-----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, UxsitSmJideM1Ux7CzbP41RI0Axlz28XeJTxNN1v9RPRE/DLDrpJuUJUzH7JrPDE dyoDBS8dVruX7k5kTh69TQ== 0001047469-98-018061.txt : 19980506 0001047469-98-018061.hdr.sgml : 19980506 ACCESSION NUMBER: 0001047469-98-018061 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980505 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRONMENTAL PLUS 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: 98609976 BUSINESS ADDRESS: STREET 1: 2995 LBJ FREEWAY STREET 2: SUITE 200 CITY: DALLAS STATE: TX ZIP: 75234 BUSINESS PHONE: 2144040270 MAIL ADDRESS: STREET 1: KINLAW ENERGY PARTNERS CORP STREET 2: 2995 LBJ FREEWAY SUITE 200 CITY: DALLAS STATE: TX ZIP: 75234 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 FEBRUARY 28, 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 ------- ENVIRONMENTAL PLUS, INCORPORATED - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Texas 75-1939021 - ----------------------------------------------------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) Route 1, Box 41, Overton, Texas 75684 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (903) 834-6965 - ----------------------------------------------------------------- (Registrant's telephone number, including area code) - ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by 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: 40,371,873 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: ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Consolidated Balance Sheets February 28, 1998 (Unaudited) and August 31, 1997
February 28, August 31, 1998 1997 - ----------------------------------------------------------------------------------- ASSETS CURRENT Cash $ 7,388 $ 19,226 Accounts receivable - trade 3,718 12,880 Note receivable 29,412 55,210 Inventory 53,375 53,128 Other 24,810 9,495 --------- -------- Total current assets 118,703 149,939 NOTE RECEIVABLE 156,343 195,184 PROPERTY, PLANT AND EQUIPMENT - NET 129,634 136,059 OTHER Goodwill and organization costs- net -- -- --------- --------- $ 404,680 $ 481,182 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 90,719 71,083 Accrued expenses 1,643 5,605 Line of credit and term notes 57,234 60,240 Notes payable and due to related parties 1,030 37,809 --------- --------- Total Current Liabilities $ 150,626 $ 174,737 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, (100,000,000 authorized; $1.00 par, 1,024,000 shares issued and outstanding, respectively) 466,600 466,600 Common stock (100,000,000 shares authorized, $.001 par, 40,371,873 shares issued and outstanding) 40,328 40,328 Paid-in Capital 644,084 644,084 Accumulated deficit (896,958) (844,567) --------- --------- Total Stockholders' Equity 254,054 306,445 --------- --------- $ 404,680 481,182 ========= =========
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Operations
Three months ended Six months ended February 1998 February 1997 February 1998 February 1997 - ---------------------------------------------------------------------------------------------------------------- REVENUES: Sales $ 569 $ 20,054 $ 18,272 $ 241,807 Interest 7,507 8,611 16,075 16,111 ---------- ---------- --------- --------- Total 8,076 28,665 34,347 257,918 COST OF SALES - (4,616) 10,522 205,860 GENERAL AND ADMINISTRATIVE Depreciation and amortization 3,212 4,670 6,425 9,154 Payroll taxes - - 338 - Interest and bank charges 1,745 2,120 4,567 3,143 Supplies 512 80 699 684 Professional fees 41,422 53,943 44,982 54,843 Taxes and licenses - 9 530 - Utilities and telephone 151 465 1,343 1,840 Salaries and benefits - 37,500 10,806 75,000 Travel - - 650 683 Insurance 1,252 - 5,107 - Other Administrative Expenses - - 769 1,146 ---------- --------- ---------- --------- Total General and Administrative 48,294 98,767 76,216 146,493 NET INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM (40,218) (65,506) (52,391) (94,435) INCOME TAXES - - - - NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (40,218) (65,506) (52,391) (94,435) EXTRAORDINARY ITEM - FORGIVENESS OF DEBT - - - - NET INCOME (LOSS) (40,218) (65,506) (52,391) (94,435) PER SHARE DATA: Net income (loss) per share - - - - Weighted Average shares outstanding 40,371,873 40,371,873 40,329,136 40,329,136
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Cash Flows
Three Months ended Six Months ended February 1997 February 1996 February 1998 February 1997 - -------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Income (loss) from operations $ (40,218) $ (65,506) $ (52,391) $ (94,435) Adjustments to reconcile income (loss) from operations to cash provided by (used in) operating activities: Depreciation and amortization 3,212 4,669 6,425 9,153 Imputed officers' salaries - 19,162 - 56,662 Change in assets and liabilities: Increase in accounts receivable - trade 15,860 204,416 9,162 5,550 (Increase) decrease in inventory - (21,777) (247) 21,479 Decrease in other assets (18,875) 11,872 (15,315) 14,372 Increase (Decrease) in accounts payable and accrued expenses 39,965 (138,472) 15,674 1,460 --------- --------- --------- -------- Net cash flows used in operating activities (156) 14,364 (36,692) 14,241 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of capital assets - - - - CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from line of credit and notes payable - - - - Retirement of debt (18,125) - (39,785) - Collection of note receivable 23,113 2,433 64,639 2,433 Loan on note receivable - (10,000) - (10,000) Net cash flows provided by financing activities 4,988 (7,567) 24,854 (7,567) Increase (Decrease) in Cash 4,832 6,797 (11,838) 6,674 Cash, beginning of period 2,556 10,438 19,226 10,561 --------- --------- --------- --------- Cash, end of period $ 7,388 $ 17,235 $ 7,388 $ 17,235
