SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest event reported) May 20, 1997
ADINA , INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-19435 75-2233445
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
17770 Preston Road, Dallas, Texas 75252
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (972) 733-3005
<PAGE>
ITEM 2. Acquisition or Disposition of Assets
On May 20, 1997 Registrant subscribed 53,811,780 restricted Preferred
Shares, Series J Camelot Corporation ("Camelot") with payment by the transfer of
6,029,921 restricted common shares of Alexander Mark Investments (USA), Inc. to
Camelot. 35,688,560 of the Preferred Shares were issued upon execution of the
Agreement and 18,123,220 are issuable as deferred consideration. The deferred
consideration will be issued as new common shares of Camelot are issued in such
a manner so that the additional Preferred Shares are issued at the same time and
in the same quantity as any new common shares. The Preferred Shares have one
vote per share and vote with the common shares, are non convertible, non-
yielding and are subordinate to outstanding preferred shares but have a
liquidation preference over common shares.
ITEM 7. Exhibits
(10) Material Contracts
a) Subscription Agreement between Camelot Corporation and
Adina, Inc. and Amendment.
(28) a) Financial Statements in accordance with Regulation S-X.
b) The Pro Forma Statements in accordance with Regulation S-X.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADINA, INC.
By:/s/ Robert Gregory
Robert Gregory
Director
Dated: June 11, 1997
<PAGE>
SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made and entered into this 20th day of May, 1997, by and
between CAMELOT CORPORATION, a Colorado corporation (hereinafter referred to as
"Camelot"), and ADINA, INC., (hereinafter referred to as "Adina"), a Delaware
Corporation.
Subscription
Adina hereby subscribes for 53,811,780 Preferred Shares, Series J, par value
$0.01, of CAMELOT on the following terms and conditions:
Consideration
1. The stock shall be paid for by the transfer of 6,029,921 restricted
common shares of Alexander Mark Investments (USA), Inc.("AMI Shares").
2. Closing of this Agreement to take place on May 20, 1997 at Dallas,
Texas or such other time and place as the parties may agree.
CAMELOT Representations
3. CAMELOT hereby warrants and represents the following facts, the truth
and accuracy of which are conditions precedent to the Closing:
(a) CAMELOT has the proper corporate authority to execute this
subscription and issue the shares as set out below;
(b) There are no liens, pledges, chattel mortgages, or other
encumbrances of any kind against the CAMELOT Shares;
(c) There are no undisclosed interests, present or future, in the
CAMELOT Shares, nor does CAMELOT know of any assertion of such an interest;
(d) CAMELOT is not required by any provision of federal, state, or
local law to take any further action or to seek any governmental approval of any
nature prior to the issuance by it of the CAMELOT Shares;
(e) There are no outstanding or existing provisions of an agreement
it is a party to that would prevent, limit, or condition the issuance of the
CAMELOT Shares to Adina;
(f) There are no provisions of any contract, indenture, or other
instrument to which CAMELOT is a party or to which the CAMELOT Shares are
subject which would prevent, limit, or condition the issuance of the CAMELOT
Shares to Adina.
(g) CAMELOT's Certificate of Incorporation, Bylaws or other agreement
or corporate resolution does not require stockholder approval prior to CAMELOT
issuing CAMELOT Shares to Adina.
(h) The Preferred Shares, Series J has been properly designated by
the Board and will have the following rights and privileges:
1. Dividends and Distribution.
There shall be no dividends paid to the shareholder of the Preferred
Stock, Series J.
2. Voting Rights. The holders of shares of Preferred Stock, Series J
shall have the following voting rights:
(A) Each share of Preferred Stock, Series J shall entitle the holder
thereof to one vote, voting together with the common stock on all matters
submitted to a vote of the stockholders of the Corporation,
(B) Except as required by law and by Section 10 hereof, holder of
Preferred Stock, Series J shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.
3. Reacquired Shares. Any shares of Preferred Stock, Series J purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired promptly after the acquisition thereof. All such shares shall upon the
retirement become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions or the Board of Directors, subject to any conditions and
restrictions on issuance set forth herein.
4. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, voluntary or otherwise, no
distribution shall be made of the holder of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Preferred Stock, Series J unless, prior thereto, the holder of shares of
Preferred Stock, Series J shall have received an amount per share (the
"Preferred Stock, Series J") equal to $0.10.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Preferred Stock, Series J and the
liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Preferred Stock, Series J in
respect thereof, then the assets available for such distribution shall be
distributed ratably to the holder of the Preferred Stock, Series J and the
holder of such parity shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
Corporation into or with the Corporation shall be deemed to be liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
5.
5. No Redemption. Shares of Preferred Stock, Series J shall not be
subject to redemption by the Company.
6. Ranking. The Preferred Stock, Series J shall rank junior to all other
series of the Preferred Stock as to the payment of dividends, and as to the
distribution of assets upon liquidation, dissolution or winding up, unless the
terms of any such series shall provide otherwise, and shall rank senior to the
Common Stock as to such matters.
7. Amendment. At any time that any shares of Preferred Stock, Series J
are outstanding, the Restated Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Preferred Stock, Series J so as to
affect them adversely without the affirmative vote of the holders of two-thirds
of the outstanding shares of Preferred Stock, Series J, voting separately as a
class.
8. Fractional Shares. Preferred Stock, Series J may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, participate in
distributions and to have the benefit of all other rights of holders of
Preferred Stock, Series J.
ADINA Representations
4. Adina hereby warrants and represents the following facts, the truth
and accuracy of which are conditions precedent to the Closing:
(a) In executing this Agreement to acquire the CAMELOT Shares, Adina
is acting solely for itself and for no other person, firm, partnership,
corporation, or entity;
(b) Adina's assets and net worth are sufficient to permit it to
purchase the CAMELOT Shares in accordance with the terms of this Agreement;
(c) Adina has no interest, direct or indirect, that would conflict
with the business of CAMELOT;
(d) Adina is not prevented by any federal, state, or local law or by
any provision of any contract, mortgage, indenture, or other instrument from
purchasing the CAMELOT Shares as contemplated by this Agreement;
(e) Adina has had access to the extent it deems necessary to the
financial information of CAMELOT sufficient to permit it to evaluate the
business of CAMELOT and thereby evaluate the merits and risks associated with
the purchase of the CAMELOT shares herein described;
(f) Adina understands that CAMELOT has had a varied business history
and that the CAMELOT Shares that it will be acquiring must be regarded as
speculative and subject to a high degree of risk. Adina has received no
assurance whatsoever as to the value of the CAMELOT Shares nor has CAMELOT or
any other officer or director of CAMELOT made any representations or promises to
Adina regarding any potential appreciation in value of the CAMELOT Shares.
