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 15, 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
ITEM 2. Acquisition or Disposition of Assets
On May 15, 1997 Registrant accepted the subscription for 42,450,000 re-
stricted common shares of Adina, Inc. by Daniel Wettreich, President and
Director in exchange for 6,029,921 restricted common shares of Alexander Mark
Investments(USA), Inc. ("AMI"). AMI owns 57% of the outstanding shares of
Meteor Technology plc ("Meteor"). Meteor has two active subsidiaries, Digiphone
International, Ltd and Meteor Payphones, ltd. Mr. Wettreich now has control
over Registrant.
ITEM 7. Exhibits
(10) Material Contracts
*a) Stock Purchase Agreement between Daniel Wettreich and Adina, Inc.
(28) a) Financial Statements of Meteor Technology for the
period ended May 31, 1996 and interim audited results for the six
months ended November 30, 1996.
b) The Pro Forma Statement of Operations for Alexander Mark
Investments (USA), Inc. and Meteor Technology plc as of April 30,
1996 and May 31, 1996 respectively.
c) The Pro Forma Balance Sheet for Alexander Mark Investments (USA),
Inc. and Meteor Technology plc as of January 31, 1997 and November
30, 1996 respectively.
*Previously Filed
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
Exhibit (28) a
CONDENSED BALANCE SHEETS
ASSETS
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
See accompanying notes to these financial statements.
ALEXANDER MARK INVESTMENTS(USA) INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
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
See accompanying notes to these financial statements.
ALEXANDER MARK INVESTMENTS(USA) INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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 $ - $ -
See accompanying notes to these financial statements.
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.
Exhibit (28) b
METEOR TECHNOLOGY PLC
INTERIM UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE HALF YEAR ENDED NOVEMBER 30, 1996
Six
months
Six to Aug
months 31,
to Nov 1995
30
Continuing 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
====== =====
METEOR TECHNOLOGY PLC
INTERIM UNAUDITED CONSOLIDATED BALANCE SHEET AT NOVEMBER 30, 1996
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
===== =====
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.
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.
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:
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
=====
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:
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)
=====
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:
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 Pay- England Ordinary 100% Payphone
phones Limited and Wales shares provider
Meteor Technology plc
notes on the interim unaudited accounts at November 30, 1996
(continued)
6. Reconciliation of shareholders' funds and movements on reserves
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 - - 21,654 - 21,654
acquisitions
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
====== ====== ===== ===== ======
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 dis-
tribution 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
Corporation (see note 8). The 2m pounds of Unsecured Convertible Loan
Stock will be redeemed as part of this transaction.
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.
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
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)
===== =====
Meteor Technology plc
restated May 31, 1996 accounts (continued)
restated balance sheet as at May 31, 1996
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
====== ======
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 in-
cluded 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 land-
lord and a provision for this amount has been included in the restated figures.
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.
Exibit (28) c
Adina, Inc.
Pro Forma Statement of Operations
($000's, except for per share and shares outstanding)
Meteor
Adina AMI Technology Adjustments Pro
30-Apr 96 30-Apr-96 31-May-96 (note 2) Forma
REVENUES
Sales $ - $ - $ 38.8 $ - $ 38.8
Cost of Sales - - 29.5 - 29.5
Gross Profit - - 9.3 - 9.3
Operating Expenses:
Distribution
Expenses - - 17.1 - 17.1
Administrative
Expenses - - 273.2 - 273.2
Total Operating
Expenses - - 290.3 - 290.3
Discontinued
Operations - - (1,331.9) - (1,331.9)
Net Loss $ - $ - (1,612.8) $ - $(1,612.8)
Net Loss per
share $ - $ - $ (0.14) $ - $ (0.02)
Weighted Average Shares
Outstanding 32,550,000 74,940,317 11,317,612 - 75,000,000
See notes to financial statements.
Exhibit (28) d
Adina, Inc.
Pro Forma Balance Sheet
($000's)
Meteor
Adina AMI Technology Adjustments Pro
31-Jan 97 31-Jan-97 30-Nov-96 (note 2) Forma
ASSETS
Current Assets:
Cash $ 0.5 $ 0.1 $ 1,892.8 $ - $ 1,893.4
Marketable
Securities - - 296.0 - 296.0
Accounts & Notes
Receivable - - 547.2 - 547.2
Total Current Assets 0.5 0.1 2,736.0 - 2,736.6
Property and Equipment:
Net Equipment - - 368.0 - 368.0
Total Assets $ 0.5 $ 0.1 $ 3,104.0 $ - $ 3,104.6
LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities $ - $ 14.3 $ 2,713.6 $ - $ 2,727.9
Notes Payable - - 3,220.8 - 3,220.8
Non-Affiliate
Interest - - - (1,542.6) (1,542.6)
Total Liabilities - 14.3 5,934.4 (1,542.6) 4,406.1
Stockholder's Equity:
Common Stock 0.7 0.1 1,113.6 (507.0) 607.4
Additional Paid-In
Capital 1.6 891.0 3,108.8 507.0 4,508.4
Retained Earnings (1.8) (905.3) (7,052.8) 1,542.6 (6,417.3)
Total Stockholder's
Equity 0.5 (14.2) (2,830.4) 1,542.6 (1,301.5)
Total Liabilities &
Equity $ 0.5 $ 0.1 $ 3,104.0 $ - $ 3,104.6
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.
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 financial statements reflect the 54.4 percent interest in the
outstanding voting share capital of Meteor Technology, PLC held by the
shareholders other than the company. The financial statements also
reflect the 20 percent minority interest in the outstanding capital of
Alexander Mark Investments (USA), Inc. held by the minority
shareholders of 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 on a historical basis.
B) 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 include 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
"C" below.
C) 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.
D) The stockholder's equity account was adjusted to reflect the
issuance of 42,450,000 common shares, $.00002 par value, of Adina stock
for 6,033,776 shares of the outstanding stock of Alexander Mark
Investment (USA), Inc. The stockholder's equity account was also
adjusted to reflect the 40,727,988 shares, approximately 57%, of the
outstanding stock of Meteor Technology that is owned by AMI.
F) 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.