<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1999
[ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ ------------
Commission file number 000-17454
NOXSO CORPORATION
(Exact name of small business issuer as specified in its charter)
VIRGINIA 54-1118334
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
19 MAPLE LANE, RHINEBECK, NEW YORK 12572
(Address of principal executive offices)
(914) 266-4858
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ ] No [X]
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date:
1,000,000 SHARES OF COMMON STOCK, $0.01 PAR VALUE, AS OF JUNE 30, 2000
Transitional Small Business Disclosure Format (check one); Yes No X
--- ---
Exhibit index on page 10 Page 1 of 13 pages
<PAGE> 2
NOXSO CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1999 June 30, 1999
(Unaudited)
<S> <C> <C>
Cash $ 23,853 $ 23,738
Prepaid Expenses 83,115 83,115
------------ ------------
Current Assets 106,968 106,853
------------ ------------
Equipment 339,931 339,931
Furniture and Fixtures 108,832 108,832
Leasehold Improvements 16,646 16,646
Accumulated Depreciation (465,409) (465,409)
------------ ------------
Property, Net -- --
------------ ------------
Total Assets $ 106,968 $ 106,853
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Pre-Petition Liabilities $ 3,603,078 $ 3,603,078
------------ ------------
Liabilities 3,603,078 3,603,078
------------ ------------
Common Stock, $.01 Par Value, 20,000,000 Shares Authorized,
15,383,468 Shares Issued 151,836 151,836
Paid In Capital 16,907,285 16,907,285
Treasury Stock (25,000) (25,000)
Retained Deficit (20,530,231) (20,530,346)
------------ ------------
Total Stockholders' Equity (Deficit) (3,496,110) (3,496,225)
------------ ------------
Total Liabilities and Shareholders' Equity $ 106,968 $ 106,853
============ ============
</TABLE>
See Notes To Unaudited Consolidated Financial Statements
2
<PAGE> 3
NOXSO CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1999 1998
<S> <C> <C>
Labor and Fringe Benefits $ 132,621
Supplies and Equipment 4,633
Loss on Impairment of Asset 1,228
Rent 9,548
Corporate Expenses $ 28 28,648
------------ ------------
28 176,678
------------ ------------
Interest Income 143 565
------------ ------------
143 565
------------ ------------
NET LOSS $ 115 $ (176,113)
============ ============
LOSS PER COMMON SHARE $ 0.00 $ (0.01)
============ ============
AVERAGE NUMBER OF SHARES OUTSTANDING 15,383,468 15,383,468
============ ============
</TABLE>
See Notes To Unaudited Consolidated Financial Statements
3
<PAGE> 4
NOXSO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1999 1998
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income / (Loss) $ 115 $(176,114)
Adjustments to reconcile net loss to net cash used
by operating activities:
Liabilities Subject To Compromise (225,863)
Liabilities Not Subject To Compromise
--------- ---------
115 (401,977)
========= =========
Cash Flows From Investing Activities: -- --
========= =========
Cash Flows From Financing Activities: -- --
--------- ---------
Net Decrease in Cash 115 (401,977)
Cash at Beginning of Period 23,738 421,340
========= =========
Cash at End of Period $ 23,853 $ 19,363
========= =========
Cash Payments For Interest $ -- $ --
========= =========
Cash Payments For Taxes $ -- $ --
========= =========
</TABLE>
See Notes To Unaudited Consolidated Financial Statements
4
<PAGE> 5
NOXSO CORPORATION
FORM 10-QSB - SEPTEMBER 30, 1999
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited, condensed, consolidated financial statements
for the three month periods ended September 30, 1999 and 1998 have been
prepared in accordance with the instructions for SEC Form 10-QSB and,
accordingly, do not include all disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management of NOXSO Corporation ("Company"), all adjustments, consisting of
normal recurring accruals considered necessary for a fair presentation,
have been included.
Interim unaudited financial results should be read in conjunction with the
audited financial statements included in the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1999.
The results of operations for the three months ended September 30, 1999 are
not necessarily indicative of the operating results to be expected for the
full fiscal year ending on June 30, 2000.
2. SUBSEQUENT EVENTS
Pursuant to the Company's filing of a second amended plan of
reorganization, on December 2, 1999, the Bankruptcy Court issued an Order
confirming the Company's second amended plan of reorganization under
Chapter 11 of the Bankruptcy Code. Under the terms of the Order, the
Company was authorized to separately transfer the corporate entity and its
assets. The proceeds from these transfers are to be used for the
distributions to be made pursuant to the Second Amended Plan, which will be
in full and final satisfaction, settlement, release and discharge as
against the Company, of any and all Claims and Interests of any nature
whatsoever that arose before December 2, 1999.
The Company's second amended plan of reorganization provided for conveyance
of the corporate entity to a group including Mr. Robert Long, the Secretary
of the Company. Simultaneously, the Company's sale of assets to FLS MILJO
a/s. free and clear of liens was also approved.