CAMELOT Covenants
5. CAMELOT hereby covenants as follows:
(a) At the Closing, CAMELOT shall undertake to deliver to Adina
certificates representing 35,688,560 Preferred Shares, Series J with the
balance, 18,123,220 Preferred Shares to be issued on one for one basis as new
common shares of Camelot are issued until the balance is fully issued.
(b) From the date hereof, CAMELOT shall take no action that would
encumber or restrict the CAMELOT Shares subject to this subscription or their
exchange or transfer;
(c) CAMELOT will file and assist Adina in filing all required
disclosure documents required by the Federal Securities Laws upon the execution
and consummation of this agreement.<PAGE>
Adina's Covenants
6. Adina hereby covenants as follows:
(a) At the Closing, Adina shall deliver to CAMELOT certificates for
the Adina Shares as set out in paragraph 1.
(b) Adina will file all required disclosure documents and assist
CAMELOT in filing all required disclosure documents required by the Federal
Securities Laws upon the execution and consummation of this Agreement.
Issuance of Shares and Rights of Shares
7. CAMELOT shall issue said shares in the name of Adina, Inc., 17770
Preston Road, Dallas, Texas 75252.
8. Adina shall provide a properly executed Stock Power to transfer the
AMI Shares into the name of Camelot, 17770 Preston Road, Dallas, Texas 75252.
9. Adina understands and agrees that CAMELOT will not issue any shares
until they are fully paid for.
10. Adina agrees that the following or similar restrictive legend shall be
placed on the certificates and that stop transfer orders shall be entered
against said shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT, THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
Miscellaneous
11. It is understood and agreed that Adina and CAMELOT and their
representatives (including counsel and accountants) shall each keep confidential
any information (unless readily ascertainable from public or published
information or trade sources) obtained from the other, concerning their
properties, operations and business.
12. All covenants, representations and warranties by CAMELOT and Adina
shall be true and correct as of the Closing, shall survive the Closing, and
shall bind Adina and CAMELOT and their heirs and assigns as to any breach
thereof not disclosed in writing or known to the parties prior to the Closing.
13. No remedy conferred by any of the specific provisions of this
Agreement is intended to be exclusive or any other remedy, and each remedy shall
be cumulative and shall be in addition to all other remedies given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by Adina or CAMELOT shall not constitute a
waiver of the right to pursue other available remedies.
14. In the event that any part of this Agreement is determined by a court
of competent jurisdiction to be unenforceable, the balance of the Agreement
shall remain in full force and effect.
15. CAMELOT hereby indemnifies Adina and Adina hereby indemnifies CAMELOT
for any breach of any representation, warranty or covenant herein contained,
including all costs associated with any resulting litigation or investigation
thereof.
16. This Agreement shall be construed according to the laws of the State
of Texas.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of
the date first written above.
CAMELOT CORPORATION
By:
Jeanette Fitzgerald
Vice President and General Counsel
ADINA, INC.
By:
Robert Gregory
Director
<PAGE>
AMENDMENT TO SUBSCRIPTION AGREEMENT
This Amendment to that certain Subscription Agreement dated May 20, 1997 by
and between Adina, Inc. and Camelot Corporation wherein Adina subscribed for
53,811,780 Preferred Shares, Series J.
Whereas, Adina and Camelot would like to amend the Subscription Agreement
to better reflect their agreed upon terms;
It is therefore agreed as follows:
That the terms of the Preferred Shares, Series J as originally set out in
paragraph 3(h) of the Subscription Agreement shall be amended by adding the
following subparagraph at the end of this paragraph as follows and this
paragraph supersedes the paragraph in the Subscription Agreement:
Reclassification of Common Shares. In the event that the Corporation
shall effect a forward or reverse split, or otherwise subdivide the outstanding
common shares or combine the outstanding shares of common stock into a smaller
number of shares then the outstanding Preferred Shares shall have an exact by
equal forward or reverse split, subdivision or combination of outstanding
preferred shares.
Both parties agree that no other portion or paragraph of the Subscription
Agreement has been changed and the Subscription Agreement shall remain in full
force and effect.
Agreed to this 28th day of May, 1997 but with effect as of May 20, 1997.
