SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
---------------------------.
Commission File Number: 0-22520
AMTEC, INC.
- ---------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 52-198912.
- ------------------------------- --------------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
599 Lexington Avenue, 44th Floor
New York, New York 10022
---------------------------------------------
(Address of principal executive offices)
(212) 319-9160
--------------
(Registrant's telephone number)
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes __x__ No ____
Class Outstanding as of September 28, 1998
--------------------- ------------------------------------
Common Stock, par value 26,180,945
$.001 per share
Transitional Small Business Format (Check one): Yes ____ No __x__
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995.
Except for the historical information contained herein, the matters
discussed in this Quarterly Report are forward-looking statements which
involve risks and uncertainties, including but not limited to economic,
competitive, governmental, international and technological factors
affecting the Company's revenues, joint ventures, operations, markets and
prices, and other factors discussed in the Company's Annual Report on Form
10-K, filed with the Securities and Exchange Commission on June 30, 1998.
INTRODUCTION
The purpose of this filing is to correct certain information
regarding the previously- reported results of operations for the
three months ended June 30, 1998 and the previously-reported
balance sheet data of AmTec, Inc. (the "Company") as of June 30,
1998, as presented in "Item 1. Financial Statements" and Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations."
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
AMTEC INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1998 March 31, 1998
<S> <C> <C>
ASSETS:
Current assets
Cash $ 8,827,274 $ 10,442,334
Accounts Receivable 118,255 114,661
Prepaid expenses and other current assets 274,372 356,554
------------ ------------
Total current assets 9,219,901 10,913,549
------------ ------------
Property and equipment, net 876,266 897,265
Investment in GSM networks, net of amortization 28,997,493 28,461,810
Other assets 63,302 113,180
Deferred expenses 6,916
------------ ------------
TOTAL ASSETS $ 39,156,962 $ 40,392,720
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities
Accounts payable $ 402,675 $ 551,705
Accrued expenses 48,391 798,376
Loans payable - shareholders 0 1,452,553
Other current payables 10,568,017 10,234,872
------------ ------------
Total current liabilities 11,019,083 13,037,506
------------ ------------
Loans payable 20,028,602 20,028,602
Other payables 1,487,727 1,487,727
Minority interest 690,553 941,974
------------ ------------
TOTAL LIABILITIES 33,225,965 35,495,809
============ ============
STOCKHOLDERS' EQUITY
Preferred Stock: authorized 10,000,000 shares
Series E Convertible Preferred Stock:
$.001 par value; 68 and 73 shares issued and
outstanding in 1998 and 1997, respectively. 1 1
Common stock: $.001 par value, authorized
100,000,000 shares; 26,983,058 and
26,532,502 issued and outstanding at
June 30, 1998 and March 31, 1998, respectively. 26,983 26,533
Additional paid-in capital 36,132,621 33,148,529
Accumulated deficit (29,351,620) (27,394,590)
Cumulative foreign currency exchange loss 0 613
Non employee deferred option cost, net (1,148,438) (1,378,125)
Warrants 271,450 493,950
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 5,930,997 4,896,911
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 39,156,962 $ 40,392,720
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
AMTEC INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ending Quarter Ending
June 30, 1998 June 30, 1997
<S> <C> <C>
Revenues $0 $0
----------- -----------
Expenses:
Selling, general and administrative 1,696,185 2,369,632
----------- -----------
Total expenses 1,696,185 2,369,632
----------- -----------
Loss from operations (1,696,185) (2,369,632)
----------- -----------
Other income (expense):
Amortization of stock options (229,688)
Other - net 119,912 (21,017)
----------- -----------
Total other income (expense) (109,776) (21,017)
----------- -----------
Loss before minority interest (1,805,961) (2,390,649)
Minority interest in loss of subsidiaries (364,098) (798,422)
----------- -----------
Net loss (1,441,863) (1,592,227)
Preferred stock dividend 402,421 108,000
----------- -----------
Loss applicable to common shares ($1,844,284) ($1,700,227)
=========== ===========
Basic loss per common share ($0.06) ($0.05)