In connection with such distributions, Equity Interests based upon
ownership of Existing Securities or rights to acquire Existing Securities,
including without limitation vested and non-vested warrants, options,
preemption rights or other rights, will be cancelled on the Consummation
Date, and the Equity Interests will receive nothing on account of those
interests.
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
NOXSO Corporation (the "Company") was incorporated in Virginia on August 28,
1979. Until June 1997, the Company was principally engaged in developing,
testing, and marketing a process of dry post-combustion emission control
technology which used a regenerable sorbent to remove a high percentage of the
pollutants which cause "acid rain" and ground level ozone from flue gas
generated by burning fossil fuel.
On February 6, 1997, Olin Corporation ("Olin"), FRU-CON Construction Company
("FRU-CON") and Industrial Rubber & Safety Products, Inc. ("Industrial Rubber")
filed an involuntary petition in bankruptcy against the Company in the United
States Bankruptcy Court in the Eastern District of Tennessee (the "Bankruptcy
Court"). On June 4, 1997, the Company (i) consented to the jurisdiction of the
Court and was adjudicated bankrupt and (ii) converted the bankruptcy to a
proceeding under Chapter 11 of the Bankruptcy Code (case no. 97- 19709). The
Company operated as a debtor-in-possession in the bankruptcy proceeding, until
the corporate entity was sold to an investor group on May 23, 2000.
Pursuant to the provisions of the Bankruptcy Code, the Company had the right to
file a plan of reorganization. An order approving the interim
debtor-in-possession financing was entered in August of 1997. The Company
subsequently applied to the Bankruptcy Court for approval of additional
debtor-in-possession financing in an amount of up to $600,000. On August 18,
1997, the Bankruptcy Court entered a final order authorizing the Company to
obtain such financing from a group of lenders (the "DIP Lenders"). Pursuant to
such arrangement, the Company was authorized to grant and had granted to the DIP
Lenders a first priority lien in certain of the Company's patents and laboratory
equipment and was authorized to issue 300,000 shares of its common stock in the
aggregate to the DIP Lenders.
The DIP Lenders loaned $600,000 to the Company pursuant to the financing
arrangement, and the Company issued 300,000 shares of common stock to the DIP
Lenders. The loans from the DIP Lenders bore interest at the rate of 20% per
annum. Interest for a one-year period (a portion of which will be refunded to
the extent not earned) and a 5% origination fee have been paid from the
proceeds.
The Company's initial plan of reorganization included two principal elements.
These two elements were the sale of the Tennessee Facility as well as the
location of a site and the obtaining of funding (including reinstatement of DOE
funding) to construct a commercial-size demonstration of the NOXSO Process.
In September of 1997, the Company executed an asset purchase agreement for the
Tennessee Facility between the Company and Republic Financial Corporation.
However, the Company was unable to effect the commercial demonstration of the
NOXSO process. Accordingly, the
6
<PAGE> 7
Company filed a Second Amended Plan of Reorganization (as modified, the "Plan")
that would result in liquidation of the Company's assets.
On December 9, 1999, the Bankruptcy Court issued an Order confirming the Plan
under Chapter 11 of the Bankruptcy Code. Pursuant to the terms of the Order, the
Company was authorized to separately transfer the corporate entity and its
assets. The proceeds from these transfers are to be used for the distributions
to be made pursuant to the Plan, which will be in full and final satisfaction,
settlement, release and discharge as against the Company, of any and all claims
and interests of any nature whatsoever that arose before December 9, 1999.
The Plan provided for conveyance of the corporate entity to an investor group
including Mr. Robert Long, an officer, director and shareholder of the Company.
Simultaneously, the Company's sale of assets to FLS MILJO a/s. free and clear of
liens was approved.
In connection with such distributions, equity interests based upon ownership of
existing securities or rights to acquire existing securities, including without
limitation vested and non-vested warrants, options, preemptive rights or other
rights, were cancelled on the consummation date.
The Company, as a corporate entity, continues to exist as a reorganized entity.
Pursuant to the Plan, on May 23, 2000, all outstanding shares of the Company
were cancelled and 900,000 shares of common stock were issued to an investor
group consisting of Robert M. Long (360,000 shares), an officer, director and
shareholder of the Company prior to the sale of the corporate entity, Robert
Platek (450,000 shares), and Spencer Levy (90,000 shares). Pursuant to the terms
of the Plan an additional 100,000 shares have been issued, pro-rata, to the
Company's unsecured creditors with allowed claims, except for the Department of
Energy, which elected not to receive shares. As of June 5, 2000, the Company had
a total of 93 shareholders of record.
Messrs. Long, Platek and Levy paid an aggregate of $50,000 cash, on a pro-rata
basis, under the terms of the Plan for the right to acquire control of the
Company and 90% of the outstanding shares of common stock.
In connection with the change of control, all of the Company's officers and
directors, with the exception of Mr. Long, were replaced on May 25, 2000. On May
25, 2000, the investor group elected Mr. Long, a director of the Company and
Secretary of the Company prior to the change of control, as a director and
President of the Company. Additionally, James Platek was elected as a director
and Treasurer of the Company, and Spencer Levy was elected as a director and
Secretary of the Company.
