<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) NOVEMBER 3, 1997
-----------------
COMPOST AMERICA HOLDING COMPANY, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 0-27832 22-2603175
- ------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
320 GRAND AVENUE ENGLEWOOD, NEW JERSEY 07631
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 541-9393
--------------
N/A
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
PLEASE ADDRESS ALL CORRESPONDENCE TO: Mark Gasarch, Esq.
40 West 57th Street
33rd Floor
New York, New York 10019
(212) 956-9595 telephone
(212) 956-7216 telecopier
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 3, 1997 Compost America Holding Company, Inc. (the "Company")
acquired all of the issued and outstanding shares of R. J. Longo Construction
Co., Inc. of Denville, New Jersey from its President and sole shareholder,
Robert J. Longo ("Longo") for approximately $33 million. This event was
reported on Form 8-K, filed November 17, 1997. That filing stated that the
financial statements required by Item 7, where applicable, would be filed by
amendment within sixty (60) days after the (November 17, 1997) date of that
filing. This amendment on Form 8-K/A to that report on Form 8-K contains
those financial statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
1. Audited financial statements of R. J. Longo Construction Co., Inc. for
the fiscal years ended December 31, 1996 and December 31, 1995
2. Unaudited interim financial statements of R. J. Longo Construction
Co., Inc. for the ten months ended October 31, 1997 and October 31,
1996
3. Form 10-KSB of Compost America Holding Company, Inc. and subsidiaries
for the fiscal years ended April 30, 1997 and April 30, 1996 -
incorporated by reference as filed with the U. S. Securities and
Exchange Commission on August 12, 1997
4. Form 10-QSB of Compost America Holding Company, Inc. and subsidiaries
for the fiscal quarters ended October 31, 1997 and October 31, 1996 -
incorporated by reference as filed with the U. S. Securities and
Exchange Commission on December 10, 1997
(b) Pro Forma Financial Information
1. Unaudited pro forma condensed combined financial statements for
Compost America Holding Company, Inc. and subsidiaries and R. J. Longo
Construction Co., Inc. for the interim period ending October 31, 1997,
including unaudited pro forma condensed combined statement of
operations of Compost America Holding Company, Inc. and subsidiaries
and R. J. Longo Construction Co., Inc. as at April 30, 1997
(c) Exhibits
23.1 - Consent of Paul B. Radler & Associates, CPAs
23.2 - Consent of Zeller Weiss & Kahn, CPAs
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this first amendment to this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: January 15, 1998
COMPOST AMERICA HOLDING COMPANY, INC.
(Registrant)
By /s/ Roger E. Tuttle
-----------------------------------
Roger E. Tuttle, President
(Principal Executive Officer)
<PAGE>
Item 7(a)1.
PAUL B. RADLER & ASSOCIATES
CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
Independent Auditor's Report
R.J. Longo Construction Co., Inc.
305 Palmer Road
Denville, New Jersey 07834
We have audited the accompanying balance sheets of R.J. Longo Construction Co.,
Inc. as of December 31, 1996 and 1995 and the related statements of income,
retained earnings, and cash flows for the years then ended. These financial
statements are the responsibility of the company management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the above named company as of
December 31, 1996 and 1995, and the results of operations and cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Paul B. Radler & Associates
PAUL B. RADLER & ASSOCIATES
September 4, 1997
-2-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
BALANCE SHEETS
DECEMBER 31, 1996 & 1995
ASSETS
1996 1995
----------- -----------
Current Assets:
Cash and Cash Equivalents $ 2,976,614 $ 3,063,766
Cash in Escrow -- 753,444
Investments, at Cost
(which approximates market) (Note 1) 994,895 1,099,378
Contracts Receivable (Note 2) 4,789,836 2,686,323
Due from Affiliated Companies 3,761,161 2,476,962
Costs & Estimated Earnings in Excess of
Billings on Uncompleted Contracts (Note 3) -- 260,000
Income Tax Receivable -- 300,978
Advances to Officer/Stockholder 819,079 819,079
Prepaid Expenses 323,014 501,244
Other Receivables 28,680 14,095
----------- -----------
Total Current Assets $13,693,279 $11,975,269
----------- -----------
Fixed Assets:
Net of Accumulated Depreciation
(Notes 4 & 6) $ 4,526,575 $ 4,946,071
----------- -----------
Other Assets:
Surety Claim Receivable (Note 9) $ 248,000 $ 1,000,000
----------- -----------
Total Other Assets $ 248,000 $ 1,000,000
----------- -----------
TOTAL ASSETS $18,467,854 $17,921,340
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current Maturity of Long-Term Debt
(Note 6) $ 816,078 $ 970,712
Accounts Payable and
Accrued Expenses 2,088,501 1,209,044
----------- -----------
Total Current Liabilities $ 2,904,579 $ 2,179,756
Long-Term Debt, Net of Current Maturity:
Notes Payable (Note 6) 6,845,047 7,662,936
----------- -----------
Total Liabilities $ 9,749,626 $ 9,842,692
----------- -----------
Stockholder's Equity:
Capital Stock $ 1,790,000 $ 1,790,000
Retained Earnings 6,928,228 6,288,648
----------- -----------
Total Stockholder's Equity $ 8,718,228 $ 8,078,648
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $18,467,854 $17,921,340
=========== ===========
See Independent Auditor's Report
and Accompanying Notes
-3-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1996 & 1995
1996 1995
------------ ------------
Contract Revenues Earned $ 17,451,456 $ 14,652,208
Cost of Revenues Earned 13,428,370 12,441,911