=========== ===========
Weighted average common shares outstanding 30,382,177 31,306,876
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
AMTEC INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Quarter Ending Quarter Ending
June 30, 1998 June 30, 1997
Cash flows from operating activities:
<S> <C> <C>
Net loss ($1,844,284) ($1,700,227)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of deferred option cost 229,687
Depreciation and amortization of GSM investment 547,342
Depreciation 29,122 36,586
Preferred Stock dividend 402,421
Issuance of common and options stock for
compensation, directors' fee 273,747
(Increase) decrease in:
Accounts receivable (3,594) (359,501)
Prepaid expenses and other current assets 82,182 37,031
Deferred Expense 6,916
Other assets 49,879
Increase (decrease) in:
Accounts payable and accrued expenses 7,473 (616,811)
Accrued interest 30,333
Other current payables 333,145
Foreign currency loss (613)
Minority interest (251,421) (696,526)
----------- -----------
Net cash provided by (used in) operating activities (411,745) (2,721,621)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (8,123) (24,842)
GSM construction costs and additional investments (1,083,025) (59,954)
----------- -----------
Net cash used in investing activities (1,091,148) (84,796)
----------- -----------
Cash flows from financing activities:
Borrowings 4,429,113
Change in Minority Interest Ownership (112,167)
Proceeds from sale of Series C convertible
preferred stock 2,500,000
----------- -----------
Net cash provided by financing activities (112,167) 6,929,113
----------- -----------
Net increase (decrease) in cash and cash equivalents (1,615,060) 4,122,696
Cash and cash equivalents, beginning of period 10,442,334 5,390,871
----------- -----------
Cash and cash equivalents, end of period $8,827,274 $9,513,567
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements at June 30, 1998 are unaudited
and reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position and
operating results for the interim period. All of the adjustments are
of a normal recurring nature. The condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto together with management's
discussion and analysis of financial condition and results of
operations, contained in the Annual Report on Form 10-K filed by the
Company on June 30, 1998 for the Company's fiscal year ended March
31, 1998. The results of operations for the three months ended June
30, 1998 are not necessarily indicative of the results for the entire
year ending March 31, 1999.
Basis of Presentation
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles. Realization of a major portion of
the assets in the accompanying balance sheet is dependent upon the
Company's existing projects developing profitable operations.
Included in the financial statements are the financial statements of the
Company for the three months ended June 30, 1998 and the financial
statements of its joint venture subsidiaries for the three months ended
March 31, 1998.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the Company, its 70%
owned subsidiary Hebei United Telecommunications Equipment Co., Ltd.
("Hebei Equipment") (a 15 year life Sino-foreign joint venture) and
subsidiary, and the Company's wholly owned subsidiary, ITV
Communications, Inc. All significant intercompany accounts and
transactions are eliminated in consolidation. Hebei Equipment in turn
owns 51% of Hebei United Telecommunications Engineering Company, Ltd.
("Hebei Engineering").
NOTE 3 - ASSETS
The consolidated balance sheet includes total current assets of
approximately $9.2 million and total assets of approximately $39.2
million. Of these amounts, approximately $5 million of cash is
reserved for parent company operations as well as additional joint
venture investments, as may be required. The Company's current cash
position is sufficient to support operations of the Company through
January 1, 2000.
The Company also reported through consolidation approximately $29
million of assets, net of amortization, associated with the
construction of the Hebei GSM Network.
NOTE 4 - LIABILITIES
The consolidated balance sheet includes total liabilities of
approximately $33.2 million. Of this amount, approximately $32.3
million are liabilities of AmTec's subsidiaries, which are guaranteed
by NTTI with no recourse to AmTec. AmTec's direct liabilities amount
to approximately $0.5 million. The decrease in consolidated
liabilities primarily relates to the elimination of shareholder loans
and related accrued expenses of ITV, Inc., a wholly-owned subsidiary.
