UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the six month period ended December 31, 1999
[ ] For the transition period from __________ to __________
Commission file number: 000-22855
AMERICAN SOIL TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 95-4780218
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
215 N. Marengo Ave., Suite 110, Pasadena, CA 91101
(Address of principal executive offices) (Zip Code)
(626) 793-2435
(Issuer's telephone number, including area code)
Check whether the issuer: (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
The issuer had 8,722,931 shares of common stock outstanding as of December
31, 1999.
Transitional Small Business Disclosure Format (check one)
Yes [ ] No [X]
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
--------
Item 1. Financial Statements 3
AMERICAN SOIL TECHNOLOGIES, INC. (Unaudited Six Months)
Comparative Unaudited Consolidated Balance
Sheets as of December 31, 1999 and December 31, 1998 4
Comparative Unaudited Consolidated Statements of
Operations for the Six Months Ended December
31, 1999 and December 31, 1998 5
Comparative Unaudited Consolidated Statements of
Cash Flow for the Six Months Ended December
31, 1999 and December 31, 1998 6
Notes to the Unaudited Consolidated Financial Statements 7
AMERICAN SOIL TECHNOLOGIES, INC.
Report of Independent Accountants
Comparative Audited Consolidated Balance
Sheets as of December 31, 1999 and December 31, 1998 13
Comparative Audited Consolidated Statements of
Operations for the Two Years Ended December
31, 1999 and December 31, 1998 14
Comparative Audited Consolidated Statements of
Cash Flow for the Two Years Ended December
31, 1999 and December 31, 1998 15
Notes to the Audited Consolidated Financial Statements 16
POLYMERS PLUS, L.L.C.
Report of Independent Accountants 23
Comparative Audited Consolidated Balance
Sheets as of December 31, 1999 and December 31, 1998 24
Comparative Audited Consolidated Statements of
Operations for the Two Years Ended December
31, 1999 and December 31, 1998 25
Comparative Audited Consolidated Statements of
Cash Flow for the Two Years Ended December
31, 1999 and December 31, 1998 26
Notes to the Audited Consolidated Financial Statements 27
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 30
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 32
Item 2. Changes in Securities and Use of Proceeds 32
Item 3. Defaults Upon Senior Securities 32
Item 4. Submission of Matters to a Vote of Security Holders 32
Item 5. Other Information 32
Item 6. Exhibits and Reports On Form 8-K 32
(a) Exhibits 32
(b) Reports On Form 8-K 32
<PAGE>
PART I - FINANCIAL INFORMATION
AMERICAN SOIL TECHNOLOGIES, INC.
NOTES TO AUDITED CONSOLIDATED
FINANCIAL STATEMENTS
1. PRESENTATION OF INTERIM INFORMATION
In the opinion of the management of American Soil Technologies, Inc. (the
"Company"), the accompanying unaudited financial statements include all normal
adjustments considered necessary to present fairly the financial position as of
December 31, 1999, the results of operations for the six months ended December
31, 1999, and December 31, 1998, and cash flows for the six months ended
December 31, 1999, and December 31, 1998. Interim results are not necessarily
indicative of results for a full year.
Also included are the financial statements for the two years ended December 31,
1999 of American Soil Technologies, Inc., formerly Soil Wash Technologies, Inc.
and the two years audited financial statements of Polymers Plus, L.L.C., the
assets and operations of which were acquired by the Company as of the close of
business on December 31, 1999. The Company also acquired in a reverse
acquisition New Directions Manufacturing Inc., the assets and liabilities of New
Directions were not significant and the financial statements of New Directions
are omitted. The fiscal year end of the Company is June 30.
3
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Balance Sheets
(unaudited)
December 31,
--------------------------
1999 1998
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 44,354 $ 58,610
Accounts and notes receivable 184,734 456,267
Receivable from stockholder 117,200 117,200
Inventory 101,326 147,870
Deposits and prepaid expenses 142,378 45,122
----------- -----------
Total Current Assets 589,992 825,069
Property, plant and equipment, net of
accumulated depreciation 731,629 746,293
Patents, licenses and rights 761,269
Deferred tax asset 1,984,200 1,894,000
Other assets 32,264 26,304
----------- -----------
Total Assets $ 4,099,354 $ 3,491,666
=========== ===========
Liabilities and Stockholders Equity
Current Liabilities:
Accounts payable $ 279,266 $ 21,891
Accrued expenses 9,839 98,497
Deferred income 1,793 37,771
Short term loans payable 60,000
Payable to Stockholder 36,371
Current portion of long term debt 13,643
----------- -----------
Total Current Liabilities 400,912 158,159
Long term notes payable, less current portion 26,904
Reserve for remediation 50,000 50,000
Payables to stockholders 146,890
----------- -----------
Total Liabilities 477,816 355,049
Stockholders' Equity:
Common stock 8,723 5,507
Additional paid in capital 6,678,276 6,053,939
Retained earnings (deficit) (3,065,461) (2,922,829)
----------- -----------
Total Stockholders' Equity 3,621,538 3,136,617
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,099,354 $ 3,491,666
=========== ===========
See accompanying notes to these financial statements.
