-----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, NNSUT1LR9p1qLGh+cz2Yf2DIF18Y3zCxDz6tK0HJGm2QDwipyNcRcMdFpu1Wn3ys CrsAaM+YQIS8orUeARn+eg== 0001108017-02-002017.txt : 20021119 0001108017-02-002017.hdr.sgml : 20021119 20021119140551 ACCESSION NUMBER: 0001108017-02-002017 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVA INTERNATIONAL INC CENTRAL INDEX KEY: 0000807732 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 161284228 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16341 FILM NUMBER: 02832679 BUSINESS ADDRESS: STREET 1: BTC 454 S ANDERSON RD STREET 2: SUITE 214 CITY: ROCK HILL STATE: SC ZIP: 29730 BUSINESS PHONE: 8033276790 MAIL ADDRESS: STREET 1: BTC 454 S ANDERSON RD STREET 2: SUITE 214 CITY: ROCK HILL STATE: SC ZIP: 29730 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED MEDICAL PRODUCTS INC DATE OF NAME CHANGE: 19920703 10QSB 1 adva.htm Form 10-QSB for ADVA International Inc.

                       SECURITIES AND EXCHANGE COMMISSION
                                 Washington D.C.

                                   FORM 10-QSB


        [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
              EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2002

                                       OR

        [ ]   TRANSITION REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE
              ACT

                For the transition period from________to________

                         Commission file number 0-16341



                             ADVA International Inc.
                 (Name of small business issuer in its charter)


                  Delaware                               16-1284228
       (State or other jurisdiction                  (I.R.S. Employer
      of incorporation or organization)              Identification No.)


                             454 South Anderson Road
                         Rock Hill, South Carolina 29730
                                  803.327.6790
 (Address and phone number of principal executive offices and place of business)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer filed all documents and reports required to be filed by
section q2, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
                                                                  Yes  X   No

                         APPLICABLE TO CORPORATE ISSUERS

The number of shares outstanding of the issuer's common stock as of September
19, 2002 is 13,185,194.




                                       1





                     ADVA INTERNATIONAL INC. AND SUBSIDERARY

                                  FORM 10 -QSB

                                      INDEX

                                                                             Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements:

   Consolidated Balance Sheet as of March 31, 2002 and September
   30, 2002....................................................................4

   Consolidated Statements of Operations for the three months ended
   September 30, 2002 and September 30, 2001, and for the six months
   ended September 30, 2002 and September 30, 2001, and the cumulative
   period April 2, 1998 (inception) through September 30, 2002.................6

   Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
   for the cumulative period April 2, 1998 (inception) through September
   30, 2002....................................................................7

   Consolidated Statements of Cash Flows for the six months ended
   September 30, 2002 and September 30, 2001 and the cumulative period
   April 2, 1998 (inception) through September 30, 2002........................8

   Notes to Consolidated Financial Statements..................................9

Item 2. Plan of Operation.....................................................19

PART II. OTHER INFORMATION

Item 2. Changes in Securities.................................................20

Item 6. Exhibits and Reports on Form 8-K......................................20

SIGNATURES....................................................................20


                                       2



Forward Looking Statements

When used in this Form 10-QSB, the words "may", "might", "will", "should",
"could", "expect(s)", "plan(s)", "intend(s)", "anticipate(s)", "believe(s)",
"estimate(s)", "predicts", "potential", or "continue(s)" or the negative of such
terms and other comparable terminology are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties,
including but not limited to economic conditions, changes in laws or
regulations, our history of operating losses, limited access to capital, demand
for our products and services, dilution from issuance of additional shares,
newly developing technologies, loss of permits, conflicts of interests in
related party transactions, regulatory matters, the occurrence of events not
covered by insurance, a substantial increase in interest rates, protection of
technology, lack of industrial standards, raw material commodity pricing, the
ability to receive bid awards, the inability to implement our growth strategy,
the inability to maintain key employees, the effects of competition and our
ability to obtain additional financing. Such factors, which are discussed in
"The Plan Of Operation" and the notes to condensed consolidated financial
statements, could effect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with undue reliance on any such forward-looking
statements, which speak only as of the date made. Although we believe the
expectations reflected in the forward-looking statements are reasonable, we
cannot and do not guarantee future results, levels of activity, performance or
achievements. See "Plan of Operation".




                                       3



Item 1.   Financial information

                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                           Consolidated Balance Sheet




                                                               September 30, 2002   March 31, 2002
- ---------------------------------------------------------------------------------------------------
                                                                 (Unaudited)          (Audited)

Assets

Current assets
     Cash and cash equivalents                                $           640       $     4,401
                                                                           -              1,714
Receivables
- ---------------------------------------------------------------------------------------------------

Total current assets                                                      640             6,115

Software                                                              318,436           318,436

Property and equipment, net (note 12)                                  16,953            20,384

Deferred financing costs, net of accumulated amortization             420,937           512,740
     of $496,563 and $450,662 (Notes 5 and 6)

Security Deposit                                                        2,979             2,979
- ---------------------------------------------------------------------------------------------------

Total assets                                                  $       759,945       $   860,654
- ---------------------------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.

                                       4




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                           Consolidated Balance Sheet
                                  -Continued-


                                                               September 30, 2002   March 31,  2002
- ---------------------------------------------------------------------------------------------------
                                                                  (Unaudited)         (Audited)


Liabilities and Stockholders' (Deficiency)

Current liabilities
     Notes payable (note 7)                                   $       85,000        $    85,000
     Accrued professional fees                                       293,050             294,895
       Accrued interest                                              213,566             151,033
       Accrued compensation                                           50,573              79,831
       Accounts payable and accrued expenses, other                   46,170              58,746
       Debt due in one year                                          500,000                  -
     Due to officer                                                    9,990              39,440
- ---------------------------------------------------------------------------------------------------

Total current liabilities                                          1,198,349             708,945

Long-term debt (Notes 5 and 6)                                     1,500,000           1,500,000
- ---------------------------------------------------------------------------------------------------

Total liabilities                                                  2,698,349           2,208,945

Commitments (Note 9)

Stockholders' deficiency (Notes 5, 9 and 10)
     Class A preferred stock, no par value                                -                   -
         Authorized 4,000 shares, none issued
     Class B preferred stock, no par value                                -                   -
         Authorized 6,000 shares, none issued
     Common stock, $.001 par value
         Authorized 20,000,000 shares
         Issued and outstanding 13,185,194 shares                     13,185              13,185
     Additional paid-in capital                                    1,957,815           1,957,815
     (Deficit) accumulated during the development stage           (3,909,404)         (3,319,291)

Total stockholders' (deficiency)                                  (1,938,404)         (1,348,291)
- ---------------------------------------------------------------------------------------------------

Total liabilities and stockholders' (deficiency)              $      759,945        $    806,654
- ---------------------------------------------------------------------------------------------------

           See accompanying notes to consolidated financial statements

                                       5





                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                      Consolidated Statement of Operations
                                                           


                                                                                                     Cumulative
                                                                                                       Period
                                                                                                    April 2, 1998
                                                    Three Months Ended        Six Months Ended       (Inception)
                                                       September 30              September 30,         through
                                                  2002             2001     2002            2001   September 30, 2002                                                         2002
- ------------------------------------------------------------------------------------------------------------------
                                                       (Unaudited)             (Unaudited)          (Unaudited)

Sales, license fees                             $   -           $   -      $   -           $   -     $   8,484

Operating expenses
     Salary and employee related               67,226           64,723    131,545         115,334      717,578
     General and administrative               140,414          221,858    300,516         481,682    1,509,011
       Expenses related to merger                  -             5,000         -           25,336      995,278
- ------------------------------------------------------------------------------------------------------------------

