-----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, WsSdDrCSGwhdFWED/qfThmKdsPB39u3H89K0n6zZwtC9wS3YF/7EgOyozagQ2KJ8 lyMv0adgUVKE74yytcLnNw== 0000917253-99-000001.txt : 19990125 0000917253-99-000001.hdr.sgml : 19990125 ACCESSION NUMBER: 0000917253-99-000001 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIROMETRICS INC /DE/ CENTRAL INDEX KEY: 0000917253 STANDARD INDUSTRIAL CLASSIFICATION: 3823 IRS NUMBER: 570941152 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-23892 FILM NUMBER: 99508476 BUSINESS ADDRESS: STREET 1: 9229 UNIVERSITY BLVD CITY: CHARLESTON STATE: SC ZIP: 29406 BUSINESS PHONE: 8035539456 MAIL ADDRESS: STREET 1: 9229 UNIVERSITY BLVD CITY: CHARLESTON STATE: SC ZIP: 29406 10QSB/A 1 ENVIROMETRICS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB/A (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended September 30, 1998 Commission file Number 0-23892 ENVIROMETRICS, INC. (Exact name of registrant as specified in its charter.) DELAWARE 57-0941152 (State or other jurisdiction of I.R.S. Employer incorporation or organization) Identification No.) 9229 UNIVERSITY BOULEVARD CHARLESTON, SC 29406 (Address of principal executive offices) Registrant's telephone number, including area code: (843) 553-9456 Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ ] NO [X] As of September 30, 1998 the Registrant had outstanding 3,012,686 shares of common Stock. Transitional small business disclosure format (check one): YES [ ] NO [X] INDEX PART I. FINANCIAL INFORMATION Page # Item 1. Financial Statements Condensed Consolidated Balance Sheet at September 30, 1998 and December 31, 1997 2 Condensed Statement of Operations for the Third Quarter ended September 30, 1998 and 1997 3 Condensed Statement of Cash Flows for the Third Quarter ended September 30, 1998 and 1997 4 Notes to Consolidated Financial Statements 5-6 Item 2.Management's Discussion and Analysis of Results of Operations and Financial Conditions 7-11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 5. Other Information 12 Item 6. Exhibits and Reports 12 Signature 12 ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1998 and December 31, 1997
September 30, 1998 December 31, 1997 ASSETS (Unaudited) (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 21,658 $ 54,096 Current portion of notes receivable 337,817 100,548 Trade receivables less allowance for doubtful accounts 1998 $4,918 and 1997 $18,082 129,109 117,625 Other receivables 2,166 4,367 Inventories 14,973 17,334 Prepaid expenses 27,745 53,821 -------- -------- TOTAL CURRENT ASSETS 533,468 347,791 -------- -------- OTHER ASSETS AND INTANGIBLES Deposits 1,902 21,093 Notes receivable, less current portion 282,863 596,197 Organization and loan costs, net of accumulated amortization 1998 $61,838; 1997 $51,958 - 9,880 Other, including amounts due amounts due from stockholders 147,007 146,148 ------- ------- 431,772 773,318 ------- ------- PROPERTY AND EQUIPMENT Furniture and equipment 1,079,738 1,079,738 Vehicles 9,490 44,033 --------- --------- 1,089,228 1,123,771 Less accumulated depreciation and amortization (976,107) (963,843) --------- --------- 113,121 159,928 --------- --------- $1,078,361 $1,281,037 ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 242,872 $ 336,106 Accounts payable 297,571 546,605 Accrued expenses 121,818 174,037 --------- --------- TOTAL CURRENT LIABILITIES 662,261 1,056,748 --------- --------- LONG-TERM DEBT, less current maturities 106,585 544,506 ---------- ---------- STOCKHOLDERS' EQUITY Common stock par value $.001; authorized 10,000,000 shares; issued 1998 - 3,012,686 shares and 1997 - 2,544,899 shares 3,013 2,670 Preferred stock, no par value; authorized 2,500,000 shares; issued 1998 - 351,268 and 1997 - 70,000 shares 3,513 700 Additional paid-in capital 5,820,023 5,320,369 Retained earnings(deficit) (5,517,034) (5,643,956) ---------- ---------- 309,515 ( 320,217) ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,078,361 $1,281,037 ========== ========== See Notes to Condensed Financial Statements
ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE QUARTER ENDED SEPTEMBER 30, 1998 and 1997