4
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Statements of Operations
(unaudited)
For the six months ended
December 31,
--------------------------
1999 1998
----------- -----------
Revenue:
Soil and water treatment $ 1,103,648 $ 1,151,882
Hauling and miscellaneous sales 36,430 69,993
----------- -----------
Gross Revenue 1,140,078 1,221,875
Cost of Operations
Materials and supplies 387,713 158,633
Labor and payroll costs 204,183 231,382
Facility costs 98,862 160,729
Equipment and maintenance 106,879 108,293
Miscellaneous and operating costs 310 29,024
----------- -----------
Total Cost of Operations 797,947 688,061
----------- -----------
Gross Profit 342,131 533,814
Sales and marketing 159,634 94,554
Depreciation and amortization 68,537 88,394
General and administrative 249,545 408,358
Interest expense 704 490
----------- -----------
Total Selling and Administrative Expense 478,420 591,796
----------- -----------
Loss before benefit for income taxes (136,289) (57,982)
Benefit for income taxes 53,000 22,500
----------- -----------
Net Income (Loss) $ (83,289) $ (35,482)
=========== ===========
Loss per common share - basic and diluted $ (0.02) $ (0.01)
=========== ===========
Weighted average common shares outstanding 5,507,420 5,507,420
=========== ===========
See accompanying notes to these financial statements.
5
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Statements of Cash Flows
(unaudited)
For the six months ended
December 31,
----------------------
1999 1998
--------- ---------
Cash Flow From Operating Activities:
Net Income (Loss) $ (83,289) $ (35,482)
Items Not Requiring Cash:
Amortization and depreciation 68,537 88,394
Allowance for doubtful accounts 18,116
Benefit of income tax credit (53,000) (22,500)
--------- ---------
Cash Flow Used By Operations (49,636) 30,412
Adjustments To Reconcile Net Income (Loss) To Net
Cash Used By Operating Activities:
(Increase)/decrease in accounts receivable 577,003 185,932
(Increase)/decrease in inventory 42,530 67,151
(Increase)/decrease in deposits and prepaid expenses (52,385) (123,849)
(Increase) in other assets (396)
(Decrease)/increase in accounts payable 122,255 (14,473)
(Decrease) in accrued expenses (96,755) (62,669)
(Decrease) in deferred income (419,264) (294,451)
--------- ---------
Total Adjustments 173,384 (242,755)
Net Cash Flow Used by Operating Activities 115,076 (212,343)
Cash Flow Used By Investing Activities:
Cash acquisition 8,672
Addition of property, plant and equipment (45,269) (67,313)
--------- ---------
Total Cash Used By Investing Activities (36,597) (67,313)
Cash Flow From Financing Activities:
Repayment of stockholder advances (146,890)
Advances from Stockholders 146,890
--------- ---------
Total Cash Flow Provided/(Used) By
Financing Activities (146,890) 146,890
--------- ---------
Net increase/(decrease) in cash and cash equivalents (59,739) (132,766)
Cash at beginning of period 104,093 191,376
--------- ---------
Cash at end of period $ 44,354 $ 58,610
========= =========
See accompanying notes to these financial statements.
6
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - THE COMPANY
American Soil Technologies, Inc., formerly Soil Wash Technologies, Inc., (the
"Company") was incorporated in California on September 22, 1993. Effective
December 31, 1999 the Company completed the reverse acquisition and acquisition
described herein and changed its name from Soil Wash Technologies, Inc. to
American Soil Technologies, Inc. and changed its state of domicile to Nevada.
During 1999 and 1998 the Company operated as Soil Wash Technologies, Inc.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies is presented to assist in
understanding the Company's financial statements. The financial statements and
notes are representations of the Company's management. Management is responsible
for their integrity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
LINE OF BUSINESS
The Company is primarily engaged in nonhazardous soil and water remediation for
commercial business.
REVENUE RECOGNITION
Revenue is generally recognized upon tons processed and freight upon shipment to
the customer or upon completion of the services and is fully earned.
ACCOUNTS RECEIVABLE
The Company provides allowances against accounts receivable to maintain
sufficient reserves to cover anticipated losses.
INVENTORY
Inventory is stated at the lower of cost or market, generally being determined
on a first-in, first-out basis. Inventory consists of materials consumed in the
soil and water remediation process.
7
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
PROPERTY, PLANT AND EQUIPMENT
Depreciation has been provided on the same basis for tax and financial
accounting purposes using the straight-line, accelerated and declining balance
methods. The estimated useful lives of the assets are as follows:
Production equipment 7-10 years
Office equipment, furniture and fixtures 5-10 years
Vehicles 3 years
Leasehold improvements 3-10 years
INCOME TAXES
The Company provides for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." SFAS 109
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the financial statement
carrying amounts and the tax basis of assets and liabilities.
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Depreciation and amortization for the six months ended December 31, 1999 and
1998 is $68,537 and $88,394, respectively.
Property plant and equipment consist of the following:
December 31, December 31,
1999 1998
----------- -----------
Production equipment $ 912,845 $ 854,747
Office equipment, furniture and fixtures 59,544 53,045
Vehicles 95,872 46,332
Leasehold improvements 528,793 520,003
----------- -----------
1,597,054 1,474,127
Less accumulated depreciation
and amortization (865,425) (727,834)
----------- -----------
$ 731,629 $ 746,293
=========== ===========
8
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4 - RELATED PARTY DEBT
The notes payable stockholders and other payables to stockholders are due to
significant shareholders of the Company and their affiliates. Repayments during
December 31, 1999 were $146,890 and net advances during the six months ended
December 31, 1998 was $146,890. The ending balances at December 31, 1999 and
1998, were $0 and $146,890, respectively. Interest expense for the periods was
$704, and $490, respectively.
NOTE 5 - COMMITMENT AND CONTINGENCIES
The Company has contractual obligations for ongoing remediation work for
businesses in its geographical area.