NOTE 5 - CHANGES TO EQUITY
The increase in Stockholders' Equity of approximately $1 million for
the quarter ended June 30, 1998 was primarily the result of an
increase in Additional paid-in capital of approximately $3 million
due to the elimination of approximately $2.4 million of shareholders'
loans and related accrued interest, amortization of the discount on
the Series E Preferred Stock of approximately $0.4 milion and the
cancellation of 300,000 warrants valued at $0.2 million. These
increases were offset by a loss for the quarter of approximately $1.8
million and an increase in Accumulated deficit of approximately $0.1
million related to AmTec's increase in the ownership of its
Sino-Foreign Joint Venture from 60.8% to 70%. Also, during the
quarter the Company issued 450,556 shares of its Common Stock upon
the conversion of 5 shares of its Series E Convertible Preferred
Stock.
NOTE 6 - SUBSEQUENT EVENTS
The Company cancelled a Common Stock Investment Agreement, as
permitted by the Agreement, with Promethean Investment Group. It is
the Company's intention to cancel the 1,019,465 shares held in escrow
that were designated for issuance under terms of the agreement.
On August 6, 1998 the Company signed an agreement with UIH
Asia/Pacific Communications, Inc ("UAP"), a wholly-owned subsidiary
of United International Holdings, Inc. ("UIH"), under which AmTec
will issue to UAP $12 million of preferred stock convertible into 9.6
million AmTec shares at a price of $1.25 per share, subject to
certain anti-dilution provisions, in exchange for 100% of the common
stock of UIH Hunan, Inc. ("UIHH"). UIHH holds a 49% interest in a
Sino-foreign joint venture with the Broadcasting Bureau of Hunan, the
monopoly cable television operator in Hunan Province, People's
Republic of China. The agreement, which is subject to satisfactory
completion of due diligence, approval of AmTec's shareholders and
approvals of appropriate regulatory authorities in China, provides
UAP with an option to increase its holdings in AmTec to 25% of
AmTec's fully diluted common shares and with rights of co-investment
with AmTec in China.
On August 9, 1998 a fourth GSM network began operations in the city
of Baoding, which has a metropolitan area population of 9.54 million
people and on September 14, 1998 a fifth GSM network began operations
in Qinghuangdao, which has metropolitan area population of 2.6
million. Both cities are located in Hebei Province in the People's
Republic of China.
On August 27, 1998 the Company signed a definitive agreement with
SFMT, Inc., a wholly owned subsidiary of Global Telesystems, Inc.
("GTS") under which SFMT will acquire approximately 5.9 million
shares of AmTec common stock in exchange for SFMT's interest in
V-Tech, a Sino-Foreign Joint Venture which holds rights to a majority
of the cash flow generated by Shanghai VSAT Network Systems, the
premier satellite- based telecommunications network operator in
China. The agreement is subject to satisfactory completion of due
diligence and approval of AmTec's shareholders.
NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS
Comprehensive Income - In June 1997, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 130, "Reporting
Comprehensive Income". This statement is effective for financial
statements issued for periods beginning after December 31, 1997.
Management has evaluated the effect on its financial reporting of the
adoption of this statement and has found the majority of required
disclosures not to be applicable and the remainder not to be
significant.
Segments of an Enterprise and Related Information - In June 1997, the
FASB issued SFAS No. 131, "Disclosure about Segments of an Enterprise
and Related Information." This statement is effective for fiscal
years beginning after December 15, 1997. SFAS No. 131 requires the
reporting of profit and loss, specific revenue and expense items, and
assets for reportable segments. It also requires the reconciliation
of total segment revenues, total segment profit or loss, total
segment assets, and other amounts disclosed for segments, in each
case to the corresponding amounts in the general purpose financial
statements. Management has evaluated the effect on its financial
reporting of the adoption of this statement and has found the
majority of required disclosures not to be applicable.