NINE MONTHS ENDED September 30, September 30, 1998 1997 --------- -------- NET SERVICE REVENUE $ 579,865 $ 730,663 DIRECT SERVICE COSTS 392,080 480,509 ---------- ---------- GROSS PROFIT 187,785 250,154 ---------- ---------- 32.3% 34.2% OTHER OPERATING REVENUE 20,325 16,406 ----------- ---------- OPERATING EXPENSES Sales and marketing 30,963 36,308 General and administrative 282,032 423,044 Depreciation and amortization 35,087 56,770 --------- --------- 348,082 516,122 --------- --------- OPERATING LOSS (139,972) (249,562) --------- --------- FINANCIAL INCOME (EXPENSE) Interest income 40,399 45,462 Interest expense (26,221) (66,450) Gain (loss) on disposition of property (9,966) 1,606 Gain (loss) on vendor balances negotiated 298,787 - Other - - Amortization of loan costs (9,880) (16,125) -------- --------- 293,119 (35,507) -------- ---------- INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 153,147 (285,069) DISCONTINUED OPERATIONS (26,225) (89,488) -------- -------- NET INCOME (LOSS) $ 126,922 $ (374,557) ========= ========== Weighted average number of common shares outstanding 2,733,805 2,559,274 ========== ========== Net loss per common share $ (0.046) $ (0.146) ========= ========== Dividends per common share $ - $ - ========= ========== See Notes to Condensed Consolidated Financial Statements
ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THIRD QUARTER ENDED SEPTEMBER 30, 1998 AND 1997
September 30,1998 September 30,1997 Cash Flows From Operating Activities: Net income (loss) $ 126,922 $ (374,557) Adjustments To Reconcile net income (loss) to net cash used in operating activities Depreciation, including $30,130 from 1997 discontinued operations 35,087 86,900 Amortization 9,880 16,125 Gain on vendor debt mediation (298,787) (1,556) Loss on disposal of equipment 9,961 3,450 Common stock issued for interest and loan costs 3,554 - Change in assets and liabilities: (Increase)Decrease in accounts receivable (9,283) 170,318 Decrease in inventory 2,361 179,800 Decrease in prepaid expenses 26,076 39,429 Increase(decrease)in accounts payable and accrued expenses 4,391 (100,948) -------- --------- Net cash (used in) provided by operating activities (89,833) 18,961 --------- --------- Cash Flows From Investing Activities: Collections of notes receivable 76,065 80,079 Cash received on disposition of assets and product line 3,400 5,100 Loss on disposition of product line - 454 Book value of assets sold in connection with disposition of asbestos product line, net of cash paid to third party - (5,554) Decrease in deposits 19,191 2,121 (Increase) in other assets (859) (36,531) --------- ---------- Net cash provided by (used in) investing activities 97,797 45,669 --------- ---------- Cash Flows From Financing Activities: Proceeds from borrowings on short-term notes 30,000 25,000 Principal payments on short-term notes, net - (65,711) Principal payments on long-term borrowing (70,402) - -------- --------- Net cash provided by investing activitiess (40,402) (40,711) --------- ---------- Net (decrease) increase in cash and cash equivalents (32,438) 23,919 Cash and cash equivalents, beginning 54,096 29,604 --------- ---------- Cash and cash equivalents, ending $ 21,658 $ 53,523 ========= ========== Supplemental Disclosure of Cash Flows Information Cash payments for interest $ 6,664 $ 41,258 ========= ========== Disposition of asbestos product line Book value of inventory - (65,200) Book value of equipment - (96,326) Loss on disposition of above - 454 Cash paid to third party - 155,972 ----------- ----------- Cash received $ - $ (5,100) =========== ========== Supplemental Disclosure of Non Cash Financing Activities Issuance of common stock for warrants, loan costs and other $ 3,554 $ 141 ========== ========== Issuance of common stock for debt conversion $ 76,877 $ - ========== ========== Issuance of preferred stock for debt conversion $ 422,379 $ - ========== =========== See Notes to Condensed Consolidated Financial Statements
ENVIROMETRICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 1998 (1) The unaudited condensed financial 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 condensed consolidated financial statements of the Company, and notes thereto, should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1995. The Company has not completed its audits of the consolidated financial statements for the years ended December 31, 1997 and 1996 and has not filed form 10-KSB for the years ended December 31, 1997 and 1996. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all adjustments necessary to present fairly the consolidated financial position, results of operations and changes in cash flow for the interim periods. All such adjustments are of a normal recurring nature. (2) Net loss per common share is computed using the weighted average number of common shares outstanding, after giving effect for the 1 for 2 reverse split effective with the initial public offering in 1994. (3) Shakespeare Partners, LTD, whose general partner is a stockholder of the Company, had outstanding notes payable due from the Company amounting to $200,000 at September 30, 1998 and $287,700 at December 31, 1997. No interest was paid by the Company during 1997 