The Company has various operating lease obligations which monthly payments. The
Company has month to month leases for its plant sites and equipment. During the
six months ended 1999 and 1998 the aggregate lease payments were $127,547 and
$157,410, respectively. The Company expects the leases to continue or be
replaced and that the ongoing lease costs will approximate that of 1999.
In conjunction with the lease of the land associated with the operating
facilities, the Company is obligated to remediate the property to its original
condition. The Company has provided a reserve to restore the property. At
December 31, 1999 and 1998 the Company has reserved $50,000 and $50,000 to
defray the final cost of at lease termination. The lease is month to month and
can be terminated by either party with notice to the other.
NOTE 6 - INCOME TAXES
At December 31, 1999 and 1998, the Company has approximately $4,859,000 and
$4,703,000 of net operating losses available to offset future income tax
liability. The reserve for remediation is not deductible for tax purposes until
paid and therefore the Company will have a deduction of the amount actually paid
in the future. There is no certainty as to the timing of such recognition nor
that the Company will be able to fully utilized these differences.
9
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 - INCOME TAXES (continued)
The components of deferred tax assets and liabilities are as follows:
December 31, December 31,
1999 1998
---------- ----------
Tax effects of reserves for doubtful accounts
and remediation $ 49,200 $ 19,500
Tax effects of carryforward benefits:
Net operating loss carryforwards 1,935,000 1,874,500
---------- ----------
Tax effects of carryforwards
Tax effects of future taxable differences and
carryforwards 1,984,200 1,894,000
---------- ----------
Net deferred tax asset $1,984,200 $1,894,000
========== ==========
Realization of the net deferred tax assets is dependent on generating sufficient
taxable income prior to their expiration. Tax effects are based on a 8.8% state
and 34.0% federal income tax rates for a net combined rate of 39.8%. The
realized net operating losses expire over the next 20 years, as follows:
Expiration Amount
---------- ----------
2008 $ 130,000
2009 1,074,000
2010 1,058,000
2011 1,016,000
2012 915,000
2018 510,000
2019 156,000
----------
Total $4,859,000
==========
Management believes that it is more likely than not that the Company will
realize the benfits of the deferred tax credits before each expires through
2019, therefore, no valuation reserve has been provided for this against the
asset.
10
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 - COMMON STOCK
At December 31, 1999 and 1998, the Company has 8,722,931 after the issuance of
3,215,511 on December 31, 1999 for the acquisitions described herein and
5,507,420 shares outstanding as a result of the stock split at December 31,
1999. At December 31, 1999, in conjunction with the acquisitions, the Company
has 25,000,000 shares authorized and the outstanding shares were increased by a
stock split of 45.90 for 1 to the original stockholders of the Company and
changed the par value per share to $0.001. In accordance with SFAS 128, this
split has been retroactively recorded as of January 1, 1998. Additionally, the
capitalization of notes and advances payable to shareholders has retroactively
been capitalized in the amount of $5,451,129 as part of that same transaction.
NOTE 8 - LOSS PER COMMON SHARE
Loss per share of common stock has been computed based on the weighted average
number of shares outstanding. As of December 31, 1999 and 1998, the weighted
average number of shares outstanding after giving effect to the stock split in
1999 was 5,507,420 and 5,507,420, respectively. There were no dilutive items
outstanding, therefore, basis and diluted loss per share are the same.
NOTE 9 - REORGANIZATION AND ACQUISITION - YEAR END EVENT
On November 24, 1999, the Company entered into an exchange agreement for the
reverse acquisition of New Directions Manufacturing, Inc. ("New Directions")
wherein New Directions would acquire the assets of the Company and change its
name to American Soil Technologies, Inc. This exchange agreement was effective
as of the close of business on December 31, 1999. Under the agreement, New
Directions would sell to one of its directors the operating subsidiary in
exchange for the cancellation of options and the shareholders of New Directions
would receive one share of the Company for each fifteen shares of New
Directions. The existing officers and directors of New Directions resigned and
officers and directors nominated by the Company were appointed. The Company's
fiscal year end will be June 30.
In addition, effective as of the close of business on December 31, 1999, the
Company acquired in exchange for 2,360,323 shares of stock all of the
outstanding interest in Polymers, Plus L.L.C. ("Polymers"). The Company acquired
the operating assets of the Polymers, including its licenses, patents and
contracts.
The purchase method of accounting was performed on New Directions and the assets
and liabilities of Polymers based on the fair market value at the transaction
date. The valuation of of New Directions and Polymers, including transaction
costs estimated at $100,000 was $627,553 A summary of the assets and liabilities
acquired, at December 31, 1999 were as follows:
11
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 9 - REORGANIZATION AND ACQUISITION - YEAR END EVENT (continued)
Assets:
Cash $ 8,672
Inventory 25,380
Deposits and prepaid expenses 3,973
Property, plant and equipment 60,980
Patents, licenses and rights 761,269
Other assets 5,925
---------
Total Assets 866,199
Liabilities:
Current liabilities (211,742)
Long-term liabilities (26,904)
---------
Fair value of acquisitions $ 627,553
=========
In conjunction with these acquisitions, the Company issued an aggregate of
3,215,511 shares of its common stock to shareholders of New Directions and to
Polymers and to consultants and promoters.
As a result of the closing of these acquisitions on December 31, 1999, the
accompanying financial statements do not include the results of operations of
the acquired entities for any period. The unaudited pro forma financial data
does not purport to represent what the Company's results from continuing
operations would actually have been had the transactions in fact occurred as of
an earlier date, or project the results for any future date or period.
