-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6b209Q2AVtFoDjrEQYnQbs1NCg2qmrdzcUQdAAVyQDKFyPxZ4BT6FeY0E1FQ21p y4UST+pCJU0fdPnLA3FGwQ== 0000950130-02-004022.txt : 20020529 0000950130-02-004022.hdr.sgml : 20020529 20020529165556 ACCESSION NUMBER: 0000950130-02-004022 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020529 FILED AS OF DATE: 20020529 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADB SYSTEMS INTERNATIONAL INC CENTRAL INDEX KEY: 0001079171 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14835 FILM NUMBER: 02665043 BUSINESS ADDRESS: STREET 1: 6725 AIRPORT RD STE 201 STREET 2: MISSISSAUGA ONTARIO CITY: CANADA L4V 1V2 BUSINESS PHONE: 9056727469 MAIL ADDRESS: STREET 1: 6725 AIRPORT RD STE 201 STREET 2: MISSISSAUGA ONTARIO CITY: CANADA L4V 1V2 FORMER COMPANY: FORMER CONFORMED NAME: BID COM INTERNATIONAL INC DATE OF NAME CHANGE: 19990210 6-K 1 d6k.txt FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Issuer PURSUANT to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 Filing No. 2 for the Month of May, 2002 ADB Systems International Inc. ------------------------------ (Exact name of Registrant) 6725 Airport Road, Suite 201, Mississauga ON, Canada L4V 1V2 ------------------------------------------------------------ (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F Form 20-F X Form 40-F --- --- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X --- ADB SYSTEMS INTERNATIONAL INC. On or about May 28, 2002, ADB Systems International Inc. ("ADB" or the "Company") mailed to all registered shareholders its First Quarter 2002 Report. This Form 6-K may include comments that do not refer strictly to historical results or actions and may be deemed to be forward-looking within the meaning of the Safe Harbor provisions of the U.S. federal securities laws. These include, among others, statements about expectations of future revenues, cash flows, and cash requirements. Forward-looking statements are subject to risks and uncertainties that may cause ADB's results to differ materially from expectations. These risks include ADB's ability to raise additional funding, develop its business-to-business sales and operations, develop appropriate strategic alliances and successful development and implementation of technology, acceptance of ADB's products and services, competitive factors, new products and technological changes, and other such risks as ADB may identify and discuss from time to time, including those risks disclosed in ADB's most recent Form 20-F filed with the Securities and Exchange Commission. Accordingly, there is no certainty that ADB's plan will be achieved. Exhibit 1. First Quarter 2002 Report 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. ADB SYSTEMS INTERNATIONAL INC. Date: May 29, 2002 By: /s/ JOHN MACKIE ------------------- Name: John Mackie Title: Vice-President, General Counsel and Corporate Secretary EX-1 3 dex1.txt FIRST QUARTER 2002 REPORT (ADB LOGO) Maximizing The Value of Assets First Quarter 2002 Report PROFILE - -------------------------------------------------------------------------------- ADB Systems International Inc. is a leading provider of asset lifecycle management solutions. Based in Toronto, we have more than 70 employees located in offices around the world serving customers across a range of industries. ADB Systems delivers innovative technology solutions that enable our customers to: o Source assets at reduced costs o Track assets ensuring that capital equipment is available and properly utilized o Monitor assets ensuring that they are operating at optimum performance o Schedule preventative and corrective maintenance to reduce down-time o Procure goods on-line at improved savings o Sell surplus assets while generating highest yield. ADB works with organizations in: o Asset-intensive industries, such as oil and gas, chemicals processing, pulp and paper, food, and transportation, to improve operational efficiencies and reduce operational down-time o The public sector to reduce purchasing costs and improve procurement processes. Current customers include BP, GE Capital, Halliburton Energy Resources, HFK, Irish Permanent Finance, ShopNBC, Skerman Group, TotalFinaElf among others. ADB shares are traded on the Nasdaq National Market (Symbol: ADBI) and the Toronto Stock Exchange (Symbol: ADY). i LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- Dear Shareholders, Our first quarter results represent the full impact of our Company's performance since the acquisition of ADB Systemer ASA. Our encouraging financial performance witnessed marked improvements in key financial areas, and provides the necessary momentum for what we believe will be a strong year for ADB Systems International Inc. We recorded a net loss for the period of $2.3 million or $0.06 per basic share, an improvement of 81 percent when compared to the net loss of $12.5 million or $0.33 per basic share achieved in the fourth quarter of 2001. Despite continued economic pessimism, particularly in our industry, our gross revenue in the first quarter was $1.5 million, an increase of 28 percent compared to the $1.2 million achieved in the fourth quarter of 2001. In addition to the financial performance gains, we experienced a number