or year to date 1998. Shakespeare Partners, LTD, loaned an additional $20,000 to the Company in May 1998 in connection with negotiation and settlement of certain vendor debt. Approximately $149,700 of debt was converted to 74,878 preferred shares which have dividend and preference in liquidation rights. The United States Company had outstanding notes payable due from the Company amounting to $209,100 at December 1997. Accrued interest due at September 30, 1998 amounted to $16,000. No interest was paid during 1997 or year to date during 1998. Approximately $85,000 of debt was converted to 111,648 preferred shares which have dividend and preference in liquidation rights. $124,100 was forgiven by the United States Company. Two Directors of the Company are officers of the United States Company. The Secretary and Treasurer is a Principal in The United States Company. The President and CEO had outstanding notes payable due from the Company amounting to approximately $15,000 at December 1997. No interest was paid during 1997 or year to date during 1998. Approximately $17,700 (original debt plus accrued interest) was converted to 8,835 preferred shares which have dividend and preference in liquidation rights. (4) The Company sold its asbestos product line (inventory and equipment) to a large customer during May 1997 for $161,072 cash. Proceeds from the disposition were used to reduce vendor trade amounts. The Company sold its remaining Air Chemical Technology (ACT) product line to its exclusive distributor for a $354,850 reduction in prepaid purchase deposits. In addition, $10,000 cash was paid and 70,000 shares of preferred stock were issued at a value of $140,000, which eliminated the prepaid purchase deposits liability. (5) The Company has a $230,000 note receivable (due no later than December 31, 1998) from the Buyer of its real property in December 1996. The buyer pays interest only monthly at 10%. The note is secured by the real estate. (6) The Company's common stock and warrants were deleted from The Nasdaq SmallCap Market(tm) on December 3, 1996 for failure to meet the capital and surplus requirement for continued listing. The Company is listed on the OTC-Bulletin Board. (7) On April 1, 1997 the Company issued 125,000 shares of its common stock to The United States Company in exchange for 640,000 warrants to purchase its common stock. On that same date the Company issued 5,000 shares of common stock to Walter H. "Skip" Elliott, III, President and CEO, 5,000 shares of common stock to Elsie L. Rose, Treasurer, 5,000 shares of common stock to Robin A. Bowers, Secretary at that date, and 1,000 shares of common stock to another employee. The Company issued 125,000 shares to Shakespeare Partners Ltd. in connection with a prior loan. On June 29, 1998 the Company granted 700,000 options to purchase common stock to its Directors and Officers. (8) During October 1997 the Company settled employment agreements with two employees at termination of their employment by agreeing to grant warrants for each to purchase 50,000 shares of Company common stock. No amounts have been recorded in the financial statements. (9) During 1998 the Company issued 180,287 shares of common stock in connection with the negotiation and settlement of vendor trade payable balances. Three Months Ended September 30, 1998 Compared to Three Months Ended September 30, 1997 The following financial information reports operating trends taking into account the discontinued operations of the Products Group for 1997. Net service revenue for the Service group, which is comprised of the industrial hygiene laboratory and the health and safety consulting, for the third quarter of 1998 amounted to $199,000 which was $6,300 (3.0%)lower than the $205,300 reported for the third quarter of 1997. Additional sales that would have been reported without the discontinued Products line amounted to $97,400 for the third quarter of 1997. Direct service costs decreased by 9.9% or $14,700 to $134,300 for the third quarter of 1998 as compared to $149,200 reported for the third quarter of 1997. Additional cost of sales that would have been reported without the discontinued Products line amounted to $31,300 for the third quarter of 1997. The gross profit for the third quarter ended September 30, 1998 increased by $8,500, an increase of 15.2%, to $64,700 as compared to $56,200 for the three months ended September 30, 1997. Additional 1997 third quarter gross profit that would have been reported without the discontinued Products line was $56,500. The Company reported a 32.5% gross margin for the third quarter of 1998 as compared to a 27.4% margin for the third quarter in 