U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(mark one)
__X___Quarterly report under Section 13 or 15 of the Securities
Exchange Act of 1934.
For the quarterly period ended December 31, 2000.
______Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the transition period from ______ to ______
Commission file number 0-16341
ADVA International Inc.
(Exact name of small business issuer as specified in its charter)
6 Woodcross Drive, Columbia, South Carolina 29212
(Address of principal executive offices) (Zip code)
(803) 407-3044
(Issuer's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer: (1) 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 registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES __X___ NO ______
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
716,277 at February 5, 2001.
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
ADVA International Inc.
Balance Sheet
Dec. 31, 2000 June 30, 2000
(unaudited)
CURRENT ASSETS:
Cash $ 62 $ 108
Total Current Assets 62 108
Total Assets 62 108
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities -0- -0-
Total Current Liabilities -0- -0-
Liabilities Subject to Compromise 39,724 39,770
Total Liabilities 39,724 39,770
Stockholders' Equity:
Common Stock, $0.01 par value; authorized
20,000,000 shares, 716,277 shares issued
and outstanding at December 31,2000 and
at June 30, 2000. 716 716
Additional Paid-In Capital 4,950,377 4,950,377
Accumulated Deficit (4,990,755) (4,990,755)
Total Stockholders' Equity (Deficit) (39,662) (39,662)
Total Liabilities and Stockholders
Equity $ 62 $ 108
The accompanying notes are an integral part of these financial
statements.
ADVA International Inc.
Statement of Operations and Accumulated Deficit
Three Months Ended
Dec 31, 2000 Dec 31, 1999
(unaudited)
(unaudited)
Net Sales $ -0- $ -0-
Cost of Sales -0- -0-
Gross Profit -0- -0-
Selling, General and Administrative -0- -0-
Research and Development -0- -0-
Interest Expenses -0- -0-
Income Before Income Taxes -0- -0-
Provision For Income Taxes -0- -0-
Net Income -0- -0-
Accumulated Deficit - Beginning of
Period (4,990,755) (4,813,468)
Accumulated Deficit - End of Period $(4,990,755) $(4,813,468)
Net Income (Loss) Applicable to
Common Shares $ -0- $ -0-
Earnings Per Share Data: (Note 8)
Net Income (Loss) $ -0- $ -0-
Weighted Average Number of Common
Shares Outstanding 716,277 596,250
The accompanying notes are an integral part of these financial
statements.
ADVA International Inc.
Statement of Operations and Accumulated Deficit
Six Months Ended
Dec 31, 2000 Dec 31, 1999
(unaudited) (unaudited)
Net Sales $ -0- $ -0-
Cost of Sales -0- -0-
Gross Profit -0- -0-
Selling, General and Administrative -0- -0-
Allowance for Doubtful Accounts -0- -0-
Research and Development -0- -0-
Interest Expenses -0- -0-
Income Before Income Taxes -0- -0-
Provision For Income Taxes _-0- -0-
Net Income -0- -0-
Accumulated Deficit - Beginning of
Period $(4,990,755) $(4,895,968)
Accumulated Deficit - End of Period $(4,990,755) $(4,895,968)
Net Income (Loss) Applicable to
Common Shares $ -0- $ -0-
Earnings Per Share Data:
Net Income (Loss) (Note 8) $ -0- $ -0-
Weighted Average Number of Common
Shares Outstanding 716,277 596,250
The accompanying notes are an integral part of these financial
statements.
ADVA International Inc.
Statement of Cash Flows
Six Months Ended
Dec 31, 2000 Dec 31, 1999
(unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) $ -0- $ -0-
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization -0- -0-
Allowance for doubtful accounts -0- -0-
Change in assets and liabilities:
Accounts receivable -0- -0-
Inventory -0- -0-
Other assets -0- -0-
Accounts payable (46) (62,918)
Other current liabilities -0- -0-
Total adjustments (46) (62,918)
Net cash provided (used) by operating
activities (46) (62,918)
Cash flows used by investing activities:
Capital expenditures -0- -0-
Proceeds from sale of equipment -0- -0-
Capitalization of software costs -0- -0-
Net cash used by investing activities -0- -0-
Cash flows provided (used) by financing
activities:
Net proceed from sale of common stock -0- -0-
Net proceeds (payments) on short term debt -0- -0-
Payments on long-term debt -0- -0-
Net cash provided (used) by financing
activities -0- -0-
Net increase (decrease) in (46) ( 62,918)
Cash, beginning of period 107 64,073
Cash, end of period $ 62 $ 1,155
Supplemental disclosures of cash flow information:
Cash paid during the period for interest: -0- -0-
Supplemental schedule of non-cash investing
and financing activities: (Note 7)
Sale of inventory -0- -0-
Elimination of accrued dividends -0- -0-
Additional paid in capital -0- -0-
Reduction of Preferred Stock -0- -0-
The accompanying notes are an integral part of these financial
statements.
ADVA International Inc.