Adina, Inc. Camelot Corporation
By:_______________________ By:_______________________
Robert Gregory, Director Jeanette Fitzgerald, Vice President
<PAGE>
Exhibit (28) a
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<S> <C> <C>
January 31, 1997 April 30, 1996
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $4,185,265 $9,870,599
Trading securities 3,484,315 1,341,508
Securities available for sale 8,268 945,777
Accounts receivable, net of allowance
for doubtful accounts of $12,836 and
$11,415 at January 31, 1997 and
April 30, 1996 322,433 241,837
Prepaid expenses 125,866 215,073
Inventories, net of allowance for
obsolescence of $584,969 and $198,000
at January 31, 1997 and April 30, 1996 870,500 1,272,973
Total current assets 8,996,647 13,887,767
PROPERTY, PLANT AND EQUIPMENT - AT COST
Office equipment and fixtures 1,587,614 1,363,484
Leasehold improvements 121,922 222,124
Less accumulated depreciation (593,731) (453,450)
Total property, plant and
equipment - at cost 1,115,805 1,132,158
OTHER ASSETS
Preferred stock - related party 530,917 530,917
Licenses and product development, net of
$500,745 and $151,979
accumulated amortization at
January 31, 1997 and April
30, 1996 1,211,289 1,141,021
Other 1,864,220 10,000
Total other assets 3,606,426 1,681,938
$13,718,878 $16,701,863
</TABLE>
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
January 31, 1997 April 30, 1996
(Unaudited) (Audited)
CURRENT LIABILITIES
Accounts payable $ 630,725 $ 777,181
Accrued expenses 190,009 194,329
Net current liabilities of
discontinued operations - 50,185
Total current liabilities 820,734 1,021,695
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
50,000,000 shares authorized,
26,553,835 and 19,452,191
shares issued at January 31,
1997 and April 30, 1996,
respectively 265,538 194,522
Preferred stock, $.01 par value,
100,000,000 shares authorized,
3,548,056 and 10,143,389
shares issued and outstanding at
January 31,1997 and April 30,
1996 respectively 35,481 101,434
Additional paid-in capital 33,725,957 30,410,954
Accumulated deficit (18,335,613) (12,186,463)
Unrealized gain (loss) on
available-for-sale securities - (50,548)
Less: treasury stock, at cost,
1,149,806 and 1,149,806
shares at January 31, 1997
and April 30, 1996 (2,714,575) (2,714,575)
Notes receivable related to
purchase of common stock (78,644) (75,156)
Total stockholders' equity 12,898,144 15,680,168
$13,718,878 $16,701,863
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Three Months Ended Nine Months Ended
January 31 January 31,
1997 1996 1997 1996
SALES $479,468 $3,338,103 $9,031,893 3,921,556
COST OF SALES 358,030 410,165 1,520,880 530,202
GROSS PROFIT (LOSS) 121,438 2,927,938 7,511,013 3,391,354
OPERATING EXPENSES:
General and
administrative 1,786,698 2,491,058 5,818,783 4,315,299
Depreciation
and amortization 204,334 126,598 621,016 206,291
1,991,032 2,617,656 6,439,799 4,521,590
INCOME (LOSS) FROM
OPERATIONS (1,869,594) 310,282 1,071,214 (1,130,236)
OTHER INCOME (EXPENSES):
Interest expense (10,343) (1,009) (10,343) (11,298)
Interest income 88,685 50,642 306,183 57,361
Dividend income-affiliate 11,664 11,664 34,993 34,993
Unrealized loss
-Trading securities (2,099,200) 1,326,714 (6,599,688) 1,326,714
Loss on disposition
of asset (3,650) (35,929) (660,367) (41,033)
(2,012,844) 1,352,082 (6,929,222) 1,366,737
INCOME (LOSS) FROM
CONTINUING OPERATIONS (3,882,438) 1,662,364 (5,858,008) 236,501
DISCONTINUED OPERATIONS:
Gain (Loss) on disposal (289,477) (70,622) (291,143) (56,467)
(289,477) (70,622) (291,143) (56,467)
NET INCOME (LOSS) (4,171,915) 1,591,742 (6,149,151) 180,034
DIVIDENDS ON PREFERRED
STOCK (12,432) (140,570) (90,434) (200,692)
NET LOSS ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(4,184,347) $1,451,172 $(6,239,585) $ (20,658)
INCOME (LOSS) PER SHARE:
Loss from continuing
operations $(.155) $ 0.113 $ (.249) $ 0.017
Income (Loss)from
discontinued operations $(.012) (0.005) (.012) (0.004)
Dividends on preferred
stock (.000) (0.009) (.004) (0.015)
NET LOSS PER COMMON SHARE $(.167) $0.099 $(.265) $(0.002)
WEIGHTED AVERAGE OF
COMMON STOCK
OUTSTANDING 25,035,618 14,710,644 23,528,941 13,487,209
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (6,149,151) $ 180,034
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Securities received as revenue (7,627,000) (2,950,575)
Depreciation and amortization 621,016 206,291
Gain on sale of subsidiary - -
(Gain) loss on disposal of assets 990,285 41,033
Non cash transactions for services - 387,391
Write down (up) of securities to
market value 6,599,688 (1,326,714)
Write-off (provision) uncollectable
accounts receivable 1,421 -
Provisions for inventory obsolescence 386,969 -
Change in assets and liabilities
Accounts receivable (112,980) (302,380)
Prepaid expenses and other 89,207 (295,986)
Inventories 15,504 (997,215)
Accounts payable and accrued
expenses (200,961) 442,770
Net cash used by operating
activities (5,386,002) (4,615,351)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment (589,058) (807,217)
Purchases of marketable securities (2,457,003) -
Proceeds from sale of property
and equipment - 11,500
Proceeds from disposition of assets
of discontinued operations - -
Proceeds from sale of marketable
securities 1,731,436 93,447
Loan to Director of Company (1,800,000) -
Deposits (23,256) -
Licenses and product development (481,517) (541,835)
Net cash used by investing
activities (3,619,398) (1,244,105)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock - 3,281,549
Sale of preferred stock 3,410,500 9,418,666
Redemption of preferred stock - (66,134)
Dividends on preferred stock (90,434) (200,692)
Redemption of subsidiary preferred stock - (264,044)
Payments on debt - (186,000)
Net cash provided (used)
by financing activities 3,320,066 11,983,345
NET INCREASE (DECREASE) IN CASH (5,685,334) 6,123,889
CASH AT BEGINNING OF PERIOD 9,870,599 149,529
CASH AT END OF PERIOD $4,185,265 $6,273,418
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ -0- $ 11,298
Cash paid for taxes - $ -
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
SCHEDULE OF NONCASH ACTIVITIES
(UNAUDITED)
Nine Months Ended
January 31,
1997 1996
On July 11, 1995, the Company issued $ $450,000
600,000 shares of restricted common
stock to Forme Capital, Inc. ("Forme")
for $450,000. In connection therewith,
Forme applied principal of $450,000 to
certain promissory notes of the Company
owed to Forme.
On August 8,1995,the Company issued 326,530 599,999
shares of restricted common stock for
prepaid advertising.
On August 17,1995 the Company issued notes 294,200
payable for acquisition of software.
On August 31,1995 and September 29, 1995, 57,286
the Company issued 28,643 shares of
restricted common stock for compensation
of services.
On October 31,1995,the Company issued 67,470 350,000
restricted common stock for acquisition of
software
On January 31,1996, the President of the Company 843,750
executed a 6% interest bearing note to exercise
a stock option to acquire 1,000,000 shares of
Company's common stock. This transaction was
rescinded in the fourth quarter of FY96.
On January 31, 1996, another officer of the Company 75,156
executed a 6% interest bearing not to exercise stock
option to acquire 60,000 shares of the Company's
common stock.
During the quarter ended July 31, 1996, 7,627,000
the Company concluded a distribution
agreement with a subsidiary of Meteor
Technology PLC in exchange for stock
in Meteor.
During the nine months ended January 31, (6,599,688)
1997, the Company recognized an unrealized
writedown of it's investment in Meteor
Technology PLC.