of operating achievements in the quarter, including: o We signed an agreement with Halliburton Productos, the Brazilian affiliate of Halliburton, to provide materials management and logistics capabilities. o We extended our agreement with DBI Logistics and will integrate sourcing capabilities to their on-line transportation marketplace. o We announced the availability of Dyn@mic Buyer 2.0, an enhanced version of our flagship sourcing solution. o We expanded our sales and marketing personnel in North America to support increased sales opportunities As already noted, our gross revenue in the first quarter totaled $1.5 million. Revenue is comprised of software license sales, service fees for software implementation, application hosting, support and training and transaction fees from on-line activities performed for customers. At the end of March 31, 2002 we held cash and marketable securities totaling $2.6 million. On April 24th we completed a private placement with Stonestreet LP resulting in gross proceeds of $1.1 million. This funding will be used to accelerate our product development and support our long-term strategy. Based on our recent quarter's successes and the increased customer demand for our asset lifecycle management solutions, we look forward to building on this and achieving stronger results in future quarters. With our current cost- containment activities that continue to reduce our cash burn rate, we believe that the trend towards profitability is sustainable and realistic. Yours truly, LOGO Jeffery Lymburner, CEO May 17, 2002 1 CONSOLIDATED BALANCE SHEETS (in thousands of Canadian dollars) (Unaudited)
- ------------------------------------------------------------------------------------------------- March 31 December 31 2002 2001 - ------------------------------------------------------------------------------------------------- ASSETS CURRENT Cash $ 2,032 $ 2,557 Marketable securities 580 1,658 Accounts receivable 1,030 1,288 Deposits and prepaid expenses 233 131 - ------------------------------------------------------------------------------------------------- 3,875 5,634 CAPITAL ASSETS (Note 2) 1,098 1,332 STRATEGIC INVESTMENTS 44 173 CAPITALIZED SOFTWARE 136 202 ACQUIRED SOFTWARE 2,819 3,102 ACQUIRED AGREEMENTS 121 149 - ------------------------------------------------------------------------------------------------- $ 8,093 $ 10,592 - ------------------------------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable $ 659 $ 841 Accrued liabilities 820 813 Current portion of capital lease obligation 35 42 Current portion of deferred revenue 790 823 - ------------------------------------------------------------------------------------------------- 2,304 2,519 DEFERRED REVENUE 22 33 CAPITAL LEASE OBLIGATION 6 18 - ------------------------------------------------------------------------------------------------- 2,332 2,570 - ------------------------------------------------------------------------------------------------- MINORITY INTEREST 8 8 SHAREHOLDERS' EQUITY Share capital 93,568 93,568 Warrants 1,349 1,349 Stock options 691 691 Foreign currency translation (5) (11) Deficit (89,850) (87,583) - ------------------------------------------------------------------------------------------------- 5,753 8,014 - ------------------------------------------------------------------------------------------------- $ 8,093 $ 10,592 - -------------------------------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements. 2 CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of Canadian dollars, except per share amount) (Unaudited)
- --------------------------------------------------------------------------------------------------------- Quarter ended March 31 2002 2001 - --------------------------------------------------------------------------------------------------------- Revenue (Note 5) $ 1,487 $ 1,255 Less: Customer acquisition costs -- (19) - --------------------------------------------------------------------------------------------------------- Net revenue 1,487 1,236 - --------------------------------------------------------------------------------------------------------- General and administrative 1,492 1,916 Sales and marketing 489 1,405 Software development and technology 1,173 987 Depreciation and amortization 622 310 Interest income (18) (113) - --------------------------------------------------------------------------------------------------------- 3,758 4,505 - --------------------------------------------------------------------------------------------------------- Loss before the undernoted (2,271) (3,269) - --------------------------------------------------------------------------------------------------------- Realized gains and losses on disposal of marketable securities and strategic investments (Note 3) (102) 3,686 Unrealized gains and losses on revaluation of marketable securities and strategic investments, and provision for impairment of assets (Note 4) 106 (899) Retail activities settlement (Note 6) -- (127) - --------------------------------------------------------------------------------------------------------- 4 2,660 - --------------------------------------------------------------------------------------------------------- NET