-----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, FXR1AQWXP08yvM4SXSjsWnZ1ky7Ca3jbcBHhJRv6KfIsOSrovoohMCaBnQLncLgj AWnzWvvxwAsTNwwWoRvJNw== 0000909143-98-000099.txt : 19980717 0000909143-98-000099.hdr.sgml : 19980717 ACCESSION NUMBER: 0000909143-98-000099 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980716 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TTI INDUSTRIES INC /TX/ CENTRAL INDEX KEY: 0000759401 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 751939021 STATE OF INCORPORATION: TX FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13041 FILM NUMBER: 98666964 BUSINESS ADDRESS: STREET 1: 3838 OAK LAWN AVENUE STREET 2: SUITE 1000 CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145201702 MAIL ADDRESS: STREET 1: 3838 OAK LAWN AVENUE STREET 2: SUITE 1000 CITY: DALLAS STATE: TX ZIP: 75219 FORMER COMPANY: FORMER CONFORMED NAME: ENVIRONMENTAL PLUS INC /TX/ DATE OF NAME CHANGE: 19960801 FORMER COMPANY: FORMER CONFORMED NAME: KINLAW ENERGY PARTNERS CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HAS OIL & GAS INC DATE OF NAME CHANGE: 19910114 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 31, 1998. [ ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________. Commission File Number: 0-13041 ------- TTI INDUSTRIES, INCORPORATED (F/K/A ENVIRONMENTAL PLUS, INC.) - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Texas 75-1939021 - --------------------------------- ------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 3838 Oak Lawn Avenue, Dallas, Texas 75219 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (214) 520-1702 - ----------------------------------------------------------------- (Registrant's telephone number, including area code) ENVIRONMENTAL PLUS, INC., Route 1, Box 41, Overton, Texas 75684 - ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: 4,043,354 shares of Common Stock, no par value - ----------------------------------------------------------------- (The number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date) PART I - FINANCIAL INFORMATION Item 1. Financial Statements: TTI INDUSTRIES, INCORPORATED (F/K/A ENVIRONMENTAL PLUS, INCORPORATED) AND SUBSIDIARIES Consolidated Balance Sheets May 31, 1998 (Unaudited) and August 31, 1997
May 31, August 31, 1998 1997 - ----------------------------------------------------------------------------------- ASSETS CURRENT Cash $ 12 $ 19,226 Accounts receivable - trade -- 12,880 Note receivable -- 55,210 Inventory -- 53,128 Other 20,000 9,495 --------- --------- Total current assets 20,012 149,939 NOTE RECEIVABLE -- 195,184 PROPERTY, PLANT AND EQUIPMENT - NET -- 136,059 OTHER Goodwill and organization costs- net -- -- --------- --------- $ 20,012 $ 481,182 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 20,012 71,083 Accrued expenses -- 5,605 Line of credit and term notes -- 60,240 Notes payable and due to related parties -- 37,809 --------- --------- Total Current Liabilities $ 20,012 $ 174,737 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, (100,000,000 authorized; $1.00 par, 1,024,000 shares issued and outstanding, respectively) -- 466,600 Common stock (100,000,000 shares authorized, $.001 par, 41,049,000 shares issued and outstanding as of August 31, 1997 and 4,043,354 shares issued and outstanding) 40,328 40,328 Paid-in Capital 960,512 644,084 Accumulated deficit (1,000,840) (844,567) --------- --------- Total Stockholders' Equity -- 306,445 --------- --------- $ 20,012 481,182 ========= =========
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Operations
Three months ended Nine months ended May 1998 May 1997 May 1998 May 1997 - ------------------------------------------------------------------------------------------- REVENUES: Sales $ 0 $ 240,574 $ 18,272 $ 482,381 Interest 319 9,717 16,394 25,828 ---------- ---------- --------- --------- Total 319 250,291 34,666 508,209 COST OF SALES - 183,436 10,522 389,296 GENERAL AND ADMINISTRATIVE Depreciation and amortization 2,502 4,578 8,927 13,732 Payroll taxes - - 338 - Interest and bank charges 1,082 3,621 5,649 6,764 Supplies - 241 699 924 Professional fees 20,159 11,284 65,141 66,127 Taxes and licenses 1,533 980 2,063 1,226 Utilities and telephone 89 1,318 1,432 3,158 Salaries and benefits - 37,500 10,806 112,500 Travel - 1,007 650 1,690 Insurance - - 5,107 - Bad Debts 69,083 - 69,083 - Other Administrative Expenses 9,753 3,895 10,522 4,795 ---------- --------- ---------- --------- Total General and Administrative 104,201 64,424 180,417 210,917 NET INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM (103,882) 2,431 (156,273) (92,004) INCOME TAXES - - - - NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (103,882) 2,431 (156,273) (92,004) EXTRAORDINARY ITEM - FORGIVENESS OF DEBT - - - - NET INCOME (LOSS) (103,882) 2,431 (156,273) (92,004) PER SHARE DATA: Net income (loss) per share (.03) - - - Weighted Average shares outstanding 4,043,354 40,329,136 4,043,354 40,329,136
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Cash Flows