Total operating expenses                      207,641          291,581    432,062         622,352    3,221,868
- ------------------------------------------------------------------------------------------------------------------

(Loss) from operations                       (207,641)        (291,581)  (432,062)       (622,352)  (3,213,384)
- ------------------------------------------------------------------------------------------------------------------

Other income (expense)
     Miscellaneous income                          -                -          -               -         1,305
     Interest (expense), Officer                   -            (1,558)      (519)         (2,808)     (14,664)
     Interest (expense), debt                 (81,877)         (70,818)  (157,532)       (141,961)    (714,734)
     Interest income                               -             1,905         -            7,453       32,073
- ------------------------------------------------------------------------------------------------------------------

Total other expense, net                      (81,877)         (70,471)  (158,051)       (137,316)    (696,020)
- ------------------------------------------------------------------------------------------------------------------

Net loss                                    $(289,518)       $(362,052) $(590,113)      $(759,668) $(3,909,404)
- ------------------------------------------------------------------------------------------------------------------

Basic and diluted loss per share               $(0.02)          $(0.03)    $(0.04)      $   (0.06) $     (0.33)
- ------------------------------------------------------------------------------------------------------------------

Weighted average shares outstanding        13,185,194       13,185,194 13,185,194      13,185,194   11,493,434
- ------------------------------------------------------------------------------------------------------------------

           See accompanying notes to consolidated financial statements

                                       6



                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

     Consolidated Statements of Changes in Stockholders' Equity (Deficiency)







                                                                                      Deficit                          Total
                                                                                    Accumulated                        Stock-
                                                                      Additional     During the        Stock          Holders
                                                    Common Stock        Paid-In     Development     Subscription      Equity
                                                Shares        Amount    Capital       Stage          Receivable    (Deficiency)
- ------------------------------------------------------------------------------------------------------------------------------------

Balance, April 2, 1998 (inception)                  -         $     -    $    -       $     -          $    -         $     -

Common stock issued, May 14, 1998                1,000              10    300,990           -           (1,000)        300,000


Net (loss)                                          -               -          -       (287,851)            -          (287,851)
- ------------------------------------------------------------------------------------------------------------------------------------

Balance, March 31,  2000                         1,000              10    300,990     (287,851)         (1,000)         12,149

Original issue discount arising from options
  granted in connection with debt, Jan. 14, 2000    -               -     900,000           -               -          900,000
(Note 5)
                                                    -               -          -      (339,034)             -         (339,034)
Net (loss)
- ------------------------------------------------------------------------------------------------------------------------------------

Balance, March 31, 2000                          1,000              10  1,200,990     (626,885)         (1,000)        573,115

Common stock issued, May 17, 2000 (Note 5)          13              -     300,000           -               -          300,000

Stock options exercised, May 17, 2000 (Note 5)     176               2    449,998           -               -          450,000

Recapitalization, March 2, 2001 (Note 1)    13,184,005          13,173    (13,173)          -               -               -

Receipt of stock subscription, March 2, 2001        -               -          -            -            1,000           1,000

Net (loss)                                          -               -          -    (1,467,711)             -       (1,467,711)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001                     13,184,194          13,185  1,937,815   (2,094,596)             -         (143,596)

Net (Loss)                                          -               -          -    (1,224,695)             -       (1,224,695)

Options issued as compensation to nonemployees      -               -      20,000           -               -           20,000
- ------------------------------------------------------------------------------------------------------------------------------------

Balance, 31 March, 2002                     13,184,194          13,185  1,957,815   (3,319,291)             -       (1,348,291)

Net (Loss) (Unaudited)                              -               -          -      (590,113)             -         (590,113)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Sept.  30, 2002                     13,185,194         $13,185 $1,957,815  $(3,909,404)         $   -      $(1,938,404)
- ------------------------------------------------------------------------------------------------------------------------------------


           See accompanying notes to consolidated financial statements

                                       7



                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                      Consolidated Statement of Cash Flows


                                                                                              Cumulative
                                                                                                Period
                                                                                             April 2, 1998
                                                                                              (Inception)
                                                                         Six Months Ended       through
                                                                           September 30         June 30
                                                                       2002          2001         2002
                                                                                 (Unaudited)   (Unaudited)
- -----------------------------------------------------------------------------------------------------------

Cash Flows from operating activities
   Net (loss)                                                      $(590,113)   $(759,668)    $(3,909,404)
    Adjustments to reconcile net (loss) to net cash used in
         operating activities
                Amortization of deferred finance costs                91,803       91,802         496,562
                Depreciation                                           3,431        1,863           8,722
                Options issued for services rendered                      -            -           20,000
                Changes in assets and liabilities
                       (Increase) decrease in assets
                                Receivables                            1,714         (46)              -
                                Security deposit                          -       (2,979)          (2,979)
                                Prepaid expenses                          -       17,083               -
                      (Increase) decrease in liabilities                                               -
                Accrued transaction and creditor payables               (560)   (299,440)
                Accounts payable and accrued expenses                 19,415     207,886          603,366
- -----------------------------------------------------------------------------------------------------------

Net cash (used in) operating activities                             (474,311)   (743,449)      (2,783,737)
- -----------------------------------------------------------------------------------------------------------

Cash flows from investing activities
       Capital expenditures                                                -     (25,677)         (25,677)
       Expenditures for software                                           -     (71,936)        (318,436)
       Loan from Officer                                              (29,450)     2,809            9,990
- -----------------------------------------------------------------------------------------------------------

Net cash (used in) provided by investing activities                   (29,450)   (94,804)        (334,123)
- -----------------------------------------------------------------------------------------------------------

Cash flows from financial activities
     Proceeds of notes payable                                        500,000         -           585,000
     Proceeds from long-term debt, net of finance fees                     -          -         1,482,500
     Proceeds from stock issuance and subscription                         -          -         1,051,000
- -----------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                             500,000         -         3,118,500
- -----------------------------------------------------------------------------------------------------------

Net  (decrease) increase in cash and cash equivalents                  (3,761)  (838,313)             640

Cash and cash equivalents at the beginning of the period                4,401    961,483               -
- -----------------------------------------------------------------------------------------------------------

Cash and cash equivalents at the end of period                            640    123,180              640
- -----------------------------------------------------------------------------------------------------------
Non cash activity
     During the year ended March 31, 2000, the Company incurred $900,000 in
        non-cash deferred finance charges from options for common stock issued
        with debt. The amount was credited to additional paid-in capital.
- -----------------------------------------------------------------------------------------------------------


           See accompanying notes to consolidated financial statements

                                       8




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements



1.   Organization  

On March 2, 2001, ADVA International Inc. ("ADVA"), Biotel, Inc. ("Biotel"),
Global Information Group USA, Inc. ("GIG" or the "Company") and the stockholders
of GIG (the "Stockholders") consummated a transaction pursuant to an Agreement
of Stock Exchange dated June 19, 2000, as amended (the "Agreement"). Under the
terms of the Agreement, the Stockholders exchanged all the issued and
outstanding shares of GIG owned by them and received in return an aggregate of
12,468,750 shares of ADVA common stock, par value $0.001 ("Common Stock"),
representing a 94.57% equity interest in ADVA (the "Stock Exchange"). GIG
accordingly became a wholly owned subsidiary of ADVA. The remaining ADVA shares
continued to be owned by the then-current stockholders of ADVA.

ADVA functions as a holding company. Currently, its primary asset is all of the
outstanding common stock of GIG. Accordingly, unless otherwise indicated or the
context otherwise requires, use of the terms "Company", "we", "our" or "us" in
this Report refers to GIG.

ADVA currently possesses no employees but employs contracted consultants to run
the day-to-day operations as well as the technical development of the company.