------------ ------------
Gross Profit from Contracts Before
Depreciation $ 4,023,086 $ 2,210,297
Depreciation (Note 1) 28,030 67,272
------------ ------------
Gross Profit $ 3,995,056 $ 2,143,025
General and Administrative Expenses 2,090,709 4,409,007
------------ ------------
Income from Operations $ 1,904,347 $ 734,018
------------ ------------
Other Income: (Expense)
Gain on Sale of Assets $ 250 $ (134,147)
Other Income (723,841) 668,270
Interest (Expense) Net of Interest
Income of $ 170,899 and
$ 267,376 respectively (541,176) (757,984)
------------ ------------
Total Other Income (Expense) $ (1,264,767) (223,861)
------------ ------------
Income Before Taxes $ 639,580 $ 510,157
Provision for Corporate Taxes
(Note 1) -- --
------------ ------------
Net Income $ 639,580 $ 510,157
Retained Earnings,
December 31, 1995 & 1994 6,288,648 5,778,491
------------ ------------
Retained Earnings,
December 31, 1996 & 1995 $ 6,928,228 $ 6,288,648
============ ============
See Independent Auditor's Report
and Accompanying Notes
-4-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 & 1995
1996 1995
----------- -----------
Cash Flows From Operating Activities:
Net Income $ 639,580 $ 510,157
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 740,203 1,358,598
Re--classification of Surty Claim 752,000 (1,000,000)
(Gain) Loss on Sale of Assets (250) 134,147
(Increase) Decrease in Contracts Receivable (2,103,513) (556,098)
(Increase) Decrease in Costs and Estimated
Earnings in Excess of Billings 260,000 (22,330)
(Increase) Decrease in Other Current Assets 163,645 109,072
Increase (Decrease) in Accounts Payable 879,457 (2,579,816)
(Increase) Decrease in Due from
Related Companies (1,284,199) (725,492)
----------- -----------
Net Cash Provided by (Used In)
Operating Activities 46,923 $(2,771,762)
----------- -----------
Cash Flows From Investing Activities:
(Acquisition) of Fixed Assets $ (19,729) $ (74,826)
Proceeds from Sale of Assets 250 874,518
Decrease (Increase) in Investments 104,483 798,957
----------- -----------
Net Cash Provided By (Used In)
Investing Activities 85,004 $ 1,598,649
----------- -----------
Cash Flows From Financing Activities:
(Increase) Decrease in Cash in Escrow $ 753,444 $ 78,462
Increase (Decrease) in Equipment Debt (972,523) (1,683,473)
(Increase) Decrease in Advances
to Stockholders -- 1,208,914
Net Cash Provided By (Used In)
Financing Activities $ (219,079) $ (396,097)
----------- -----------
Net Increase (Decrease) in
Cash and Cash Equivalents $ (87,152) $(1,569,210)
Cash and Cash Equivalents,
December 31, 1995 & 1994 3,063,766 4,632,976
----------- -----------
Cash and Cash Equivalents,
December 31, 1996 & 1995 $ 2,976,614 $ 3,063,766
=========== ===========
Supplemental Cash Flow Disclosures:
Cash Paid During the Year for: 1996 1995
----------- -----------
Interest Expense $ 712,075 $ 1,025,360
=========== ===========
Income Taxes $ 0 $ 0
=========== ===========
See Independent Auditor's Report
And Accompanying Notes
-5-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES:
Company's Activities and Operating Cycle:
The Company is engaged in utility and heavy highway construction, with emphasis
on sewerage facilities and conduits. The work is performed primarily under unit
price contracts and fixed price contracts. These contracts are undertaken by the
company or in partnership with other affiliated companies through joint venture.
The length of contracts varies on the type and size of the job.
The company also handles solid waste by railroad and is capable of hauling
anywhere in the continental United States.
Revenue and Cost Recognition: Revenues on construction contracts are recognized
on the percentage of completion method, measured by the percentage of total
costs incurred to date to estimated total costs for each contract. Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools,
repairs and maintenance, etc. Indirect costs are allocated based on the
percentage of direct labor of each job to total direct labor for all active
jobs. General and administrative costs are charged to expenses as incurred.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Changes in job performance, job conditions,
and estimated profitability, including those arising from contract penalty
provisions and final contract settlements, may result in revisions to costs and
income and are recognized in the period in which the revisions are determined.
Revenues on solid waste hauling contracts are recognized on a fixed unit,
variable quantity basis.
Investments at Cost:
Investments at December 31, consists of the following:
1996 1995
--------- ----------
Mortgage Receivable at 6.5% $ -- $ 182,273
Municipal Bonds, pledged in lieu
of retainage, at lower of cost
or market 994,895 917,105
--------- ----------
Total $ 994,895 $1,099,378
========= ==========
-6-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES: (Con't)
Property and Equipment Depreciation: is provided principally on the
straight line method over the estimated useful lives of the assets, the
majority being five to seven years.
Income Taxes: The company is treated under the provisions of Subchapter
"S" of the Internal Revenue Code and as such, pay no federal taxes on
ordinary income.
Cash and Cash Equivalents:
The company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The company
maintains at various financial institutions cash and cash equivalents
which may exceed federally insured amounts at times.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
financial statements and the reported period. Actual results could differ
from these estimates, having a material effect on the financial
statements.