December 31,
--------------------------
Pro Forma (unaudited) 1999 1998
----------- -----------
Revenue $ 1,155,805 $ 1,279,932
Cost of goods sold 828,488 724,442
----------- -----------
Gross profit 327,317 555,490
Expenses
Selling, general and administrative (546,613) (664,353)
Interest expense (2,400) (1,706)
----------- -----------
Loss from Operations (221,696) (110,569)
Tax Benefit 53,000 22,500
----------- -----------
Net income (Loss) $ (168,696) $ (88,069)
=========== ===========
Loss per share $ (0.02) $ (0.01)
=========== ===========
Weighted average number of shares 8,722,931 8,722,931
=========== ===========
12
<PAGE>
Report of Independent Accountants
To the Board of Directors
American Soil Technologies, Inc. (formerly Soil Wash Technologies, Inc.)
Pasadena, California
We have audited the accompanying balance sheets of American Soil
Technologies, Inc. (formerly Soil Wash Technologies, Inc.) as of December 31,
1998 and 1999, and the related statements of operations and retained earnings
(deficit) and cash flows for the two years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 audit provides 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 American Soil Technologies,
Inc. (formerly Soil Wash Technologies, Inc.) as of December 31, 1998 and 1999,
and the results of operations and its cash flows for the two year then ended in
conformity with generally accepted accounting principles.
James C. Marshall, CPA, P.C.
Scottsdale, Arizona
February 18, 2000
13
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Balance Sheets
December 31,
----------- -----------
1999 1998
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 44,354 $ 58,610
Accounts and notes receivable 184,734 456,267
Receivable from stockholder 117,200 117,200
Inventory 101,326 147,870
Deposits and prepaid expenses 142,378 45,122
----------- -----------
Total Current Assets 589,992 825,069
Property, plant and equipment, net of
accumulated depreciation 731,629 746,293
Patents, licenses and rights 761,269
Deferred tax asset 1,984,200 1,894,000
Other assets 32,264 26,304
----------- -----------
Total Assets $ 4,099,354 $ 3,491,666
=========== ===========
Liabilities and Stockholders Equity
Current Liabilities:
Accounts payable $ 279,266 $ 21,891
Accrued expenses 9,839 98,497
Deferred income 1,793 37,771
Short term loans payable 60,000
Payable to Stockholder 36,371
Current portion of long term debt 13,643
----------- -----------
Total Current Liabilities 400,912 158,159
Long term notes payable, less current portion 26,904
Reserve for remediation 50,000 50,000
Payables to stockholders 146,890
----------- -----------
Total Liabilities 477,816 355,049
Stockholders' Equity:
Common stock 8,723 5,507
Additional paid in capital 6,678,276 6,053,939
Retained earnings (deficit) (3,065,461) (2,922,829)
----------- -----------
Total Stockholders' Equity 3,621,538 3,136,617
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,099,354 $ 3,491,666
=========== ===========
See accompanying notes to these financial statements.
14
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Statements of Operations
For the year December 31,
--------------------------
1999 1998
----------- -----------
Revenue:
Soil and water treatment $ 2,130,268 $ 1,820,875
Hauling and miscellaneous sales 61,997 109,525
----------- -----------
Gross Revenue 2,192,265 1,930,400
Cost of Operations
Materials and supplies 693,497 394,420
Labor and payroll costs 408,561 447,235
Facility costs 233,197 312,799
Equipment and maintenance 192,668 231,137
Miscellaneous and operating costs 610 29,554
----------- -----------
Total Cost of Operations 1,528,533 1,415,145
----------- -----------
Gross Profit 663,732 515,255
Sales and marketing 198,731 148,436
Depreciation and amortization 137,591 178,000
General and administrative 558,910 716,648
Interest expense 1,332 1,135
----------- -----------
Total Selling and Administrative Expense 896,564 1,044,219
----------- -----------
Loss before benefit for income taxes (232,832) (528,964)
Benefit for income taxes 90,200 205,700
----------- -----------
Net Income (Loss) $ (142,632) $ (323,264)
=========== ===========
Loss per common share - basic and diluted $ (0.03) $ (0.06)
=========== ===========
Weighted average common shares outstanding 5,507,420 5,507,420
=========== ===========
See accompanying notes to these financial statements.
15
<PAGE>
American Soil Technologies, Inc
(formerly Soil Wash Technologies, Inc.)
Statements of Cash Flows
For the year December 31,
----------------------
1999 1998
--------- ---------
Cash Flow From Operating Activities:
Net Income (Loss) $(142,632) $(323,264)
Items Not Requiring Cash:
Amortization and depreciation 137,591 178,000
Allowance for doubtful accounts 76,500
Benefit of income tax credit (90,200) (205,700)
--------- ---------
Cash Flow Used By Operations (18,741) (350,964)
Adjustments To Reconcile Net Income (Loss) To Net
Cash Used By Operating Activities:
(Increase)/decrease in accounts receivable 195,033 (262,117)
(Increase)/decrease in inventory 71,924 6,802
(Increase)/decrease in deposits and prepaid expenses (93,283) 128,599
(Increase) in other assets (35) (396)
(Decrease)/increase in accounts payable 155,879 (27,462)
(Decrease) in accrued expenses (88,890) (64,465)
(Decrease) in deferred income (35,978) (34,867)
--------- ---------
Total Adjustments 204,650 (253,906)
Net Cash Flow Used by Operating Activities 185,909 (604,870)
Cash Flow Used By Investing Activities:
Cash acquisition 8,672
Addition of property, plant and equipment (61,947) (59,913)
--------- ---------
Total Cash Used By Investing Activities (53,275) (59,913)
Cash Flow From Financing Activities:
Repayment of stockholder advances (146,890)
Advances from Stockholders 146,890
Proceeds of capital contribution 552,207
--------- ---------
Total Cash Flow Provided/(Used) By
Financing Activities (146,890) 699,097
--------- ---------
Net increase/(decrease) in cash and cash equivalents (14,256) 34,314
Cash at beginning of period 58,610 24,296
--------- ---------
Cash at end of period $ 44,354 $ 58,610
========= =========
See accompanying notes to these financial statements.