LOSS FOR THE PERIOD $ (2,267) $ (609) - --------------------------------------------------------------------------------------------------------- LOSS PER SHARE $ (0.06) $ (0.02) - --------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF DEFICIT (in thousands of Canadian dollars) (Unaudited) - --------------------------------------------------------------------------------------------------------- Quarter ended March 31 2002 2001 - --------------------------------------------------------------------------------------------------------- DEFICIT, BEGINNING OF PERIOD $ (87,583) $ (68,869) NET LOSS FOR THE PERIOD (2,267) (609) - --------------------------------------------------------------------------------------------------------- DEFICIT, END OF PERIOD $ (89,850) $ (69,478) - ---------------------------------------------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements. 3 CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of Canadian Dollars) (Unaudited)
- ---------------------------------------------------------------------------------------------------------- Quarter ended March 31 2002 2001 - ---------------------------------------------------------------------------------------------------------- NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES OPERATING Net loss for the period $ (2,267) $ (609) Items not affecting cash: Depreciation and amortization 622 310 Non cash customer acquisition costs -- 19 Realized gains and losses on disposal of marketable securities and strategic investments (Note 3) 102 (3,686) Unrealized gains and losses on revaluation of marketable securities and strategic investments, and provision for impairment of assets (Note 4) (106) 899 - ---------------------------------------------------------------------------------------------------------- (1,649) (3,067) Changes in non-cash operating working capital (58) (1,677) - ---------------------------------------------------------------------------------------------------------- (1,707) (4,744) - ---------------------------------------------------------------------------------------------------------- INVESTING Capital assets (10) (200) Strategic investments -- (152) Proceeds from disposal of strategic investments 126 -- Capitalized software, trademarks and intellectual property (2) (5) Marketable securities 1,087 9,815 - ---------------------------------------------------------------------------------------------------------- 1,201 9,458 - ---------------------------------------------------------------------------------------------------------- FINANCING Repayment of capital leases (19) (2) - ---------------------------------------------------------------------------------------------------------- (19) (2) - ---------------------------------------------------------------------------------------------------------- NET CASH (OUTFLOW) INFLOW DURING THE PERIOD (525) 4,712 CASH, BEGINNING OF PERIOD 2,557 7,363 - ---------------------------------------------------------------------------------------------------------- CASH, END OF PERIOD $ 2,032 $ 12,075 - ---------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS Income taxes $ -- $ -- Interest expense -- --
See accompanying notes to interim consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements. 4 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The interim consolidated financial statements of ABD Systems International Inc. (formerly Bid.Com International Inc. (the "Company")) should be read in conjunction with the Company's most recent annual audited financial statements. The interim consolidated financial statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements except for the following: Stock-based Compensation. The Company adopted handbook section 3870, "Stock-based Compensation and Other Stock-based Payments," implemented by the Canadian Institute of Chartered Accountants effective January 1, 2002. This standard is consistent with Statement of Financial Accounting Standards (SFAS) 123, "Accounting for Stock-based Compensation". As no stock options have been issued in 2002, this new standard does not impact the Company's financial statements. 2. CAPITAL ASSETS
---------------------------------------------------------------------------------- March 31, 2002 December 31, 2001 ---------------------------------------------------------------------------------- Accumulated Net Book Accumulated Net Book Cost Depreciation Value Cost Depreciation Value ---------------------------------------------------------------------------------- (in thousands) Computer hardware $2,856 $ 2,117 $ 739 $2,889 $ 1,949 $ 940 Furniture and fixtures 468 230 238 468 201 267 Leasehold improvements 151 132 19 151 129 22 Building 105 3 102 105 2 103 ---------------------------------------------------------------------------------- $3,580 $ 2,482 $1,098 $3,613 $ 2,281 $1,332 ---------------------------------------------------------------------------------- 3. REALIZED GAINS AND LOSSES ON DISPOSAL OF MARKETABLE SECURITIES AND STRATEGIC INVESTMENTS --------------------- Three months Ended March 31 --------------------- 2002 2001 --------------------- (in thousands) (Loss) gain on disposal of marketable securities (Note 3(a)) $ (143) $ 3,686 Gain on disposal of strategic investments (Note 3(b)) 41 -- --------------------- $ (102) $ 3,686 ---------------------