During the quarter ended July 31, 1996, (643,878)
the Company recognized a loss on the
August 1996 disposal of the remaining
investment in Firecrest.
During the quarter ended January 31, (341,347)
1997,the Company wrote-off the
leasehold improvements and fixtures
for the four Software @ Cost+10%
stores closed.
During the nine months ended January 31, 1997, the Company's
preferred stock was converted to common stock as follows:
112,000 Series BB preferred for 76,877 shares of
restricted common
333,332 Series G preferred for 224,770 shares of
restricted common
9,908,333 Series H preferred for 6,412,027 shares of
restricted common
150,000 Series I preferred for 309,238 shares of
restricted common
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
ITEM 1. Financial Statements and Principles of Consolidation
The accompanying condensed consolidated financial statements have
been prepared in accordance with the instruction to Form 10-Q, 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 adjustments) 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-K filing for the year
ended April 30, 1996.
The consolidated financial statements include the accounts of the
Company and all majority-owned subsidiaries. All intercompany
transactions have been eliminated.
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations
The Company's revenue for the quarter ending January 31, 1997 was
$479,468 compared with $3,338,103 in 1996. Net loss for the three
month period was $4,171,915 compared with a gain for the previous year
of $1,591,742. These results are due to further write-down of value
of Trading Securities, and operating expenses in excess of current
gross profits.
The consolidated balance sheets for the period show stockholders'
equity of $12,898,144 compared with $15,680,168 for the financial year
ended April 30, 1996. Total assets were $13,718,878 compared with
$16,701,863.
During the period under review, the Registrant's subsidiary Third
Planet Publishing, Inc. introduced two new products, Say It! and
Proficia. Say It! which began distribution to the market in February,
is an Internet voice mail program allowing for voice e-mails instead
of text e-mail messages. Say It! works with Windows 3.1, Windows 95
and Mac0s7.5. It is not necessary for the recipient to have the Say
It! program to hear the message. Say It! is more convenient than
sending traditional text e-mail messages and works on a PC or
Macintosh just like a recorder. When you run Say It! you simply press
record and Say It! compresses your voice into a .wav file. You can
then play it back and make sure it says exactly what you want it to
say and then send it, and the recipient receives the .wav file in
their e-mail program. The recipient does not need any additional
software to hear your message. The retail selling price is expected
to be $14.95.
Proficia expected to be available in March 1997, is an Internet
audio handset. This ergonomically designed handset features a privacy
mode that eliminates the feedback that is encountered by the use of a
microphone and speakers. The Proficia handset functions just like a
telephone so when used with Digiphone Internet Telephony software
applications conversations can be conducted in private instead of
being blasted through not so private speakers. It is designed with an
optical sensor that automatically switches from the privacy mode to
the handsfree mode when placed on the desktop. Speakers and
microphone can be replaced by a Proficia, a single sleek compact
device that brings high quality audio and desktop convenience. For
the multimedia enthusiast the Proficia speaker pass through switch
provides the option to use external speakers or the Proficia handset.
Camelot Internet Access Services has amended its pricing
structure to offer unlimited usage for $19.95 a month as well as
offering five free hours per month with a $2.50 per hour charge after
that.
The Registrant also completed all necessary procedures to have
its common shares listed on the Frankfurt Stock Exchange. With effect
from January 27, 1997, Registrant's common shares have been granted
permission from the Association of Frankfurt Securities Dealers
(Vereinigung Frankfurter Effektenhandler c.V.) to begin trading on the
Third Market Segment of the Frankfurt Stock Exchange. The trading
symbol will be "CAM" with the German Securities - code
(Wertpapierkennnummer) 890 544. The Third Market Segment is intended
for foreign companies who are quoted on overseas stock exchanges and
who require stock trading facilities in Germany. This offers another
venue on which Registrant's common shares may be traded by European
investors.
Subsequent to the period, the Registrant acquired the U.S.
and Canadian rights to PCAMS software a payphone contract and
management system software from Meteor Technology plc ("Meteor").
Meteor is a U.K. public company listed on the Alternative Investment
Market of the London Stock Exchange and is the international
distributor of DigiPhone. The PCAMS software was originally developed
for Meteor's payphone subsidiary and now has been refined and
modified to provide contract and management capabilities on a
universal basis. The consideration for PCAMS was 2,500,000 pounds payable
by the redemption of 2,000,000 pounds of loan stock owed to Camelot by
Meteor and 500,000 pounds by the issuance by Camelot to Meteor of
3,238,400 restricted common shares.
Management continues to concentrate the majority of its
management and financial resources on the development and successful
marketing of Internet related software products produced by its
subsidiary, Third Planet Publishing.
Liquidity and Capital Resources
Net cash used by operating activities for the nine months ended
January 31, 1997 was $5,386,002 compared with $4,615,351 in 1996. Net
cash used by investing activities was $3,619,398 compared with
$1,244,105 in 1996. Net cash provided by financing activities was
$3,320,066 compared with $11,983,345 in 1996. Cash and securities of
$7,677,848 at January 31, 1997 compares with $12,157,884 at April 30,
1996.
The Company's plan for capital expenditures relate principally to
the purchase of property and equipment to further its software
development program. Management believes that the anticipated level
of revenue generated by the Company together with the present level of
cash resources available to the Company will be sufficient for its
needs. Management believes that should the Company require additional
cash resources, it can raise additional resources from the sale of
Common and Preferred Stock and/or by incurring borrowing. Management
is aware that the Company has no long term corporate debt. There are
no known trends, demands, commitments, or events that would result in
or that is reasonably likely to result in the Company's liquidity
increasing or decreasing in a material way other than the potential
use of cash resources for investment in the Company's subsidiaries in
the normal course of business.