NOTE 2: CONTRACTS RECEIVABLE:
Contracts Receivable:
1996 1995
----------- -----------
Completed Contracts $ 4,789,873 $ 2,686,232
Contracts in Progress -- --
Retained -- --
----------- -----------
TOTAL $ 4,789,873 $ 2,686,232
=========== ===========
NOTE 3: COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:
1996 1995
----------- -----------
Costs Incurred to Date $ -- $67,000,049
Estimated Gross Profits
Earned to Date $ -- (1,656,670)
----------- -----------
$ -- $65,343,379
Less: Amount Billed to Date -- 65,083,379
----------- -----------
$ -- $ 260,000
=========== ===========
-7-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 3: COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS: (Con't)
1996 1995
----------- -----------
Included in Accompanying Balance Sheet
Under The Following Captions:
Costs and Estimated Earnings
in Excess of Billings
on Uncompleted Contracts $ -- $ 260,000
Billings in Excess of Costs
and Estimated Earnings on
Uncompleted Contracts -- --
----------- -----------
$ -- $ 260,000
=========== ===========
NOTE 4: FIXED ASSETS:
1996 1995
----------- -----------
Cost:
Construction Equipment $18,342,845 $18,335,850
Automotive Equipment 1,448,762 1,384,531
Office Equipment 245,752 245,752
Leasehold Improvements 829,238 479,757
----------- -----------
Total $20,866,597 $20,545,890
----------- -----------
Accumulated Depreciation:
Construction Equipment $14,422,713 $13,744,476
Automotive Equipment 1,134,140 1,061,045
Office Equipment 207,037 230,105
Leasehold Improvements 576,132 564,193
----------- -----------
Total $16,340,022 $15,599,819
----------- -----------
Fixed Assets, Net of Accumulated
Depreciation $ 4,526,575 $ 4,946,071
=========== ===========
NOTE 5: JOINT VENTURE:
A Joint Venture was formed for the purpose of bidding the Passaic Valley
Sewer Commission (PVSC) contracts to haul solid waste from their Newark,
New Jersey facility. The contract expires December 31, 1995. The company
was low bidder on a contract for the ensuing 5 years and that contract
expires December 31, 2000. The contract requires a retainage of $600,000
to be held until the end of the contract. Effective November 19, 1992, the
company bought the remaining 20%, thereby terminating the Joint Venture.
The cost included a covenent not to compete totalling $1,283,759 which is
being amortized over the remaining life of the contract. The operations
are being accounted for on a fixed price variable quantity basis.
-8-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 6: NOTE PAYABLE:
Refinancing:
R.J. Longo Construction Co., Inc. has closed on the refinancing of their
entire debt outstanding as of December 31, 1995. A summary of the
refinancing is as follows:
Railcars: The company has refinanced $5,500,000 in debt, secured by
railcars, with U.S. Bancorp, on a seven (7) year term note, based upon a
ten (10) year amortization. Interest on the note is at 315 basis points
above the 30 day LIBOR rate, with an option to fix at 315 basis points
above comparable term treasuries.
Other: The company has refinanced approximately $340,000 in debt, secured
by its containers handling equipment, with the CIT Group on a five (5)
year term note. The note has a stated interest rate of 8% and is fully
amortizing.
The combined refinancing have the effect of reducing the company's monthly
cash flow for debt service from approximately $228,000 a month to
approximately $125,000 per month.
1996 1995
---------- ----------
CIT Group, Interest at 8% with a
five year term. The note is secured
by container handling equipment $ 293,242 $ -
U.S. Bancorp. Interest at 3.15% above
30 day LIBOR rate with an option to
fix 3.15% above comparable term
treasuries. The note has a 10 year
amortization and a 7 year term. The
note is secured by 150 rail cars 5,320,499 -
Textron Financial: Various notes with
9.9% fixed rate of interest and 5 year
terms. The notes are secured by 1286
Intermodal Containers 2,047,384 -
BOT Financial Corporation
The average interest rate is
approximately 10.9% the monthly
payment is $228,597 through January
1996, with a balloon payment of
$7,635,478 - 8,633,648
---------- ----------
Total $7,661,125 $8,633,648
Less: Current Maturity (816,078) (970,712)
---------- ----------
Long Term Debt $6,845,047 $7,662,936
========== ==========
-9-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 6: NOTES PAYABLE: (Con't)
The following are maturities of long term debt for each of the next five
years:
1997 $ 816,078
1998 896,284
1999 984,403
2000 1,081,219
2001 732 226
--------------
$ 4,510,210
==============
NOTE 7: COMMITMENTS:
An Intermodal Transfer Station - Brills Yard, is leased from Consolidated
Rail Corporation (Conrail) in Newark, New Jersey. Annual rent is $56,200,
payable quarterly through February 29, 1996 with option to renew. The
lease has been renewed thru the year February 29, 2001, with annual rates
payable as follows:
1997 $ 61,200
1998 $ 63,900
1999 $ 66,600
2000 $ 69,300
2001 $ 72,000
NOTE 8: BANK LINE OF CREDIT:
First Union Bank has extended an unsecured line of credit with a maximum
aggregate amount of $4,000,000 to R.J. Longo Construction Co., Inc. and
Longo Puerto-Rico, Inc. The entire line of credit remains available for
working capital needs.
NOTE 9: SURETY CLAIM RECEIVABLE:
The management expects to receive $248,000 from the bonding company of a
subcontractor in default of performance at the company's Camden County MUA
In-Vessel Composting Facility project. This represents capitalized costs
on this job.