16
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
American Soil Technologies, Inc., formerly Soil Wash Technologies, Inc., (the
"Company") was incorporated in California on September 22, 1993. Effective
December 31, 1999 the Company completed the reverse acquisition and acquisition
described herein and changed its name from Soil Wash Technologies, Inc. to
American Soil Technologies, Inc. and changed its state of domicile to Nevada.
During 1999 and 1998 the Company operated as Soil Wash Technologies, Inc.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies is presented to assist in
understanding the Company's financial statements. The financial statements and
notes are representations of the Company's management. Management is responsible
for their integrity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
LINE OF BUSINESS
The Company is primarily engaged in nonhazardous soil and water remediation for
commercial business.
REVENUE RECOGNITION
Revenue is generally recognized upon tons processed and freight upon shipment to
the customer or upon completion of the services and is fully earned.
ACCOUNTS RECEIVABLE
The Company provides allowances against accounts receivable to maintain
sufficient reserves to cover anticipated losses.
INVENTORY
Inventory is stated at the lower of cost or market, generally being determined
on a first-in, first-out basis. Inventory consists of materials consumed in the
soil and water remediation process.
17
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
PROPERTY, PLANT AND EQUIPMENT
Depreciation has been provided on the same basis for tax and financial
accounting purposes using the straight-line, accelerated and declining balance
methods. The estimated useful lives of the assets are as follows:
Production equipment 7-10 years
Office equipment, furniture and fixtures 5-10 years
Vehicles 3 years
Leasehold improvements 3-10 years
INCOME TAXES
The Company provides for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." SFAS 109
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the financial statement
carrying amounts and the tax basis of assets and liabilities.
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Depreciation and amortization for the year ended December 31, 1999 and 1998 is
$137,591 and $178,000, respectively.
Property plant and equipment consist of the following:
December 31, December 31,
1999 1998
----------- -----------
Production equipment $ 912,845 $ 854,747
Office equipment, furniture and fixtures 59,544 53,045
Vehicles 95,872 46,332
Leasehold improvements 528,793 520,003
----------- -----------
1,597,054 1,474,127
Less accumulated depreciation and amortization (865,425) (727,834)
----------- -----------
$ 731,629 $ 746,293
=========== ===========
18
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY DEBT
The notes payable stockholders and other payables to stockholders are due to
significant shareholders of the Company and their affiliates. Repayments during
December 31, 1999 were $146,890 and net advances during the year ended December
31, 1998 was $699,097. The ending balances at December 31, 1999 and 1998, were
$0 and $146,890, respectively. Interest expense for the periods was $1,332, and
$1,135, respectively.
NOTE 5 - COMMITMENT AND CONTINGENCIES
The Company has contractual obligations for ongoing remediation work for
businesses in its geographical area.
The Company has various operating lease obligations which monthly payments. The
Company has month to month leases for its plant sites and equipment. During 1999
and 1998 the aggregate lease payments were $249,093 and $314,821, respectively.
The Company expects the leases to continue or be replaced and that the ongoing
lease costs will approximate that of 1999.
In conjunction with the lease of the land associated with the operating
facilities, the Company is obligated to remediate the property to its original
condition. The Company has provided a reserve to restore the property. At
December 31, 1999 and 1998 the Company has reserved $50,000 and $50,000 to
defray the final cost of at lease termination. The lease is month to month and
can be terminated by either party with notice to the other.
NOTE 6 - INCOME TAXES
At December 31, 1999 and 1998, the Company has approximately $4,859,000 and
$4,703,000 of net operating losses available to offset future income tax
liability. The reserve for remediation is not deductible for tax purposes until
paid and therefore the Company will have a deduction of the amount actually paid
in the future. There is no certainty as to the timing of such recognition nor
that the Company will be able to fully utilized these differences.
19
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - INCOME TAXES (continued)
The components of deferred tax assets and liabilities are as follows:
December 31, December 31,
1999 1998
---------- ----------
Tax effects of reserves for doubtful accounts
and remediation $ 49,200 $ 19,500
Tax effects of carryforward benefits:
Net operating loss carryforwards 1,935,000 1,874,500
---------- ----------
Tax effects of carryforwards
Tax effects of future taxable differences and
carryforwards 1,984,200 1,894,000
---------- ----------
Net deferred tax asset $1,984,200 $1,894,000
========== ==========
Realization of the net deferred tax assets is dependent on generating sufficient
taxable income prior to their expiration. Tax effects are based on a 8.8% state
and 34.0% federal income tax rates for a net combined rate of 39.8%. The
realized net operating losses expire over the next 20 years, as follows:
Expiration Amount
---------- -----------
2008 $ 130,000
2009 1,074,000
2010 1,058,000
2011 1,016,000
2012 915,000
2018 510,000
2019 156,000
-----------
Total $ 4,859,000
===========
Management believes that it is more likely than not that the Company will
realize the benfits of the deferred tax credits before each expires through
2019, therefore, no valuation reserve has been provided for this against the
asset.
