<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission File No.: 1-9156
New Dimensions in Medicine, Inc.
filing in Behalf of
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
(Exact name of registrant as specified in its charter)
DELAWARE 41-6410139
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45 SOUTH SEVENTH STREET
SUITE 3400
MINNEAPOLIS, MINNESOTA (Address of 55402
principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (612) 607-7000
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
<PAGE>
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.
Dated: March 27, 1998 NEW DIMENSIONS IN MEDICINE, INC.
LIQUIDATING TRUST
By /s/ James A. Potter
-----------------------------------
James A. Potter
TRUSTEE
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
ANNUAL REPORT TO BENEFICIARIES UNDER COVER OF FORM 10-K
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION METHOD OF FILING
- ----------- ----------- ----------------
<S> <C> <C>
99.1 Report to Beneficiaries of the New
Dimensions in Medicine, Inc. Liquidating
Trust as of December 31, 1997............. Filed herewith.
99.2 New Dimensions in Medicine, Inc.
Liquidating Trust Financial Statements
and Independent Auditor's Report,
December 31, 1997 and 1996................ Filed herewith.
</TABLE>
<PAGE>
TO: The Beneficiaries of the NDM Liquidating Trust
FROM: James A. Potter
Liquidating Trustee of the NDM Liquidating Trust
SUBJECT: Report to Beneficiaries of the NDM Liquidating Trust as of
December 31, 1997
- --------------------------------------------------------------------------------
I. INTRODUCTION
On November 14, 1995, the Board of Directors ("Board") of New Dimensions In
Medicine, Inc. ("NDM") approved the Plan of Complete Liquidation and
Dissolution of NDM ("Plan of Liquidation"). The Board appointed James A.
Potter to serve as Liquidating Trustee of the liquidating trust to be formed
under the Plan of Liquidation. On February 22, 1996, the Board approved the
execution of the New Dimensions In Medicine, Inc. Liquidating Trust Agreement
("Trust Agreement"). Terms not otherwise defined herein shall have the
meaning ascribed in the Trust Agreement. Pursuant to the terms of the Trust
Agreement, the Liquidating Trustee is to deliver semi-annual reports to
beneficiaries of the NDM Liquidating Trust.
THIS REPORT HAS NOT BEEN REVIEWED BY ANY GOVERNMENTAL AGENCY TO DETERMINE THE
ADEQUACY OR ACCURACY OF INFORMATION CONTAINED HEREIN. HOWEVER, EVERY EFFORT
HAS BEEN MADE TO ENSURE ACCURACY.
II. BACKGROUND
On October 18, 1995, the Board approved the sale of most of NDM's assets to
CONMED Corporation ("CONMED"). NDM also entered into an agreement to sell
its international wound care business to Paul Hartmann AG ("Hartmann").
NDM's shareholders approved the Plan of Liquidation and the sale of assets to
CONMED at a special meeting of shareholders held on February 23, 1996. After
consummating the sales to CONMED and Hartmann on February 23, 1996, NDM
ceased doing business.
On February 17, 1996, the Board approved an Initial Liquidation Distribution
to shareholders of record as of February 23, 1996. The aggregate
distribution totaled $19,119,087.52 or $4.3189 per share. On March 8, 1996,
NDM executed the Trust Agreement and created the NDM Liquidating Trust. The
purpose of the NDM Liquidating Trust is to liquidate the remaining assets of
NDM, pay all fixed and known liabilities of NDM, and distribute any remaining
assets to the holders of the NDM Common Stock of record as of March 12, 1996.
On March 7, 1996, the Board approved a second liquidation distribution
("Second Liquidation Distribution") of $.1201 per share for an aggregate
distribution of $530,768.00.
III. SURRENDER AND CANCELLATION OF NDM COMMON STOCK
As a condition to receiving the Second Liquidation Distribution or any future
distribution from the NDM Liquidating Trust, each holder of the common stock
of NDM ("NDM Common Stock") must surrender the certificates representing such
stock. A letter of transmittal has been previously circulated for that
purpose. The Liquidating Trustee shall maintain a record of each holder's
beneficial interest in the NDM Liquidating Trust. Each holder's beneficial
interest in the NDM Liquidating Trust shall be maintained in book entry form
only. No beneficial interest will be certificated. BENEFICIAL INTERESTS IN
THE NDM LIQUIDATING TRUST ARE NON-TRANSFERABLE, EXCEPT IN ACCORDANCE WITH THE
LAWS OF DESCENT AND
<PAGE>
DISTRIBUTION. Any distribution from the NDM Liquidating Trust shall be paid
only to the holder(s) designated on the letter of transmittal.