-10-
<PAGE>
Item 7(a)2.
R. J. LONGO CONSTRUCTION CO., INC.
FINANCIAL STATEMENTS
OCTOBER 31, 1997 AND 1996
<PAGE>
R. J. LONGO CONSTRUCTION CO., INC.
INDEX
FINANCIAL STATEMENTS: PAGES
Independent Accountant's Compilation Report 2
Balance Sheets - October 31, 1997 and 1996 3
Statements of Income and Retained Earnings
For the Ten Months Ended October 31, 1997 and 1996 4
Statements of Cash Flows
For the Ten Months Ended October 31, 1997 and 1996 5
Notes to Financial Statements 6-8
-1-
<PAGE>
INDEPENDENT ACCOUNTANT'S COMPILATION REPORT
R. J. Longo Construction Co., Inc.
305 Palmer Road
Denville, New Jersey 07834
We have compiled the accompanying balance sheet of R. J. Longo Construction Co.,
Inc. as of October 31, 1997 and 1996 and the related statements of income,
retained earnings, and cash flows for the ten months then ended, in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of R. J. Longo Construction Co., Inc. We
have not audited or reviewed the accompanying financial statements and,
accordingly do not express an opinion or any other form of assurance on them.
/s/ Paul B. Radler & Associates
PAUL B. RADLER & ASSOCIATES
January 13, 1998
-2-
<PAGE>
R. J. LONGO CONSTRUCTION CO., INC.
BALANCE SHEET
OCTOBER 31, 1997 AND 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
------------ -------------
CURRENT ASSETS:
<S> <C> <C>
Cash & Cash Equivalents (Note 1) $ 827,885 $ 3,190,718
Investments, at Cost -- 965,245
Contracts Receivable 4,487,754 4,615,470
Due from Stockholder -- 819,079
Due from Related Companies 4,599,873 3,331,209
Prepaid Expenses and Security Deposits 673,327 617,061
------------- ------------
Total Current Assets $ 10,588,839 $ 13,538,782
------------- ------------
FIXED ASSETS:
Net of Accumulated
Depreciation (Notes 1, 2 & 3) $ 3,997,705 $ 4,628,110
------------- ------------
OTHER ASSETS:
Surety Claim Receivable $ -- $ 248,000
------------- -------------
Total Other Assets $ -- $ 248,000
------------- -------------
TOTAL Assets $ 14,566,544 $ 18,414,892
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable - (Note 3) $ 887,925 $ 869,300
Accounts Payable and Accrued Expenses 1,554,819 2,182,491
Due to Stockholder 5,437,093 --
------------- --------------
Total Current Liabilities $ 7,879,837 $ 3,051,791
NON-CURRENT LIABILITIES:
Notes Payable - (Note 3) 6,104,040 6,923,937
------------- -------------
Total Liabilities $ 13,983,877 $ 9,975,728
------------- -------------
STOCKHOLDERS' EQUITY:
Common Stock, No Par Value
Authorized 1000 Shares
Issued and Outstanding 200 Shares $ 1,790,000 $ 1,790,000
Retained Earnings, (Deficit) (1,207,333) 6,649,164
------------- -------------
Total Stockholders' Equity $ 582,667 $ 8,439,164
============= =============
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 14,566,544 $ 18,414,892
============= =============
</TABLE>
See Independent Accountant's Compilation Report
And Accompanying Notes
-3-
<PAGE>
R. J. LONGO CONSTRUCTION CO., INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE TEN MONTHS ENDED OCTOBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
Revenues Earned $ 14,375,593 $ 14,393,755
Cost of Revenues Earned 11,857,372 11,020,943
------------- ------------
Gross Profit $ 2,518,221 $ 3,372,812
General and Administrative Expenses 1,606,345 1,722,751
------------- ------------
Income from Operations $ 911,876 $ 1,650,061
------------- ------------
OTHER INCOME AND (EXPENSES):
Interest (Expense) $ (644,167) $ (671,398)
Interest Income 141,608 120,185
Other Income (Expense) -- (738,332)
------------- ------------
Total Other Income (Expense) $ (502,559) $ 1,289,545
------------- ------------
Income before Taxes $ 409,317 $ 360,516
Provision for Corporate Taxes (Note 1) 114,650 --
------------- ------------
Net Income $ 294,667 $ 360,516
Retained Earnings,
December 31, 1996 and 1995 6,928,228 6,288,648
Dividends (8,430,228) --
------------- ------------
Retained Earnings, (Deficit)
October 31, 1997 and 1996 $ (1,207,333) $ 6,649,164
============= ============
</TABLE>
See Independent Accountant's Compilation Report
And Accompanying Notes
-4-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
STATEMENT OF CASH FLOWS
FOR THE TEN MONTHS ENDED OCTOBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- --------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 294,667 $ 360,516
Adjustments to Reconcile Net Income
To Net Cash Provided by (Used In)
Operating Activities:
Depreciation and Amortization 678,928 616,836
(Increase) Decrease in Contracts Receivable 302,082 (1,929,147)
Increase in Costs & Estimated Earnings
In Excess of Billings on Uncompleted Contracts -- 260,000
(Increase) Decrease in Other Current Assets (73,633) 199,257
Decrease in Surety Claim Receivable -- 752,000
Increase (Decrease) in Accounts Payable
And Accrued Expenses (533,683) 973,447
------------- ------------
Net Cash Provided by
Operating Activities $ 668,361 $ 1,232,909
------------ ------------
INVESTING ACTIVITIES:
(Acquisition) of Fixed Assets $ (130,057) $ (298,976)
Decrease in Investments 994,895 134,144
------------- ------------
Net Cash Provided By (Used In)
Investing Activities $ 864,838 $ (164,743)
------------- -------------
FINANCING ACTIVITIES:
Decrease in Cash in Escrow $ -- $ 753,444
(Decrease) in Equipment Debt 669,160) (840,411)
(Increase) in Due from Related Companies (838,712) (854,247)
Increase in Due to Stockholder 6,256,172 --
Dividends (Paid) (8,430,228) --
------------- -------------
Net Cash (Used in)
Financing Activities $ (3,681,928) $ (941,214)
------------- -------------
Net Increase(Decrease) in
Cash & Cash Equivalents $ (2,148,729) $ 126,952
Cash, and Cash Equivalents
December 31, 1996 and 1995 2,976,614 3,063,766
------------- -------------
Cash, and Cash Equivalents
October 31, 1997 and 1996 $ 827,885 $ 3,190,718
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash Paid During the Period for:
Interest Expense $ 644,167 $ 671,398
============ ============
Income Taxes $ 0 $ 0
============ ============
</TABLE>
See Independent Accountant's Compilation Report
And Accompanying Notes
-5-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES:
COMPANY'S ACTIVITIES AND OPERATING CYCLE:
The company handles solid waste by rail and truck, and is capable of hauling
anywhere in the continental United States.