NOTE 8- RESTATEMENT OF OPERATING RESULTS
In September, 1998, the Company determined that its
previously-reported results of operations for the three months ended
June 30,1998 and its previously-reported balance sheet data as of
June 30, 1998 required restatement. The changes, which were caused by
a problem with the Company's accounting system, relate to an error in
posting cash disbursements and accounts receivable of $190,458 and
$12,298 respectively. These mis-postings caused an under-recording of
operating expenses of $172,596 and an over-recording of trade
payables of $5,564. The system problem has been corrected.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
AmTec, Inc. ("AmTec" or "the Company") is a telecommunications company with
operations in the People's Republic of China ( the "PRC" or "China"). The
Company has focused its operations on China because of China's large and
rapidly growing need for telecommunications services, China's requirement
for foreign capital and technology to meet that need, and the opportunity
to obtain cash flow sharing and technical services agreements with
operators who hold exclusive or semi-exclusive communications licenses. The
Company has established majority ownership in joint ventures with Chinese
and other partners to provide financing, network construction and
operational consulting services to licensed China network operators. The
Company's current operations primarily are focused on a series of cellular
telephone networks in the northeastern province of Hebei, which has 11
major cities and a population of approximately 65 million people. In
addition, the Company has interests in other projects and networks in
various stages of development, including a multimedia network for cable
television programming transmission. Developing existing network interests
and obtaining additional interests in communications networks in China in
the future are key components of the Company's business strategy.
CHINA TELECOMMUNICATIONS MARKET
Through the Company's interest in cellular telephone networks in Hebei
Province and relationships that the Company has developed with key policy
makers and decision makers in Chinese governmental agencies, AmTec has
focused its business to capitalize on the growth of the Chinese
telecommunications market, which is among the world's largest, fastest
growing, and most under-serviced telecommunications markets. Due to the
importance of a well-developed communications infrastructure to China's
continuing economic development, the PRC government has targeted
communications network development as a high priority in the country's
economic reform program. It is expected that before the year 2000, China
will surpass the United States as both the largest cellular telephone and
cable television markets in the world.
Since the establishment of China United Telecommunications, Incorporated
("Unicom") in 1994, China has had only two licensed competitors for
cellular, fixed wire and long-distance telephony. The cable television
market in China is a monopoly run by the Ministry of Information Industry,
which also regulates telecommunications in China. While other
communications markets in China have experienced greater competition, most
notably paging and value-added services, communications licenses have
generally been limited to a small number of competitors relative to markets
in the United States. The Company believes that both the overall market
size and the environment of limited competition are attractive aspects of
the Chinese communications market.
Although Chinese regulations currently prohibit direct foreign ownership or
operation of communications networks, the regulatory environment has shown
recent indications of continuing a policy of partial deregulation. And
while there can be no assurance that this policy of partial deregulation
will continue, the Company believes that it is well-positioned to benefit
from deregulation permitting direct foreign ownership and operation of
communications networks, if such deregulation were to occur in the future.
JOINT VENTURES IN CHINA
AmTec holds a 70% interest in Hebei United Telecommunications Equipment
Company Limited ("Hebei Equipment"), a Sino-foreign joint venture with a
wholly-owned subsidiary of the Electronics Industry Department of Hebei
Province. Hebei Equipment, in turn, holds a 51% interest in Hebei United
Telecommunications Engineering Company Limited ("Hebei Engineering"), a
joint venture with NTT International ("NTTI") and Itochu Corp. Both Hebei
Equipment and Hebei Engineering are organized as Sino-foreign equity joint
ventures under the laws of China and are headquartered in Shijiazhuang, the
capital of Hebei Province.
CELLULAR TELEPHONE NETWORKS
Currently, legal restrictions in China prohibit foreign participation in
the operation and ownership of communications networks. Therefore, the
Company has established majority ownership in joint ventures with Chinese
and other partners to provide financing, network construction and
operational consulting services to licensed Chinese network operators.
Substantially all of the Company's revenues are derived from contractual
arrangements for the sharing of cash flow generated from network operations
rather than from ownership or operation of the networks. Until regulations
in China change to permit direct foreign ownership and operations of
communications networks, all future revenues of the Company will continue
to be derived from these contractual arrangements.
Through Hebei Engineering, AmTec entered into an agreement (the "Unicom
Agreement") on February 9, 1996 with Unicom to (i) finance and assist
Unicom in the construction of cellular networks (the "GSM Networks" or "GSM
Project") in the ten largest cities in Hebei Province and (ii) provide
consulting and management support services to Unicom in its operation of
the GSM Networks in the 10 largest cities of Hebei Province. This GSM
Project will have a capacity of up to 70,000 subscribers. Hebei Engineering
is entitled to 78% of the distributable cash flow (defined as activation
charges plus depreciation plus net income) from the GSM Networks for a
15-year period commencing February 9, 1996.