ENVIRONMENTAL PLUS, INCORPORATED AND SUBSIDIARIES Notes to Financial Statements November 30, 1997 - ------------------------------------------------------------------------- NOTE 1 - STATEMENT BY MANAGEMENT CONCERNING INTERIM FINANCIAL INFORMATION The financial information for February 28, 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 (consisting solely of normal recurring 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 six months ended February 28, 1998, the Company used cash to pay interest expense in the amount of $5,766. No cash was paid for income taxes. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS: GENERAL - ------- The Company's results of operations for the quarter ended February 28, 1998 and the six months ended February 28, 1998 were significantly affected by the Company's acquisition in July, 1996 of substantially all of the assets of Gulf Coast Cooling Tower Services, Inc. ("GCCST"), a company engaged in the industrial cooling tower services business. Virtually all of the Company's revenues for the quarter and six months ended February 28, 1998 were derived from operations resulting from the GCCST acquisition. Gulf Coast Cooling Towers, Inc., a wholly owned subsidiary of the Company ("GCCT"), undertakes the Company's business of construction and repair of industrial cooling towers, primarily in Texas, Louisiana and Arkansas. GCCT entered into a maintenance contract with a Texas public utility company which contract continued through December 31, 1997. This contract did not provide sufficient revenue to GCCT during the quarter or six months ended February 28, 1998 to service all debt and pay all expenses related to GCCT's business. GCCT is engaged in active bidding for similar contracts with other utility and petro chemical companies. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's working capital deficit at February 28, 1998 was $<31,923> compared to $207,878 at February 28, 1997 and $(24,798) at August 31, 1997. Cash and cash equivalent decreased to $7,338 at February 28, 1998 as compared to $17,235 at February 28, 1997 and $19,226 at August 31, 1997. The decrease in cash and cash equivalents for the quarter ended February 28, 1998 was primarily the result of reduced revenue. The decrease in cash and cash equivalent for the six months ended February 28, 1998 was the result of the decrease in revenues and a reduction in trade accounts payable during that period. During the quarter ended February 28, 1998, cash was used to fund normal working capital requirements, including efforts to market GCCT business. The trade accounts receivable at February 28, 1998 was $3,718 compared to $41,700 at February 28, 1997 and $12,880 at August 31, 1997. The Company's inventory levels were at $53,375 at February 28, 1998 an increase from $21,777 at February 28, 1997 and $53,128 at August 31, 1997, respectively. Trade accounts payable at February 28, 1998 increased to $90,719 compared to $ 31,615 at February 28, 1997 and $71,083 at August 31, 1997 as a result of decreased sales and payments made during the quarter and the six-month period. The Company made no capital acquisitions or improvement expenditures during the six-month period ended February 28, 1998. While the Company is not anticipating any capital expenditures over the next two quarters with respect to its present operations, any funding for unexpected capital expenditures or improvements will be paid from cash flows generated through operating activities or additional sources of financing, if available. See "Subsequent Event." No significant disposition of equipment occurred during the six-month period ended February 28, 1998. The Company plans to sell substantially all of it assets during the next three months. See "Subsequent Event." Based upon current operations and internally generated cash flows, management believes that adequate resources will be available to meet current and future requirements. RESULTS OF OPERATIONS - --------------------- As discussed above, GCCT has utilized the assets acquired from GCCST to continue the Company's business. GCCT generated revenues during the quarter ended February 28, 1998 pursuant to the maintenance contract with a Texas public utility company. As discussed above, the maintenance contract continued through December 31, 1997. FZI experienced virtually no activity in the quarter and six month period ended February 28, 1998, and contributed virtually no income towards the Company's revenues for the quarter. Revenue from sales and other sources for the quarter ended February 29, 1998 was $569 and $7,507, respectively compared to $20,054 and $8,611 in the same period of fiscal 1997. Revenues from sales and other sources for the six-months ended February 28, 1998 was $18,272 and $16,075, respectively, compared to $241,807 and $16,111, respectively for the six months ended February 28, 1997. The decrease in sales revenue reflects a decline in the business operations of GCCT. The costs of sales for the quarter ended February 28, 1998 was -0- as compared to $(4,616) during the same period of fiscal 1997. The costs of sales for the six months ended February 28, 1998 was $10,522 as compared to $205,860 for the same period in fiscal 1997. The decrease in costs of sales is attributable to the decrease in revenues during such periods. 