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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission file number: 0-23532
AMERICAN DIVERSIFIED GROUP, INC.
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NEVADA 86-0359523
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(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification No.)
501 South Dixie Highway, West Palm Beach, FL 33401
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(Address of Principal Executive Offices)
(407) 832-5208
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Issuer's telephone number
________________________________________________________________________________
(Former Name, Former Address, and Former Fiscal Year,
if Changed since last Report)
Check whether the issuer: (i) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months ( or for such shorter
period that the Issuer was required to file such reports), and (ii) has been
subject to the filing requirements for the past 90 days.
Yes No x
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Check whether the registrant filed all documents and reports required to be
filed by section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under plan confirmed by court.
Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each issuer's classes of common
equity, as of the latest practicable date:
54.962,560 shares of Common Stock, $.001 par value, as of March 31, 1996.
Transitional Small Business Disclosure Format (check one):
Yes No x
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Page 1 of 14.
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996
Page
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Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes To Financial Statements 4
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
BALANCE SHEET
(UNAUDITED)
AS OF MARCH 31, 1996
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<CAPTION>
ASSETS
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Current Assets:
Cash $ 10,621
Inventories 5,000
Deferred Consulting Fees 2,275,583
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Total Current Assets $2,291,204
Fixed Assets:
Property and Equipment (Net) 20,774
Other Assets:
Prepaid Acquisition Costs 2,000
Deposits 570
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Total Other Assets 2,570
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TOTAL ASSETS $2,314,548
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LIABILITIES AND SHAREHOLDER'S EQUITY
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Current Liabilities:
Accounts Payable and Accrued Expenses $ 16,767
Due to Related Parties 43,000
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Total Current Liabilities 59,767
Shareholders' Equity:
Preferred Stock, Series A, $10 par value
authorized 50,000 shares; none
outstanding --
Common Stock, par value $.001 per share,
authorized 100,000,000 shares; issued
and outstanding 62,592,520 shares 62,592
Additional Paid-In Capital 12,423,389
Accumulated Deficit (10,231,200)
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Total Shareholders' Equity 2,254,781
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TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $2,314,548
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
1996 1995
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Revenues:
Other Income $0 $0
Expenses:
General and Administrative 1,424,206 239,998
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Loss From Operations (1,424,206) (239,998)
Other Losses (Gains):
Loss on Disposal of Subsidiary 2,545,076
Loss on Possible Acquisition 250,000
Loss on Settlement of Litigation 375,000
Loss (Gain) on Settlement (4,795)
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Total Other Losses (Gains) (4,795) 3,170,076
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Net Loss ($1,419,411) ($3,410,074)
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Net Loss Per Share ($0.0251) ($0.0968)
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Average Number of Shares Outstanding 56,598,015 35,237,520
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SEE NOTES TO FINANCIAL STATEMENTS
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
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<CAPTION>
1996 1995
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Cash Flows From Operating Activities:
Net Loss ($1,419,411) ($3,410,074)
Depreciation 800
General and Administrative Expenses Paid
by Stock 1,388,917 228,000
Other Losses Paid by Stock 375,000
Loss on Disposal of Subsidiary 2,545,076
Loss on Possible Acquisition 250,000
Increase in Deposits (570)
Increase (Decrease) in Accounts Payable
and Accrued Expenses (1,059) 6,210
Increase In Due To Related Parties 43,000
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Net Cash Flows From Operating Activities 11,677 (5,788)
Cash Flows From Investing Activities:
Payments for Prepaid Acquisition Costs (2,000) __
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Net Cash Flows From Investing Activities (2,000) __
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Net Increase (Decrease) in Cash 9,677 (5,788)
Cash, Beginning of Period 944 6,801
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Cash, End of Period $ 10,621 $ 1,013
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Non-Cash Transactions:
1. Issued 17,850,000 shares of common stock for services of $3,034,500 in 1996,
and 3,180,000 shares for services of $228,000 in 1995.
2. Issued 2,000,000 shares of common stock for pending acquisition; recorded at
par value ($.001 per share) in 1996.
3. Issued 8,100,000 shares of common stock for possible acquisitions valued at
$250,000 in 1995.