(a) In January 2002, the Company sold its remaining shares in America Online Inc. for gross proceeds of $1.3 million, and realized a loss of $143,000. In January 2001, the Company sold 122,801 shares for gross proceeds of $10.0 million, realizing a gain of $3.7 million. (b) Throughout the first quarter, the Company disposed of a portion of its strategic investments. This resulted in a cash proceeds of $126,000 and a realized gain of $41,000. 5 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
- ----------------------------------------------------------------------------------------------------------------------------------- 4. UNREALIZED GAINS AND LOSSES ON REVALUATION OF MARKETABLE SECURITIES AND STRATEGIC INVESTMENTS, AND PROVISION FOR IMPAIRMENT OF ASSETS - ----------------------------------------------------------------------------------------------------------------------------------- Three months Ending March 31 ---------------------- 2002 2001 ---------------------- (in thousands) Revaluation of impaired strategic investments (Note 4(a)) $ 106 $ (357) Revaluation of marketable securities (Note 4(b)) -- 383 Provision for impairment of assets (Note 4(c)) -- (925) ---------------------- $ 106 $ (899) ----------------------
(a) The Company reviewed the carrying value of its strategic investments and determined a reversal of a prior period's provision should be recorded given the recent financial performance of securities held. During the first quarter of 2001, a provision was deemed necessary. (b) During the first quarter of 2001 the Company reviewed the market value of its shares in America Online Inc. and determined that a mark-to-market adjustment was required. (c) At March 31, 2001 the Company determined the net realizable value of prepaid advertising assets had been significantly reduced as a result of market conditions and changes to the Company's business-to-business marketing strategy. 5. SEGMENTED INFORMATION The Company operates in several reportable geographic segments: North America, Ireland and the United Kingdom, and Norway. Net revenue by Geographic Region
------------------------ Three months Ending March 31 ------------------------ 2002 2001 ------------------------ (in thousands) North America $ 497 $ 1,158 Ireland and U.K. 157 97 Norway 833 -- ------------------------ $ 1,487 $ 1,255 ------------------------
Assets by Geographic Region
------------------------------------------------------------- March 31, 2002 December 31, 2001 ------------------------------------------------------------- Capital Intangible and Capital Intangible and Assets Other Assets Assets Other Assets ------------------------------------------------------------- (in thousands) North America $ 671 $ 180 $ 588 $ 375 Ireland and U.K. 103 -- 449 -- Norway 324 2,940 295 3,251 -------------- --------------- -------------- --------------- $ 1,098 $ 3,120 $ 1,332 $ 3,626 -------------- --------------- -------------- ---------------
6 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued) - -------------------------------------------------------------------------------- 6. RETAIL ACTIVITIES The Company ceased its on-line retail activities in October 2000, however it was required to settle certain amounts payable relating to product sales of previous years. These amounts were not previously anticipated. 7. SUBSEQUENT EVENT As of April 24, 2002, the Company had entered into an agreement for a private placement with a third party for gross proceeds of $1.1 million. The Company will issue 3.3 million common shares at US $0.21 per share and warrants exercisable into 1 million common shares at US $0.35 per share. The warrants have a term of three years. This transaction is subject to regulatory and exchange approvals. 8. RECLASSIFICATION OF PRIOR PERIODS Certain prior period amounts have been re-classified to conform to the current period basis of presentation. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- Results of Operations Comparison of the Quarters Ended March 31, 2002 and March 31, 2001. This section compares the unaudited consolidated financial results for the three months ending March 31, 2002 and March 31, 2001 and analyzes significant changes in the financial statement components, which comprise the consolidated statement of operations, consolidated balance sheets and consolidated statements of cash flows. Overview. Net loss for the quarter was $2.3 million compared to net loss of $609,000 for the same quarter of 2001, however, the first quarter of 2001 included a significant non-operational gain from the disposition of a large portion of shares of America Online Inc. Total expenses decreased $850,000 or 18.2 percent this quarter when compared to the same quarter last year. The loss from operations in the first quarter was $2.3 million or $0.06 per share compared with a loss of $3.3 million and $0.12 per share for the same period of 2001. Operating loss is a non-GAAP earnings measure and is calculated by netting revenue against expenses ignoring non-operational items such as: realized gains and losses on