The construction and operational plan for the GSM Networks consists of a
"roll-out" across Hebei Province on a city-by-city basis. As of September
14, 1998 five cities, were providing commercial service, with approximately
17,000 subscribers; construction in two additional cities was substantially
completed, with commercial launch dates scheduled during 1998 for these
additional cities.
As of June 30, 1998, construction of the GSM Networks had been financed by
Hebei Engineering with $3 million of equity capital, approximately $11
million of vendor financing guaranteed by NTTI, and a $20 million Term Loan
facility from Bank of Tokyo Mitsubishi also guaranteed by NTTI and Ito Chu.
Of the $3 million of equity raised by Hebei Engineering, $1.17 million was
contributed by Hebei Equipment.
Achievement of the Company's business objectives is dependent upon Unicom's
operation of the GSM Networks, among other factors. The implementation of
the GSM Networks involves systems design, site procurement, construction,
electronics installation, initial systems optimization and receipt of
necessary permits and business licenses prior to commencing commercial
service. Each stage can involve various risks and contingencies, the
outcome of which cannot be predicted with a high degree of assurance as
interconnection of the GSM Networks with the public switched telephone
network is sometimes difficult and time consuming, and the successful
completion of all planned sites of the GSM Networks will be dependent, to a
significant degree, upon the ability of the parties to lease or acquire
sites for the location of their base station equipment. While no major
difficulties have been encountered to date in procuring such sites, future
site acquisition can not be assured.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED
TO THE THREE MONTHS ENDED JUNE 30, 1997.
The Company did not recognize revenues from the GSM operations during the
quarters ended June 30, 1998 and 1997 because it has adopted a policy of
recognizing revenues only upon the receipt of cash from UNICOM. As the
agreement with UNICOM calls for annual cash distributions, the Company does
not expect to recognize revenues from its GSM networks until the third
fiscal quarter. At June 30, 1998 there were three networks operating with a
subscriber base of approximately 11,000.
The Company did not recognize any revenues from the Hebei Multimedia
Network which is still in the early stages of development.
Selling, general and administrative expenses decreased from approximately
$2.4 million during the three months ended June 30, 1997 to approximately
$1.7 million during the three months ended June 30, 1998. The decrease
primarily related to a reduction in the startup costs of the joint ventures
of approximately $1.5 million offset primarily by increases in the
amortization of the investment in GSM network of approximately $0.5 million
and salaries and fringe benefits of approximately $0.3 million related to
the hiring of a Chief Financial Officer and General Counsel in June, 1997.
The Company reported assets of approximately $39.2 million at June 30,
1998, a decrease of 3% or $1.2 million from March 31, 1998. This decrease
primarily related to the amortization of the GSM network of approximately
$0.5 million and the funding of current operations of approximately $0.7
million using cash and other accounts payable.
The consolidated balance sheet of the Company includes total liabilities of
approximately $33.2 million. Of this amount, approximately $32.3 million
are liabilities of AmTec's Sino-foreign joint venture subsidiaries, with no
recourse to AmTec. AmTec's direct liabilities amount to approximately $0.5
million. The decrease in consolidated liabilities primarily relates to the
elimination of shareholder loans and related accrued expenses.
The Company's loss before dividends decreased from $1.6 million during the
three months ended June 30, 1997 to $1.4 million during the three months
ended June 30, 1998. The decrease in net loss primarily relates to a
decrease in general and administrative expenses, partially offset by $0.2
million amortization of Non-employee deferred option costs .
Stockholders' Equity increased by $1 million from March 31, 1998 to June
30, 1998, as a result of an increase in Additional paid-in capital of
approximately $3 million due to the elimination of approximately $2.4
million of shareholders' loans and related accrued interest, amortization
of the discount on the Series E Preferred Stock of approximately $0.4
milion and the cancellation of 300,000 warrants valued at $0.2 million.