Revenues on solid waste hauling contracts are recognized on a fixed unit,
variable quantity basis. This accrual method is used for both financial
statement and tax basis.
PROPERTY AND EQUIPMENT DEPRECIATION: is provided principally on the straight
line method over the estimated useful lives of the assets, the majority being
five to seven years.
INCOME TAXES: As of July 31, 1997 R. J. Longo Construction Co., Inc. is no
longer electing to be treated under provisions of Subchapter "S" of the Internal
Revenue Code. As such a provision have been made for Federal and State taxes for
income from August 1, 1997 through October 31, 1997.
CASH AND CASH EQUIVALENTS:
The company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The company maintains
at various financial institutions cash and cash equivalents which may exceed
federally insured amounts at times.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported period. Actual results could differ from these estimates, having a
material effect on the financial statements.
-6-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 2: FIXED ASSETS:
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Cost:
Construction Equipment $ 18,372,741 $ 18,321,013
Automotive Equipment 1,463,264 1,448,762
Office Equipment 245,752 245,752
Leasehold Improvements 914,900 829,238
------------- -------------
Total $ 20,996,657 $ 20,844,765
------------- -------------
Accumulated Depreciation:
Construction Equipment $ 14,994,463 $ 14,307,713
Automotive Equipment 1,196,815 1,118,060
Office Equipment 241,382 225,471
Leasehold Improvements 586,292 565,411
------------- -------------
Total $ 17,018,952 $ 16,216,655
------------- -------------
Fixed Assets, Net of Accumulated
Depreciation $ 3,977,705 $ 4,628,110
============= =============
NOTE 3: NOTES PAYABLE:
CIT Group, Interest at 8% with a
five year term. The note is secured
by container handling equipment. $ 243,299 $ 302,839
U.S. Bancorp. Interest at 3.15% above
30 day LIBOR rate with an option to
fix 3.15% above comparable term
treasuries. The note has a 10 year
amortization and a 7 year term. The
note is secured by 150 rail cars. 5,029,082 5,380,630
Textron Financial: Various notes with
9.9% fixed rate of interest and 5 year
terms. The notes are secured by 1286
Intermodal Containers. 1,719,584 2,109,768
------------- -------------
Total $ 6,991,965 $ 7,793,237
Less: Current Maturity (887,925) (869,300)
------------- -------------
Long Term Debt $ 6,104,040 $ 6,923,937
============= =============
</TABLE>
-7-
<PAGE>
R.J. LONGO CONSTRUCTION CO., INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 4: COMMITMENTS:
An Intermodal Transfer Station - Brills Yard, is leased from
Consolidated Rail Corporation (Conrail) in Newark, New Jersey. Annual
rent is $ 56,200, payable quarterly through February 29, 1996 with
option to renew. The lease has been renewed through the year February
29, 2001, with annual rates payable as follows:
1998 $ 61,200
1999 $ 63,900
2000 $ 66,600
2001 $ 69,300
2002 $ 72,000
NOTE 5: BANK LINE OF CREDIT:
First Union Bank has extended an unsecured line of credit with a
maximum aggregate amount of $ 4,000,000 to R. J. Longo Construction
Co., Inc. and Longo Puerto-Rico, Inc. The entire line of credit ramains
available for working capital needs.
NOTE 6: SUBSEQUENT EVENTS:
On November 3, 1997 Compost America Holding Company, Inc. of Englewood,
New Jersey purchased 100% of the outstanding common stock of R. J.
Longo Construction Co., Inc.
-8-
<PAGE>
Item 7(b)1.
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited proforma data presented in the unaudited proforma condensed
combined financial statements are included in order to illustrate the effect on
the Company's financial statements of the transactions described below.
