<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 ON
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIER EVENT REPORTED): DECEMBER 25, 1998
COMMISSION FILE NUMBER 0-10054
COMMODORE ENVIRONMENTAL SERVICES, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C>
DELAWARE 87-0275043
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
150 EAST 58TH STREET, 10155
NEW YORK, NEW YORK (Zip Code)
(Address of Principal Executive Offices)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 308-5800
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CURRENT REPORT ON FORM 8-K/A
COMMODORE ENVIRONMENTAL SERVICES, INC.
DECEMBER 25, 1998
This Amendment No. 1 amends Item 7 of the Current Report on Form 8-K dated
December 25, 1998 (the "Current Report"), of Commodore Environmental Services,
Inc. (the "Company"), a Delaware corporation, filed with the Securities and
Exchange Commission on December 31, 1998, relating to the Company's acquisition
of Commodore Separation Technologies, Inc. ("Separation"), to include the
information set forth below.
Item 7. Financial Statements, Pro Forma Financial Statements and
Exhibits.
(a) Financial Statements of Business Acquired.
The audited balance sheet of Separation as of June 30, 1997 and the related
audited statements of operations, shareholders' equity and cash flows for the
fiscal year ended June 30, 1997 and the accompanying notes are incorporated
herein by reference to Part II, Item 8 of Separation's Annual Report on Form
10-K for the fiscal year ended June 30, 1997. The audited balance sheet of
Separation as of December 31, 1997 and June 30, 1997 and the related audited
statements of operations, shareholders' equity and cash flows for the six months
ended December 31, 1997 and the accompanying notes are incorporated herein by
reference to Part II, Item 8 of Separation's Transition Report on Form 10-K for
the transition period from July 1, 1997 to December 31, 1997. The unaudited
condensed balance sheet of Separation as of September 30, 1998 and the related
unaudited condensed statements of operations and cash flow for the nine month
period ended September 30, 1998 and 1997 and the accompanying notes are
incorporated herein by reference to Part I, Item 1 of Separation's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1998.
(b) Pro Forma Financial Information.
In accordance with Item 7 (b), attached as exhibit 99.5 are the unaudited pro
forma financial statements and accompanying notes for Commodore Environmental
Services, Inc. and Commodore Separation Technologies, Inc. combined. The pro
forma financial information included herein reflects the pro forma effects of
the acquisition of Separation by Environmental. It combines the historical
balance sheets of Environmental and Separation as of September 30, 1998. The
business combination has been accounted for as a purchase of Separation giving
effect to the acquisition of 61% of beneficial ownership of the outstanding
common shares of Separation. The unaudited condensed pro forma balance sheet
should be read in conjunction with the historical financial statements and
related notes.
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The following unaudited condensed pro forma combined statements of operations
for the nine months ended September 30, 1998 and for the year ended December 31,
1997 for Environmental and Separation, assumes the acquisition of Separation by
Environmental as of January 1, 1997.
The pro forma results of operations are not necessarily indicative of the
results of operations that would actually have been obtained if the transactions
had occurred as of the beginning of the year and nine month period. These
statements should be read in conjunction with the historical financial
statements and related notes.
(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION
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99.2 The audited balance sheet of Separation as of June 30,
1997 and the related audited statements of operations,
shareholders' equity and cash flows for the fiscal year
ended June 30, 1997 and the accompanying notes are
incorporated herein by reference to Part II, Item 8 of
Separation's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997. (File No. 0-22291)
99.3 The audited balance sheet of Separation as of December 31,
1997 and the related audited statements of operations,
shareholders' equity and cash flows for the six months
ended December 31, 1997 and the accompanying notes are
incorporated herein by reference to Part II, Item 8 of
Separation's Transition Report on Form 10-K for the
transition period from July 1, 1997 to December 31, 1997.
(File No. 0-22291)
99.4 The unaudited condensed balance sheet of Separation as of
September 30, 1998 and the related unaudited condensed
statements of operations and cash flow for the nine month
period ended September 30, 1998 and 1997 and the
accompanying notes are incorporated herein by reference to
Part I, Item 1 of Separation's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1998.
