UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
- -----------------------------------------------------------------
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 31, 2002
- -----------------------------------------------------------------
Auto Data Network Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3944580
- ---------------------- ------------------
State of Incorporation IRS Employer ID No.
The Forsythe Centre, Lamberts Road
Tunbridge Wells, Kent, UK
- -------------------------------------- --------
Address of principal Executive Offices Zip Code
Registrant's Telephone Number 011 44 1892 511 566
Check here whether the issuer (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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_______
As of January 31, 2002, the following shares of the Registrant's
common stock were issued and outstanding:
Voting common stock 11,124,601
<page>
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .3
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .4
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .5
Note 1. Nature of Business and Significant
Accounting Policies. . . . . . . . . . . . 7
Note 2. Use of Office Space. . . . . . . . . . . . .7
Note 3. Liquidity. . . . . . . . . . . . . . . . . .7
Note 4. Related Party Transaction. . . . . . . . . .8
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . . 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 14
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 14
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 14
Item 5. Other information. . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 14
<page>
PART I - FINANCIAL INFORMATION
Auto Data Network Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
<table>
As Of As Of
January 31, 2002 April 30, 2001
(Unaudited) (Audited)
---------------------------------
<s> <c> <c>
ASSETS
Current Assets
Cash $ 0 $3,455
Accounts Receivable 2,312 0
Other Current Assets 38,618 651,849
----------- ----------
Total Current Assets $40,930 $655,304
Tangible Assets 24,826 0
Intangible Assets 4,621,969 0
Other Assets 0 0
----------- ----------
TOTAL ASSETS $4,687,725 $655,304
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $555,103 $10,662
Accrued Expenses/other liabilities 553,855 19,282
Auto Lease Payable 0 1,246
Short Term Bank Borrowings 55,504 0
----------- ----------
Total Current Liabilities 1,164,463 31,190
Long Term Liabilities 0 1,044,826
----------- ----------
Total Liabilities $1,164,463 $1,076,016
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
11,124,601 Shares 11,124 5,038
Additional Paid in Capital 5,145,814 9,000
Accumulated other
comprehensive income (208,827) 0
Deficit Accumulated During the
Development Stage (1,424,849) (434,750)
----------- ----------
Total Stockholders' Equity $3,523,262 $(420,712)
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,687,725 $655,304
</table>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<page>
Auto Data Network Inc.
(A Development Stage Company)
CONDENSED CONSOLIDATED INCOME STATEMENT
<table>
For the 9 Mos Ended For the 3 Mos Ended
January 31 January 31
2002 2001 2002 2001
------------------------------------------
<s> <c> <c> <c> <c>
TOTAL REVENUES: $40,258 0 40,171 0
COST OF REVENUES: 40,777 0 40,703 0
OPERATING EXPENSES:
Sales & Marketing 2,468 0 2,468 0
Research& Development 0 0 0 0
General &
Administration 413,038 0 287,596 0
Disposal 648,960 0 0 0
Amortization 0 0 0 0
Depreciation 4,345 0 4,345 0
-------------------------------------------
Total Operating 1,068,811 0 294,409 0
Other Start up Costs (0) (41,525) 0 (13,795)
-------------------------------------------
Operating Loss (1,069,330) (41,525) (294,941) (25,935)
Interest expense (6,893) 0 (6,603) 0
Loss before
income taxes (1,076,223) 0 (301,544) 0
-------------------------------------------
NET LOSS (1,076,223) (41,525) (301,544) (25,935)
NET LOSS PER SHARE (0.09674) (.0082423) (0.027) (.005148)
Weighted Average
Number of Shares
Outstanding 11,124,601 5,038,000 11,112,122 5,038,000
</table>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<page>
Auto Data Network Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (unaudited)
<table>
For the 3 mos For the 3 mos
Ended Ended
to to
January 31, 2002 January 31, 2001
------------------- -------------------
<s> <c> <c>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(301,544) $(41,525)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Depreciation and amortization 4,345 0
Write off of Prototype Research
And Development costs 0 0
Other Non cash charges 0 0
Changes in Assets and Liabilities:
Accounts Receivable 14,383 0
Other current assets 1,058,146 0
Tangible Assets (1,359) 0
Accounts Payable 33,573 45,292
Accrued Expenses 227,054 0
Other Non current liabilities 0 0
---------- ---------
Net Cash Used in
Operating Activities 1,034,598 3,767
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Subsidiaries (744,603) 0
---------- ---------
Net cash used in investing
Activities 289,995 0
CASH FLOWS FROM FINANCING
ACTIVITIES:
New Share issue 12 0
Additional Paid-in Capital 24,946 0
Effect of exchange rates on cash (370,950) 0
---------- ---------
Net Change in Cash (55,997) 3,767
Cash at Beginning of Period 493 (219)
Cash at End of Period (55,504) 3,986
Supplemental disclosure of cash flow
Information
Interest paid $ 6,603 0
</table>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<page>
Auto Data Network Inc.