4. Issued 150,000 shares of common stock in settlement of litigation of
$375,000 in 1995.
SEE NOTES TO FINANCIAL STATEMENTS
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AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements reflect all adjustments, which,
in the opinion of management, are necessary for a fair presentation of the
financial position and the results of operations for the interim period
presented.
Certain financial information and footnote disclosures which are normally
included in financial statements prepared in accordance with generally accepted
accounting principles, but which are not required for interim reporting
purposes, have been condensed or omitted. The accompanying financial statements
should be read in conjunction with the financial statements and notes thereto as
of December 31, 1995 contained in the Company's Form 10-K.
NOTE 2 - EARNINGS (LOSS) PER SHARE
Per share information is computed based on the weighted average number of shares
outstanding during the period.
7
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements contained in this Form 10-QSB include all
adjustments which in the opinion of the management are necessary in order to
make the financial statements not misleading.
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ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The Company has never had revenues from operations. Until March, 1995,
the Company through a subsidiary was engaged in the business of developing and
marketing of computer controlled shock absorber systems. Before development of
the systems completed, the Company divested itself of ownership of the shock
absorber and air suspension subsidiary and commenced a plan to acquire ADMC, as
discussed above. Following the termination of its acquisition of ADMC, because
of ADMC's failure to satisfy the asset requirements of the agreement, the
Company has continued to develop its business efforts as a diversified medical
company, with operations intended to involve the sale of products manufactured
by others, principally in the medical field. The Company also intends to explore
potential acquisitions of operating businesses and to that end is currently
exploring a potential purchase of a computer supply company. The structure of
this acquisition is still to be determined, and may in fact not be completed,
depending upon the valuation of the computer operation and inventory.
The Company did not generate any operating revenues in fiscal 1995 and
will be dependent upon its ability of generating revenues from operations during
the fiscal year commencing January 1, 1996 for it to be able to continue
operations. It may be necessary for the Company to raise additional funds,
either from the sale of equity or debt, or from the exercise of outstanding
options if the Company is not successful in generating operating revenues, of
which there can be no assurance.
The Company issued common stock purchase options to Emerging Trends
Linkages Corp. exercisable to purchase 450,000 shares at $.18 per share, the
price of the shares on the date of the grant. ETLC is engaged in the business of
marketing pharmaceutical products and other products and services in West and
Central Africa. In April, 1996, ETLC, the option holder, exercised options to
acquire 450,000 shares at $.18 per share for total proceeds of $81,000 to the
Company. The Company deems that this payment may also be considered as payment
by ETLC for the rights to market the Company's test kits and HSA in ETLC's
territory, which includes Ivory Coast, Guinea, Mali and Congo.
There can be no assurance that any additional options will be exercised or that
additional debt or equity financing will be available to the Company, whether at
terms agreeable to the Company or otherwise.
In pursuit of its diversified medical business, the Company has
entered into contractual relationships and, following the end of its recent
fiscal year, has recently entered into a letter of intent with UBI for the
purpose of acquiring UBI. In addition, the Company has entered into consulting
agreement with ETCL. As a result of these recent agreements, the Company plans
upon engaging in the business of selling a variety of medical products including
HSA, DNA Analyzers, and Test Kits. If the letter of intent with UBI results in a
completed acquisition, UBI will become a wholly owned subsidiary of the Company.
This acquisition will result in the Company having acquired from UBI its
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sources of HSA, as well as the marketing, distribution and representation
agreements for HSA in Central and South America. The sources of HSA should
permit the Company to satisfy the existing and potential future orders, if any,
for HSA that have been and may in the future be generated by ETLC from Guinea
and elsewhere in West Africa.
The acquisition will also provide the Company with certain non-
exclusive marketing rights to distribute the DNA Analyzer in Mexico. If the
agreement for the acquisition of UBI is completed, the Company will also have
assigned from UBI orders for HSA and Cholera Test Kits as follows: Mexico
(Cholera Test Kits) $351,000; Brazil (HSA) $106,500; Peru (HSA) $88,750; Ecuador
(HSA) $177,500; Colombia (HSA) $53,250; Bolivia (HSA) $53,250; Argentina (HSA)
$106,500; and certain conditional orders that are to be priced following receipt
by the customers in Mexico and Brazil of test vials and unit pricing for HSA.