disposal of marketable securities and strategic investments; unrealized gains and losses on revaluation of marketable securities and strategic investments and provision for impairment of assets; and settlement of retail activities. Revenue. Revenue is comprised of software license sales, service fees for software implementation, application hosting, support and training and transaction fees from on-line activities performed for customers. Overall revenue increased to $1.5 million for the quarter ended March 31, 2002 from $1.2 million for the quarter ended March 31, 2001. This increase is attributable to the acquisition of ADB Systemer ASA completed in the fourth quarter of 2001. General and Administrative. General and administrative expenses decreased to $1.5 million for the quarter ended March 31, 2002 from $1.9 million for the quarter ended March 31, 2001, a decrease of 21.1 percent. Decreased headcount and improved expense control across all departments were the drivers behind lower general and administrative expenses. Major expense savings over the same period last year included professional fees ($274,000), and salaries ($246,000) as the Company placed additional reliance on fewer staff. Sales and Marketing. Sales and marketing costs include all salaries and related expenses for sales and marketing personnel as well as business development expenses such as advertising, sales support materials, and trade show costs. For the quarter ended March 31, 2002 sales and marketing costs amounted to $489,000, as compared to $1.4 million in the same period of 2001. A refocusing of marketing initiatives coupled with significantly lower staffing levels resulted in lower costs. Salaries were down $708,000 over the same period last year due to closures of US based sales offices and a rationalization of Canadian based sales personnel through 2001. Software Development and Technology. For the quarter ended March 31, 2002 these costs amounted to $1.2 million compared with $987,000 for the first quarter of 2001. The increase in costs is due to last year's acquisition of ADB Systemer ASA. A significant portion of the Norwegian subsidiary's expenses relate to software application development and technology for new products and version releases. Depreciation and Amortization. Depreciation and amortization expense was $622,000 for the quarter ended March 31, 2002 as compared to $310,000 for the quarter ended March 31, 2001. This increase is due to the depreciation in the first quarter of 2002 of certain software acquired as a result of the ADB Systemer acquisition. This additional depreciation was $324,000. Interest Income. Interest income was $18,000 for the quarter ended March 31, 2002, as compared to $113,000 for the quarter ended March 31, 2001. Interest income reflects interest from investments in cash and marketable securities, which have decreased significantly, quarter over quarter. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS - (Continued) - -------------------------------------------------------------------------------- Realized Gains and Losses on Disposal of Marketable Securities and Strategic Investments. Realized losses on the disposal of marketable securities and strategic investments amounted to $102,000 for the quarter ended March 31, 2002 compared with realized gains of $3.7 million for the first quarter of 2001. During the quarter, the Company disposed of its remaining position in America Online Inc. (AOL) as well as holdings in certain strategic investments. This resulted in cash proceeds of $1.3 million and the corresponding realized loss of $102,000. During the first quarter of 2001 the Company sold a significant portion of its AOL shares for proceeds of $10.3 million, realizing a gain of $3.7 million. Unrealized Gains and Losses on Revaluation of Marketable Securities and Strategic Investments, and Provision for Impairment of Assets. Unrealized gains and losses on marketable securities and strategic investments are the result of an assessment by management as to the recoverability of value of certain assets and are not realized losses. Unrealized losses are outside the normal course of operations but are not considered extraordinary. We conducted an assessment of our long-term strategic investment portfolio at quarter end by analyzing the financial performance of our investee companies and determined that a reversal of the impairment provision from previous quarters of $106,000 was required in the first quarter of 2002. In the first quarter of 2001, a provision of $357,000 was necessary as well as an impairment of a prepaid asset for $925,000. These unrealized losses were offset by an unrealized gain from the revaluation of marketable securities of $383,000. Cash Flows Comparison of the Quarter Ended March 31, 2002 and March 31, 2001. Operating Activities. Cash outflows from operating activities declined to $1.7 million in the first quarter of 2002 from $4.7 million in the same period of 2001. Significant cost reductions as a result of the restructuring done in 2001 has resulted in the improved cashflow from operations. Investing Activities. Cash inflows from investing activities decreased to $1.2 million for the three months ending March 31, 2002 