(File No. 0-22291)
99.5 Unaudited pro forma financial statements and accompanying
notes for the Company and Separation combined.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 2, 1999
COMMODORE ENVIRONMENTAL SERVICES, INC.
(Registrant)
By /s/ Andrew P. Oddi
---------------------------------
Andrew P. Oddi - Vice President
Treasurer
(Principal Financial Officer)
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.2 The audited balance sheet of Separation as of June 30,
1997 and the related audited statements of operations,
shareholders' equity and cash flows for the fiscal year
ended June 30, 1997 and the accompanying notes are
incorporated herein by reference to Part II, Item 8 of
Separation's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997. (File No. 0-22291)
99.3 The audited balance sheet of Separation as of December 31,
1997 and the related audited statements of operations,
shareholders' equity and cash flows for the six months
ended December 31, 1997 and the accompanying notes are
incorporated herein by reference to Part II, Item 8 of
Separation's Transition Report on Form 10-K for the
transition period from July 1, 1997 to December 31, 1997.
(File No. 0-22291)
99.4 The unaudited condensed balance sheet of Separation as of
September 30, 1998 and the related unaudited condensed
statements of operations and cash flow for the nine month
period ended September 30, 1998 and 1997 and the
accompanying notes are incorporated herein by reference to
Part I, Item 1 of Separation's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1998.
(File No. 0-22291)
99.5 Unaudited pro forma financial statements and accompanying
notes for the Company and Separation combined.
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EXHIBIT 99.5
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1998
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
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COMMODORE COMMODORE ADJUSTMENTS
SEPARATION ENVIRONMENTAL AND PROFORMA
TECHNOLOGIES SERVICES ELIMINATIONS COMBINED
------------ -------- ------------ --------
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ASSETS
Current Assets:
Cash and cash equivalents $ 715 $ 39 $ $ 754
Accounts receivable, net
Advances from related parties 2 150 152
Restricted cash 210 50 260
Inventory 631 631
Prepaid assets and other 1 1
------- ------- ------
TOTAL CURRENT ASSETS 1,559 239 1,798
Other receivables 325 325
Other investments 357 357
Investment in and loans to
unconsolidated subsidiary 7,914 (3,745)abd 4,169
Property and equipment, net 1,494 64 1,558
Note receivable 642 642
Deferred financing costs 24 24
Patents and completed
technology, net 184 4,288 153e 4,625
Goodwill, net
Other assets 18 18
------- ------- ------- -------
TOTAL ASSETS $ 3,237 $13,871 $(3,592) $13,516
======= ======= ======= =======
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See notes to pro forma financial statements.
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COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1998
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
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COMMODORE COMMODORE ADJUSTMENTS
SEPARATION ENVIRONMENTAL AND PROFORMA
TECHNOLOGIES SERVICES ELIMINATIONS COMBINED
------------ -------- ------------ --------
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable and
accrued liabilities $ 276 $ 563 $ $ 839
Due to related party 367 (357)d 10
Current portion of long term
debt 4,000 4,000
Other accrued liabilities 450 923 1,373
-------- -------- -------- --------
TOTAL CURRENT LIABILITIES 1,093 5,486 (357) 6,222
Other long-term debt 6 6
Deferred gain 621 621
Promissory note to related party 2,250 2,250
-------- -------- -------- --------
TOTAL LIABILITIES 1,099 8,357 (357) 9,099
Preferred stock of subsidiary 209b 209
Stockholders' Equity:
Preferred stock 1 39 (1)b 39
Common stock 12 628 (12)b 628
Additional paid in capital 11,363 45,953 (11,210)be 46,106
(Deficit) (9,238) (41,081) 7,779b (42,540)
-------- -------- -------- --------
2,138 5,539 (3,444) 4,233
Less cost common stock held
in treasury (25) (25)
-------- -------- -------- --------
TOTAL STOCKHOLDERS' EQUITY 2,138 5,514 (3,444) 4,208
-------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,237 $ 13,871 $ (3,592) $ 13,516
======== ======== ======== ========
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See notes to pro forma financial statements.