Notes to Financial Statements
1. Basis of Presentation
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principals for interim financial information and with the
instructions to Form 10-QSB and Article 10-01 of Regulation
S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting
principals 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.
2. Bankruptcy and Related Party Transactions
On March 23, 1999, Advanced Medical Products, Inc. filed a
motion with the Federal Bankruptcy Court, District of South
Carolina, for an order authorizing the sale of all assets,
including equipment, inventory, and accounts receivable,
outside the ordinary course of business, free and clear of all
liens and encumbrances, pursuant to 11 U.S.C. Section 363 of
the bankruptcy code.
On May 10, 1999 Biotel Inc.(Biotel), the Company's majority
shareholder, purchased the assets and assumed all of the
secured debt, employee and commission liabilities, and all
customer warranty and service liabilities of Advanced Medical
Products, Inc. In addition, Biotel made a payment of $68,000
for certain priority claims and administrative expenses, and
for distribution to outside unsecured creditors. Biotel and
its subsidiaries agreed not to participate in distribution of
payments toward unsecured claims, although their claims
exceeded unsecured claims by all non-affiliated creditors
combined. The assets and liabilities of Advanced Medical
purchased by Biotel were consolidated with the operating
assets and liabilities of Biosensor Corporation (whose name
was changed to Biotel Inc.), and the assets and liabilities of
Diagnostic Monitoring, purchased by Biotel from Cardiac
Sciences Inc. on December 31, 1998, into Advanced Biosensor,
Inc., a new wholly owned subsidiary of Biotel, which agreed to
assume Advanced Medical's lease obligations and to continue to
operate the business at the present Columbia, SC location.
The Company filed the Final Report in Chapter 11 Proceeding
with the Court on October 5, 1999. The United States
Bankruptcy Court for the District of South Carolina issued an
order on May 5, 2000 approving a modification to the confirmed
Plan of Reorganization of Advanced Medical Products, Inc.,
debtor-in-possession, which deletes the provisions for
dissolution of the corporation and the extinguishment of the
existing shares of Advanced Medical Products, Inc. stock, and
substitutes provisions stating that the corporation will
continue its existence and the existing shares of stock will
remain valid. The court re-opened the case and issued the
order approving and amending the Plan of Reorganization in
order that a transaction fee could be realized for the benefit
of creditors of Advanced Medical Products, Inc. and the
payment of certain transaction related expenses. The Federal
Bankruptcy Court entered an Order on January 5, 2001 closing
the re-opened case.
3. Changes to Corporate Structure and Related Party Transactions
On February 29, 2000, in accordance with the Information
Statement mailed to shareholders on or about January 7, 2000,
and the vote of the majority of the shares of common stock of
Advanced Medical Products Inc., a Certificate of Amendment of
the Certificate of Incorporation was filed with the Secretary
of State of Delaware changing the name of Advanced Medical
Products, Inc. to ADVA International Inc., effecting a one
share for ten shares reverse split of all of the common stock
issued and outstanding, and authorizing the Company to issue
20,010,000 shares, of which 20,000,000 shares shall be common
stock, all of which shall have a par value of $0.001,
amounting in the aggregate to $20,000, and 4,000 shares shall
be Class A Preferred Stock all of which shall have no par
value, and 6,000 shares of Class B Preferred Stock all of
which shall have no par value. The common stock trading
symbol on the NASDAQ Bulletin Board for the Company was
changed from "ADVA" to "ADII" in March 2000. All references to
shares and per share data in this Annual Report give retroactive
effect to all reverse splits and re-capitalizations discussed
herein.
4. Capital Stock Transactions
On January 21, 2000, the Board of Directors of the Company,
believing that it was in the best interest of the stockholders
to pursue opportunities to merge a private company into the
Company, authorized by unanimous consent the appointment of a
committee made up of two members of the Company's Board, one
of whom is also an officer and director of Biotel, the Chief
Financial Officer of Biotel, and an outside member who is also
an outside director of Biotel, (the "Committee") for the
purpose of seeking potential reverse merger candidates,
reviewing information, negotiating terms of a stock sale and
merger or a share exchange, and presenting recommendations to
the Company's Board for approval. Whereas the Company has no
financial resources to pay employees, directors, advisors or
consultants for services, the Board approved the "2000
Consulting Plan", authorizing the issuance of common stock of
the Company to members of the Committee, and to one or more
outside consultants to assist the committee with the process,
as compensation in lieu of cash for these services.
On March 13, 2000, the Company filed a Registration Statement
on Form S-8 with the Securities and Exchange Commission
registering 120,000 shares of common stock to be used for the
purpose of "stock in lieu of cash compensation" to consultants
under the "2000 Consulting Plan". On March 24, 2000, one
hundred twenty thousand (120,000) shares of the Company's
common stock were issued, 60,000 shares to the four members of
the Committee formed by the Company's Board and 60,000 shares
to an outside consulting firm, for services performed under
the 2000 Consulting Plan. These shares were valued at $0.65 a
share for financial reporting purposes.
