terms. Changes in key suppliers could cause
delays in manufacturing and distribution of products and a possible loss in
sales, which could adversely affect operating results.
The Company maintains its administrative offices in Westlake Village,
California and its manufacturing facility in Irvine, California.
2. Summary of Significant Accounting Policies
Basis of Presentation
Since inception, the Company has incurred start-up losses. Also, the Company
has a combined working capital deficit of approximately $1,100,000 and has a
combined total deficit of approximately $849,000 at February 29,1996.
Management has funded these losses, and intends to fund future losses,
through offering of notes and equity securities and ultimately, through the
attainment of positive operating cash flows. Through the acquisition of the
Company by Edudata Corporation (see Note 3), the Company raised approximately
$660,000 and recently has accepted applications to purchase 737,000 shares of
the Company's common stock for $649,000 through an offshore offering
pursuant to Regulation S (see Note 9). Management plans additional equity
financing offerings.
The ability of the Company to raise additional funds and ultimately achieve
positive operating cash flows is uncertain and, therefore, this raises
substantial doubt about the Company's ability to continue as a going concern.
The accompanying combined financial statements have been prepared assuming
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that the Company will continue as a going concern and do not include any
adjustments that might result from the outcome of this uncertainty.
Principles of Combination
The combined financial statements include the accounts of Dental/Medical
Diagnostic Systems, LLC and Bavarian Dental Instruments, Inc. as of February
29, 1996 and for the period from inception (October 23, 1995) to February 29,
1996. These entities are presented on a combined basis due to common
management and ownership and the purchase of DMD and BDI by Edudata
Corporation on March 1, 1996, as more fully described in Note 3. All
significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. The significant estimates made in the preparation of
the combined financial statements relate to the assessment of the carrying
value of accounts receivable, inventories and warranty provision. Actual
results could differ from those estimates.
Cash and Cash Equivalents
Cash included currency on hand and demand deposits with financial
institutions. Cash equivalents are defined as short-term, highly liquid
investments both readily convertible to known amounts of cash and so near
maturity that there is insignificant risk of change in value because of
changes in interest rates.
Inventories
Inventories are carried at standard costs which approximate the lower of
actual cost (first-in; first-out) or market. Such amounts include the cost of
materials and, when applicable, labor and overhead.
Advertising and Promotion Costs
Production costs of future media advertising and costs of dental industry
trade shows are deferred until the advertising or trade show occurs. All
other advertising and promotion costs are expensed as incurred. Total
advertising and promotion expenses incurred for the period from inception
through February 29, 1996 were $434,612.
Property and Equipment
Property and equipment is recorded at cost, less accumulated depreciation.
Capitalized leases are recorded at the lower of fair market value or the
present value of future minimum lease payments, less accumulated
amortization. Maintenance and repairs are expensed as incurred.
The cost and related accumulated depreciation and amortization of property
and equipment sold or retired are removed from the accounts and the resulting
gains or losses are included in current operations. Depreciation and
amortization are provided on a straight line basis over the estimated useful
lives of the related asset, limited as to leasehold improvements and capital
leases by the primary term of the lease, as follows:
Equipment and software, including capitalized leases 5 years
Furniture and fixtures 7 years
Leasehold improvements 3 years
Major Customers
No customer accounted for more than ten percent of revenues in the period
presented. The majority of the Company's current customers consist of dental
professionals. Certain of the dental professionals lease the Company's
products through third party leasing companies. Under the terms of the sales,
the leasing companies have no recourse to the Company.
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Revenue Recognition
The Company recognizes revenue from system and supply sales at the time of
shipment, net of estimated sales returns and allowances.
Warranty Expenses
The Company generally warrants its systems for one year. A provision for
estimated future costs relating to warranty is recorded when systems are
shipped.
Income Taxes
DMD was formed as a limited liablity company, electing to be taxed as a
partnership, and BDI has elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code. As a result the Company's federal
and state taxable income or loss and tax credits are passed through to the
individual shareholders. Accordingly, no provision for Federal or state
income taxes has been reflected in the combined financial statements. As a
result of the acquisition on March 1, 1996 as described in Note 3, as of that
date DMD and BDI terminated their status as being taxed as a partnership and
under the provisions of Subchapter S of the Internal Revenue Code,
respectively, and will be taxed as a C corporation in the future. Due to the
net operating loss incurred, however, treatment as a C corporation for tax
purposes would not have resulted in tax expense for the period from inception
(October 23, 1995) to February 29, 1996.