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COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
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COMMODORE COMMODORE ADJUSTMENTS
SEPARATION ENVIRONMENTAL AND PROFORMA
TECHNOLOGIES SERVICES ELIMINATIONS COMBINED
------------ -------- ------------ --------
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CONTRACT REVENUES $ $ 1,259 $ $ 1,259
COSTS AND EXPENSES
Cost of sales 649 1,013 1,662
Research and development 520 200 720
General and administrative 997 2,232 3,229
Depreciation and amortization 287 (23)f 310
Corporate overhead expenses 529 529
Sales and marketing 370 246 616
------------ ------------ ------------
Total costs and expenses 3,352 3,691 7,066
OPERATING LOSS 3,352 2,432 5,807
Other income (expense):
Interest income 94 419 513
Interest expense (467) (467)
Other income 19 19
Equity in losses from unconsolidated
subsidiary (3,999) 1,459a (2,540)
Gain on sale of subsidiary stock 8,024 8,024
Minority interest 418 418
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (3,239) $ 1,963 $ 1,436 $ 160
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE:
Basic $ *
============
Diluted $ *
============
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic 61,038,000
Diluted 64,820,000
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* Less than one cent per share.
See notes to pro forma financial statements.
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COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
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COMMODORE COMMODORE ADJUSTMENTS
SEPARATION ENVIRONMENTAL AND PROFORMA
TECHNOLOGIES SERVICES ELIMINATIONS COMBINED
------------ -------- ------------ --------
<S> <C> <C> <C> <C>
CONTRACT REVENUES $19,493 $19,493
COSTS AND EXPENSES
Cost of sales $ 50 16,325 $(50)c 16,325
Research and development 1,390 3,074 (1,390)c 3,074
General and administrative 1,800 17,058 (1,800)c 17,058
Depreciation and amortization 234 1,282 (203)cf 1,313
Corporate overhead expenses 1,616 (1,616)c
Sales and marketing 281 (281)c
------------ ------------ --------- ------------
Total costs and expenses 5,371 37,739 (5,340) 37,770
OPERATING LOSS (5,371) (18,246) 5,340 (18,277)
Other income (expense):
Interest income 294 1,004 (294)c 1,004
Interest expense (9) (1,052) 9c (1,052)
Other income
Equity in losses from unconsolidated
subsidiary (1,827) (1,827)
Gain on sale of subsidiary stock 1,896 1,896
Minority interest 4,718 (1,400)c 3,318
------------ ------------ --------- ------------
NET INCOME (LOSS) $ (5,086) $ (13,507) $ 3,655 $ (14,938)
============ ============ ========= ============
NET INCOME (LOSS) PER SHARE:
Basic and diluted* $ (.29)
============
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic and diluted 58,482,000
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* Reflects $1,998 of dividends on preferred stock
See notes to pro forma financial statements.
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COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying pro forma condensed consolidated financial statements have
been prepared in accordance assuming the purchase of an incremental 61% of the
common stock of Commodore Separation Technologies, Inc. ("Separation") by
Commodore Environmental Services, Inc. ("Environmental") took place as of
January 1, 1997.
PRO FORMA ADJUSTMENTS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro-forma adjustments have been made in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. The financial
statement information was derived from unaudited financial statements unless
indicated otherwise. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine month periods ended September
30, 1998 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1998.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1997.
A) To reverse Environmental's interest in Separation's losses for the nine
months ended September 30, 1998 which were included in Applied's results.
Environmental accounts for Commodore Applied Technologies, Inc.'s ("Applied")
losses under the equity method and thereby recorded its percentage of
Separation's losses included in Applied's results in its historical results for
the nine months ended September 30, 1998.
B) To eliminate the equity section of Separation against the investment account
of Environmental.
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C) To eliminate the operations of Separation which were included in
Environmental results for the period presented. In December 1996, Environmental
sold the capital stock of Separation to Applied, its 69% owned subsidiary ).
Therefore the results of Separation for the year ended December 31, 1997 were
consolidated with the results of Environmental.
D) To eliminate intercompany balances.
E) To record step-up basis in assets acquired.
F) To record amortization of completed technology acquired.