The unaudited proforma condensed combined balance sheet data at October 31,
1997 presents adjustments for two series of transactions. First, adjustments
are presented as if, at such date, the Company acquired R.J. Longo Construction
Co., Inc. of Denville, New Jersey from its President and Sole Shareholder,
Robert J. Longo, for approximately $33 million (which transaction was closed in
the third quarter of 1997, November 3, 1997). The Company acquired all the
included assets and a $340 million contract for organic waste removal. Payment
was made by the issuance of 3,547,182 shares of the Company's common stock,
39,000 shares of its Series A preferred stock and 21,000 shares of its Series C
preferred stock, the assumption of $7 million of R.J. Longo Construction Co.,
Inc. debt and $20 million in cash. Second, adjustments are presented as if, at
such date the acquisition has occurred, the Company issued 11,490,609 shares of
its common stock, no par value, 130,000 shares of its Series A preferred stock
and 70,000 shares of its Series C preferred stock to Wasteco Ventures Limited, a
British Virgin Islands Company for $20 million in cash which was used to make
the acquisition of R.J. Longo Construction Co., Inc.
The unaudited proforma condensed combined financial statement of operations
data for the period ended October 31, 1997 presents adjustments for the two
series of transactions to show the effect of certain transactions and agreements
that took place as a condition to the acquisition and stock issuances of R.J.
Longo Construction Co., Inc. and Wasteco Ventures Limited.
The unaudited proforma condensed combined statement of operations for the
year ended April 30, 1997 have also been prepared with adjustments to reflect
the above transactions.
The financial statements of R.J. Longo Construction Co., Inc. are based on
a fiscal year ending December 31 while Compost America Holding Company, Inc. is
on a fiscal year ending April 30. The accompanying proforma condensed combined
financial statements have been adjusted in the combination due to reflect any
material transactions. The practicality of restatement was considered non-
material. The Company's fiscal year has been used in the proforma financial
statements.
The proforma condensed combined financial statements reflecting the
acquisition of R.J. Longo Construction Co., Inc. has been accounted for as a
purchase of the assets and assumption of the liabilities by the purchase of 100%
of all outstanding stock of R.J. Longo Construction Co., Inc.'s shareholder.
In the opinion of management, all adjustments have been made that are
necessary to present fairly the proforma data.
2
<PAGE>
The unaudited proforma condensed combined financial statements should be
read in conjunction with the Company's consolidated financial statements and the
notes thereto and the financial statements and the notes thereto of R.J. Longo
Construction Co., Inc. appearing elsewhere in this Form 8-K/A. The unaudited
proforma statement of operations data are not necessarily indicative of the
results that would have been reported and such events actually occurred on the
date specified, nor are they indicative of the results of the Company;s future
reports. There can be no assurance that the R.J. Longo Construction Co., Inc.
acquisition or any other transaction related to the acquisition will be fruitful
to the operations of the Company.
The unaudited proforma condensed combined financial statements are provided
for informational purposes only and should not be construed to be indicative of
the Company's combined financial position and results of operations had such
events been consummated on the dates assumed and do not project the Company's
financial position or results of operations for any future date or period.
3
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
FOR THE PERIOD ENDED OCTOBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
HISTORICAL PROFORMA
-------------------------------- ------------------------------
ADJUSTMENTS COMBINED
COMPOST R.J. LONGO FOR BALANCE
AMERICA CONSTRUCTION COMBINATION SHEET
------- ------------ ----------- -----
<S> <C> <C> <C> <C>
Current assets:
Cash $ 171,640 $ 827,885 (5) $20,000,000
(4) ( 20,000,000) $ 999,525
Investment (4) 26,000,000
(6) ( 26,980,784)
(7) 980,784
Accounts receivable 44,086 44,086
Contracts receivable 4,213,426 (1) ( 1,451,797) 2,761,629
Loan receivable 94,053 94,053
Due from affiliates 4,599,873 (1) ( 4,599,873)
Due from stockholder 2,993,135 (1) ( 3,117,512)
(1) 124,377
Prepaid expenses 135,037 673,327 (1) ( 426,485) 381,879
----------- ----------- -----------
Total current assets 444,816 13,307,646 4,281,172
----------- ----------- -----------
Plant, property and equipment:
Land 8,466,441 8,466,441
Site improvements 174,519 174,519
Transportation equipment 160,046 1,463,264 (1) ( 359,131) 1,264,179
Office equipment 71,051 245,752 (1) ( 400,042) ( 83,239)
Machinery and equipment 609,247 18,372,740 (1) ( 2,488,169) 16,493,818
(6) 8,200,000 8,200,000
Leasehold improvements 914,900 (1) ( 239,171) 675,729
Construction in progress, Compost
projects 7,763,570 7,763,570
----------- ----------- -----------
17,244,874 20,996,656 42,955,017
Less accumulated depreciation ( 227,399) ( 17,018,952) (1) 3,394,738
(1) 267,337
(6) ( 585,715) ( 14,169,991)
----------- ----------- -----------
17,017,475 3,977,704 28,785,026
----------- ----------- -----------
Other assets:
Acquisition of New York City contract (6) 18,780,784
Accumulated amortization (6) ( 626,026) 18,154,758
Excess cost over assets acquired, net of
amortization 455,761 455,761
Town of Freehold lease acquisition cost,
net of amortization 803,853 803,853
Intangible assets, net of amortization 238,675
Acquisition costs (9) 1,245,051 238,675