The contemplated consideration to be paid if the acquisition is completed is
presently 2,300,000 shares of common stock, which shares are to be registered in
a registration statement on Form S-1 under the Securities Act of 1933, as
amended (the "Act"), which registration statement shall provide for the resale
by the persons being issued the Company's shares. In addition, the agreement
contemplates the Dr. Jerry Thornthwaite, president and principal shareholder of
UBI, will be granted certain stock options pursuant to an employment agreement
to be executed with the Company. The shares underlying the employee stock option
granted to Dr. Thornthwaite and other employees will also be registered in such
registration statement or under another form appropriate under the Act.
The Company has recently been informed by ETLC that it has received an
initial order from the Government of the Republic of Guinea for Test Kits and
HSA, in the amount of $200,000, and for generic drugs and vitamins in the
minimum amount of $500,000 and the maximum amount of $1,000,000. The timing for
shipment of such order is presently planned to commence in September, 1996, and
to continue during the ensuing twelve months. The Company reasonably expects
that these orders will generate operating revenues for the Company in the third
quarter of 1996. As stated above, supply of generic drugs and vitamins to
fulfill the purchase order shall be available at prices and in amounts and terms
satisfactory to the Company. Neither the Company nor ETLC presently can estimate
the length of time that will be required to secure the supply from third party
manufacturers and/or suppliers of the generic pharmaceutical products and
vitamins to satisfy the orders generated from Guinea or the anticipated orders
that the Company hopes to generate from other West African country within the
territory granted to ETLC.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On December 30, 1994, Deniston Limited, a British Virgin Islands
corporation, filed a complaint against Kenneth Coleman, Tera West Ventures,
Inc., PBA Energy Associates and Peter Berney seeking injunctive relief, specific
performance and damages in connection with a securities subscription agreement
in which Deniston Limited alleged that it was to acquire common stock of the
Company. Deniston Limited v. Kenneth Coleman, Tera West Ventures, Inc., PBA
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Energy Associates, and Peter Berney 11th Judicial Circuit, Dade County,
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Florida, Case No. 94-24371. The case was settled in February 1996.
Item 2. Changes in Securities
The Company filed a Certificate of Amendment to the Certificate of
Incorporation to increase its authorized capital stock to 200,000,000 shares of
common stock, par value $.001 per share.
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits and Reports on Form 10-QSB
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Sequential
Exhibit No. Document Description Page No.
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3.01 Articles of Incorporation
3.02 Amendment to Articles of Incorporation filed
December 3, 1991 changing name to Gerard
Enterprises, Ltd. and increasing authorized
shares to 25,000,000
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<TABLE>
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3.03 Amendment to Articles of Incorporation filed
November 23, 1992 changing name to Tera West
Ventures, Inc. and increasing authorized to
50,000,000 shares
3.04 Amendment to Articles of Incorporation filed
April 8, 1993 changing name to Tera West
Ventures, Inc. and authorized 50,000,000 shares
of Series A Preferred Stock
3.05 Amendment to Articles of Incorporation filed
March 15, 1995 changing name to American Diversified
Group, Inc.
3.06 Amendment to Articles of Incorporation filed
July 17, 1996 changing name to increase authorized
shares to 200,000,000 shares par value $.001
3.11 Certificate of Incorporation of American Diversified
Medical Corp., a Delaware Corporation
10.6 Contract to acquire American Diversified Medical Corp.
10.7 Assignment from Ameril Corporation and Assumption
by ADGI of Equipment Lease with C&W Leasing
(DNA Analyzer)
(b) Reports on Form 8-K
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The Company filed no reports on Form 8-K during the quarter ended March 31,
1996.
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SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AMERICAN DIVERSIFIED GROUP, INC.
By: Jerrold R. Hinton, President
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Jerrold R. Hinton, President,
Chief Executive Officer and
Director
Date: August 12, 1996
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