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 February 28, 1998 was -0- as compared to an imputed $37,500 for the three months ended February 28, 1997. The SEC staff has determined that the historical statement of operations should reflect all costs of doing business. Accordingly, officers' salaries for 1996 were imputed based on the actual number of months in operation in 1996. No officers' salaries were paid during the quarter ended February 28, 1998. General and Administrative expenses, which includes salaries and benefits discussed above, decreased during the quarter ended February 28, 1998 to $48,294 from $98,787 during the quarter ended February 28, 1997. This decrease is attributable to decreased sales activities during such periods. The Company has no material commitments for capital expenditures as of the end of its latest fiscal period. As further discussed below, the Company intends to change the focus of its operations. SUBSEQUENT EVENT - ---------------- The Company has incurred operating losses over the last two years which raised substantial doubt about the Company's ability to continue as a going concern. Effective January 15, 1998, and as part of management's plan to have the Company continue to operate in the foreseeable future, a Stock Purchase Agreement was entered into among Terminator Technologies, Inc. ("TTI"), a Texas corporation, the Company and various shareholders of the Company (the "Agreement"). According to the Agreement, TTI or its designee will become the new controlling shareholder(s) and control group of the Company, through the purchase of the majority shares of the Company from certain shareholders, including present management shareholders. The Agreement is subject to completion and satisfaction of several covenants and conditions as more fully set out in the Agreement. As part of the conditions, among other things, the Company will be required to consummate a reverse stock split of its shares on the bases of 1-for-10. The Company currently has 40,433,549 ($.001 par value) shares of common stock and 749,000 ($1.00 par value) shares of preferred stock issued and outstanding. After the reverse stock split and as part of the Agreement, the Company will have zero (0) issued and outstanding shares of preferred stock and 4,043,354 ($.01 par value) shares of common stock issued and outstanding. TTI or its designee will own approximately 2,362,282 shares (58%) of the issued and outstanding common stock. The selling shareholders and the Company will receive $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 subject to shareholder approval, the Company will sell 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 presently owned by Mr. Davis. Additionally, TTI will purchase from the Company a warrant to purchase up to 1,500,000 additional common shares at $.04445 per share. TTI, a Texas corporation, has virtually no business operations. TTI plans to operate as a holding company and through subsidiaries, none of which have yet been formed, acquire rights to develop and market inventions, none of which have yet been acquired. While TTI or its designees would become controlling shareholders of the Company upon completion and closing of the Agreement with the Company, and while it is not obligated by the Agreement to do so, the Company believes that TTI intends to conduct its own ongoing operations through 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 and is specifically incorporated herein by reference. The transaction which is the subject of the Agreement between TTI, the Company and certain of its shareholders is scheduled to close between April 30, 1998 and May 5, 1998. 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. "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 (if any) 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 November 30, 1997. 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. ENVIRONMENTAL PLUS, INCORPORATED April 28, 1998 /s/ GEORGE DAVIS ------------------------------------ George Davis, Chairman of the Board of Directors EX-27.1 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ENVIRONMENTAL PLUS, INCORPORATED FOR THE QUARTER ENDED FEBRUARY 28, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS AUG-31-1998 DEC-01-1997 FEB-28-1998 7,388 0 3,718 0 53,375 118,703 129,634 3,212 404,680 150,626 0 0 466,600 40,328 (254,054) 404,680 569 8,076 0 0 48,294 0 5,766 (40,218) 0 (40,218) 0 0 0 (40,218) 0 0
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