1997. The reason for the improvement in gross margin in the Services Division and the $8,500 increase in the amount of gross profit reported by that division is due primarily to reduced personnel costs. Other operating expense was $300 for the quarter ended September 30, 1998 as compared to $10,200 of revenue for the quarter ended September 30, 1997. Operating expenses were $57,700 lower and amounted to $106,400 for the three months ended September 30, 1998, as compared to $164,100 reported for the three months ended September 30, 1997. Sales and marketing expenses decreased by $3,700, which savings were mostly attributable to a reduction in staff for 1998. General and administrative costs decreased by $46,300 to $86,300 for the three months ended September 30, 1998, as compared to $132,600 reported for the three months ended September 30, 1997. This decrease is primarily attributable to a reduction in personnel and lower insurance costs. Depreciation and amortization costs decreased overall by $7,600 due to the reduction in vehicles of the Service Group for the second quarter of 1998. The Company incurred an operating loss of $42,100 for the three months ended September 30, 1998 as compared to an operating loss of $97,800 for the three months ended September 30, 1997. Additional operating loss that would have been reported without the discontinued Products line amounted to $4,700 for the third quarter of 1997. Interest income for the quarter ended September 30, 1998 was $13,100 compared to $14,800 of interest income recorded for the quarter ended September 30, 1997. The decrease is due to the reduction in the principal balance outstanding for a note receivable that was executed during 1996 in connection with the disposition of the Environmental Consulting and Engineering and Civil Engineering and Surveying Division. Interest expense of $4,300 for the three months ended September 30, 1998 was $15,300 lower than than the amount reported for the third quarter of 1997 which was $19,600. The decrease in interest expense is attributable to elimination of borrowing under the Company's asset based lending arrangement for the Products Group which was disposed during the fourth quarter of 1997 and conversion of long-term debt to equity at June 30, 1998. The Company recorded a net gain of $14,500 for the third quarter of 1998 on vendor trade payables and notes payable that were negotiated. Loan costs were fully amortized at the end of the second quarter of 1998, so no amounts were amortized during the third quarter of 1998. Amortization of loan costs for the third quarter of 1997 was $5,400. The Company incurred a loss before discontinued operations of $23,400 for the three months ended September 30, 1998 as compared to a loss before discontinued operations of $108,100 for the three months ended September 30, 1997. The improvement of $84,700 is due to the items discussed above. Discontinued operations related to the Products line for the third quarter ended September 30, 1998 was a trailing expense of $100 and for the same period in 1997 was $1,500 of income due to sales of remaining inventory items and a small amount of trailing expenses. Net loss for the third quarter ended September 30, 1998 was $23,500 which is $83,000 lower than the net loss of $106,500 reported for the third quarter ended September 30, 1997. Nine Months Ended September 30, 1998 Compared to Nine Months Ended September 30, 1997 The following financial information reports operating trends taking into account the discontinued operations of the Products Group for 1997. Net service revenue for the Service group, which is comprised of the industrial hygiene laboratory and the health and safety consulting, for the first nine months of 1998 amounted to $580,000 which was $150,700 (20.6%) lower than the $730,700 reported for the first nine months of 1997. $123,100 of the decrease is attributable to reduced sample analysis during the first nine months of 19987. $32,400 of the decrease resulted from the elimination of air quality services from the consultative service offering when employee positions were not filled. Additional sales that would have been reported without the discontinued Products line amounted to $711,300 for the first nine months of 1997. Direct service costs decreased by 18.4% or $88,300 to $392,200 for the first nine months of 1998 as compared to $480,500 reported for the first nine months of 1997. Most of the the decrease is due to reduced laboratory revenue volume discussed above. The consultative group experienced higher direct service costs from the use of subcontractors. Additional cost of sales that would have been reported without