Three Months ended Nine Months ended May 1997 May 1997 May 1998 May 1997 - -------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Income (loss) from operations $(103,882) $ 2,431 $(156,273) $ (92,004) Adjustments to reconcile income (loss) from operations to cash provided by (used in) operating activities: Depreciation and amortization 2,502 4,578 8,927 13,732 Imputed officers' salaries - 35,679 - 92,342 Reserve for bad debts 69,083 - 69,083 - Change in assets and liabilities: Increase in accounts receivable - trade 344 (174,730) 9,506 (169,180) (Increase) decrease in inventory 47 (3,389) (200) 18,088 Decrease in other assets - (1,536) (15,315) 12,836 Increase (Decrease) in accounts payable and accrued expenses (43,233) (25,167) (27,559) (23,707) --------- --------- --------- ---------- Net cash flows used in operating activities (75,179) (162,134) (111,831) (147,893) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of capital assets - (375) - - Shareholder contribution to capital 30,491 - 30,491 - Sale of Subsidiaries (3,205) - (3,205) - Net Cash Flows Provided by (used in) Investing Activities 27,286 (375) 27,286 (375) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from line of credit and notes payable - 150,000 - 150,000 Retirement of debt - - (39,785) - Shareholder loans 34,132 - 34,132 - Collection of note receivable 6,345 - 75,984 - Loan on note receivable - - 65,331 (10,000) Net cash flows provided by financing activities 40,477 167,451 65,331 159,884 Increase (Decrease) in Cash (7,376) 4,942 (19,214) 11,616 Cash, beginning of period 7,388 17,235 19,226 10,561 --------- --------- --------- ---------- Cash, end of period $ 12 $ 22,177 $ 12 $ 22,177
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Notes to Financial Statements May 31, 1998 - ---------------------------------------------------------------- NOTE 1 - STATEMENT BY MANAGEMENT CONCERNING INTERIM FINANCIAL INFORMATION The financial information for May 31, 1998, included herein is unaudited and does not include all information and footnotes required by generally accepted accounting principles for complete financial statements; however, such information reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period. It is suggested, however, that the accompanying financial statements be read in conjunction with the financial statements and notes thereto incorporated by reference in the Company's August 31, 1997 Annual Report on Form 10-K. NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION During the nine months ended May 31, 1998, the Company used cash to pay interest expense in the amount of $5,766. No cash was paid for income taxes. NOTE 3 - NONCASH INVESTING AND FINANCING TRANSACTIONS The Company sold all capital stock of its wholly owned subsidiary, Gulf Coast Towers and Fire Zap, Inc., in exchange for all of the outstanding shares of the Company's Series A convertible preferred stock, $1.00 par value per share, which was issued in connection with the Company's acquisition of such subsidiaries. The capital stock of the wholly owned subsidiaries was sold at the book value of the net assets of the respective companies, therefore no gain or loss was recognized by the Company. The transaction resulted in a $466,600 charge to the preferred stock account and a $265,936 credit to additional paid- in capital. All previously outstanding preferred shares were canceled. Cash and cash equivalents included in the net assets of the subsidiaries at the time of the exchange totaled $3,205. The Company adopted amendments to the Articles of Incorporation to effect a reverse stock split in which each share of common stock of the Company currently issued and outstanding or held in treasury would be reclassified and exchanged into one-tenth of a share of new common stock of the Company, thereby reducing the number of issued and outstanding shares of common stock of the Company from 40,433,549 to 4,043,354, and the par value of each share of the Company's common stock was increased from $0.001 to $0.01 per share. The Company agreed to grant to a shareholder owning fifty-eight percent of the Company's common stock a warrant to acquire up to 1.5 million shares of common stock (calculated following the reverse stock split) with an exercise price of $0.04445 per share in exchange for $20,000. The transaction resulted in a $20,000 credit to additional paid-in capital and the balance sheet at May 31, 1998, includes, in other current assets, a receivable for $20,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS: GENERAL - ------- The Company has incurred operating losses over the last two years which raised substantial doubt about the Company's ability to continue as a going concern. Effective January 15, 1998, and as part of management's plan to have the Company continue to operate in the foreseeable future, a Stock Purchase Agreement was entered into among Terminator Technologies, Inc. ("TTI"), a Texas corporation, the Company and various shareholders of the Company (the "Agreement"). The transaction contemplated by the Agreement and the terms thereof, closed on May 6, 1998. As a result of the Agreement, TTI and its designees became the new controlling shareholder(s) and control group of the Company, through the purchase of the majority shares of the Company from certain shareholders, including past management shareholders. As part of the Agreement, among other things, the Company consummated a reverse stock split of its shares on the bases of 1-for-10. As a result of the reverse split and the transaction contemplated