Accumulated amortization (9) ( 41,502) 1,203,549
Option deposit 62,500 62,500
City of Miami contract performance fee 1,000,000 1,000,000
----------- ----------- -----------
2,560,789 21,919,096
----------- ----------- -----------
$20,023,080 $17,285,350 $54,985,294
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
4
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
FOR THE PERIOD ENDED OCTOBER 31, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
HISTORICAL PROFORMA
-------------------------------- ------------------------------
ADJUSTMENTS COMBINED
COMPOST R.J. LONGO FOR BALANCE
AMERICA CONSTRUCTION COMBINATION SHEET
------- ------------ ----------- -----
<S> <C> <C> <C> <C>
Current liabilities:
Mortgages payable - Praxair Corp. $ 2,100,000 (12) ($ 1,000,000) $ 1,100,000
Current portion of long-term debt 4,211,200 $ 1,311,857 5,523,057
Notes payable, bank 100,000 100,000
Notes payable, other 234,750 234,750
Notes payable, shareholder 70,000 (12) 1,000,000
(1) 124,377 1,194,377
Due to related parties 4,523,574 4,523,574
Accounts payable, accrued expenses and
payroll taxes payable 4,710,871 1,440,169 (9) 1,245,051 7,396,091
Dividends payable 8,430,228 (3) ( 8,430,228)
Reserve for land replacement 85,375 85,375
----------- ----------- -----------
Total current liabilities 16,035,770 11,182,254 20,157,224
----------- ----------- -----------
Long-term debt, net of current portion 1,534,625 5,680,108 7,214,733
----------- ----------- -----------
Contingencies and commitments
Minority interest in consolidated
subsidiary 0 0 0
----------- ----------- -----------
Stockholders' equity:
Preferred stock, Series A (5) 6,500,000
(4) 1,950,000 8,450,000
Convertible preferred stock, Series B 2,002,500 2,002,500
Preferred stock, Series C (5) 2,000,000
(4) 500,000 2,500,000
Common stock 13,276,759 1,790,000 (5) 11,500,000
(4) 3,550,000 30,116,759
Deficit accumulated during the development
stage ( 12,797,882) ( 1,367,012) (7) 980,784
(1) 267,337
(6) ( 585,715)
(6) ( 626,026)
(9) ( 41,502)
(1,3) ( 1,257,214) ( 15,427,230)
Less: subscription receivable ( 28,692) ( 28,692)
----------- ----------- -----------
2,452,685 422,988 27,613,337
----------- ----------- -----------
$20,023,080 $17,285,350 $54,985,294
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
5
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
HISTORICAL PROFORMA
----------------------------- --------------------------------
ADJUSTMENTS COMBINED
COMPOST R.J. LONGO FOR BALANCE
AMERICA CONSTRUCTION COMBINATION SHEET
------- ------------ ----------- -----
<S> <C> <C> <C> <C>
Net sales $14,375,593 $14,375,593
Other revenues $ 232,868 232,868
----------- ----------- -----------
Total 232,868 14,375,593 14,608,461
Cost of operations 22,106 11,857,372 (1) ($267,337)
(6) 626,026
(6) 585,715
(9) 41,502 12,865,384
----------- ----------- -----------
Gross income 210,762 2,518,221 1,743,077
General and administrative 3,398,414 1,606,345 5,004,759
----------- ----------- -----------
Loss from operations ( 3,187,652) 911,876 ( 3,261,682)
----------- ----------- -----------
Other non-operating (income) and
expenses:
Interest income ( 141,608) ( 141,608)
Interest expense 550,291 644,167 1,194,458
----------- ----------- -----------
550,291 502,559 1,052,850
----------- ----------- -----------
Income (loss) from operations ( 3,737,943) 409,317 ( 4,314,532)
Income tax expense 114,650 114,650
----------- ----------- -----------
Net income (loss) ($ 3,737,943) $ 294,667 ($ 4,429,182)
----------- ----------- -----------
----------- ----------- -----------
Net income (loss) per share ($ .17) ($ .13)
Fully diluted weighted average common
shares outstanding 24,027,336 33,646,261
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
6
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 1997
<TABLE>
<CAPTION>
HISTORICAL PROFORMA
-------------------------------- ------------------------------
ADJUSTMENTS COMBINED
COMPOST R.J. LONGO FOR BALANCE
AMERICA CONSTRUCTION COMBINATION SHEET
------- ------------ ----------- -----
<S> <C> <C> <C> <C>
Net sales $17,451,456 $17,451,456
Other revenues $ 147,466 147,466
----------- ----------- -----------
Total 147,466 17,451,456 17,598,922
Cost of operations 10,803 13,456,400 (1) $1,171,430
(2) 1,252,052
(3) 83,004
(4) ( 534,674) 15,439,015
----------- ----------- -----------
Gross income 136,663 3,995,056 2,159,907
General and administrative 5,007,790 2,090,709 7,098,499
----------- ----------- -----------
Loss from operations ( 4,871,127) 1,904,347 ( 4,938,592)
----------- ----------- -----------
Other non-operating (income) and
expenses:
Gain on sale of assets ( 250)
Miscellaneous expense 723,841 723,841
Interest expense 1,166,082 541,176 1,707,258
----------- ----------- -----------
1,166,082 1,264,767 2,430,849
----------- ----------- -----------
Income (loss) from operations ( 6,037,209) 639,580 ( 7,369,441)
Income tax expense
----------- ----------- -----------
( 6,037,209) 639,580 ( 7,369,441)
Consolidated subsidiaries 129,209 129,209
----------- ----------- -----------
Net income (loss) ( 5,908,000) 639,580 ( 7,240,232)
Loss in equity in joint venture 13,603 13,603
----------- ----------- -----------
Net income (loss) ($ 5,921,603) $ 639,580 ($ 7,253,835)
----------- ----------- -----------
----------- ----------- -----------
Net income (loss) per share ($ .31) ($ .20)
Fully diluted weighted average
common shares outstanding 19,063,308 36,201,099
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
7
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(1) Reflects the split off of the assets of R.J. Longo Construction Co., Inc.
excluded in the acquisition by Compost America Holding Company, Inc. of the
division, Environmental Protection Improvement Company ("EPIC").