the discontinued Products line amounted to $484,300 for the first nine months of 1997. The gross profit for the nine months ended September 30, 1998 decreased by $62,400, a decrease of 24.9%, to $187,800 as compared to $250,200 for the nine months ended September 30, 1997. Additional gross profit that would have been reported without the discontinued Products line amounted to $227,100 for the first nine months of 1997. The Company reported a 32.4% gross margin for the first nine months of 1998 as compared to a 34.2% margin for the same period in 1997. The reason for the deterioration in gross margin in the Services Division is due to the consultative group costs discussed above. Other operating revenue was $20,300 for the nine months ended September 30, 1998 as compared to $16,400 of revenue for the nine months ended September 30, 1997. Most of the increase was due to refunds and reimbursements related to insurance and rent. Operating expenses were $168,000 lower and amounted to $348,100 for the nine months ended September 30, 1998, as compared to $516,100 reported for the nine months ended September 30, 1997. Sales and marketing expenses decreased by $5,300, which savings were mostly attributable to a reduction in staff for 1998. General and administrative costs decreased by $141,000 to $282,000 for the nine months ended September 30, 1998, as compared to $423,000 reported for the nine months ended September 30, 1997 due to reduced personnel costs and related benefits, lower insurance and lower outside service costs. Depreciation and amortization costs decreased overall by $21,700 due to the reduction in service vehicles of the Service Group for the first nine months of 1998 and sale of the Products line operations during 1997. The Company incurred an operating loss of $140,000 for the nine months ended September 30, 1998 as compared to an operating loss of $249,600 for the nine months ended September 30, 1997. Additional operating loss that would have been reported without the discontinued Products line amounted to $86,000 for the first nine months of 1997. Interest income for the nine months ended September 30, 1998 was $40,400 compared to $45,500 of interest income recorded for the nine months ended September 30, 1997. The decrease is due to the reduction in the principal balance outstanding for a note receivable that was executed during 1996 in connection with the disposition of the Environmental Consulting and Engineering and Civil Engineering and Surveying Division. Interest expense of $26,200 for the nine months ended September 30, 1998 was $40,200 lower that the amount reported for the first nine months of 1997 which was $66,400. The decrease in interest expense is attributable to elimination of borrowing under the Company's asset based lending arrangement for the Products Group which was disposed during the fourth quarter of 1997 and conversion of long-term debt to equity at June 30, 1998. The Company recorded a net gain of $298,800 for the nine months ended September 30, 1998 on vendor trade payables and notes payable that were negotiated. Amortization of loan costs for the first nine months of 1998 was $9,900 and $16,100 for the same period in 1997. The Company reported income before discontinued operations of $153,100 for the nine months ended September 30, 1998 as compared to a loss before discontinued operations of $285,100 for the nine months ended September 30, 1997. Discontinued operations for the first nine months ended September 30, 1998 were $26,200 from trailing operating expenses of personnel and facility costs related to the Products line. Discontinued operations for the first nine months ended September 30, 1997 were $89,500 related to the Products line. Net income for the nine months ended September 30, 1998 was $126,900 which is a $501,500 improvement over the net loss of $374,600 reported for the first nine months of 1997. FINANCIAL CONDITION The Company's financial condition significantly improved during the second three months of 1998 and continued into the third quarter due principally to conversion of debt of secured creditors to equity and negotiation of trade payable balances with vendors. However, the Company is continuing to experience cash flow problems. The working capital deficiency has decreased by $580,200 from $709,000 at December 31, 1997 to $128,900 at September 30, 1998. This is primarily due to the conversion of debt owed to related party secured creditors to equity of $422,400 and forgiveness of debt by a secured creditor of $124,100. Vendor trade payables were reduced by a net amount of $174,700 which was recorded as a gain and $80,400 which was converted to