IV. SIGNIFICANT EVENTS
A. Novamedix Litigation
As indicated in the Proxy Statement dated February 2, 1996, Novamedix
Limited ("Novamedix") commenced an action against NDM on June 10, 1994,
alleging infringement on several of Novamedix's patents. A detailed
description of the Novamedix litigation is included in the Proxy Statement
under the heading "Legal Proceedings," p. 61.
Novamedix and NDM entered into a settlement agreement on or about March 7,
1996. As a part of the settlement agreement, NDM agreed to the entry of a
consent judgment against it, it shipped its footpump and consumable
inventory to Novamedix in Texas, and it paid Novamedix $47,500.00.
Several days after the parties signed the settlement papers, and before
the inventory was shipped, an NDM employee informed Novamedix that tests
on the footpump slippers indicated that they did not conform to the
specifications filed with the Food and Drug Administration ("FDA").
Novamedix sought and received NDM's internal memoranda on the topic
generated in early 1996.
Subsequently, Novamedix moved the federal court in Ohio for an order
styled as "enforcing the settlement agreement" by requiring NDM to pay
Novamedix $744,300.00, the alleged value of the slippers had they complied
with the FDA specifications. Novamedix has based its claim on the Uniform
Commercial Code's ("UCC") implied warranties of fitness and
merchantability on the sales of goods.
Mr. Potter, on behalf of NDM, has denied that the slippers constituted
value given for the settlement or that the UCC applies to the transfer of
inventory pursuant to the settlement of a patent infringement lawsuit. He
also has argued that the slippers are not valueless, and that Novamedix
has no right to sell the slippers in any event absent obtaining its own
authority from the FDA at which time the differing specifications would be
disclosed and most likely approved.
The court heard telephonic oral arguments in August 1996. On March 20,
1997, the court denied Novamedix's motion. Novamedix appealed that
decision to the Sixth Circuit Court of Appeals which, on its own review of
the matter, has transferred the case to the United States Court of
Appeals. Oral arguments were heard on March 6, 1998. The court has not
yet ruled.
B. Hartmann Escrow
In connection with the sale of assets to Hartmann, NDM deposited
$600,000.00 into an escrow account ("Hartmann Escrow") to ensure payment
of NDM's obligation to indemnify Hartmann against certain threatened
litigation. The Liquidating Trustee has the authority to direct
investment of the funds in the Hartmann Escrow, and all income on such
funds are payable to the NDM Liquidating Trust. Funds in the Escrow
Account will be released when a settlement agreement is reached or
February 22, 1998, whichever is earlier. Hartmann has acknowledged that it
has no claim against the Hartmann Escrow. The funds in the Hartmann Escrow
were
2
<PAGE>
transferred to the NDM Liquidating Trust on or about February 26, 1998.
As of December 31, 1997, the balance of the Hartmann Escrow was
approximately $664,000.
V. SUMMARY OF RECEIPTS AND DISBURSEMENTS
A copy of the trust's audited financial statement is attached.
VI. QUESTIONS REGARDING THE SURRENDER OF THE NDM COMMON STOCK
AND COMMUNICATIONS WITH THE LIQUIDATING TRUSTEE
If you should have questions regarding the surrender of the NDM Common Stock,
please contact Norwest Stock Transfer at (612) 450-2448 or (800) 380-1372.
Questions for the Liquidating Trustee should be directed to: Oppenheimer
Wolff & Donnelly LLP, 3400 Plaza VII, 45 South Seventh Street, Minneapolis,
Minnesota 55402, Attention: Mark G. Rabogliatti, Esq. PLEASE NOTE THAT
NEITHER THE LIQUIDATING TRUSTEE NOR ITS COUNSEL CAN GIVE TAX ADVICE.