Fair Value Of Financial Instruments
The Financial Accounting Standards Board, Statement of Financial Accounting
Standards No. 107, "Disclosures About Fair Value of Financial Instruments",
requires disclosure of fair value information about all financial instruments
held by a company except for certain excluded instruments and instruments for
which it is not practicable to estimate fair value. The carrying value of the
Company's financial instruments approximates their fair values.
3. Acquisition of DMD and BDI
On March 1, 1996, Edudata Corporation ("Edudata") completed the acquisition
of BDI and DMD. The acquisition was effected pursuant to the terms of two
Contribution Agreements dated February 29, 1996 ("Contribution Agreements")
between Edudata and BDI and Edudata and DMD. Pursuant to the Contribution
Agreements the former shareholders of BDI and members of DMD received a
total of 5,000,000 shares of newly issued Edudata restricted common stock,
constituting approximately 66.7% of Edudata's outstanding common stock,
taking into consideration the newly issued shares. As part of the
transaction, Edudata's prior Board of Directors resigned and were replaced by
Mr. Robert H. Gurevitch, Chief Executive Officer, Board Member and
member/shareholder of DMD and BDI, Mr. Hiroki Umezaki, President of DMD's
International Operations, Board Member and member of DMD and two outside
members. In addition, existing management and security holders of both DMD
and BDI also assumed management control of Edudata.
For accounting purposes, the acquisition will be treated as a
recapitalization of DMD and BDI with DMD and BDI combined as the acquiror
(reverse acquisition). As a result, the combined historical financial
statements of DMD and BDI will become the financial statements of Edudata.
Further, since Edudata's assets consisted solely of approximately $660,000
in cash and cash equivalents and has had no operations in the last five
years, for accounting purposes this transaction will be recorded by DMD
and BDI as the issuance of common stock for cash held by Edudata.
Therefore, no proforma information is presented.
4. Related Party Transactions
DMD has entered into an agreement with Boston Marketing Company, Ltd.,
("Boston Marketing") whereby DMD obtained the exclusive worldwide rights to
market the Teli camera and frame grabber circuitry to the dental market and
the rights to use the "TeliCam" trademarks. Under another agreement
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with Boston Marketing, DMD agreed to purchase 5,000 camera and frame grabber
units at prices ranging from $650 to $750, depending on the specific unit,
through October 30, 1996. Boston Marketing is partially owned by Mr. Hiroki
Umezaki, the President of International Operations, Director and Secretary
of DMD and 40% membership interest holder in DMD. Under another agreement
with DMD, Mr. Umezaki has the exclusive rights to sell TeliCam products on
behalf of the Company in the Far East for five years, with a five year
option to extend. He will receive commissions ranging from 10 to 15% on
these sales.
Through February 29, 1996, 905 cameras and frame grabber units at an
aggregate cost of $674,218, had been purchased by DMD. A total of
approximately 825 units remain in inventory at February 29, 1996. No payments
had been made to Boston Marketing through February 29, 1996 and amounts
payable to Boston Marketing totaling $674,218 are included in accounts
payable, including $79,218 which were past due. No sales of DMD's product
have been made to date in the Far East. Through May 7, 1996 an additional 300
camera and frame grabber circuitry units have been purchased by DMD at an
aggregate cost of $225,000. Subsequent to February 29, 1996 payments
totaling $229,217 have been made to Boston Marketing
From December 1995 through February 1996 Mr. Robert H. Gurevitch, President,
Board Member and member/shareholder of DMD and BDI, and Boston Marketing
collectively loaned $377,015 to DMD in exchange for promissory notes dated
February 1 and 15, 1996. The promissory notes bear interest at 6% per annum
and are payable within six months. On February 26, 1996 DMD repaid $50,000 to
both Mr. Gurevitch and Boston Marketing. On April 11, 1996 Boston Marketing
loaned DMD an additional $25,000 under similar terms. No interest has been
paid on these notes. Accrued interest totaling $1,827 related to these notes
is included in other accrued liabilities. The carrying amounts of these notes
payable approximates their fair value.