20
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - COMMON STOCK
At December 31, 1999 and 1998, the Company has 8,722,931 after the issuance of
3,215,511 on December 31, 1999 for the acquisitions described herein and
5,507,420 shares outstanding as a result of the stock split at December 31,
1999. At December 31, 1999, in conjunction with the acquisitions, the Company
has 25,000,000 shares authorized and the outstanding shares were increased by a
stock split of 45.90 for 1 to the original stockholders of the Company and
changed the par value per share to $0.001. In accordance with SFAS 128, this
split has been retroactively recorded as of January 1, 1998. Additionally, the
capitalization of notes and advances payable to shareholders has retroactively
been capitalized in the amount of $5,451,129 as part of that same transaction.
NOTE 8 - LOSS PER COMMON SHARE
Loss per share of common stock has been computed based on the weighted average
number of shares outstanding. As of December 31, 1999 and 1998, the weighted
average number of shares outstanding after giving effect to the stock split in
1999 was 5,507,420 and 5,507,420, respectively. There were no dilutive items
outstanding, therefore, basis and diluted loss per share are the same.
NOTE 9 - REORGANIZATION AND ACQUISITION - YEAR END EVENT
On November 24, 1999, the Company entered into an exchange agreement for the
reverse acquisition of New Directions Manufacturing, Inc. ("New Directions")
wherein New Directions would acquire the assets of the Company and change its
name to American Soil Technologies, Inc. This exchange agreement was effective
as of the close of business on December 31, 1999. Under the agreement, New
Directions would sell to one of its directors the operating subsidiary in
exchange for the cancellation of options and the shareholders of New Directions
would receive one share of the Company for each fifteen shares of New
Directions. The existing officers and directors of New Directions resigned and
officers and directors nominated by the Company were appointed. The Company's
fiscal year end will be June 30.
In addition, effective as of the close of business on December 31, 1999, the
Company acquired in exchange for 2,360,323 shares of stock all of the
outstanding interest in Polymers, Plus L.L.C. ("Polymers"). The Company acquired
the operating assets of the Polymers, including its licenses, patents and
contracts.
The purchase method of accounting was performed on New Directions and the assets
and liabilities of Polymers based on the fair market value at the transaction
date. The valuation of of New Directions and Polymers, including transaction
costs estimated at $100,000 was $627,553 A summary of the assets and liabilities
acquired, at December 31, 1999 were as follows:
21
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.
(FORMERLY SOIL WASH TECHNOLOGIES, INC.)
NOTES TO FINANCIAL STATEMENTS
NOTE 9 - REORGANIZATION AND ACQUISITION - YEAR END EVENT (continued)
Assets:
Cash $ 8,672
Inventory 25,380
Deposits and prepaid expenses 3,973
Property, plant and equipment 60,980
Patents, licenses and rights 761,269
Other assets 5,925
---------
Total Assets 866,199
Liabilities:
Current liabilities (211,742)
Long-term liabilities (26,904)
---------
Fair value of acquisitions $ 627,553
=========
In conjunction with these acquisitions, the Company issued an aggregate of
3,215,511 shares of its common stock to shareholders of New Directions and to
Polymers and to consultants and promoters.
As a result of the closing of these acquisitions on December 31, 1999, the
accompanying financial statements do not include the results of operations of
the acquired entities for any period. The unaudited pro forma financial data
does not purport to represent what the Company's results from continuing
operations would actually have been had the transactions in fact occurred as of
an earlier date, or project the results for any future date or period.
December 31,
--------------------------
Pro Forma (unaudited) 1999 1998
----------- -----------
Revenue $ 2,249,303 $ 2,058,152
Cost of goods sold 1,557,946 1,486,223
----------- -----------
Gross profit 691,357 571,929
Expenses
Selling, general and administrative (1,057,548) (1,206,345)
Interest expense (4,539) (3,549)
----------- -----------
Loss from Operations (370,730) (637,965)
Tax Benefit 90,200 205,700
----------- -----------
Net income (Loss) $ (280,530) $ (432,265)
=========== ===========
Loss per share $ (0.03) $ (0.05)
=========== ===========
Weighted average number of shares 8,722,931 8,722,931
=========== ===========
22
<PAGE>
Report of Independent Accountants
To the Board of Directors
Polymers Plus, L.L.C.
Willcox, Arizona
We have audited the accompanying balance sheets of Polymers Plus, L.L.C. as
of December 31, 1998 and 1999, and the related statements of operations and cash
flows for the two years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 audit provides 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 Polymers Plus, L.L.C. as of
December 31, 1998 and 1999, and the results of operations and its cash flows for
the two year then ended in conformity with generally accepted accounting
principles.
James C. Marshall, CPA, P.C.
Scottsdale, Arizona
February 18, 2000
23
<PAGE>
POLYMERS PLUS, L.L.C.
BALANCE SHEETS
DECEMBER 31, 1998 AND 1999
1998 1999
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,654 $ 8,672
Inventory 18,800 25,380
Deposits and prepaid expenses 3,973 3,973
--------- ---------
Total current assets 24,427 38,025
Property, plant and equipment, net of
accumulated depreciation 38,724 60,980
Other assets, net of accumulated amortization 5,050 5,925
--------- ---------
Total assets $ 68,201 $ 104,930
========= =========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable $ 1,916 $ 1,496
Accrued expenses 34 232
Short-term loans payable 60,000
Current portion of long term debt 6,443 13,643
Payable to members 36,810 36,371
--------- ---------
Total current liabilities 45,203 111,742
Long term debt, less portion due within one year 11,317 26,904
--------- ---------
Total liabilities 56,520 138,646
Members' capital:
Members' capital account 11,681 (33,716)
--------- ---------
Total members' capital 11,681 (33,716)
--------- ---------
Total liabilities and members' capital $ 68,201 $ 104,930
========= =========
See accompanying notes to these financial statements.