3
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
DECEMBER 31, 1997 AND 1996
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
TABLE OF CONTENTS
DECEMBER 31, 1997 AND 1996
REPORT OF LARSON, ALLEN, WEISHAIR & CO., LLP - INDEPENDENT AUDITORS 1
STATEMENTS OF NET ASSETS IN LIQUIDATION 2
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS 3
STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION 4
STATEMENTS OF CASH FLOWS - CASH BASIS 5
NOTES TO FINANCIAL STATEMENTS 6
<PAGE>
[LOGO]
REPORT OF LARSON, ALLEN, WEISHAIR & CO., LLP
INDEPENDENT AUDITORS
Trustee
New Dimensions in Medicine, Inc. Liquidating Trust
Minneapolis, Minnesota
We have audited the accompanying statements of net assets in liquidation of
New Dimensions in Medicine, Inc. Liquidating Trust (the "Liquidating Trust")
as of December 31, 1997 and 1996, and the related statements of cash receipts
and disbursements, changes in net assets in liquidation, and cash flows -
cash basis for the year ended December 31, 1997 and from inception date of
March 8, 1996 through the period ended December 31, 1996. These financial
statements are the responsibility of the Liquidating Trust's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits 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 audits provide a
reasonable basis for our opinion.
As described in Note 2 to the financial statements, the Liquidating Trust's
policy is to prepare its financial statements on the basis of cash receipts
and disbursements, which is a comprehensive basis of accounting other than
generally accepted accounting principles.
In our opinion, the statements referred to above present fairly, in all
material respects, the net assets in liquidation of the Liquidating Trust at
December 31, 1997 and 1996, and its cash receipts and disbursements and
changes in net assets in liquidation and its cash flows - cash basis for the
year ended December 31, 1997 and from the inception date through the period
ended December 31, 1996, on the basis of accounting described in Note 2.
/s/ Larson, Allen, Weishair & Co., LLP
LARSON, ALLEN, WEISHAIR & CO., LLP
Minneapolis, Minnesota
February 26, 1998
(1)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF NET ASSETS IN LIQUIDATION
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash and Cash Equivalents $ 531,745 $ 555,763
Cash - Restricted 744,300 744,300
----------- -----------
Net Assets $ 1,276,045 $ 1,300,063
----------- -----------
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(2)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FROM INCEPTION DATE OF MARCH 8, 1996 THROUGH DECEMBER 31, 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
CASH RECEIPTS
Interest $ 60,064 $ 55,024
Proceeds from Sale of Patents 35,000 -
Other - 34,146
---------- ----------
Total Cash Receipts $ 95,064 $ 89,170
CASH DISBURSEMENTS
General and Administrative Disbursements 119,082 269,582
---------- ----------
CASH DISBURSEMENTS IN EXCESS OF CASH RECEIPTS
ALLOCABLE TO BENEFICIARIES $ (24,018) $ (180,412)
---------- ----------
---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(3)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FROM INCEPTION DATE OF MARCH 8, 1996 THROUGH DECEMBER 31, 1996
<TABLE>
<S> <C>
Net Assets at Inception, March 8, 1996 (Per Unit: 1996, $.4543) $ 2,011,243
Cash Disbursements in Excess of Cash Receipts Allocable to
Beneficiaries (Per Unit: 1996, $.0407) (180,412)
Liquidating Distribution (Per Unit: 1996, $.1201) (530,768)
------------
NET ASSETS AT END OF YEAR (PER UNIT: 1996, $.2937) $ 1,300,063
Cash Disbursements in Excess of Cash Receipts Allocable to
Beneficiaries (Per Unit: 1997, $.0054) (24,018)
------------
NET ASSETS AT END OF YEAR (PER UNIT: 1997, $.2883) $ 1,276,045
------------
------------
</TABLE>
There were 4,426,842 units of beneficial interest outstanding at the
beginning and end of the year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(4)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS - CASH BASIS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FROM INCEPTION DATE OF MARCH 8, 1996 THROUGH DECEMBER 31, 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Disbursements in Excess of Cash Receipts Allocable
to Beneficiaries $ (24,018) $ (180,412)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Initial Funding of Trust $ - $ 2,011,243
Liquidating Distributions Paid - (530,768)
----------- -----------
Net Cash Provided by Financing Activities $ - $ 1,480,475
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS $ (24,018) $ 1,300,063
Cash and Cash Equivalents - Beginning of Period 1,300,063 -
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,276,045 $ 1,300,063
----------- -----------
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(5)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS - CASH BASIS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FROM INCEPTION DATE OF MARCH 8, 1996 THROUGH DECEMBER 31, 1996
NOTE 1 ORGANIZATION AND BACKGROUND
On November 14, 1995, the Board of Directors (Board) of New Dimensions
In Medicine, Inc. (NDM) approved the Plan of Complete Liquidation and
Dissolution of NDM (Plan of Liquidation).