2.   Basis of Presentation 

The consolidated Financial statements are unaudited and have been filed without
review or advice from either ADVA's independent accountants in accordance with
the AICPA statement on auditing standards no. SAS 71 or outside legal counsel.
These statements include the accounts of ADVA International Inc. ("ADVA") and
its wholly owned subsidiary Global Information Group USA, Inc. ("GIG"). All
significant inter-company accounts and transactions have been eliminated in
consolidation.

ADVA's independent accountants have indicated in their report on our audited
financial statements (10KSB/A August 8, 2002) that our financial condition
raises substantial doubt about our ability to continue as a going concern.

New debt and equity issuances are expected to provide near term working capital
until earnings from operations can support the Company. There can be no
assurance that management will be successful in its efforts to attract such
capital.

In the opinion of management, all adjustments (consisting of normal recurring
accruals) have been made which are necessary to present fairly the financial
position of the company as of March 31, 2002, and the results of its operations
for the six months ended September 30, 2002.

The results of operations experienced for the three months ended September 30,
2002 are not necessarily indicative of the results to be experienced for the
fiscal year ended March 31, 2003.

The statements and related notes have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The accompanying notes should
therefore be read in conjunction with the Company's March 31, 2002 annual
financial statements.


3.   Business Operations And Basis of Presentation

Business Operations

From April 2, 1998 (inception) to March 31, 2000, the Company maintained
operations in the Netherlands and in April 2000 moved all operations to the
United States. The Company is in the development stage and planned principal
operations have not yet commenced due to a chronic lack of funding.

The Company develops applications software running on the Linux (the "Linux(R)
OS") and UNIX (the "UNIX(R)OS") operating systems. The Company's present
software product, first developed for the UNIX(R)OS, is believed to be the only
complete 3D solid modeling, animation and rendering system currently available
on the Linux(R)OS. The Company's software has been designed for use by digital
content creators in the production of 3D film and video special effects,
animation, computer-aided design/manufacture ("CAD/CAM") and scientific
visualization, Internet web site, print graphics and virtual television
production. Since acquiring the software and the related source code in February
2000, the Company has been developing and executing marketing plans for sales of
the software to users in the Linux(R)and UNIX(R)OS communities as well as
enhancing the compatibility of the products to these and other platforms.
Although saleable in a variety of 3D graphics segments, the Company expects to
focus its near-term marketing efforts on the CAD/CAM segment.

The Companys success will depend in part on its ability to obtain patents and
product license rights, maintain trademark protection and trade secrets, and
operate without infringing on the proprietary rights of others, both in the
United States and other countries.

There can be no assurance that patents or trademarks issued to or licensed by
the Company will not be challenged, invalidated, or circumvented, or that the
rights granted thereunder will provide proprietary protection or competitive
advantages to the Company

Basis of Presentation

The Company has no significant operating history and, from April 2, 1998
(inception) to September 30, 2002, has generated a net loss of $3,909,404. This
loss has been financed by proceeds from equity and debt issuances. Also, as of
September 30, 2002, the Company has a working capital deficiency of $1,197,709
and a stockholders' deficiency of $1,938,404. During fiscal 2003, management
intends to commence principal operations. Earnings from operations are expected
to provide working capital. In May 2002, the Company entered into a loan
agreement that provided the Company with proceeds of $500,000 to work towards
extinguishing outstanding liabilities and provide working capital through August
2002. In October 2002, the Company entered into a new loan agreements that
provided the Company with proceeds of $280,000 to continue to extinguish
outstanding liabilities, provide additional working capital and make investments
in continuing software development. The Company is also seeking additional
working capital through additional loan proceeds and/or the sale of additional
shares of its common stock. There can be no assurance that management will be
successful in its efforts.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.



                                        9





                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

4.   Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, GIG. All significant intercompany
accounts and transactions have been eliminated.

Revenue Recognition

Planned principal operations have not commenced and revenues since inception
have not been significant.

When planned principal operations begin, the Company will adopt AICPA Statement
of Position 97-2, "Software Revenue Recognition", which requires that revenue
recognized from software arrangements be allocated to each element of the
arrangement based on the relative fair values of the elements, such as software
products, upgrades, enhancements, post contract customer support, installation,
or training.

Revenue from product sales will be recognized upon shipment or transfer of title
to the customer. Certain sales might require continuing service, support, and
performance by the Company, and accordingly, a portion of the revenue will be
deferred until the future service, support and performance are provided.
Reserves for sales returns and allowances will be recorded in the same period as
the related revenues.

Cash Equivalents

Cash and cash equivalents include cash and short-term investments with original
maturities of 90 days or less.

Research and Development

Internal research and development costs are expensed as incurred. Research and
development costs of approximately $11,500, $9,000 and $153,500 for the years
ended March 31, 2002 and 2001 and for the cumulative period from April 2, 1998
(inception) through September 30, 2002, respectively, are included in general
and administrative expenses in the accompanying statements of operations.

Deferred Finance Costs

The deferred finance costs arising from the incurrence of long-term debt are
being amortized using the straight-line method over the five-year terms of the
related debt.

Software Costs

Software costs represent amounts paid to third parties during February 2000 to
acquire technologically feasible software and its related source code and
$118,436 of additional development costs incurred during the year ended
March 31, 2002 to modify and adapt the software to platforms other than Linux.
The Company will begin amortizing, over a three-year period, the software costs
when sales commence on a commercial basis. The Company will continue to evaluate
any impairment to the software on a periodic basis.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and
amortization. Additions and betterments are capitalized and maintenance and
repairs are charged to current operations. The cost of assets retired or
otherwise disposed of and the related accumulated depreciation and amortization
are removed from the accounts and the gain or loss on such dispositions is
included in current operations. Depreciation and amortization are provided using
the straight-line method over the estimated useful life of the respective
assets.

Accounting for Stock-Based Compensation

The Company adopted the disclosure provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation." In accordance with the provisions of SFAS No. 123,
the Company applies Accounting Principles Board Opinion 25 and related
interpretations in accounting for its employee stock option plans.

Credit Risk

The  Company's  policy is to limit the  amount  of  credit  exposure  to any one
financial  institution  and places its investments  with financial  institutions
evaluated as being credit worthy. At times, such amounts may be in excess of the
Federal Deposit Insurance Corporation limits.


                                       10




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

Income Taxes

The Company follows the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). SFAS No. 109
requires a company to recognize deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized in its
financial statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the differences between the financial
statement carrying amounts and tax bases of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Long-Lived Assets

The Company reviews the carrying values of its long-lived and identifiable
intangible assets for possible impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable based on the sum of the expected future undiscounted cash flows. As
of September 30, 2002, the Company has determined that no impairment has
occurred.

Expenses Related to Mergers

These costs consist primarily of professional fees incurred in connection with
the reverse merger between GIG and ADVA (see Note 1) and with other merger
activities, which were not consummated. These costs also include the payments to
be made for ADVA's transaction costs and creditor payables (see Note 1).

Net Loss Per Share

Historic basic and diluted net loss per share is calculated using the weighted
average number of shares of common stock outstanding during each period.
Equivalent common shares consist of options granted to officers, directors and
consultants. These options have been excluded from the calculation of diluted
net loss per share since the effect is antidilutive.