5. Inventories
Inventories at February 29, 1996 consisted of the following:
<TABLE>
<S> <C>
Raw materials $ 741,337
Work in process 47,626
Finished goods 268,625
----------
Total $1,057,588
==========
</TABLE>
6. Prepaid and Other Current Assets
Prepaid and other current assets at February 29, 1996 consisted of the
following:
<TABLE>
<S> <C>
Prepaid advertising and industry trade show fees $115,245
Other 36,679
--------
Total $151,924
========
</TABLE>
7. Property and Equipment
Property and equipment at February 29, 1996 consisted of the following:
<TABLE>
<S> <C>
Equipment and software, including $96,870 of
capitalized leases $190,875
Furniture and fixtures 61,352
Leasehold improvements 5,162
--------
257,389
Less accumulated depreciation and amortization,
</TABLE>
<TABLE>
<S> <C>
including $3,368 relating to capitalized leases (9,219)
--------
Total $248,170
========
</TABLE>
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8. Commitments and Contingencies
Leases
DMD leases two facilities under various operating leases which expire in
fiscal 1998 and fiscal 2001. The leases require the Company to pay taxes,
maintenance fees and insurance and provide for periodic fixed rent increases
and increases based on a published price index. Under certain circumstances
DMD has the right to terminate one lease at the forty second month. DMD also
leases certain equipment under capital leases which expire in fiscal 2001.
DMD has the right to purchase the underlying equipment at the termination of
the leases for its fair market value. Rent expense for all operating leases
was approximately $38,061 for the period from inception (October 23, 1995) to
February 29, 1996. All non-cancelable leases are guaranteed by Mr. Robert H.
Gurevitch, President, Board Member and member/shareholder of DMD and BDI. The
other facility lease is co-guaranteed by Mr. Hiroki Umezaki, President of
DMD's International Operations, Board Member and member of DMD.
The aggregate liability for future rentals under these lease agreements as of
February 29, 1996, is summarized as follows:
<TABLE>
<CAPTION>
Year Ended Capital Operating
February 29, Leases Leases Total
<S> <C> <C> <C> <C>
1997 $ 25,668 $116,359 $142,027
1998 25,668 121,507 147,175
1999 25,668 96,348 122,016
2000 25,668 68,601 94,269
2001 17,736 54,052 71,788
-------- -------- --------
120,408 $456,867 $577,275
======== ========
Less: Amounts representing:
Interest 30,067
Current Portion 15,505
--------
Long Term Portion $ 74,836
========
</TABLE>
9. Capital Transactions
DMD allocated 90% of its membership interests to Mr. Robert H. Gurevitch,
President, Board Member and member/shareholder of DMD and BDI, and Mr. Hiroki
Umezaki, President of DMD's International Operations, Board Member and member
of DMD in exchange for cash payments of $549,235. Membership interests of 10%
were allocated to two other employees in exchange for services and were
valued in proportion to the interests issued for cash. Compensation expense
totaling $61,026 was recognized in conjunction with the allocation of these
interests for services and is included in the combined statement of
operations.
BDI issued 1,650 common shares to its President, Mr. Robert H. Gurevitch, in
exchange for a cash payment of $82,000. In exchange for services, 1,350
common shares were issued to two employees and were valued in proportion to
the common shares issued for cash. Compensation expense totaling $ 67,091 was
recognized in conjunction with the issuance of these shares for services and
is included in the combined statement of operations.
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Mr. Gurevitch and Mr. Umezaki have options to acquire an additional 20% and
10% membership interests in DMD, respectively, for $200,000 and $150,000,
respectively.
As discussed in Note 3, on March 1, 1996 Edudata acquired DMD and BDI in a
reverse acquisition. Edudata has authorized 10,000,000 common shares with a
par value of $.01 per share and prior to the acquisition had 2,509,909 shares
outstanding. As indicated, Edudata issued 5,000,000 restricted shares of
common stock for the acquisition of DMD and BDI.
For accounting purposes, the acquisition of DMD and BDI will be treated as a
recapitalization of DMD and BDI, whereby the previously outstanding shares
and interests of DMD and BDI were exchanged for 5,000,000 shares of Edudata's
restricted common stock and issuance of 2,509,909 common shares for the
approximately $660,000 in cash and cash equivalents held by Edudata.
There were no options outstanding to purchase Edudata's common stock prior
to the acquisition of DMD and BDI. On March 5, 1996, the Company issued
options to purchase 15,000 shares of common stock to each of the four new
board members and 120,000 options to purchase common shares to an
individual for services in connection with the acquisition of DMD and BDI.
All options are exercisable at $.30 per share and expire on March 4, 2001.
The Company is in the process of offering common shares in an offshore
offering pursuant to Regulation S at $.88 per share and through May 10,
1996 has received applications for 737,000 shares for proceeds of
approximately $649,000 minus related expenses.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EDUDATA CORPORATION
(Registrant)
By: /s/ Robert H. Gurevitch
-------------------------------------
Robert H. Gurevitch
Chief Executive Officer and
Chairman of the Board
Date: May 20, 1996
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