These increases were offset by a loss for the quarter of approximately $1.8
million and an increase in Accumulated deficit of approximately $0.1
million related to AmTec's increase in the ownership of its Sino-Foreign
Joint Venture from 60.8% to 70%.
LIQUIDITY AND CAPITAL RESOURCES
While the Company reported $216,348 of revenue during the year ended March
31, 1998, the Company did not report revenues for the quarter ended June
30, 1998 because it reports revenues from its investment in the GSM network
as received, which in the normal course of business for the Company's joint
venture, occurs once per year, in the Company's third fiscal quarter. As a
result, the Company generated an operating loss of $1.7 million and a loss
applicable to common shares of $1.8 million during this period. While the
Company expects to achieve profitable operations within several years,
there can be no assurances that the Company will achieve this goal. As a
result, the Company has financed its current activities primarily through
private equity placements.
During the three months ended June 30, 1998, the Company's cash decreased
by approximately $1.6 million, primarily due to additional investment in
the GSM network of approximately $1.1 million and to cash used to fund
current operations of approximately $0.5 million. The Company's direct cash
position is expected to be sufficient to support operations of the Company
through January 1, 2000.
EQUITY ISSUANCES
The Company issued 450,556 shares of its Common Stock during its first
quarter upon conversion of 5 shares of the Company's Series E Convertible
Preferred Shares (the "Series E Shares") by certain holders of the Series E
Shares.
PART II
OTHER INFORMATION
Item 2. Changes in Securities
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders during the
Quarter ended June 30, 1998.
Item 2. Agreement with UIH Asia/Pacific Communications, Inc.
On August 6, 1998 the Company signed an agreement with UIH
Asia/Pacific Communications, Inc ("UAP"), a wholly-owned subsidiary
of United International Holdings, Inc. ("UIH"), under which AmTec
will issue to UAP $12 million of preferred stock convertible into 9.6
million AmTec common shares at a price of $1.25 per share, subject to
certain anti-dilution provisions in exchange for 100% of the common
stock of UIH Hunan, Inc. UIH intends, through its ownership in AmTec,
to make AmTec its key operation in the China telecommunications
market. The transaction, which is subject to satisfactory completion
of due diligence, approval of AmTec's shareholders and approvals of
appropriate regulatory authorities in China will result in UAP
becoming AmTec's largest shareholder and hold the right to nominate 2
members to AmTec's Board of Directors. In addition, UAP will receive
co-investment rights with AmTec in China and an option to purchase
additional AmTec common stock at $3.00 per share to increase its
stake in AmTec to 25 % on a fully diluted basis.
UIHH holds a 49% interest in a Sino-foreign joint venture with the
Broadcasting Bureau of Hunan, the monopoly cable television operator
in Hunan Province, People's Republic of China. The operator is
currently delivering video services to 13 cities and over 255,000
subscribers. The joint venture currently receives fees for
transmission services and participates in the network's advertising
revenue. It is currently profitable and will add revenues to AmTec in
the first quarter after closing, which is anticipated to take place
in the third quarter of the Company's fiscal year.
Agreement with SFMT, Inc.
On August 27, 1998 the Company signed a definative agreement with
SFMT, Inc., a wholly owned subsidiary of Global Telesystems, Inc.
("GTS") under which SFMT will acquire approximately 5.9 million
shares of AmTec common stock in exchange for SFMT's interest in
V-Tech, a Sino-Foreign Joint Venture which holds rights to a majority
of the cash flow generated by Shanghai VSAT Network Systems, the
premier satellite- based telecommunications network operator in
China. The agreement is subject to satisfactory completion of due
diligence and approval of AmTec's shareholders.
The shares will be issued at a price of $1.35 per share and will make
GTS, through a wholly owned subsidiary, AmTec's largest shareholder
following the close of the above mentioned merger with UIH
Asia/Pacific Communications, Inc.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits.
27. Financial Data Schedule
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during the Quarter ended
June 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: September 28, 1998 AmTec, Inc.
By: /s/ Joseph R. Wright, Jr.
--------------------------------
Joseph R. Wright, Jr.
Chief Executive Officer
By: /s/ Albert G. Pastino
--------------------------------
Albert G. Pastino
Principal Financial and
Accounting Officer