5.   Share Purchase and Shareholders' Agreement

In January 2000, GIG entered into a Share Purchase and Shareholders' Agreement
with five other parties. The agreement was established in order to promote the
growth of GIG either through an initial public offering or merger with a
publicly held company. The agreement provided that one of the five parties
purchase 100 shares of GIG stock from its chief executive officer and two other
parties ("lenders") advance $300,000 to GIG in the form of loans (see Note 5).
In addition, the agreement granted an option to purchase 30% of GIG's
outstanding stock from its chief executive officer to a party providing
consulting and other services. Such option was exercised on May 17, 2000 upon
the advance to GIG of $400,000, representing the first tranche of additional
loans aggregating $1,200,000 from the lenders. In connection with the granting
of the option, GIG recorded deferred financing costs of $900,000 (representing
the estimated fair value of the option based on application of the Black-Scholes
option pricing model utilizing a risk free rate of 6.38%, volatility of .00001,
and an expected life of five years). Amortization through September 30, 2002
totals $496,563.

The consulting company was also granted additional options in connection with
the above agreement to purchase an indefinite number of shares to be determined
based on an agreed upon formula, exercisable upon GIG's sale, merger or initial
public offering. When GIG entered into the agreement to merge with ADVA (see
Note 1), the formula calculation resulted in a grant of options to purchase 176
shares representing approximately 13.8% of the total outstanding stock of GIG.
Notification of intent to exercise the options was received on March 29, 2000.
The stock was issued on May 17, 2000 for $450,000. This amount, credited to
additional paid-in capital, was net of $750,000 that the consultant earned for
investment advisory and other services. Since the options granted were
contingent upon the consummation of then undetermined future equity
transactions, no value was ascribed to the options as of the grant date.



                                       11




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements



6.   Long-Term Debt

In February 2000, the Company received the first advance from its lenders. The
loan agreements provide for an aggregate amount of $1,500,000, of which
$1,500,000 and $300,000 were outstanding as of March 31, 2001 and 2000,
respectively. The loans carry an interest rate of 6.5% per annum. Interest on
each advance is accrued on a daily basis and is payable 18 months from the date
of each advance and, thereafter, at the end of each of the succeeding three
month periods. Under the terms of the loan agreements, the first interest
payment was due in August 2001. The Company has failed to make timely interest
payments and as of March 31, 2002, the Company was in default of the loan
agreements for which waivers were obtained. In connection with the granting of
the waivers, the Company and its lenders have agreed to negotiate for the
issuance of the Company's common stock to the lenders in satisfaction of any
unpaid accrued interest on the loans until July 1, 2003 at a conversion price of
$.70 per share.

The loans are due generally five years from January 14, 2000. The loans were
intended to be secured by an escrow agreement under which the source code for
the Company's software is held as collateral. Such source code is being held as
collateral under a vendor obligation. One of the lenders and certain common
stockholders share a common managing director. Additionally, a director of the
other lender owns shares in a stockholder of the Company. Deferred finance fees
of $17,500, withheld from the loan proceeds, are being amortized over the
five-year terms of the agreements.

7.   Notes Payable

On November 27, 2001, the Company obtained financing pursuant to promissory
notes with six lenders. The notes provide for an aggregate amount of $85,000, of
which the entire amount was outstanding as of June 30, 2002. The notes carry an
interest rate of 7.5% per annum. The notes and all accrued interest are payable
within 12 months from the date of the advance. Subject to approval of the
Company's Board of Directors, the notes, if unpaid at term, allow the lenders to
convert any principal balance of the note and all outstanding accrued interest
into common stock of the Company at a conversion rate of $0.70 per share within
12 months from the date of the advance.

On May 1, 2002, the Board of Directors of the Company approved the terms of a
promissory note with a finance company, which establishes a loan facility of
$500,000 with an interest rate of 7.5% per annum, to be repaid, including all
accrued interest, within one year from the date of the first advance. The loan
proceeds are to be disbursed to the Company in four monthly tranches beginning
in April 2002 to be used to pay outstanding salaries, expenses and fees and to
provide working capital to the Company. Subject to approval of the Company's
Board of Directors and within one year of issuance of the note, the note allows,
if the loan is unpaid at term, the lender to convert the outstanding principal
amount and outstanding interest into common stock of the Company at a conversion
rate of $0.35 per share. As of September 30, 2002, $500,000 was outstanding.

On October 8, 2002, the Board of Directors of the Company approved the terms of
a two promissory notes establishing loan facilities totaling $280,000 with an
interest rate of 7.5% per annum, to be repaid, including all accrued interest,
within one year from the date of the receipt of funds. The loan proceeds were to
be disbursed to the Company as of October 10, 2002 to be used to pay outstanding
salaries, expenses, and fees and to provide working capital to the Company.
Subject to approval of the Company's Board of Directors and within 90 days of
issuance of the note, the note allows the lender to convert the outstanding
principal amount and outstanding interest into common stock of the Company at a
conversion rate of $0.18 per share.

                                       12




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements


8.   Income Taxes

The Company has net operating loss carry forwards aggregating approximately
$2,042,000 at March 31, 2002, expiring through 2022. SFAS No. 109 requires the
establishment of a deferred tax asset for all deductible temporary differences
and operating loss carryforwards. Because of the uncertainty that the Company
will generate income in the future sufficient to fully or partially utilize
these carryforwards and that some losses may be limited to the extent they were
generated from operations outside of the United States and due to recent changes
in the Company's stock ownership, which could limit the utilization of the
available carry forward for federal income tax purposes, a deferred tax asset of
approximately $762,000 is offset by a valuation allowance of the same amount.

9.   Commitments

Leases

In May 2001, the Company entered into a noncancelable lease agreement for office
space in Rock Hill, South Carolina. The lease is for a three-year period with
minimum annual rental payments of approximately $18,000.

Rent expense for the quarter, was approximately $4,469 in 2002 and $4,469 in
2001.

Employment and Consulting Agreements

In January 2000, the Company entered into an employment agreement with the
former chief executive officer that provided for payments of $110,000 per year
along with certain other benefits in exchange for defined services to be
performed by the employee. Effective May 1, 2002, the employment agreement was
terminated and a consulting agreement to retain the services of the former chief
executive officer was executed concurrently.

On April 23, 2001, the Board of Directors granted an Incentive Stock Option (see
Note 9) to the President of GIG who is also a Director to purchase 100,000
shares of common stock in connection with an employment agreement with GIG. The
Incentive Stock Option will vest in four equal annual increments starting on
April 23, 2001. The exercise price was based upon the closing price of the
common stock on April 23, 2001 or $1.75 per share. Effective May 1, 2002, the
employment agreement and Incentive Stock Option were terminated and on May 3,
2002, a consulting agreement, with the former president of GIG, was executed.

On May 1, 2001, the Company entered into a one-year contractual agreement with a
consultant who acted as chief financial advisor to the Company. The agreement
provided for payment of $4,300 monthly. The Company also granted an Incentive
Stock Option (see Note 9) to acquire 25,000 shares of common stock which vests
in equal quarterly increments beginning August 1, 2001. Effective December 1,
2001, the agreement was canceled by the consultant, which resulted in the
cancellation of the Incentive Stock Option. On April 1, 2002, the Company
entered into a new six-month contractual agreement with this consultant. On
November 1, 2002, the Company entered into a new, revised three month
contractual agreement with this consultant.

ADVA has temporarily replaced all of its employment contracts with Consulting
Agreements until such time as it is viable for the company to recruit and retain
full time employees again.

Subsequent to March 31, 2002, the Company entered into five contractual
agreements, generally for a six-month period, with consultants who will act as
officers or occupy key positions in the Company and GIG. The agreements replace
certain employment contracts described above, provide monthly payments between
$2,000 and $10,000 and are cancelable by either the Company or the consultant
with between 30-90 days notice. Additionally, certain of the agreements provided
for the granting of Incentive Stock Options to acquire an aggregate of 107,500
shares of common stock, which vest between 90 and 180 days from the grant dates.
The exercise price will be based on the per share market price on the date that
the options were approved by the Board of Directors. The fair value of these
options will be expensed in fiscal 2003.