The United States Bankruptcy Court for the District of South
Carolina issued an order on May 5, 2000 approving a
modification to the confirmed Plan of Reorganization of
Advanced Medical Products, Inc., Debtor-in-Possession, which
deletes the provisions for dissolution of the corporation and
the extinguishment of the existing shares of Advanced Medical
Products, Inc. stock, and substitutes provisions stating that
the corporation will continue its existence and the existing
shares of stock will remain valid. The court re-opened the
case and issued the order approving and amending the Plan of
Reorganization in order that a transaction fee, to be funded
by a merging party, at Closing, could be realized for the
benefit of creditors of Advanced Medical Products, Inc. -
Debtor in Possession and for the payment of certain
transaction related expenses. On January 5, 2001 the Federal
Bankruptcy Court entered an order closing the re-opened case.
5. Agreement of Stock Exchange
On June 17, 2000, ADVA International Inc. entered into a
Definitive Agreement of Stock Exchange to acquire all of the
outstanding shares of common stock of Global Information Group
USA, Inc. ("GIG") in exchange for 12,468,750 common shares of
ADVA, or 94.57% of the total capital stock outstanding after
giving effect to the transaction. Under the terms of the
Agreement, the existing stockholders of ADVA International
Inc. would own the remaining approximate 5.43% of the common
stock. Shareholders of GIG who are not officers or directors
of GIG or the Company would be entitled to one demand
registration right, and all GIG shareholders and Biotel Inc.,
the Company's largest shareholder prior to the transaction,
would be entitled to certain piggy-back registration rights.
GIG would pay a transaction fee of $300,000 which would be
used to pay certain costs of the transaction and all priority
claims of Advanced Medical Products Inc. - Debtor in
Possession, with the balance to be paid pro-rata to the
remaining unsecured creditors of Advanced Medical Products
Inc.
As a result of the transaction as proposed, GIG would become a
wholly owned subsidiary of ADVA; the operations of GIG would
become the operations of ADVA, and because of the reverse
nature of the merger, the prior financials of GIG would become
the historical financials of ADVA International Inc.
GIG develops and markets 3D solid modeling, animation and
rendering software that runs on the LINUX Operating System.
The LINUX OS is "open source" software developed, debugged and
improved by an international community of programmers and is
distributed free on the Internet. The application software
market targeted by GIG is the high volume/low price segment of
the computer market where users have embraced LINUX as a
robust lower cost alternative to the UNIX and MS Windows
operating systems.
As of December 31, 2000 the Definitive Agreement of Stock
Exchange between GIG and the Company, and an extension
thereto, had expired. However, on February 7, 2001 the
Company and GIG entered into an Escrow Agreement extending the
Agreement of Stock Exchange until March 2, 2001. Under the
terms of the Escrow Agreement, $50,000 has been deposited in
an escrow account to be applied toward the $300,000
transaction fee at Closing. If the agreed upon transaction
has not closed by March 2, 2001 for any reason other than a
material default of the Agreement of Stock Exchange by the
Company, Advanced Medical Products, Inc. - Debtor in
Possession will be entitled to the escrowed funds. The
Company and Biotel, and their officers and directors, have
agreed to cease all third party contacts related to seeking
potential reverse merger candidates until March 2, 2001
pending completion of the anticipated transaction with GIG by
that date.
ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS
Forward Looking Statements
This and other sections of this report contain "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which represent the
Company's expectations concerning future events including
future cash flows and results of operations, and any share
exchange that may, or may not, take place as a result of the
Definitive Agreement of Stock Exchange between the Company and
GIG as disclosed in Note 4 above. By their very nature,
forward-looking statements are subject to known and unknown
risks and uncertainties relating to the Company's future
performance that may cause actual results to differ materially
from those expressed or implied in such forward-looking
statements. The Company does not undertake and assumes no
obligation to update any forward-looking statement that may be
made herein or from time to time by or on behalf of the
Company.
The following discussion should be read in conjunction with
the accompanying Financial Statements, including the notes
thereto, appearing elsewhere herein.
Results of Operations
The Company had no operations and no sales for the three
months or six months ended December 31, 2000, or the three
months or six months ended December 31,1999. There were no
selling, general or administrative expenses and no research
and development costs, and there was zero net income.
During the six months ended December 31, 2000, net cash
decreased by $46 due to bank service charges, and liabilities
decreased by $46 since liabilities to creditors of Advanced
Medical Products, Inc.- Debtor in Possession will be limited
to the net cash available for final distribution.
Liquidity and Capital Resources
The Company ceased operations on May 11, 1999. The cash
available on December 31, 2000 of $62 was insufficient to meet
remaining priority claims totaling $39,724. No capital
resources were available to the Company on December 31, 2000,
and there was no liquidity. Any future liquidity will be
dependent upon completion of a reverse merger transaction.
PART II - OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K have
been filed during the quarter for which this
report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVA International Inc.
(Registrant)
By: /s/GEORGE L. DOWN
George L. Down, President
Dated: February 7, 2001
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