common stock at September 30, 1998. Trade accounts receivable increased approximately $11,500 to $129,100 at September 30, 1998 from $117,600 at December 31, 1997. The Company receives interest income in 1998 of approximately $5,000 per month from two notes receivable executed during 1996, related to the disposition of the Environmental Consulting and Engineering and Civil Engineering and Surveying Division on July 31, 1996 and sale of the real estate in December 1996. The $230,000 note receivable from the sale of the real estate is due no later than December 1998. RECENT DEVELOPMENTS In September 1998 the Company, through its wholly owned subsidiary, Azimuth, Inc. (Azimuth), entered into a strategic alliance with PHT Services, Ltd. (PHTS) for the marketing and selling of environmental, health and safety services to health care organizations in South Carolina. The alliance between Azimuth and PHTS will be formalized under a contract that outlines the environmental, health and safety services PHTS will market to its clients. Azimuth and PHTS will share the revenue generated. During November 1998 the Company received its first engagement under this arrangment. In November 1998 the Company, through its wholly owned subsidiary, Azimuth, Inc.(Azimuth), entered into a strategic alliance with Enviro-Guard, Ltd. to cross sell services into the respective customer bases of each company. Enviro-Guard has a complete service line for medical environmental monitoring, including medical gas systems evaluation and decontamination. The alliance will compliment the existing menu of services offered by Azimuth to hospitals. The alliance between Azimuth and Enviro-Guard will be formalized under a contract that outlines the services to be provided by each company. YEAR 2000 Historically, certain computer programs were written using two digits rather that four to define the applicable year. Accordingly, the Company's software may recognize a date using "00" as 1900 reather than the year 2000, which could result in computer systems failures or miscalculations, commonly referred to as the Year 2000 ("Y2K") issue. The Y2K issue can arise at any point in the Company's supply, lab analysis processing, and financial applications. Incomplete or untimely resolution of the Y2K issue by the company, key suppliers, customers and other parties could have a material adverse effect on the company's results of operations, financial condition and cash flows. The Company has developed a plan to modify its information technology to recognize the Year 2000 and has, to the extent necessary, begun analyzing and converting, where necessary, its critical data processing systems. Since many of the Company's systems and software are relatively new, management does not expect Year 2000 issues related to its own internal systems to be significant and does not anticipate that it will incur significant operating expenses or be required to invest heavily in computer systems improvements to be Year 2000 compliant. The Company is planning to initiate formal communications with certain of its significant lab equipment suppliers and service providers to determine the extent to which the Company's systems may be vulnerable to embedded technology such as microcontrollers. The Company currently expects the project to be completed in the third quarter of 1999. There can be no guarantee that the systems of suppliers or other companies on which the Company relies will be converted in a timely manner and will not have a material adverse effect on the Company's systems. To date the Company has not developed a formal contingency plan. The Company believes it is taking the steps necessary regarding Year 2000 compliance with respect to matters within its control. However, no assurance can be given that the Company's systems will be made Year 2000 compliant in a timely manner or that the Year 2000 problem will not have a material adverse effect on the Company's business, prospects, financial condition and results of operations. PART II. OTHER INFORMATION Item 1. Legal Proceedings - None Item 5. Other Information - None Item 6. Exhibits and Reports - None SIGNATURE 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. ENVIROMETRICS, INC. Date: January 20, 1999 Walter H. Elliott, III _______________________ Walter H. Elliott, III President and CEO
EX-27 2 ART 5 FDS FOR 3RD QTR 10-QSB/A 1998
5 9-MOS DEC-31-1998 SEP-30-1998 21,658 0 474,010 (4,918) 14,973 505,723 1,089,228 976,107 1,078,361 662,261 0 0 3,513 3,013 302,989 1,078,361 579,865 600,190 392,080 392,080 54,967 0 26,221 126,922 0 126,922 0 0 0 126,922 (.046) (.046)
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