                                       13




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements



Consultant Contracts

Ernst R. Verdonck.
Mr. Verdonck serves as the President, Chief Executive Officer and Chief
Financial Officer of ADVA. A Consulting Agreement between the Company and Mr.
Verdonck, which secured Mr. Verdonck's services for a six-month term, was
approved by ADVA's Board of Directors (with Mr. Verdonck abstaining) effective
as of May 1, 2002. It includes "work-for-hire", non-disclosure, non-competition,
travel and expense reimbursement clauses typically found in such agreements. The
agreement includes a retainer of eighty (80) hours per month, with the option to
reserve an additional 24 hours per month at a higher rate. The base monthly
payment equals $9,000. ADVA reimburses Mr. Verdonck's reasonable, approved
business travel and associated expenses. The agreement is renewable and
termination of the agreement is possible by either party with ninety (90) days
notice. Mr. Verdonck is to serve as the President of ADVA and provide management
services related to ADVA's corporate and Board functions.

Subject to Board approval, Mr. Verdonck will also be granted a stock option to
purchase 30,000 shares of ADVA Common Stock if he achieves certain specific
goals. The agreement also provides for certain incentive compensation based on
achieving performance-related milestones as measured by stock trading, share
price and the timely accomplishment of specific business goals.

Anthony E. Mohr
Mr. Mohr was employed by ADVA in January 2000 to serve as its President and
Chief Executive Officer. The relatedagreement was terminated on April 30, 2002.
The agreement provided Mr. Mohr for a severance package which on the date of
termination would totalapproximately $75,000. Mr. Mohr's Termination Agreement
provides for the repayment of approximately $67,450 in loans, accrued interest,
un-reimbursed expenses and deferred salary to be divided into four equal
tranches paid monthly commencing on May 1, 2002. A Consulting Agreement between
ADVA and Prûdens~Consulo LLC, which retained Mr. Mohr's services for a one year
term, was approved by the ADVA Board of Directors (with Mr. Mohr abstaining)
with an effective date of May 1, 2002. It includes "work-for-hire",
non-disclosure, non-competition, travel and expense reimbursement clauses
typically found in such agreements. The Consulting Agreement includes a base
retainer of eighty (80) hours per month with the option to retain an additional
twenty-four (24) hours per month at a higher rate. The base monthly payment
equals $10,000 and ADVA reimburses Mr. Mohr's reasonable, approved business
travel and associated expenses. Mr. Mohr is eligible for a monthly reimbursement
for personal automobile usage at a rate of $0.35 per mile when on company
business. The Consulting Agreement is renewable and termination is possible by
either party with ninety (90) days notice. Mr. Mohr's charter is to provide
strategic consultation on all aspects of operations, technology and marketing.
Subject to Board approval, Mr. Mohr will also be granted a stock option to
purchase 25,000 shares of ADVA Common Stock. If ADVA fulfills the terms of both
the Termination and Consulting Agreements, Mr. Mohr has agreed to waive his
rights to the severance package due him under his prior Employment Agreement. If
ADVA defaults on the terms of either agreement, all monies due Mr. Mohr,
including the total value of the severance package will become due and owing
immediately and ADVA will be required to pay in a lump sum total within ten (10)
days of the default. As of August 3, 2002, ADVA was in default under certain
terms of the Termination Agreement. Mr. Mohr hads orally agreed to waive this
default until the earlier of ADVA's cure of the default, or September 1, 2002.
The parties are prepared and executed documentation memorializing the oral
waiver for execution.


                                       14




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements



George L. Down
Mr. Down was previously employed by GIG to serve as its President. Mr. Down's
Employment Agreement, signed on May 1, 2001, was terminated on May 1, 2002. This
agreement provided for a severance package with an approximate value of $35,000
at the date of his termination. His Termination Agreement provides for the
repayment of approximately $31,250 in un-reimbursed expenses and deferred salary
to be divided into four equal tranches paid monthly commencing on May 3, 2002.
The Termination Agreement also calls for the vesting as of May 1, 2002 of 75,000
share options previously included in his Employment Agreement. A Consulting
Agreement between ADVA and Mr. Down, which secured Mr. Down's services for a
six-month term, was approved by the ADVA Board of Directors (with Mr. Down
abstaining) with an effective date of May 3, 2002. It includes customary
"work-for-hire", non-disclosure, non-competition, travel and expense
reimbursement clauses typically found in contracts of this type. Mr. Down's
Consulting Agreement includes a retainer of one hundred (100) hours per month
with the option to reserve an additional thirty (30) hours per month at a higher
rate. The base monthly payment equals $6,250. ADVA reimburses Mr. Down's
reasonable, approved business travel and associated expenses. Mr. Down is
eligible for a monthly reimbursement for personal automobile usage at a rate of
$0.35 per mile when on company business, including when commuting to and from
the ADVA office. The Consulting Agreement is renewable and termination is
possible by either party with ninety (90) days notice. Mr. Down is to serve as
the President of GIG and provide management services related to ADVA's corporate
and Board functions. Subject to Board approval, Mr. Down will also be granted a
stock option to purchase 100,000 shares of ADVA Common Stock. The first 50,000
shares vest on the effective date of Mr. Down's Consulting Agreement. The
remaining shares vest if specific performance goals are achieved. If ADVA
fulfills the terms of both the Termination and Consulting Agreements, Mr. Down
will waive his rights to the severance package due him under his prior
employment agreement. If ADVA defaults on the terms of either agreement, all
monies due Mr. Down, including the current value of the severance package, will
become due and owing immediately and ADVA will be required to pay a lump sum
total within ten (10) days of the default. As discussed above in connection with
Mr. Mohr, ADVA is in default of certain terms of the Termination Agreements. Mr.
Down has orally agreed to waive this default until the earlier of ADVA's cure of
the default, or September 1, 2002. The parties have prepared and executed d
ocumentation memorializing the oral waiver.

Thomas A. Kruger
Effective May 1, 2002, Mr. Kruger serves as a financial controller for a six (6)
month term under a consulting agreement. Mr. Kruger is reimbursed at the rate of
$50 per hour based on a minimum of 86 hours per month. Additional hours
requested by ADVA or GIG is charged at a rate of $75 per hour. Mr. Kruger has
also been granted options to purchase 25,000 shares of ADVA Common Stock. Of
these, 6,250 options vested on February 1, 2002, with additional tranches of
6,250 options vesting on each of May 1, August 1 and November 1, 2002.

On November 1, 2002, a new three (3) month consultant agreement was made with
Mr. Kruger calling for an hourly rate of $75 based upon a minimum of 86 hours
per month. Additional hours are charged at $100.00. Mr. Kruger has been granted
an additional option of 6,250 shares as part of this agreement.

Robert Eijkelhof
Effective May 1, 2002, Mr. Eijkelhof serves as Vice President Investor Relations
for a six-month term, as approved by ADVA's Board of Directors. Mr. Eijkelhof's
agreement includes "work-for-hire", non-disclosure, non-competition, travel and
expense reimbursement clauses typically found in such agreements. The agreement
includes a retainer of forty (40) hours per month, reimbursed at the rate of $50
per hour, with the option to reserve an additional 12 hours per month at a $70
per hour rate. The base monthly payment equals $2,000. ADVA reimburses Mr.
Eijkelhof's reasonable, approved business travel and associated expenses.  The
agreement is renewable and termination of the agreement is possible by either
party with ninety (90) days notice.

                                       15




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements



ADVA expects to retain other staff for technology and marketing efforts in the
near future.