24
<PAGE>
POLYMERS PLUS, L.L.C.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
1998 1999
--------- ---------
Revenue:
Sales $ 127,424 $ 56,925
Freight and miscellaneous sales 328 113
--------- ---------
Gross revenue 127,752 57,038
Cost of operations:
Materials and supplies 57,587 18,596
Equipment and maintenance 13,491 10,817
--------- ---------
Total cost of operations 71,078 29,413
--------- ---------
Gross income/(loss) 56,674 27,625
Sales and marketing costs 34,400 35,583
Depreciation and amortization 16,612 14,100
General and administrative costs 112,249 112,633
Interest expense 2,414 3,207
--------- ---------
Sales and administrative costs 165,675 165,523
--------- ---------
Net income (loss) $(109,001) $(137,898)
========= =========
See accompanying notes to these financial statements
25
<PAGE>
POLYMERS PLUS, L.L.C.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
Cash flow from operating activities:
Net loss $(109,001) $(137,898)
Items not requiring cash
Amortization and depreciation 16,612 14,100
Accrued compensation 16,196
--------- ---------
Net cash used by operating activities (76,193) (123,798)
Adjustments to reconcile net loss to net cash
used by operating activities
Changes in assets and liabilities:
Increase in inventory (14,100) (6,580)
Increase in deposits and prepaid expenses (1,633)
Increase in other assets (2,150)
(Decrease)/increase in accounts payable 591 (420)
(Decrease)/increase in accrued expenses (1,593) (241)
--------- ---------
Total adjustments (16,735) (9,391)
--------- ---------
Net cash flow from(used by) operating activities (92,928) (133,189)
--------- ---------
Cash used by investing activities:
Purchases of property, plant and equipment (4,131) (35,080)
--------- ---------
Total cash used in investing activities (4,131) (35,080)
--------- ---------
Cash flow from financing activities:
Increase in notes and loans payable 87,714
Repayment of debt (10,578) (4,927)
Proceeds from Increase in equity 105,000 92,500
--------- ---------
Total cash flow from financing activities 94,422 175,287
Net increase/(decrease in cash (2,637) 7,018
Cash at beginning of period 4,291 1,654
--------- ---------
Cash at end of period $ 1,654 $ 8,672
========= =========
See accompanying notes to these financial statements.
26
<PAGE>
POLYMERS PLUS, L.L.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1999
NOTE 1 - ORGANIZATION
Polymers Plus, L.L.C. ("Polymers") was organized on July 15, 1995 in the state
of Arizona. Polymers is organized as a limited liability company. The business
of the company is the development, manufacture and sale of agricultural water
and soil conservation products.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies of Polymers Plus, L.L.C. is
presented to assist in understanding these financial statements. The financial
statements and notes are representations of the Polymers' management. Management
is responsible for their integrity. These accounting policies conform to
generally accepted accounting principles and have been consistently applied in
the preparation of the financial statements.
LINE OF BUSINESS
Polymers is primarily engaged in the manufacture and sale of agricultural
enhancement products to farms and horticultural interests.
EQUIPMENT AND DEPRECIATION
Depreciation has been provided on the same basis for tax and financial
accounting purposes using the straight-line, accelerated and declining balance
methods. The estimated useful lives of the assets are as follows:
Production equipment 5 Years
Office equipment, furniture and fixtures 7 Years
Vehicles 5 Years
ORGANIZATION COSTS
Polymers is amortizing the organizational costs of $6,375 are being amortized
over 60 months on a straight-line basis.
PATENTS
Polymers owns various licenses and patents for the production and sale of
agricultural polymer products. The cost of these licenses and patents have been
expensed as incurred by Polymers. The patents and related licenses have terms
expiring through 2017.
27
<PAGE>
POLYMERS PLUS, L.L.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1999
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
TAX STRUCTURE
Polymers was organized as a limited liability company whereby its income and
losses are attributed to the individual members in proportion to their
individual ownership percentages in the same manner as income and loss are
attributed to limited partners of a partnership.
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT, DEPRECIATION AND AMORTIZATION
Depreciation and amortization for the year ended December 31, 1998 and 1999 is $
15,337 and $12,825, respectively. Amortization of organizational expense for the
years is $1,275 and $1,275, respectively.
Property, plant and equipment consist of the following:
1998 1999
------- -------
Production equipment $28,131 $28,131
Furniture and fixtures 4,856 4,802
Vehicles 28,665 63,799
------- -------
61,652 96,732
Accumulated depreciation 22,928 35,752
------- -------
$38,724 $60,980
======= =======
NOTE 4 - LONG TERM DEBT
Long term debt consists of the following:
Note Payable - Bank $17,760 $12,813
Note Payable - GMAC 27,734
------- -------
17,760 40,547
Current portion of long term debt 6,443 13,643
------- -------
Long term portion $11,317 $26,904
======= =======
NOTE 5 - COMMITMENT AND CONTINGENCIES
Polymers has certain operating leases for equipment requiring annual lease
payments of $23,850, through December, 2002.