thereby, the Company's outstanding shares decreased from 40,433,549 ($.001 par value) shares of common stock and 749,000 ($1.00 par value) shares of preferred stock issued and outstanding to zero (0) issued and outstanding shares of preferred stock and 4,043,354 ($.01 par value) shares of common stock issued and outstanding. TTI and its designees own approximately 2,362,282 shares (58%) of the issued and outstanding common stock. The selling shareholders and the Company received $105,003 and $20,000, respectively, in proceeds from the sale of shares and a warrant to TTI. In addition, pursuant to the Agreement, and with shareholder approval, the Company sold substantially all of its assets to Mr. George Davis in exchange for Mr. Davis' transfer to the Company of 599,000 shares of preferred ($1.00 par value) stock by Mr. Davis. Additionally, TTI purchased from the Company a warrant to purchase up to 1,500,000 additional common shares at $.04445 per share. In addition, as a result of the transactions contemplated by the Agreement, and with the Shareholder approval, the Company changed its name to TTI Industries, Inc. On May 6, 1998, at a duly convened meeting of the Company's Board of Directors, Messrs. Davenport and White resigned as officers and directors of the Company, Mr. Davis resigned as President of the Company, and Messrs. Frank Harrison and Joe Nicholson were elected as directors and Mr. Harrison was elected as President and Chief Executive Officer of the Company. A copy of the Agreement between TTI, the Company and certain of its shareholders has been filed with the Company's Annual Report on Form 10-KSB for the year ended August 31, 1997 and is specifically incorporated herein by reference. At a duly noticed and conducted special meeting of the shareholders of the Company held on April 17, 1998, the shareholders approved the following proposals by an affirmative vote of 33,842,837 and 32,701,991, respectively: 1. A proposal to approve and adopt amendments to the Articles of Incorporation of the Company to effect a reverse stock split in which each share of common stock of the Company currently issued and outstanding or held in the treasury would be reclassified and exchanged into one-tenth (1/10) of a share of new Common Stock of the Company thereby reducing the number of issued and outstanding shares of Common Stock of the Company from 40,433,459 to 4,043,354 (adjusted for the rounding of any fractional shares up to the nearest whole share), and the par value of each share of the Company's Common Stock would be increased from $0.001 to $0.01 per share, and (ii) change the name of the Company to "TTI Industries, Incorporated."; and 2. A proposal to approve the Company's sale of substantially all of its assets resulting from the sale of the capital stock of (a) Gulf Coast Towers, Inc., a wholly owned subsidiary of the Company, to George Davis, Chairman of the Board of the Company, in exchange for all of his outstanding shares (599,000) of the Company's Series A convertible preferred stock, $1.00 par value per share, which were issued in connection with the Company's acquisition of the assets currently operated by GCT from Mr. Davis, and (b) FireZap, Inc., a wholly owned subsidiary of the Company, to H. Wayne Franklin in exchange for all of his outstanding shares (150,000) of Company Preferred Stock which were issued in connection with the Company's acquisition of FZI from Mr. Franklin. On April 30, 1998, the Company completed the transactions regarding FZI and GCT as referenced in Proposal 2 adopted by the shareholders on April 17, 1998. Effective May 1, 1998 the Company changed its name to TTI Industries, Incorporated, effected the 10 to 1 reverse stock split, and changed its trading symbol to TTIA. The transaction which is the subject of the Agreement between TTI, the Company and certain of its shareholders closed on May 6, 1998. The Company's results of operations for the quarter and nine months ended May 31, 1998 were significantly affected by the Company's discontinuation of the business of construction and repair of industrial cooling towers ("Past Business") and the consummation of the Agreement between certain company shareholders and Terminator Technologies, Inc., and the sale of substantially all of its assets to Mr. George Davis in exchange for Mr. Davis' transfer to the Company of 599,000 shares of preferred ($1.00 par value) stock (the "TTI Transaction"). Effective May 6, 1998, the TTI Transaction was closed and subsequent to that date and the close of the quarter ended May 31, 1998 the Company did not engage in any reverse or income producing activities. As a result of the TTI Transaction, new management was appointed the Company discontinued existing operations, changed its name to TTI Industries, Inc., and commenced plans for new operations. The Company intends to focus operations in the acquisition, production and sale of innovative pest control products for home and garden with an emphasis on products that are (i) safe for children, pets and wildlife, (ii) environmentally friendly, (iii) low cost, and (iv) are packaged in attractive animal-shaped designs. There can be no assurance that the Company will be successful in this effort. Virtually all of the Company's revenues for the quarter and nine months ended May 28, 1998 were derived from operations resulting from the operations discontinued during the quarter. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's working capital (deficit) at May 31, 1998 was zero (0) compared to $250,191 at May 31, 1997 and $(24,798) at August 31, 1997. Cash and cash equivalent decreased to $12 at May 31, 1998 as compared to $22,177 at May 31, 1997 and $19,226 at August 31, 1997. The decrease in cash and cash equivalents for the quarter and nine months ended May 31, 1998 was primarily the result of the TTI Transaction and the Company's discontinuation of its Past Business. As a result of the TTI Transaction and the cessation of the Company's Past Business (i) the Company's trade accounts receivable at May 31, 1998 were reduced to zero (0) compared to 216,430 at August 31, 1997, and $12,880 at May 31, 1997, (ii) the Company's inventory levels were zero (0) at May 31, 1998 compared to $25,166 at May 31, 1997 and $53,128 at August 31, 1997, and (iii) trade accounts payable were $20,012 at May 31, 1998, compared to zero (0) at May 31, 1997 and 71,083 at August 31, 1997. The Company made no capital acquisitions or improvement expenditures during the nine-month period ended May 31, 1998. The Company has no present ability to finance proposed operations and will seek a capital infusion to do so. The Company has no present arrangements for such financing and there can be no assurance that it can make such arrangements. RESULTS OF OPERATIONS - --------------------- As a result of the TTI Transaction revenue from sales and other sources for the quarter and nine months ended May 31, 1998 were $319 and $34,660, respectively compared to $250,291 and $508,209 respectively for the same periods of fiscal 1997. Similarly, again as the result of the TTI Transaction, the costs of sales for the quarter ended May 31, 1998 was -0- as compared to $183,436 during the same period of fiscal 1997. The costs of sales for the nine months ended May 31, 1998 was $10,522 as compared to $389,296 for the same period in fiscal 1997. During 1996, the officers of the Company determined that they would not take a salary until cash flow from operations permitted them to pay each of the three officers $50,000. Salaries and benefits for the quarter ended May 31, 1998 was -0- as compared to an imputed $37,500 for the three months ended May 31, 1997. The SEC staff has determined that the historical statement of operations should reflect all costs of doing business. Accordingly, officers' salaries for 1997 and 1998 were imputed based on the actual number of months in operation during those years. No officers' salaries were paid during the quarter ended May 31, 1998. General and Administrative expenses, which includes salaries and benefits discussed above, increased during the quarter ended May 31, 1998 to $104,201 from $64,424 during the quarter ended May 31, 1997. This increase is attributable to allocation of bad debts. The Company has no material commitments for capital expenditures as of the end of its latest fiscal period. As further discussed above, the Company has changed the focus of its operations. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. - ---------------------------------------------------- Forward-looking statements in this report, including without limitation, statements relating to the adequacy of the Company's resources and any anticipated changes on the Company's business following the consummation of the Stock Purchase Agreement, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, potential quarterly fluctuation in sales; risks associated with acquisitions and expansion, and other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. YEAR 2000 COMPLIANCE - -------------------- The Company is aware of the issues associated with the programming code in existing computer systems and software as the millennium (year 2000) approaches. The Company intends to address problems with the "year 2000" issue during the fiscal year ending August 31, 1998. Management has not yet assessed the "year 2000" compliance expense and related potential effect on the Company's earnings. PART II Items 1. - 5. No "other" information required. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27.1 Financial Data Schedule (filed herewith) (b) Reports on Form 8-K. No Reports on Form 8-K were filed by the Company during the quarter ended May 31, 1998. 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. TTI INDUSTRIES, INC. July 15, 1998 /s/ FRANK HARRISON ------------------------------------- Chief Executive Officer and President INDEX TO EXHIBITS ------------------ EXHIBIT NO. DOCUMENT DESCRIPTION ----------- -------------------- 27.1 Financial Data Schedule (filed herewith) EX-27.1 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF TERMINATOR TECHNOLOGIES, INCORPORATED FOR THE NINE MONTHS ENDED MAY 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS AUG-31-1998 SEP-01-1997 MAY-31-1998 12 0 0 0 0 20,012 0 0 20,012 20,012 0 0 0 40,328 (40,328) 20,012 18,272 34,666 10,522 10,522 180,417 0 0 (156,273) 0 (156,273) 0 0 0 (156,273) 0 0 Includes $5,649 in interest expense. $5,649 of Interest Expense is included in "Other Expenses" line item.
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