Employment and Consulting Agreement Wavers

As of September 30, 2002, ADVA was in default under certain terms of Mr. Mohr's
and Mr. Down's Termination Agreements requiring ADVA to pay all their accrued
back pay and unpaid reimbursable expenses and, in the case of Mr. Mohr, all
loans (plus accrued interest), in four monthly installments commencing May 1,
2002.

The Termination Agreements also provide that, so long as ADVA remains current in
these repayment obligations, then Messrs. Mohr and Down each waive their rights
to severance packages otherwise due them under the terms of their respective
Employment. Messrs. Mohr and Down have orally agreed to waive ADVA's default
until the earlier of ADVA's cure of the default, or September 1, 2002.

The parties prepared written waivers memorializing their oral agreements for
execution through September 1, 2002.

Certain consultants executed addenda to their Consulting Agreements allowing
ADVA to defer reimbursement of consultant expenses and payment of additional
consultant fees for services rendered based upon contractual obligations waiving
any defaults in connection with such deferral until the earlier of ADVA's
payment of such deferred amounts or September 1, 2002.

As of September 30, 2002, The Company was in default of these certain Consultant
agreements and wavers regarding expenses and additional consultant fees.

Consulting Contract Extensions

On October 30,2002, The Board of Directors agreed to extend for three months the
consultant agreements for Messrs. Ernst R. Verdonck, George L. Down and R. A.
Eijkelhof with an option for a further ninety (90) day renewal.. The stock
option clauses for these three (3) contract extensions were tabled pending
further research, discussion, and negotiation for thirty days.

Independent Accountants and Outside Legal Counsel 

Due to the lack of funds, ADVA ceased making payments to its independent
accountants and outside legal counsel near the end of calendar 2001. Upon
receipt of loan proceeds of approximately $500,000 in April 2002, ADVA entered
into agreements with each of its independent accountants and outside legal
counsel providing for the payment of these outstanding obligations aggregating
approximately $227,000.

As of September 30, 2002, these outstanding obligations totaled $222,746.


                                       16




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements





10.   Stock Option Plan

The Company, upon approval of the stockholders on September 26, 2001, adopted
the 2001 Stock Option Plan (the "Plan") to provide for grants of options to
purchase shares of common stock to officers, key employees, directors and
consultants of the Company who are eligible to participate in the Plan.
1,400,000 shares of common stock have been reserved for issuance under the Plan.

Options granted under the Plan will be either Incentive Stock Options or
Non-Qualified Stock Options and will be granted at a price equal to the fair
market value of the Company's common stock at the date of grant. In addition, no
Incentive Stock Option may be granted to an employee owning directly or
indirectly stock having more than 10% of the total combined voting power of all
classes of stock of the Company, unless the exercise price is set at not less
than 110% of the fair market value of the shares subject to such Incentive Stock
Option on the date of the grant and such Incentive Stock Option expires not
later than five years from the date of grant.

Generally, the Incentive Stock Options and Non-Qualified Stock Options have
terms of ten years from the date of grant. 20% of the options vest immediately
on the date of grant. On each anniversary date of the grant, the options vest in
increments of 20%. The options become fully vested and exercisable four years
from the date of grant. Notwithstanding the preceding, the Board of Directors
determines the terms of options granted on a case-by-case basis.

The Company has granted options to acquire shares of common stock to officers,
directors, and consultants, as follows:

                                  Option Shares
- ----------------------------------------------------------------------------------

                              Options Outstanding       Options Exercisable
                          ------------------------   ---------------------------

                                         Weighted                      Weighted
                                          Average                       Average
                                         Exercise                      Exercise
                            Shares          Price       Shares            Price
- --------------------------------------------------------------------------------

Balance,
    March 31, 2001              --   $         --           --    $          --
Granted                    137,750           1.61           --               --
Exercised                       --             --           --               --
Forfeited                  (25,500 )         1.24           --               --
- --------------------------------------------------------------------------------

Balance,
    March 31, 2002         112,250   $       1.69       27,450    $        1.65
- -------------------------------------------------------------------------------


The following table summarizes  information about stock options outstanding at
June 30, 2002.


                                 Weighted
                                  Average       Weighted                 Weighted
Range of                        Remaining        Average                 Average
Exercise          Number        Contractual     Exercise      Number     Exercise
 Prices        Outstanding       Life (yrs)       Price     Exercisable    Price
- --------------------------------------------------------------------------------

$.01 - $.75       2,250          9.50            $ .58        450         $ .58
1.25             10,000          9.63             1.25      2,000          1.25
1.75            100,000          9.08             1.75     25,000          1.75
- --------------------------------------------------------------------------------

$.01 - $1.75    112,250          9.14           $ 1.69     27,450         $1.65
================================================================================
The options were to generally vest at various dates through April 2004.
                                  (See Note 8).

Pro forma information regarding net income is required by SFAS No. 123 and has
been determined as if the Company had accounted for its employee stock options
under the fair value method defined in this statement. The fair value for these
options was estimated at the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions for 2002:

                                                    2002
                                                   -------
Risk-free interest rate                             4.65%
Volatility factor                                    100%
Expected dividend yield                                0%
Weighted-average expected life                        10 years

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect fair value estimate, in management's
opinion the existing models do not necessarily provide a reliable single measure
of the fair value of its employee stock options.

                                       17




                        ADVA INTERNATIONAL AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements


For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma net loss was as follows:

                 Year ended March 31,                          2002
                 ---------------------------------------------------------------
                 Net loss - as reported                      $(1,224,695)
                 Net loss - pro forma                         (1,264,695)
                 Basic and diluted loss per share
                 As reported                                 $      (.09)
                 Pro forma                                          (.10)
                 ---------------------------------------------------------------


11.   Property and Equipment

As of September 30, 2002, property and equipment consisted of the following:

                 September 30, 2002,                                2002
                 ---------------------------------------------------------------

                                                             Estimated
                                                               Useful
                                                              Life in
                                                                Years
                 ---------------------------------------------------------------
                 Computers and office equipment                  3       $12,943
                 Furniture and fixtures                          5        12,734
                 ---------------------------------------------------------------
                                                                          25,677
                 Less accumulated depreciation                             8,724
                 ---------------------------------------------------------------
                                                                         $16,953
                 ---------------------------------------------------------------
Depreciation expense for the quarters ended June 30, 2002 and 2001 was $1,715
and $-0-, respectively.

12.   ADVA Outside Director Options

On April 30, 2002, the Board of Directors in special consideration for advisory
services rendered to ADVA International Inc. granted a Director a Non-Qualified
Stock Option for 10,000 shares of stock at an exercise price based upon the
closing price of ADVA (ADII) on April 30, 2002.

13.   Director Changes 

None


                                       18





Item 2.   Plan of Operations

The following information should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this Form 10-QSB.

Our short-term objectives are four fold:

        o   To attract sufficient funding to operate the company and realize our
            business plans until such time as income is sufficient to do so. To
            build out from the current source code a universal rendering module
            (GIGSTAR) for marketing as a Component Technology product to third
            parties
        o   To further enhance the compatibility of our CAD visualization
            product (GIGVIZ) with the three major 3D solid modeling kernels
            thereby gaining complete compatibility with nearly five (5) million
            CAD users as potential
        o   To begin marketing our products and technology and create multiple
            revenue streams

With adequate funding, we expect to commence sales during the fourth quarter of
fiscal 2003. We expect to be in a position to show our GIGSTAR component in beta
form to a variety of potential clients at various CAD/CAM oriented trade shows
commencing in February 2003. The success of this plan depends, in part, on our
ability to forge cooperative relationships with the major hardware and software
vendors in the CAD/CAM market. We shall also seek to sell our products worldwide
directly over the Internet and via the reseller channel for CAD solutions
commencing in the above-mentioned period

We expect to introduce our CAD visualization product on the three largest
distributions of the UNIX® OS: H-P UNIX®, SGI Irix and SUN Solaris, during the
coming year.