7
<PAGE> 8
Pursuant to the Company's Second Amended Plan of Reorganization, as of May 23,
2000, the Company has no material assets. As such, the Company can be defined as
a "shell" company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity. The Board of Directors of the
Company has elected to commence implementation of the Company's principal
business purpose, described below under "Plan of Operation."
The corporate entity was conveyed to the investor group without any assets or
liabilities, excluding the value, if any, of any tax loss carryforwards
attributed to the Company. As such, the financial statements of the Company
prior to the sale, including the financial statements included herein, are not
representative of the Company's future operations.
As of the date of this report the Company had no source of income and must rely
entirely upon loans and equity investments from affiliates to pay operating
expenses.
PLAN OF OPERATION
The Company currently has no capital to fund operations or on-going expenses.
The Company must rely upon loans and investments from affiliates to pay
operating expenses. There are no assurances that such affiliates will continue
to advance funds to the Company or will continue to invest in the Company's
securities. In the event the Company is unable to obtain additional capital or
funding it may be unable to identify and/or acquire a suitable business
opportunity. During the twelve months following the filing of this report,
management intends to seek to acquire assets or shares of an entity actively
engaged in a business that generates revenues, in exchange for its securities.
The Company has not identified a particular acquisition target and has not
entered into any negotiations regarding such an acquisition. Management intends
to contact investment bankers, corporate financial analysts, attorneys and other
investment industry professionals through various media. As of the date to this
report, none of the Company's officers, directors, promoters or affiliates have
engaged in any preliminary contact or discussions with any representative of any
other company regarding the possibility of an acquisition or merger between the
Company and such other company.
Depending upon the nature of the relevant business opportunity and the
applicable state statutes governing the manner in which the transaction is
structured, the Company's Board of Directors expects that it will provide the
Company's shareholders with complete disclosure documentation concerning a
potential business opportunity and the structure of the proposed business
combination prior to consummation. Such disclosure is expected to be in the form
of a proxy, information statement, or report.
While such disclosure may include audited financial statements of such a target
entity, there is no assurance that such audited financial statements will be
available. The Board of Directors does intend to obtain certain assurances of
value of the target entity's assets prior to consummating such a transaction,
with further assurances that audited financial statements would be provided
within sixty days after closing. Closing documents will include representations
that the value of
8
<PAGE> 9
the assets conveyed to or otherwise so transferred will not materially differ
from the representations included in such closing documents, or the transaction
will be voidable.
Due to the Company's intent to remain a shell company until a merger or
acquisition candidate is identified, it is anticipated that its cash
requirements will be minimal, and that all necessary capital, to the extent
required, will be provided by the directors or officers. The Company does not
anticipate that it will have to raise capital or acquire any plant or
significant equipment in the next twelve months, unless a merger or acquisition
target is identified.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
9
<PAGE> 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
<TABLE>
<CAPTION>
REGULATION S-B CONSECUTIVE
NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
2 Debtor's Second Plan of Reorganization with
Modifications Through December 2, 1999,
Order of Judge R. Thomas Stinnett dated
December 9, 1999 and Order Approving
Disclosure Statement and Confirming Second
Amended Plan of Reorganization Under Chapter
11 of the Bankruptcy Code(3) N/A
3(i) Articles of Incorporation, as amended(1) N/A
3(ii) Amended and Restated Bylaws(1) N/A
11 Statement re computation of per share earnings(2) N/A
27 Financial Data Schedule 12
</TABLE>
--------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 filed with the Commission on January 13, 1989, file No. 33-26541.
(2) See Part I - Financial Statements.
(3) Incorporated by reference to the Exhibits previously filed with the
Company's Current Report on Form 8-K dated May 23, 2000.
b) REPORTS ON FORM 8-K:
None.
10
<PAGE> 11
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.
NOXSO CORPORATION
(Registrant)
Date: August 10, 2000 By: /s/ James Platek
--------------------- -----------------------------------
James Platek, Director, Treasurer,
Principal Financial Officer and
Principal Accounting Officer
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
REGULATION S-B CONSECUTIVE
NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
2 Debtor's Second Plan of Reorganization with
Modifications Through December 2, 1999,
Order of Judge R. Thomas Stinnett dated
December 9, 1999 and Order Approving
Disclosure Statement and Confirming Second
Amended Plan of Reorganization Under Chapter
11 of the Bankruptcy Code(3) N/A
3(i) Articles of Incorporation, as amended(1) N/A
3(ii) Amended and Restated Bylaws(1) N/A
11 Statement re computation of per share earnings(2) N/A
27 Financial Data Schedule N/A
</TABLE>
--------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 filed with the Commission on January 13, 1989, file No. 33-26541.
(2) See Part I - Financial Statements.
(3) Incorporated by reference to the Exhibits previously filed with the
Company's Current Report on Form 8-K dated May 23, 2000.
12