On March 8, 1996, NDM executed the Trust Agreement and created NDM
Liquidating Trust. The purpose of the NDM Liquidating Trust is to
liquidate the remaining assets of NDM, pay all fixed and known
liabilities of NDM, and distribute any remaining assets to the holders
of the NDM Common Stock of record as of March 12, 1996. On February
17, 1996, the Board approved an Initial Liquidation Distribution to
shareholders of record as of February 23 1996. The aggregate
distribution totaled $19,119,088 or $4.3189 per share. On March 7,
1996, the Board approved a second liquidation distribution of $.1201
per unit for an aggregate distribution of $530,768.
The NDM Liquidating Trust shall terminate on the earliest of the
following dates: (a) the date that all assets in such NDM Liquidating
Trust have been liquidated and the proceeds distributed to the
Beneficiaries as provided in the Plan of Liquidation and in the Trust
Agreement, (b) the date on which a court of competent jurisdiction
enters a Final Order authorizing the termination of such NDM
Liquidating Trust, or (c) three years after the Transfer Date.
Notwithstanding the foregoing, in the event the Trustee shall have
been unable, after reasonable efforts, to liquidate or otherwise
dispose of the assets of the NDM Liquidating Trust within the initial
three-year term of the Trust Agreement, then the Trustee shall have
the right to extend the term of the NDM Liquidating Trust for
successive one-year renewal terms until the assets of the NDM
Liquidating Trust have been sold or otherwise disposed of in
fulfillment of the purpose of the NDM Liquidating Trust. The term of
the NDM Liquidating Trust shall in no event exceed fifteen years after
the date that the Trust Agreement is executed.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements were prepared on the basis of cash receipts
and disbursements. Under this method, cash receipts and related assets
were recognized when received, rather than when earned, and cash
disbursements were recognized when paid, rather than when the
obligation was incurred.
CASH EQUIVALENTS
Cash equivalents consist of cash invested in a mutual fund consisting
of short-term U.S. Government obligations.
(6)
<PAGE>
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
For federal income tax purposes, the transfer of assets and
liabilities to the Liquidating Trust and distribution to the
shareholders of Units of Beneficial Interest in the Liquidating Trust
were treated as a distribution of assets and liabilities by the
Company to its shareholders and a contribution by the shareholders of
such net assets to the Liquidating Trust in return for Units of
Beneficial Interest. The Liquidating Trust is treated as a grantor
trust and not as a corporation. Accordingly, any receipts or
disbursements of the Liquidating Trust is not taxable to the
Liquidating Trust, but is taxable to the Unit holders as if the Unit
holders had themselves realized the receipts or disbursements from
their undivided interests in the assets of the Liquidating Trust.
NOTE 3 CONTINGENT LIABILITIES - RESERVE FUND
Under Delaware law, NDM was required, in connection with its
dissolution, to pay or provide for payment of all known, fixed and
contingent liabilities. Within the liquidation period, NDM set aside
a cash Reserve Fund for payment of all known or ascertainable
liabilities of the Company, including amounts estimated to be
necessary for the payment of estimated expenses, taxes and contingent
liabilities.
If any portion of the Reserve Fund appears to be in excess of
remaining liabilities, distributions to stockholders and/or interest
holders correspondingly would be increased. Nevertheless, in the event
that the amounts set aside in the Reserve Fund prove to be inadequate
to pay NDM's liabilities, pursuant to Section 282 of the Delaware
General Common Law, the stockholders of NDM may be held personally
liable for the payment of any claim against NDM, but such personal
liability by statute cannot exceed the lesser of the stockholder's pro
rata share of the claim or the amount distributed to such stockholder
pursuant to the Plan of Liquidation. In addition, in the event a
court determines that NDM failed to pay or to make adequate provision
for its liabilities prior to a liquidation distribution, a creditor of
NDM could obtain an injunction delaying or diminishing the anticipated
liquidation to the stockholders pursuant to the Plan of Liquidation.
NOVAMEDIX LITIGATION
Novamedix Limited (Novamedix) commenced an action against NDM on June
10, 1994, alleging infringement on several of Novamedix's patents.
Novamedix and NDM entered into a settlement agreement on or about
March 7, 1996. As a part of the settlement agreement, NDM agreed to
the entry of a consent judgment against the company and shipped its
footpump and consumable inventory to Novamedix in Texas and paid
Novamedix $47,500.