Our long-term objectives are to generate steadily increasing revenues and obtain
the capital necessary to acquire or license other promising technologies. We are
also exploring several new technology opportunities for future development and
marketing enterprises.

During the Quarter ended September 30, 2002, ADVA suffered a loss from
operations of $(289,518). We funded our operating losses during this period
through the proceeds from long-term debt.

During the year ended March 31, 2002, we generated operating losses of
$(940,977). We funded our operating losses during this period through the
proceeds from long-term debt.

We do not have available creditor, bank financing or other external sources of
funding. Due to historical operating losses, our operations have not generated
positive cash flow. In order to obtain capital we may need to sell additional
shares of common stock and/ or borrow funds from private lenders, some of which
may take the form of a Convertible loan. There is no assurance if we do receive
a convertible loan we will be able to pay this money back to the lender prior to
its due date, thus having to convert the loan to stock. The Company is actively
seeking fresh capital from a pool of accredited investors, some of which are
existing investors.

Based upon the anticipated combination of an infusion of capital through low
interest loans, convertible to stock after one year (or less), capital raised
through the sale of additional stock plus anticipated revenue from joint venture
agreements with hardware and software manufacturers in the 3D, Animation and CAD
marketplaces, we believe we will have adequate funds to meet our projected cash
needs through Dec. 30, 2002.

However, should we not receive an infusion of capital, and or not execute
anticipated agreements with hardware and software manufacturers, the Company
will continue to incur additional losses and may be forced to cease operations.
No assurances can be given at this time as to the availability of the new
funding, the terms thereof, or the execution of revenue generating agreements.

Going forward, we have reduced our total number of employees to zero, now
relying on outside vendors and contract consultants for the Company's day-to-day
operation and technology development.

                                       19




PART II. OTHER INFORMATION

Item 2.   Changes in Securities

        None

Item 6.   Exhibits and Reports on Form 8-K.

        (a)   Exhibits

No.                     Description
- ---                     -----------
10.1                    Thomas Kruger Consulting Agreement

(1)                     Lagan Investments Ltd. Promissory Note previously filed
                        with the Securities and Exchange Commission on November
                        12, 2002 on Form 8-K.

(2)                     H.J. Heerema Promissory Note previously filed with the
                        Securities and Exchange Commission on November 12, 2002
                        on Form 8-K.

(3)                     Ernst R Verdonck Addendum to Consulting Agreement
                        previously filed with the Securities and Exchange
                        Commission on 10-KSB July 15, 2002.

(4)                     Anthony E Mohr Addendum to Consulting Agreement
                        previously filed with the Securities and Exchange
                        Commission on 10-KSB July 15, 2002.

(5)                     George L Down Addendum to Consulting Agreement
                        previously filed with the Securities and Exchange
                        Commission on 10-KSB July 15, 2002.

(6)                     Robert A. F. Eijkelhof Addendum to Consulting Agreement
                        previously filed with the Securities and Exchange
                        Commission on 10-KSB July 15, 2002.

(7)                     Anthony E Mohr Waver to Termination Agreement previously
                        filed with the Securities and Exchange Commission on
                        10-KSB/A 0n August 8, 2002.

(8)                     George L Down Waver to Termination Agreement previously
                        filed with the Securities and Exchange Commission on
                        10-KSB/A 0n August 8, 2002.


99.1                    Certification Pursuant to 18 A.S. C. Section 1350, as
                        Adopted Pursuant to Section 906 of the Sarbanes - Oxley
                        Act of 2002.


        (b)   Reports on Form 8-K

                  An 8-K Report was filed on November 12, 2002 during the
quarter following this report.


                                       20





                                   Signatures

In accordance with the requirements of the Exchange Act, the issuer caused this
report to be signed on its behalf by the undersigned, thereunto duly signed.


                                            /s/ Ernst R. Verdonck
                                              ------------------------
                                                Ernst R. Verdonck
                                                CEO, President and CFO

Date: November 19, 2002


EX-10.1 3 e101.htm Exhibit 10.1

                   ADVA INTERNATIONAL INC CONSULTING AGREEMENT


ADVA is a Delaware Corporations in the business of developing and marketing
software for the LINUX OS marketplace.


PREAMBLE: This is an agreement, effective as of Nov 1, 2002 between Tom Kruger
Associates of 2420 Sedley Rd., Charlotte NC 28211 ("Consultant"), and ADVA / GIG
of BTC, Suite 214 Rock Hill, SC ("Client").

PURPOSE: Client wishes to retain the services of Consultant to advise and
consult Client in capacity as a financial advisor relative to Client's
businesse(s), and Consultant is willing to provide such services.

1.       Consultant agrees, subject to Section 7, that for a period of three (3)
         months, commencing with the effective date of this Agreement, he will,
         consistent with his other obligations, render to Client such financial
         consulting services as Client may request relating to the field as set
         forth in Exhibit A.

2.       Client agrees to reimburse Consultant for such consulting services at
         the monthly rates shown In Exhibit B, attached Rates. Consultant shall
         invoice Client monthly for services rendered, and such invoices shall
         be payable upon receipt. Invoices shall include work provided and a
         brief description of the services rendered. Upon adequate
         substantiation, Client will reimburse Consultant for all reasonable
         travel and related expenses incurred by Consultant in connection with
         any requested business travel by Client. Prior written approval (direct
         email and fax shall suffice) by Client shall be required for all travel
         outside the states of North and South Carolina in connection with this
         Agreement.

3.       Consultant shall act as an independent Consultant and not as an agent
         or employee of Client and Consultant shall make no representation as an
         agent or employee of Client except as directed by the  CEO and or
         President and agreed to in writing by Consultant. See Exhibit C
         Limitation of Liability.

4.       Consultant shall be responsible for all taxes as an independent
         contractor. Consultant shall have no authority to bind Client or incur
         other obligations on behalf of Client unless otherwise directed in
         writing by the CEO and or President.

5.       Any and all improvements, inventions, discoveries, formulas, processes,
         or methods within the scope of the business activities of the Company,
         or any of its affiliates (as such term is defined in Rule 405 under the
         Securities Act of 1933) which Consultant may conceive or make during
         his consultation period with the Company shall be the sole and
         exclusive property of the Company or such affiliates. Consultant
         agrees, whenever requested to do so by the Company and at its expense,
         to execute and sign any and all applications, assignments, or other
         instruments, and to do all other things which the Company may deem
         necessary or appropriate in order to apply for patent or other
         protection in the United States or any foreign country for such
         improvements, discoveries, formulas, processes, or methods.

6.       Consultant agrees to hold all Client Proprietary Information in
         confidence and to treat the Proprietary Information with at least the
         same degree of care and safeguards that he takes with his own
         proprietary information. Consultant shall use proprietary Information
         only in connection with services rendered under this Agreement.
         Proprietary Information shall not be deemed to include information that
         (a) is in or becomes in the public domain without violation of this
         Agreement by Consultant, or (b) is already in the possession of
         Consultant, as evidenced by written documents, prior to the disclosure
         thereof by Client, or (c) is rightfully received from a third entity
         having no obligation to Client and without violation of this Agreement
         by Consultant.

7.       Consultant warrants that he is under no obligation to any other entity
         that in any way conflicts with this Agreement, that he is free to enter
         into this Agreement, and is under no obligation to consult for others
         in areas covered by this Agreement. Consultant shall not, during the
         term of this Agreement, perform consulting services for others in areas
         of LINUX software development and sales but shall have the right to
         perform consulting services for others outside of this specialty.