<PAGE>
Exhibit (28) b
<PAGE>
ALEXANDER MARK INVESTMENTS(USA) INC.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<S> <C> <C>
January 31, 1997 April 30, 1996
(Unaudited) (Audited)
Cash $ 41 $ 66
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable $ 13,971 $ 4,134
Advances from officer and affiliates 300 300
Total current liabilities 14,271 4,434
Stockholders' Equity (Deficit):
Common stock no par value,
75,000,000 shares authorized;
74,940 shares issued
at January 31, 1997
and April 30, 1996 95 9,481
Additional paid in capital 892,122 882,736
Deficit 905,314 (895,452)
(13,097) (3,235)
Less treasury stock, 68,353
shares at cost (1,133) (1,133)
(14,230) (4,368)
$ 41 $ 66
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
ALEXANDER MARK INVESTMENTS(USA) INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1997 1996
Income $ - $ -
Expenses 9,862 -
Loss from operations (9,862) -
Provision for taxes $ - $ -
NET LOSS $ (9,682) $ -
LOSS PER COMMON SHARE* $ * $ *
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 74,940 74,940,317
*Net loss is less than $0.001 per share
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
ALEXANDER MARK INVESTMENTS(USA) INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss from operations $(9,862) $ -
Increase in accounts payable 9,837 -
Increase in accrued expenses - -
Net cash used by operating activities (25) -
CASH FLOWS FROM INVESTING ACTIVITIES - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from Affiliate - -
Net cash provided by financing
activities - -
NET INCREASE (DECREASE) IN CASH (25) -
CASH AT BEGINNING OF PERIOD 66 66
CASH AT END OF PERIOD $ 41 $ 66
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ - $ -
Cash paid for taxes $ - $ -
</TABLE>
See accompanying notes to these financial statements.
<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, 1996.
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations
During the period under review the Company held a shareholder's meeting whereby
the Company changed its name to Alexander Mark Investments (USA), Inc. and
approved a 1 for 100 reverse stock split. The financial statements reflect the
reverse stock split.
No operating revenues were received during the nine months ended January
31, 1997 and 1996. For the nine months ended January 31, 1997, loss before
tax was $9,862 compared to $ -0- loss for the nine months ended January
31, 1996. General and administrative expenses result from expenses related
to SEC reporting requirements and recordkeeping fees.
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.
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 Registrant has negligible liquid assets available
for its continuing needs. At present the Registrant has no material
sources of external liquidity, and in the absence of any additional liquid
resources, the Registrant will be faced with cash flow problems.
<PAGE>
Exhibit (28) c
<PAGE>
METEOR TECHNOLOGY PLC
INTERIM UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE HALF YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<S> <C> <C> <C> <C> <C>
Six
months
Six to Aug
months 31,
to Nov 1995
Continuing 30, 1996 (Note
Operations 2)
ongoing acquisi- Total Total
tions
Notes 000s 000s 000s 000s
Turnover 102 398 500 -
Cost of sales 146 320 466 -
----- ------ ------ ------
Gross profit/(loss) (44) 78 34 -
Administrative 390 284 674 113
expenses
Exceptional items 3 1,379 - 1,379 -
----- ------ ------ ------
1,769 284 2,053 113
----- ------ ------ ------
Operating loss (1,813) (206) (2,019) (113)
----- ------
Interest receivable 10 -
Interest payable (4) -
------ ------
6 -
------ ------
Loss on ordinary
activities (2,013) (113)
before taxation
Taxation charge on
loss on - -
ordinary
activities
------ ------
Loss for the half (2,013) (113)
year attributable to
the members of the
parent company
====== ======
Interim dividend Nil Nil
Loss per ordinary 4 0.04p 1.12p
share
====== =====
</TABLE>
<PAGE>
METEOR TECHNOLOGY PLC
INTERIM UNAUDITED CONSOLIDATED BALANCE SHEET AT NOVEMBER 30, 1996
<TABLE>
<S> <C> <C> <C> <C>
Aug
31
Nov 1995
30
1996 (Note
2)
Notes 000s 000s 000s
Fixed assets:
Intangible assets - 63
Tangible assets 230 1
----- -----
- -
230 64
Current assets:
Stocks 185 -
Debtors 342 200
Cash at bank and in hand 1,183 50
----- -----
1,710 250
Creditors: amounts falling (1,696) (34)
due within one year
----- -----
Net current assets 14 216
----- -----
- -
Total assets less current 244 280
liabilities
Creditors: amounts falling
due after more
than one year:
Loans (13) -
7% Unsecured Convertible 7 (2,000) -
Loan Stock
----- -----
(1,769) 280
===== =====
Capital and reserves:
Called up share capital 696 101
Share premium account 1,943 292
Other reserve (1,356) -
Profit and loss account (3,052) (113)
----- -----
Shareholders' funds 6 (1,769) 280
===== =====
</TABLE>
<PAGE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
1. Basis of preparation and accounting policies
The interim unaudited results for the six months ended November 30, 1996
have been prepared on the basis of accounting policies consistent with those
adopted for the period ended May 31, 1996 as set out in the accounts of the
company (formerly Telecom Credit Europe Limited) except for the policy for
goodwill and the policies which have been added, as detailed below. The
interim accounts do not constitute full statutory accounts and are
unaudited. They have however been reviewed by the auditors and their report
is set out on page 3. The company's accounts to May 31, 1996, which
received an unqualified audit opinion have been filed with the Registrar of
Companies.
Basis of consolidation
The results of the subsidiary undertakings acquired during the period are
included in the profit and loss account from the date of acquisition as
follows:
DigiPhone Europe Limited from August 12, 1996
Paragon Investment Holdings Limited from August 15, 1996
Telecredit Telekommunications GmbH, a wholly owned subsidiary undertaking
incorporated in Germany has not been consolidated, as on July 10, 1996 it
was sold in exchange for shares in
RC Telecom Limited, a company incorporated in the Isle of Man.
See further detail on the acquisitions in the period and the subsidiary
undertakings at note 5.
Goodwill
Goodwill arising on acquisition or on consolidation is charged directly
against reserves. In the May 31, 1996 accounts, goodwill was capitalised
and was being amortised over 4 years. The impact of this change in
accounting policy is to write back 25k pounds of amortisation to the profit
and loss account (see details in the restated accounts for May 31, 1996 at
pages 12 to 14).
Stocks
Stocks are stated at the lower of cost incurred in bringing each product to
its present location and condition and net realisable value, as follows:
Goods for resale - purchase cost on a first-in, first-out basis
Net realisable value is based on estimated selling price less any further
costs expected to be incurred to completion and disposal.
Recognition of profits on leased items
Certain subsidiary undertakings have entered into agreements with finance
houses in respect of payphones which are subleased by the finance house to
customers. Net income from leasing agreements is credited to the profit and
loss account so as to spread any profit arising equally over the period of
the lease between the customer and the finance house.