The excluded assets are as follows:
Construction equipment $2,488,169
Vehicles 359,130
Leasehold improvements 239,171
Office equipment 400,042
----------
3,486,512
Less accumulated depreciation 3,394,738
----------
$ 91,774
----------
----------
Prepaid expenses $ 426,485
Amounts due from shareholders 3,117,512
Accounts receivable 1,451,797
Amounts due from affiliates 4,599,873
(2) Reflects the historical revenues of R.J. Longo Construction Co., Inc. and
Compost America Holding Company, Inc. at April 30, 1997 and October 31,
1997.
(3) Reflects the payment of a dividend to the shareholders of R.J. Longo
Construction Co., Inc. of $8,430,228 prior to the acquisition by Compost
America Holding Company, Inc.
(4) Reflects the Company's purchase of the "EPIC" division of R.J. Longo
Construction Co., Inc. which closed on November 3, 1997. The Company paid
$20,000,000 in cash, issued common stock of 3,547,182 shares valued at
$3,550,000, 39,000 shares of Series A preferred stock valued at $1,950,000
and 21,000 shares of Series C preferred stock valued at $500,000. The
Company also assumed the $6,991,965 of outstanding debt of R.J. Longo
Construction Co., Inc.
(5) Reflects issuance of 11,490,600 shares of common stock valued at
$11,500,000, 130,000 shares of Series A preferred stock valued at
$6,500,000 and 70,000 shares of Series C preferred stock valued at
$2,000,000 to Wasteco Venture Limited for $20,000,000.
8
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(6) Reflects the assets purchased in the acquisition of R.J. Longo Construction
Co., Inc. and its division Environmental Protection Improvement Company.
In addition to all the assets and liabilities assumed was a contract for 15
years with the City of New York for $340 million for organic waste removal.
The Company has valued the machinery and equipment acquired at the fair
market value based on appraisals:
Machinery and equipment at
book value $ 3,885,929
-----------
Fair market value:
Other machinery and equipment 985,929
Rail cars 7,500,000
Containers 3,600,000
-----------
12,085,929
-----------
Net increase in value $ 8,200,000
-----------
-----------
The Company has valued the contract with the City of New York at
$18,780,784 which is being amortized over 15 years.
(7) Reflects the elimination of the investment account and set up of the assets
Note (6).
(8) Reflects depreciation and amortization based upon preliminary allocation of
consideration and related amortization as follows: 1) Intangible assets of
approximately $19,925,835 (including $18,780,784 for the New York contract)
over periods of 5 to 15 years. 2) Property and equipment of approximately
$12,085,929 is being depreciated over periods of 5 to 7 years. Actual
depreciation and amortization may differ depending on the final allocation
of total consideration.
(9) The estimated cost of the transaction for legal, accounting, printing and
mailing costs, and filing fees in the amount of $1,245,051 have been
accrued and are reflected on the proforma balance sheet and are being
amortized as acquisition costs.
(10) Historical primary and fully diluted per share data based on continuing
operations for the Company and primary and fully diluted proforma per share
data attributed to the transaction are included in the proforma condensed
income statement together with the number of shares used to compute per
share data. The number of shares used in the calculation of the proforma
data is based on the weighted average number of shares outstanding during
the period adjusted to give effect to shares issued.
9
<PAGE>
COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(11) Reflects employment agreements with executives of R.J. Longo Construction
Co., Inc. to the following individuals and the annual salaries to each is
supplemental to the proforma financial statements:
EXECUTIVE ANNUAL SALARY
Robert J. Longo $325,000
Jay Waxenbaum 125,000
Kevin Walsh 150,000
--------
$600,000
--------
--------
Supplemental presentation of proforma data:
October 31, April 30,
1997 1997
Combined net loss $4,429,182 $2,253,835
---------- ----------
Proforma adjustment to compensation
expenses:
Contractual increase 240,000 288,088
Related income taxes 0 0
---------- ----------
240,000 288,088
---------- ----------
Proforma net loss after contractual
increase in officers salary $4,669,182 $7,541,923
---------- ----------
---------- ----------
Per share of common stock:
Net loss ($ .13) ($ .20)
---------- ---------
---------- ---------
Proforma net loss per share after
contractual increase to be made in
officers salary ($ .14) ($ .21)
---------- ---------
---------- ---------
(12) Reflects a November 3, 1997 transaction where Robert J. Longo, a
shareholder, lent the Company $1,000,000 which was used to reduce the
mortgage payable to Praxair Corp.
10
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in this report of our report dated September 4, 1997
relating to the financial statements of R. J. Longo Construction Co., Inc.
/s/ Paul B. Radler
PAUL B. RADLER & ASSOCIATES, CPA's
Denville, New Jersey
January 15, 1998
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in this report of our report dated July 31, 1997
relating to the financial statements of Compost America Holding Company, Inc.
/s/ Zeller Weiss & Kahn
--------------------------------
ZELLER WEISS & KAHN
Certified Public Accountants
Mountainside, New Jersey
January 15, 1998