from $9.5 million recorded in the first quarter of 2001. The sale of shares of America Online Inc. in the first quarter of 2002 resulted in cash proceeds of $1.3 million compared with cash proceeds of $10.3 million in the same period of 2001. Financing Activities. Minimal cash outflows from financing activities were incurred year to date in 2002 and during the same period in 2001. Activity relates to the continued repayment of capital leases. Financial Condition Current Assets. Cash and marketable securities decreased $1.6 million over the quarter. The Company realized $1.3 million in proceeds from the disposal of marketable securities and strategic investments. Deposits and prepaids increased due to the added operations of ADB Systemer ASA. Other Assets. There were no significant additions to fixed assets for the three month period ended March 31, 2002. Strategic investments decreased $129,000 as a result of the continued liquidation of our holdings. Acquired software and acquired agreements from the ADB Systemer ASA acquisition are being amortized over the life of the respective assets, which is 3 years. Current Liabilities. Accounts payable and accrued liabilities declined $175,000 over the three month period ended March 31, 2002 as a result of lower expenses from restructuring efforts implemented in 2001. Present Status. The Company has not earned profits to date and, at March 31, 2002, the Company had an accumulated deficit of $89.9 million. As of March 31, 2002 the Company had cash on hand and marketable securities of $2.6 million. On April 24, 2002 the Company entered into a private placement agreement with a third party for gross proceeds of $1.1 million. The Company believes that current cash balances and anticipated funds from operations will be sufficient to meet its needs through 2002. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS - (Continued) - -------------------------------------------------------------------------------- This quarterly report may include comments that do not refer strictly to historical results or actions and may be deemed to be forward-looking within the meaning of the Safe Harbor provisions of US federal securities laws. These may include, among others, statements about expectations of future revenues, cash flows and cash requirements. Forward looking statements are subject to risks and uncertainties that may cause the Company's results to differ materially from expectations. These risks include the Company's ability to raise additional funding, develop its business-to-business sales and operations, develop appropriate strategic alliances and the successful development and implementation of technology, acceptance of the Company's products and services, competitive factors, new products and technological changes, and other such risks as the Company may identify and discuss from time to time, including those risks disclosed in the Company's Form 20-F filed with the Securities and Exchange Commission, as it may be amended. Accordingly, there is no certainty that the Company's plans will be achieved. 10 CORPORATE DIRECTORY
- ----------------------------------------------------------------------------------------------------------------------------- Additional Shareholder Directors Officers ADB Systems Offices Information - --------------------------- ---------------------------- -------------------------- ----------------------------- Jeffrey Lymburner Jeffrey Lymburner North America www.adbsys.com CEO CEO Corporate Headquarters investor-relations@adbsys.com ADB Systems Martin Bekkeheien(3) Mark Wallace International Inc. Registrar and Transfer Senior Vice President President 6725 Airport Road, Agent Statoil Suite 201 CIBC Mellon Trust Company Jan Edvin Pederson Mississauga, Ontario PO Box 70390 T. Christopher Bulger(2) President, ADB Systemer, L4V 1V2 Toronto, Station A CEO, Megawheels Norwegian Operations 1 888 287 7467 Toronto, Ontario M5W 2X5 Paul Godin(2) Jim Moskos ADB Systems President, International Inc. Auditors Jim Moskos ADB Technology Group 3001 North Rocky Point Deloitte & Touche LLP President, Drive, Suite 200 Chartered Accountants ADB Technology Group Aidan Rowsome, Tampa, Florida Toronto, Ontario, Canada Vice President, 33607 David Pamenter(1)(3) Global Sales 1 888 750 7467 Lawyers Partner, Gowlings Gowlings, Toronto John Mackie Europe Brown Raysman, New York John Reynolds(2) Vice President, ADB Systemer AS Managing Director, General Counsel and Vingveien 2, N-4050 Stock Exchange Listings LimeRock Partners Corporate Secretary Sola, Norway Toronto Stock Exchange + 47 51 64 71 00 Symbol: ADY Ken Sexton(1) David Pamenter Assistant Secretary ADB Systems Limited Nasdaq National Market Charles Walker(1) Blenheim House Symbol: ADBI CEO and President, 1-2 Bridge Street Walker Group Inc. Giuldford, Surrey Shares Outstanding GUI 4RY (March 31, 2002) UK Issued 38,185,252 + 44 (0) 1483 592100 Diluted 42,658,512 ADB Systems International Ltd. VistaTEC House 700 South Circular Road Kilmainham, Dublin 8 Ireland + 353 1 416 8188
- ---------- (1) Member of Audit Committee (2) Member of the Management Resources and Compensation Committee (3) Member of the Corporate Governance Committee -----END PRIVACY-ENHANCED MESSAGE-----