<PAGE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
(continued)
1. Basis of preparation and accounting policies
(continued)
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction.
2. Comparative figures
The company reported interim half year figures for the period to August 31,
1995 as at that time the company's accounting reference date was February
28. The accounting reference date was subsequently changed to May 31
thereby changing the half year to November 30. In view of the change in the
nature and size of the Group due to the acquisitions in 1996, the
comparative figures are not particularly meaningful and therefore no pro-
forma figures to November 30, 1995 have been prepared. Consequently the
August 31, 1995 interim unaudited figures have been used as the comparative
amounts.
3. Exceptional items
During the period Meteor Technology PLC acquired the rights to distribute
DigiPhone internet telephony software in the UK, Ireland and the rest of the
world (ie excluding the USA, Canada and Europe) for 1.379m pounds (see
note 8). These costs have been written off in full in the period.
The rights to distribute this software in Europe were acquired by DigiPhone
Europe Limited prior to its acquisition by the company and therefore the
group now holds the distribution rights for the software on a worldwide
basis excluding the USA and Canada.
4. Loss per ordinary share
Loss per ordinary share is based on the weighted average number of ordinary
shares in issue during the period of 47,116,400 (August 31, 1995 -
10,104,500).
5. Investments
(a)Subsidiary undertakings acquired in the period
On August 12, 1996 DigiPhone Europe Limited ("DigiPhone") was acquired in
exchange for consideration of 21,437,142 pounds payable by way of issuing
52,285,714 ordinary 1 pence shares at a fully paid price of 41 pence each.
<PAGE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996 (continued)
5. Investments (continued)
The net assets of DigiPhone at the date of acquisition were as follows:
<TABLE>
<S> <C> <C> <C>
Fair value
Book value adjustments Fair value
000s 000s 000s
Fixed assets 63 - 63
Debtors 52 - 52
Cash 1,041 - 1,041
------ ------ ------
1,156 - 1,156
Creditors due (144) - (144)
within one year
------ ------ ------
Net assets on 1,012 - 1,012
acquisition
===== =====
Consideration and 21,626
costs
------
Goodwill arising 20,614
=====
</TABLE>
On August 15, 1996 Paragon Investment Holdings Limited ("Paragon") was
acquired in exchange for consideration of 760,000 pounds payable by way of
issuing 2,000,000 ordinary 1 pence shares at a fully paid price of 38
pence each. The net assets of Paragon at the date of acquisition were
as follows:
<TABLE>
<S> <C> <C> <C>
Fair value
Book value adjustments Fair value
000s 000s 000s
Fixed assets 142 (55) 87
Stock 24 - 24
Debtors 144 - 144
Cash 5 - 5
------ ------ ------
315 (55) 260
Creditors due within (986) (263) (1,249)
one year
Creditors due in more (16) - (16)
than one year
------ ------ ------
Net assets on (687) (318) (1,005)
acquisition
===== =====
Consideration and 778
costs
------
Goodwill arising (1,783)
=====
</TABLE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
(continued)
5. Investments
(continued)
(b)Details of principal subsidiary undertakings at November 30, 1996
Details of the principal investments in which the company holds more than
10% of the nominal value of any class of share capital are as follows:
<TABLE>
<S> <C> <C> <C> <C>
Country of
registration (or Proportion of
Name of incorporation) voting rights Nature of
company and operation Holding and shares held business
Subsidiary undertakings
All held by the company unless indicated.
DigiPhone Europe England Ordinary 100% Software
Limited and Wales shares distribution
The Public Tele- England Ordinary 100% Payphone
phone Company and Wales shares provider
Limited
Paragon Payphones England Ordinary 100% Payphone
Limited and Wales shares provider
</TABLE>
<PAGE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
(continued)
6. Reconciliation of shareholders' funds and movements on reserves
<TABLE>
<S> <C> <C> <C> <C> <C>
Profit Total
Share Share Other and shareholders'
loss
capital premium reserve account funds
000s 000s 000s 000s 000s
Balance at May 31, 126 1,393 - (436) 1,083
1996
Restatement
adjustments
(see pages 12 to 5 200 (613) (603) (1,011)
14)
Exercise of warrants 14 54 - - 68
Loss attributable to
members of the company - - - (2,013) (2,013)
Shares issued for 543 - - - 543
acquisitions
Premium on shares
issued for acquisitions - - 21,654 - 21,654
Goodwill written off - - (22,397) - (22,397)
Loan stock converted 8 296 - - 304
------ ------ ----- ----- ------
Balance at November 696 1,943 (1,356) (3,052) (1,769)
30, 1996
====== ====== ===== ===== ======
</TABLE>
7. Unsecured convertible loan stock
In November 1996, the company issued 2m pounds of 7% Unsecured Convertible
Loan Stock 1996-2001 to Camelot Corporation, of which 1m pounds was in ex-
change for cash and 1m pounds in payment for certain of the DigiPhone distri-
bution rights. The company has announced that on March 4, 1997 it intends to
sell rights to use certain software in the US and Canada to Camelot Cor-
poration (see note 8). The 2m pounds of Unsecured Convertible Loan Stock
will be redeemed as part of this transaction.
<PAGE>
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
(continued)
8. Related party transactions
As disclosed in note 3, Meteor Technology PLC acquired certain distribution
rights in the period from Camelot Corporation, a company in which Mr D
Wettreich, the Chairman, is interested through his position as Chairman and
Chief Executive Officer of Camelot Corporation and through his and his
family's interests in approximately 17% of the common shares of that company
(assuming no exercise of stock options).
As set out in note 7 loan stock was issued during the period to Camelot
Corporation. Mr D Wettreich is also interested in this transaction for the
reasons stated above.
<PAGE>
Meteor Technology plc
restated May 31, 1996 accounts
On January 24, 1997 the directors announced that they had decided to restate
the company's accounts for the year ended May 31, 1996 to reflect a write
down of investments. In the directors' opinion a fundamental error existed
in the accounting for the investment and associated costs in respect of the
German subsidiary undertaking, Telecredit Telekommunikations GmbH.