(7)
<PAGE>
NOTE 3 CONTINGENT LIABILITIES - RESERVE FUND (CONTINUED)
NOVAMEDIX LITIGATION (CONTINUED)
Several days after the parties signed the settlement papers, and
before the inventory was shipped, an NDM employee informed Novamedix
that tests on the footpump slippers indicated that they did not
conform to the specifications filed with the Federal Drug
Administration (FDA) for the slippers. Subsequently Novamedix moved
the federal court in Ohio for an order enforcing the settlement
agreement by requiring NDM to pay Novamedix $744,300, the alleged
value of the slippers had they complied with the FDA specifications.
Novamedix has based its claim on the Uniform Commercial Code's (UCC)
implied warranties of fitness and merchantability on the sales of
goods.
The Trustee of behalf of NDM has denied that the slippers constituted
consideration for the settlement or that the UCC applies to the
transfer of inventory pursuant to the settlement of a patent
infringement lawsuit. The Trustee has also argued that the slippers
have value, and that Novamedix has no right to sell the slippers in
any event absent obtaining its own authority from the FDA at which
time the differing specifications would be disclosed and most likely
approved.
The court heard telephonic oral arguments in August of 1996. At
December 31, 1996, the Trustee had agreed not to make distributions
out of the trust which would reduce the balance below $744,300.
Consequently, this amount is shown on the balance sheet as restricted
cash.
On March 20, 1997, the court denied Novamedix's motion. Novamedix
appealed the decision.
TAXES
The Trust may be liable for income taxes which could arise if the
utilization of NDM's net operating loss carryforwards are disallowed
to offset the gains realized by NDM upon the sale of NDM's assets.
The NDM Board of Directors have estimated that this liability could
range from $-0- to $1,000,000.
NOTE 4 HARTMANN ESCROW
In connection with the sale of assets of NDM's International Wound
Care Business, NDM deposited $600,000 into an escrow account (Hartmann
Escrow) to ensure payment of NDM's obligation to indemnify the buyer
(Hartmann) against certain threatened litigation. The Trustee has the
authority to direct investment of the funds in the Hartmann Escrow,
and all income on such funds is payable to the Trust. Funds in the
Escrow Account will be released when a settlement agreement is reached
or February 22, 1998, whichever is earlier. On February 26, 1998 the
funds in the escrow were distributed to the Trustee. The amount of
the distribution was approximately $665,000.
(8)
<PAGE>
NOTE 5 LIQUIDATING DISTRIBUTION
As a condition to receiving any distributions under the Liquidating
Trust Agreement, shareholders of NDM surrendered the instruments
representing their NDM common stock to the Trustee. No distributions
subsequent to February 23, 1996 have been or will be made to any
shareholder who has not surrendered their NDM common stock.
Any future distributions, including the Second Liquidation
Distribution, allocable to a shareholder who has not surrendered or is
not deemed to have surrendered their NDM common stock is placed in a
segregated account for the benefit of such shareholder. If the holder
does not surrender its NDM common stock within 180 days of the date on
which the notice of Final Distribution is mailed, all distributions
allocable to such shareholder shall be transferred to and deposited
with the state official authorized by the laws of the State of
Delaware to receive the proceeds of such distribution. Such transfer
shall comply in all respects with the laws of the State of Delaware.
The proceeds of such distribution shall thereafter be held solely for
the benefit of and for the ultimate distribution to such shareholder
as the sole equitable owner thereof and shall escheat to the State of
Delaware or be treated as abandoned property in accordance with the
laws of the State of Delaware. In no event shall the proceeds of any
such distribution revert to or become the property of the NDM Trust
Estate. At December 31, 1997 and 1996, 20,652 shares of NDM common
stock had not been surrendered to the Trustee.
Initial distribution prior to formation of Trust:
<TABLE>
<CAPTION>
Distribution
Record Date Payment Date Per Unit Amount
----------- ------------------- ------------- ------------
<S> <C> <C> <C>
February 23, 1996 February 23, 1996 4.3189 $ 19,119,088
------------
------------
</TABLE>
Liquidating distributions have been paid as follows:
<TABLE>
<CAPTION>
Distribution
Record Date Payment Date Per Unit Amount
----------- ------------------- ------------- ------------
<S> <C> <C> <C>
March 7, 1996 April 16, 1996 0.1201 $530,768
------------
------------
</TABLE>
NOTE 6 PATENTS
The Liquidating Trust has right to various patents which were obtained
by NDM. The value, if any, of such patents has not been determined
and no value was included as a Trust Asset at December 31, 1996.
During 1997, the Liquidating Trust entered into an agreement to sell
certain patents to another company. The sale price was $35,000 was
received and is recorded in income.
(9)