(A Development Stage Company)
NOTE 1. BASIS OF PRESENTATION
The financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financials statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three and six
months ended January 31, 2002 are not necessarily indicative of
the results that may be expected for the period ending February
28, 2002. These Condensed Consolidated Financial Statements
should be read in conjunction with the Consolidated Financial
Statements and notes thereto contained in the Company's Form 10-K
for the year ended April 30, 2001.
NOTE 2. NET LOSS
During the period ending 31st October 2001, the Company sold
subsidiary CMAC Limited and its assets for nil consideration and
this has been accounted for as a write off of $774,402, which
includes the disposal of a vehicle prototype valued at $648,960.
The Company acquired Auto Data Group on October 2nd, 2001, and
the Auto Data Group revenues and income are included from that
date onwards. Trading has been limited until such time as
investment funds and the planned Group structure materializes.
The loss of $215,420 for the quarter reflects the maintenance of
a basic administration and finance function within the Group.
NOTE 3. LIQUIDITY
The Company's viability as a going concern is dependent upon
Executing the company's current acquisition strategy which
includes raising additional capital.
As a result, the Company has from time of inception to January
31, 2002 derived revenue of $87,000 and a net loss from
operations of $774,679. These results are no longer reflective of
the ongoing business of the Company subsequent to the October 2nd
acquisition of Auto Data Group.
It is anticipated that the Company will be able to meet its
financial obligations through internal net revenue in the
foreseeable future providing that it executes its current
acquisition strategy. Therefore, if the Company does not execute
its current acquisition strategy future sources of liquidity will
be limited to the Company's ability to obtain additional debt
or equity funding.
Note 4. Stock Transactions
On September 28, 2001 the Company issued 8,333,333 shares of
common stock to Gala Consultancy in consideration for the
capitalization of all of their loans to the company.
On September 29, 2001 the Company conducted a 25 for 1 reverse
split of the Company's common stock to 534,871 shares which
became effective on 15th October 2001.
On October 16, 2001 the Company issued 9,500,000 shares of the
Company's common stock to the shareholders of Europortal Inc T/A
Auto Data Group in consideration for the acquisition of
Europortal Group T/A Auto Data Group and its subsidiaries.
On October 17, 2001 the Company issued 1,077,268 shares to
various parties in consideration for the capitalization of
$4,039,754 of loans at the closing price on that date of $3.75.
<page>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
On September 28, 2001, the company sold subsidiary CMAC Limited
for no consideration. The Company also issued 8,333,333 shares of
common stock to Gala Consultancy Limited in consideration for
capitalizing their loans to the Company.
On September 29,2001 the company carried out a 25 for 1 reverse
split of the company's then issued and outstanding stock of
13,371,374 to 534,871 shares.
On October 2, 2001, the Company acquired 9,500 shares of
common stock, $1.00 par value, of EUROPORTAL INC T/A AUTO DATA
GROUP, (hereinafter "Auto Data Group") a company incorporated
under the laws of the State of Delaware.
The acquisition was consummated by the execution of an
Acquisition Agreement dated October 2, 2001. The shares
acquired by the Company represented all of Auto Data Group's then
currently issued and outstanding common stock in a tax free
stock-for-stock acquisition. The aggregate purchase price paid
by the Company for the Auto Data Group common shares was
9,500,000 newly issued shares of post-reverse split shares of
voting common stock of the Company, $0.001 par value. These
shares were issued to the sellers of Auto Data Group.
As a result of the foregoing transaction, there was a change in
control of the company to the shareholders of Auto Data Group.
The shareholders of Auto Data Group now hold approximately 95.0%
of the outstanding shares of common stock of the company.
These shares have been issued to the sellers of the Auto Data
Group shares subsequent to a 25 to 1 reverse split of the
voting common stock by the Company of its voting common stock
which became effective on 15th October 2001. The transaction has
been ratified and approved by a majority of the shareholders of
the Company and Auto Data Group.