Therefore the accounts have been restated for this and various other matters
as explained in the notes as follows:
restated consolidated profit and loss account
for the period ended May 31, 1996
<TABLE>
<S> <C> <C> <C>
Restated As
presented
Notes 000s 000s
Turnover 25 25
Cost of sales (19) (19)
------ ------
Gross profit 6 6
Distribution expenses (11) (11)
Administration expenses 4,5 (174) (159)
------ ------
Operating loss (179) (164)
Interest receivable 2 2
Interest payable (4) (4)
------ ------
(181) (166)
Amount written off investment 1,2,3,4 (858) (270)
------- ------
(1,039) (436)
===== =====
<PAGE>
Meteor Technology plc
restated May 31, 1996 accounts (continued)
restated balance sheet as at May 31, 1996
</TABLE>
<TABLE>
<S>
<C> <C> <C>
Group Group
Restated As
presented d
Notes 000s 000s
Fixed assets:
Intangible assets 5 - 602
Tangible assets 30 30
Investments - -
------ ------
30 632
Current assets:
Stocks 80 80
Investments 1 - 300
Debtors 4 49 74
Cash 153 153
------ ------
282 607
Creditors: amts falling 2,4 (242) (144)
due within one year
------ ------
Net current assets 40 463
Total assets less 70 1,095
liabilities
Creditors: amounts falling
due within more (12) (12)
than one year
------ ------
58 1,083
====== ======
Capital and reserves:
Called up share capital
Issued 113 113
Committed but unissued 3 18 13
Share premium account
Issued 756 756
Committed but unissued 3 837 637
Other reserves 5 (627) -
Profit and loss account (1,039) (436)
------ ------
58 1,083
====== ======
</TABLE>
<PAGE>
Meteor Technology plc
notes on the restated May 31, 1996 accounts
1. The investment in Telecredit Telekommunikations GmbH was exchanged for
100,000 ordinary shares in RC Telecom Limited on July 10, 1996. In the new
directors' opinion this investment, which represents 10 per cent of that
company's share capital, was worthless at the date of acquisition.
Accordingly a provision for diminution in value of 300k pounds has been
included in the restated figures.
2. The company provided a rent guarantee to the landlord of the premises
occupied by Telecredit Telekommunikations GmbH. These premises were
vacated in early 1996 leaving rent arrears and an ongoing obligation and
therefore the landlord called the rent guarantee. No provision for these
costs was accrued at May 31, 1996. A settlement of 70k pounds has been
reached with the landlord and a provision for this amount has been included
in the restated figures.
3. A fee of 205k pounds was payable to Vivian Gray Nominees in respect of a fee
relating to Telecredit Telekommunikations GmbH. While shares in settlement
of this fee had been committed but not issued at May 31, 1996, this was not
recorded in the company's accounts.
4. Debtors totalling 25k pounds were included in the May 31, 1996 accounts which
were not valid debtors. Expenses of 13k pounds in respect of operating
costs of Telecredit Telekommunikations GmbH were due but not provided at
May 31, 1996. Costs of 15k pounds were committed at May 31, 1996 which
were of no benefit to the company and therefore should have been provided for
at that date.
5. The accounting policy for goodwill arising on acquisition or on
consolidation has been changed to a policy of charging it against reserves.
Accordingly amortisation of 25k pounds expensed in the period to May 31,
1996 has been written back to the profit and loss account for that period.
<PAGE>
Exibit (28) d
<PAGE>
Adina, Inc.
Pro Forma Statement of Operations
($000's, except for per share and shares outstanding)
<TABLE>
<S> <C> <C> <C>
Adina Camelot AMI
30-Apr 96 30-Apr-96 30-Apr-96
REVENUES
Sales $ - $ 3,002.0 $ -
Cost of Sales - 843.1 -
Gross Profit - 2,158.9 -
Operating Expenses:
Distribution Expenses - - -
Administrative Expenses - 6,233.5 -
Depreciation & Amortization - 354.4 -
Total Operating Expenses - 6,587.9 -
Operating Loss - (4,429.0) -
Other Income - 114.2 -
Discontinued Operations - (250.9) -
Net Loss - (4,565.7) -
Dividends-Preferred Stock - (575.4) -
Net Loss-Common Stock $ - $ (5,141.1) $ -
Net Loss per
common share $ - $ (0.37) $ -
Weighted Average Shares
Outstanding 32,550,000 13,764,755 74,940,317
See notes to financial statements.
</TABLE>
Adina, Inc.
Pro Forma Statement of Operations - Continued
($000's, except for per share and shares outstanding)
<TABLE>
<S> <C> <C> <C>
Meteor
Technology Adjustments Pro
31-May-96 (See note 2) Forma
REVENUES
Sales $ 38.8 $ - $ 3,040.8
Cost of Sales 29.5 - 872.6
Gross Profit 9.3 - 2,168.2
Operating Expenses:
Distribution Expenses 17.1 - 17.1
Administrative Expenses 273.2 - 6,506.7
Depreciation & Amortization - - 354.4
Total Operating Expenses 290.3 - 6,878.2
Operating Loss (281.0) - (4,710.0)
Other Income - - 114.2
Discontinued Operations (1,331.9) - (1,582.8)
Net Loss (1,612.8) - (6,178.5)
Dividends-Preferred
Stock - - (575.4)
Net Loss-Common Stock $ (1,612.8) $ - (6,753.9)
Net Loss per common
share $ (0.14) $ - $ (0.09)
Weighted Average Shares
Outstanding 11,317,612 - 75,000,000
See notes to financial statements.
</TABLE>
<PAGE>
Exhibit (28) e
<PAGE>
<TABLE>
<S> <C> <C> <C>
Adina, Inc.
Pro Forma Balance Sheet
($000's)
Adina Camelot AMI
30-Apr 96 30-Apr-96 30-Apr-96
ASSETS
Current Assets:
Cash $ 0.5 $ 4,185.3 $ 0.1
Marketable Securities - 3,492.6 -
Accounts & Notes Receivable - 322.4 -
Prepaids - 125.9 -
Inventory - 870.5 -
Total Current Assets 0.5 8,996.7 0.1
Property and Equipment:
Net Equipment - 1,115.8 -
Licenses - 1,211.3 -
Other - 2,395.1 -
Total Assets $ 0.5 $ 13,718.9 $ 0.1
LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
Accounts Payable $ - $ 630.7 $ 14.3
Accrued Expenses - 190.0 -
Total Current Liabilities - 820.7 14.3
Notes Payable - - -
Minority Interest - - -
Total Liabilities - 820.7 14.3
Stockholder's Equity:
Common Stock 0.7 265.5 0.1
Preferred Stock - 35.5 -
Additional Paid-In Capital 1.6 33,647.4 891.0
Treasury Stock - (2,714.6) -
Retained Earnings (1.8) (18,335.6) (905.3)
Total Stockholder's Equity 0.5 12,898.2 (14.2)
Total Liabilities & Equity $ 0.5 $ 13,718.9 $ 0.1
See notes to financial statements.