28
<PAGE>
POLYMERS PLUS, L.L.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1999
NOTE 6 - RELATED PARTY TRANSACTIONS
A contract between the managing member and Polymers provides that the managing
member is to receive an annual compensation of $36,000. The unpaid balance due
the member has been accrued and is included in the payable to members amount.
NOTE 7 - EXCHANGE AGREEMENT
In 1999, Polymers entered into an exchange agreement with Soil Wash
Technologies, Inc., subsequently renamed to American Soil Technologies, Inc.
whereby Polymers was to receive 2,360,323 shares of American Soil Technologies,
Inc. in exchange for all of the assets, liabilities and contracts of Polymers.
This exchange was competed as of December 31, 1999. The business and operations
Polymers will continue as a division of American Soil Technologies, Inc., under
the name Agriblend.
NOTE 8 - MEMBERS' EQUITY
During 1998 and 1999, the members contributed $105,000 and $92,500,
respectively, to Polymers.
29
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE COMPANY
On September 29, 1999, the Company signed a letter of intent for an acquisition
and stock exchange in which the Company will be the surviving entity. Effective
as of December 31, 1999, and completed on January 2, 2000, the Company completed
an acquisition and stock exchange in which the Company is the surviving entity.
In the acquisition, the Company spun off its operating subsidiary, New
Directions Manufacturing, Inc., an Arizona corporation ("New Directions-
Arizona"), and changed its name to American Soil Technologies, Inc. After a 15
for 1 reverse stock split, New Directions shareholders received ASTI stock in
exchange for their New Directions stock.
American Soil Technologies, Inc. was formed by merging the respective assets and
liabilities of Soil Wash Technologies, Inc. and Polymers Plus, LLC. Soil Wash
Technologies owns and operates a commercial non-hazardous soil and water
remediation facility which is located in San Diego, California and Polymers Plus
has developed, patented and trademarked product lines that can be used in
agriculture, turf, garden and landscaping. When tilled into the soil, AGRIBLEND
PLUS(R) creates a Semi-Permeable Barrier beneath the soil surface that cost
effectively retains moisture, nutrients, and herbicides in the germination and
root zone. The technological link between the merger of Soil Wash Technologies
and Polymers Plus is the expert knowledge each company has with respect to
polymers and soil.
RESULTS OF OPERATIONS
Six Months Ended December 31, 1999 as compared to the Six Months Ended December
31, 1998
NET SALES
Net sales of $1,140,078 for the second quarter of fiscal 2000, which ended
December 31, 1999, were less than the sales of the same period for the previous
year of $1,221,875 by $81,797 or 7.17%. The second quarter sales losses can
largely be attributed to the general reduction nationally in the sale of
agricultural products.
30
<PAGE>
COST OF SALES AND GROSS PROFIT
The gross profit was $242,131 or 30.0% in the quarter ending December 31, 1999
in comparison with $533,814 or 43.68% for the same quarter the previous year. As
a percentage of sales, cost of sales was 82.74% compared to 61.06% during the
same aforementioned time periods. The decrease in gross profit margin for the
two quarters was primarily due to an increase in material and supply costs.
OPERATING EXPENSES
Operating expenses were $797,947 or 69.99% of net sales during the six months
ending December 31, 1999. This compares with $688,061 or 56.31% for the period
ending December 31, 1998.
Operating expenses for the 6 months ending December 31, 1999 decreased $113,376
or 9.6% compared to the same period in 1998. The difference was primarily due to
a decrease in General and Administrative expenses.
INTEREST
Net interest expense for the 6 months ending December 31, 1999 increased $214
compared to the same period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for sales and marketing and
operating expenses, including labor costs, raw materials purchases, and funding
of accounts receivable. The Company's primary sources of cash have been from
operations.
Accounts receivable-net at December 31, 1999 decreased $301,533 from December
31, 1998. The decrease in receivables is primarily due to the collection of some
older receivables during this period. The Company has not recognized any
significant bad debt expense in any of the periods represented.
The Company's current plans require additional capital expenditures for the
remainder of the year of approximately $700,000. To attract this investment, the
Company is completing a private sale of convertible debentures raising a total
of $1,075,000 and expects to complete this offering by March 1, 2000. There can
be no assurances that the Company can obtain such additional funds as may be
needed to expand production, increase sales, and ultimately achieve
profitability.
31
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management of the Company believes that there are no litigation matters
pending or threatened against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
(27) Financial Data Schedule
(b) REPORTS ON FORM 8-K:
None.
32
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN SOIL TECHNOLOGIES, INC.
(Registrant)
Date: February 22, 2000 /s/ Neil C. Kitchen
----------------------------------------
NEIL C. KITCHEN
President, Chief Executive Officer,
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR 6 MONTHS ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN
ITS ENTIRITY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 44,354
<SECURITIES> 0
<RECEIVABLES> 378,434
<ALLOWANCES> 76,500
<INVENTORY> 101,326
<CURRENT-ASSETS> 589,992
<PP&E> 1,597,054
<DEPRECIATION> 865,425
<TOTAL-ASSETS> 4,099,354
<CURRENT-LIABILITIES> 400,912
<BONDS> 26,904
0
0
<COMMON> 8,723
<OTHER-SE> 6,678,276
<TOTAL-LIABILITY-AND-EQUITY> 4,099,354
<SALES> 1,103,648
<TOTAL-REVENUES> 1,140,078
<CGS> 797,131
<TOTAL-COSTS> 1,276,367
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 18,116
<INTEREST-EXPENSE> 704
<INCOME-PRETAX> (136,289)
<INCOME-TAX> (53,000)
<INCOME-CONTINUING> (83,289)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (83,289)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
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