There was no material relationship between the Company and Auto
Data Group prior to the acquisition by the company of the Auto
Data Group shares. Subsequent to the closing of the
transaction, control of the company passed to the
shareholders of Auto Data Group.
On 4th October 2001, the company changed its name to Auto Data
Network Inc (ADN).
Auto Data Network comprises a group of established, automotive
companies providing real time data and transactional services to
manufacturers, retailers and consumers, Services are integrated
onto a single transaction platform and data network. The platform
propositions are integrated as a communications channel that
allows all automotive sector participants to transact within a
single environment, in which transactional data is added and
modified on the network. This process creates a unique source of
``Intelligent Information(TM)'' that can be accessed by
subscribing companies to analyze and react to changes in market
conditions.
ADN does not currently have a working capital line of credit with
any financial institution. Agreements regarding funding have
been reached, subject to the completion of satisfactory due
diligence, with vFinance Inc, where vFinance will arrange funding
for the company to complete on its current acquisition strategy.
Future sources of liquidity will be limited to the Company's
ability to close planned acquisitions and obtain additional debt
or equity funding.
The Company is currently engaged in raising equity finance in
order to complete its acquisition strategy and provide working
capital. There is no guarantee that the company's efforts will
be successful.
The Company is also undertaking additional acquisitions in order
to increase its liquidity and to provide the Company with
additional capital which is necessary to develop the Company's
operations. Any entity acquired will become subject to the same
reporting requirements as the Company upon consummation of any
such business combination. Thus, in theevent that the Company
successfully completes an acquisition with another operating
business, the resulting combined business must provide audited
financial statements for at least the two most recent fiscal
years or, in the event that the combined operating business has
been in business less than two years, audited financial
statements will be required from the period of inception of the
target acquisition or merger candidate.
No representation is made, nor is any intended, that the Company
will be able to carry on future business activities successfully.
Further, there can be no assurance that the Company will develop
sustaining business opportunities or acquire businesses that will
be of material value to the Company.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until its
equity funding is completed. At that time, management will
evaluate the possible effects of inflation on the Company as it
relates to its business and operations following a successful
acquisition or merger.
In the event the Company consummates an acquisition transaction,
the Company believes that there will not be a change in control
in the Company.
In the event management wishes to actively negotiate or otherwise
consent to the purchase of any portion of their common stock as a
condition to or in connection with a proposed merger or
acquisition, this would need to be disclosed to the Board of
Directors and entered into the Company's minutes. The Company's
shareholders will be afforded an opportunity to approve or
consent to any particular stock buy-out transaction or merger.
The Company at this time has been in discussions with various
entities for the purpose of consummating a business transaction
or acquisition. The Company has in place, Letters of Intent
regarding the acquisition of the following companies:
E-Com Multi (UK) Ltd, MAM Software Ltd, North of England Vehicle
Rentals Ltd and Automatrix (UK) Ltd.The Company will continue to
conduct discussions with other interested parties for the purpose
of seeking to consummate a further business transaction or
acquisition.
<page>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are currently no pending legal proceedings against the
company.
ITEM 2. CHANGES IN SECURITIES
The instruments defining the rights of the holders of any class
of registered securities have not been modified.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 2, 2001, the Company acquired 9,500 shares of
common stock, $1.00 par value, of EUROPORTAL INC T/A AUTO DATA
GROUP, (hereinafter "Auto Data Group") a company incorporated
under the laws of the State of Delaware.
The acquisition was consummated by the execution of an
Acquisition Agreement dated October 2, 2001. The shares
acquired by the Company represented all of Auto Data Group's then
currently issued and outstanding common stock in a tax free
stock-for-stock acquisition. The aggregate purchase price paid
by the Company for the Auto Data Group common shares was
9,500,000 newly issued shares of post-reverse split shares of
voting common stock of the Company, $0.001 par value. These
shares were be issued to the sellers of the Auto Data Group
shares subsequent to a 1 for 25 reverse split of the voting
common stock by the Company of its voting common stock.
As a result of the foregoing transaction, there was a change in
control of the company to the shareholders of Auto Data Group.
The shareholders of Auto Data Group now hold approximately 95.0%
of the outstanding shares of common stock of the company.
ITEM 5. OTHER INFORMATION
There is no other information to report which is material to the
company's financial condition not previously reported.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company on October 17, 2001 filed a Form 8-K announcing its
acquisition with the Auto Data Group which is incorporated by
reference herein.
<page>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
/s/ Auto Data Network Inc.
- --------------------------_______________________
Christopher Glover, President
Dated: March 14, 2002