</TABLE>
Adina, Inc.
Pro Forma Balance Sheet
($000's)
<TABLE>
<S> <C> <C> <C>
Meteor
Technology Adjustments Pro
31-May-96 (See note 2) Forma
ASSETS
Current Assets:
Cash $ 1,892.8 $ - $ 6,078.7
Marketable Securities 296.0 (3,484.3) 304.3
Accounts & Notes Receivable 547.2 (31.4) 838.2
Prepaids - - 125.9
Inventory - - 870.5
Total Current Assets 2,736.0 (3,515.7) 8,217.6
Property and Equipment:
Net Equipment 368.0 - 1,483.8
Licenses - - 1,211.3
Other - - 2,395.1
Total Assets $ 3,104.0 $ (3,515.7) $ 13,307.8
LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
Accounts Payable $ 2,713.6 $ - $ 3,358.6
Accrued Expenses - - 190.0
Total Current Liabilities 2,713.6 - 3,548.6
Notes Payable 3,220.8 (2,487.0) 733.8
Minority Interest - 4,039.6 4,039.6
Total Liabilities 5,934.4 1,552.6 8,322.0
Stockholder's Equity:
Common Stock 1,113.6 (662.7) 717.2
Preferred Stock - - 35.5
Additional Paid-In Capital 3,108.8 662.7 38,311.5
Treasury Stock - - (2,714.6)
Retained Earnings (7,052.8) (5,068.3) (31,363.8)
Total Stockholder's Equity (2,830.4) (5,068.3) 4,985.8
Total Liabilities & Equity $ 3,104.0 $ (3,515.7) $ 13,307.8
</TABLE>
See notes to financial statements.
Adina, Inc.
Notes to Pro Forma Financial Statements
(Unaudited)
NOTE 1: The respective financial statements were derived from the following
reports:
Adina, Inc.: audited financial statements of Adina, Inc. for the
fiscal period ended April 30, 1996 and unaudited interim financial
statements for the period ended January 31, 1997.
Alexander Mark Investments (USA), Inc.: audited financial statements
of Alexander Mark Investments (USA), Inc. (AMI), formerly Danzar
Investment Group, Inc., for the fiscal period ended April 30, 1996 and
unaudited interim financial statements for the period ended January 31,
1997.
Camelot Corporation: audited financial statements of Camelot
Corporation for the fiscal year ended April 30, 1996 and unaudited
interim financial statements for the period ended January 31, 1997.
Meteor Technology, PLC: audited financial statements from Meteor
Technology, PLC for the fiscal year ended May 31, 1996 and unaudited
interim financial statements for the period ended Nov. 30, 1996.
NOTE 2: Adjustments:
A) The Pro Forma Balance Sheet reflects the accounting change that
Camelot Corporation has made for the treatment of the Meteor
Technology, PLC securities. Prior to Camelot's decision to pool
Alexander Mark Investments (USA), Inc., and Meteor Technology assets,
Camelot was classifying these securities as "Securities Held for Sale".
As required by general accounting rules, each quarter the value of this
asset was adjusted to reflect changes in market valuation. Through the
first nine months of FY97, approximately $6.6 million was charged to
expense on Camelot Corporation's accounting records due to the
reduction of Meteor Technology's market value. Following the decision
to pool assets this security will now be classified as a "Long Term
Investment" and the valuation changes will now be reflected in the
Equity section of the balance sheet. This change does not effect the
April 30, 1996 Pro Forma Statement of Operations and the cumulative
impact of this change will be fully disclosed in Camelot Corporation's
annual Form 10-K that is scheduled to be released no later than the end
of July 1997. The cumulative impact of this change for FY97 is
approximately a $1.1 million increased loss on Camelot Corporation's
financial statements.
B) Intercompany elimination's were made on the Pro Forma Balance Sheet
to reflect transactions that occurred between Camelot Corporation and
Meteor Technology, PLC. These transactions include loans that were
made to Meteor and affiliated companies and the associated interest
income. In addition, the Pro Forma Balance Sheet reflects the
elimination of the License agreement that was signed between Camelot
Corporation and Meteor Technology, PLC.
C) The financial statements reflect the 51 per cent non-affiliate
interest in Camelot Corporation after intercompany elimination's and
recording of minority interests. The minority interests include
portions of Meteor Technology, PLC and Alexander Mark Investments
(USA), Inc. held by the shareholders of Meteor Technology, PLC and
Alexander Mark Investments (USA), Inc. and not owned by the company.
The minority interest is based on the proportioned share of the
consolidated net assets of Meteor Technology and Alexander Mark
Investments (USA), Inc. on a historical basis.
Adina, Inc.
Notes to Pro Forma Financial Statements - Continued
(Unaudited)
D) Meteor Technology financial presentation is based on the accounting
rules of the United Kingdom. Pro Forma 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. Total
assets and liability amounts were not changed except for as noted in
"E".
E) Meteor Technology'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, 1997, one pound equals $1.60. The
conversion used for the statement of operations was based on an average
exchange rate for the twelve months ended May 31, 1996. This
conversion rate was one pound equals $1.55.
F) The stockholder's equity account was adjusted to reflect the
issuance of 53,811,780 Preferred Shares, $.01 par value, of Camelot
Corporation stock for 6,029,921 shares of the outstanding stock of
Alexander Mark Investment (USA), Inc. Per the agreement, Camelot
delivered 35,688,560 Preferred Shares at the closing with the balance,
18,123,220 Preferred Shares to be issued on one for one basis as new
common shares of Camelot are issued until the balance is fully issued.
The stockholder's equity account was also adjusted to reflect the
elimination of the outstanding stock of Meteor Technology that is owned
directly or indirectly by Camelot Corporation.
G) The pro forma weighted average shares outstanding is based on the
total Adina shares outstanding after the issuance of 42,450,000 shares
for 80% of the Alexander Mark Investments (USA), Inc. stock.