8.       Client or consultant may terminate this Agreement at any time on thirty
         (30) days advance written notice. Any and all equipment, computers,
         services or products provided for the Consultant by the Client are to
         be used solely in the commission of the Consultant's services for the
         Client and remain the property of the Client. Client shall not be held
         liable for any illegal use of said products or services, or use
         unrelated to Clients business, by the Consultant or any resulting legal
         action.

9.       The secrecy provisions of Section 5 hereof shall survive any
         termination of this Agreement for a period of three (3) years after
         such termination.

10.      This Agreement is not assignable by either party without the consent of
         the other.

Signed:                                                 Signed:

 /s/ Tom Kruger                                /s/ Ernst Verdonck
  ------------------------------------          ------------------------------------
For: Tom Kruger Associates (Consultant)            Ernst Verdonck
                                                   CEO and Chairman of the Board

                                                   ADVA INTERNATIONAL INC (Client)

Date:   11/01/02                                   Date:   11/01/02




                                 I.I EXHIBIT A

Consulting Services

It is anticipated that the services provided by the Consultant to the Client
shall encompass the following tasks and responsibilities. (This list should not
be considered inclusive):

1. Responsibilities

   a. Essential Duties

       i. As a financial Consultant to the CEO and President, Consultant will
coordinate the creation of business plans and help in overseeing financial
investments and expenditures and perform controller duties.

      ii. Consultant will help establish and oversee financial systems and
controls to ensure compliance for all lines of business and monitor financial
procedures to meet business objectives.

     iii. Consultant will assist in the creation, implementation and adherence
to company financial policies and procedures, government regulations, sound
accounting practices (GAAP) and tax and reporting as they relate to company
financial activities.

      iv. Consultant will advise and assist in the coordination of the
Corporation's outside auditing firm and corporate and SEC attorneys relating to
all financial and SEC reporting issues.

       v. Consultant will advise regarding potential financial liabilities faced
by the Company on all fronts, and work with the executive management team to
mitigate these liabilities, especially as situations arise which may influence
and effect the investment community.

  b. Additional Duties

      i. Assist in raising capital in private and public capital markets
including successive stages of corporate financial development.

     ii. Assist in Investor relations activities.

    iii. Advise in the management of the Corporation's insurance, financing, and
investment policies and programs.



                                 I.2 EXHIBIT B



Compensation Rates & Rules

Consultant Fees & Expenses

1. Payments to the Consultant by the Client will be at the rate of $75.00 per
hr. US ($6450.00) per month based on a minimum of 86 hours per month. Additional
hrs. at Client's request exceeding 86 hrs per month will be reimbursed at a rate
of $100.00 per hr.

2. Consultant will provide a monthly invoice at the end of month worked
outlining efforts undertaken over this period, Invoice shall be payable upon
receipt by Client.

3. Expenses will be billed by Consultant and paid by the Client separately.

4. Monthly status briefs in "bullet point" format shall be provided to the
Client along with invoices.



Stock Options*

6,250 option shares vested January 31,2003

37,500 shares November 1, 2002  for signing new contract

*Consultant will be included in the ADVA International 2001 Stock Option Plan as
amended. The exercise price shall be based on the per share market price on the
date on which the options are granted by the Board of Directors (the "Grant
Date"). Should the stock be non-trading or there is no bid price available at
the Grant Date, the exercise price shall be set at the lesser of the last price
quoted for ADII.OB on the Nasdaq OTB:BB or the first price set at the
recommencement of trading on the same or other bourse.



                       Exhibit C: Limitation of Liability




This Exhibit, effective as of Nov 1, 2002, by and between ADVA International
Inc. and Tom Kruger Associates relative to an Agreement between the same dated
Nov 1, 2002 ("Consulting Agreement");

The parties agree that:

1.       Effect of Exhibit.  This Exhibit is a modification  of the Agreement
only to the extent specifically provided. If there is any conflict between the
terms of this Exhibit and the terms of the Agreement, the terms of this Exhibit
shall control. Otherwise the terms of the Agreement shall remain in full force
and effect as provided therein. Terms used in this Exhibit that are defined in
the Agreement shall have the meanings given to them in the Agreement.

2.       Limitation of Liability. To the maximum extent permitted by applicable
law, in no event shall the Consultant or his suppliers be liable for any
special, incidental, indirect, or consequential damages whatsoever (including,
without limitation, damages for loss of business profits, business interruption,
loss of business information, or any other pecuniary loss) arising out of the
failure to provide advice, support services or products, even if the Consultant
has been advised of the possibility of such damages. In any case, the
Consultant's entire liability under any provision of this Agreement shall be
limited to the monetary fees charged for the specific advice, service or product
in question as provided by this Agreement.

3.       Limitation of Claims. No claim, regardless of form, which in any way
arises out of this Agreement or the parties' performance of this Agreement may
be made, nor action based upon such a claim brought, by either party more than
one (1) year after the termination of this agreement or basis for the claim
becomes known to the party desiring to assert it, which ever is shorter.

4.       Force Majeure. Each party's performance of this Agreement is subject to
interruption and delay due to causes beyond its reasonable control such as acts
of God, acts of any government, war or other hostility, the elements, fire,
explosion, power failure, equipment failure, industrial or labor dispute,
inability to obtain necessary supplies, health, personal emergencies and the
like. In the event of such interruption or delay, the period of performance
shall be extended for a period of time equal to the interruption or delay;
provided, however, that, if any such interruption or delay continues for more
than ninety (90) days, the party whose performance is not affected may terminate
this Agreement immediately upon giving written notice of termination to the
other party.

5.       Assignment. Neither this Agreement nor any part or portion hereof shall
be assigned, sublicensed or otherwise transferred by either party without the
other party's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.

6.       Severability. Should any provision of this Agreement be held to be
void, invalid, unenforceable or illegal by a court, the validity and
enforceability of the other provisions shall not be affected thereby.

7.       Non-Waiver. Failure of either party to enforce any provision of this
Agreement shall not constitute or be construed as a waiver of such provision nor
of the right to enforce such provision.

8.       Notices. All  notices required to be given under this Agreement shall
be given in writing by personal delivery or by certified or registered mail to
ADVA International Inc. 454 S Anderson Rd. Suite 214 Rock Hill, SC 29730, or
such other address as (Client) may designate and to Tom Kruger Associates 2420
Sedley Rd. Charlotte,NC 28211, or such other address as Consultant may
designate.

9.       Choice of Law. This Agreement shall be governed by and interpreted
under the laws of the state of South Carolina.

10.      Headings and Captions. The headings and captions contained in this
Agreement are inserted for convenience only and shall not constitute a part
hereof.

         In WITNESSOF, the parties have executed this Exhibit:




Signed:                                      Signed:
       -------------------------------              --------------------------
              [ENTER FULL NAME]                            (Client)



Date:                                                           Date:
       -------------------------------              --------------------------


EX-99.1 4 e991.htm Exhibit 99.1
                             ADVA INTERNATIONAL INC.

                            CERTIFICATION PURSUANT TO
                                18 U.S.C.ss.1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the filing by ADVA International Inc. (the "Company") of its
Report on Form 10-KSB/A for the period ending September 30, 2002 with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Ernst
R. Verdonck, the Chief Executive Officer and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C.ss.1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

         (1)      The Report fully complies with the requirements of
                  section 13(a) or 15(d) of the Securities Exchange Act
                  of 1934; and

         (2)      The information contained in the Report fairly presents,
                  in all material respects, the financial condition and result
                  of operations of the Company.




                                                   /s/ Ernst R. Verdonck
                                                      ------------------------
                                                       Ernst R. Verdonck
                                                       Chief Executive Officer and
                                                       Chief Financial Officer
Date:  November 19, 2002

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