<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1997
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ----------------------
Commission file number 0-22630
---------
Seiler Pollution Control Systems, Inc.
- -----------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2448906
- -------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.
555 Metro Place North, Suite 100, Dublin, Ohio 43017
- ---------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 614/791-3272
---------------
- -----------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year,
if Changes Since Last Report.
Indicate by X whether the registrant (1) has filed all reports to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes [ X ] No [ ]
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes _____ No _____
As of December 31, 1997, the Registrant had outstanding 21,160,588 shares
of its Common Stock, par value $.0001 per share.
FORWARD LOOKING STATEMENTS
Certain statements included in this Quarterly Report are not based on
historical facts, but are forward looking statements. These statements can be
identified by the use of forward looking terminology such as "believes",
"expects", "may", "will", "should", or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy. These statements reflect the Company's reasonable judgments with
respect to future events and are subject to risks and uncertainties that could
cause actual results to differ materially from those in the forward looking
statements. Such risks and uncertainties include, but are not limited to the
completion of an economically viable HTV system and the development and
marketing of additional systems. The Company must also generate additional
resources to enable it to continue the completion of an HTV system. Such
additional resources may be generated through the sale of additional equity
securities, the sale of an existing system, alliances, joint ventures or other
business transactions which would generate sufficient resources. Other factors
such as changes in business conditions and changes in regulations and laws may
also impact the outcome of forward looking statements.
<PAGE>
Seiler Pollution Control Systems, Inc.
Form 10-Q
TABLE OF CONTENTS
-----------------
Item No. Page
- -------- ----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 1-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........ 8-9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 10
Item 2. Changes in Securities................................ 10
Item 3. Defaults upon Senior Securities...................... 10
Item 4. Submission of Matters to a Vote of Security-Holders.. 10
Item 5. Other Information.................................... 10
Item 6. Exhibits and Reports on Form 8-K..................... 10
Signatures.................................................... 11
Financial Data Schedule....................................... Last Page
<PAGE>
PART I. FINANCIAL INFORMATION
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
1
<PAGE>
Item 1. Financial Statements.
SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
ASSETS
December 31, 1997
(Unaudited) March 31, 1997
------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 100 $ 4,188,278
Prepaid expenses and sundry receivables 807,175 207,066
----------- -----------
Total Current Assets 807,275 4,395,344
----------- -----------
HIGH TEMPERATURE VITRIFICATION SYSTEMS
Advances to supplier 13,972,013 9,518,246
Construction in progress 2,373,030 1,000,000
----------- -----------
16,345,043 10,518,246
OTHER ASSETS
Licensing agreements, less accumulated amortization of
$1,416,050 and $1,178,048 at December 31, 1997 and
March 31, 1997, respectively 3,344,950 3,581,952
Advances to related party 510,803 516,832
Vetrotherm option 167,920 167,920
Deposits 276,385 27,776
----------- -----------
4,300,058 4,294,480
----------- -----------
PROPERTY AND EQUIPMENT - AT COST (net of
accumulated depreciation of $2,186 at
December 31, 1997 and March 31, 1997, respectively) 903,558 356,084
----------- -----------
$22,360,934 $19,564,154
=========== ===========
<CAPTION>
LIABILITIES
December 31, 1997
(Unaudited) March 31, 1997
------------- --------------
<S> <C> <C>
CURRENT LIABILITIES
Notes payable - bank $ 2,345,670 $ -
Accounts payable 782,663 1,005,577
Accrued expenses 454,556 637,337
----------- -----------
Total Current Liabilities 3,582,889 1,642,914
LONG-TERM DEBT
Licensing agreements payable 1,977,250 1,977,250
Loans payable - stockholders 699,140 913,627
Notes Payable - debentures 2,457,000 -
DEFERRED INCOME - GOVERNMENT SUBSIDY 2,355,682 -
MINORITY INTEREST 1,905,000 1,880,000
----------- -----------
12,976,961 6,413,791
----------- -----------
STOCKHOLDERS' EQUITY
COMMON STOCK
Common stock, $.0001 par value; authorized
25,000,000 shares, issued and outstanding
21,160,588 and 21,142,188 shares at
December 31, 1997 and March 31, 1997,
respectively. 2,117 2,115
ADDITIONAL PAID IN CAPITAL 26,552,234 26,538,439
ACCUMULATED DEFICIT (16,458,394) (12,906,183)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT (711,984) (484,008)
----------- -----------
9,383,973 13,150,363
----------- -----------
$22,360,934 $19,564,154
=========== ===========
</TABLE>
See notes to financial statements
2
<PAGE>
SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES
- -------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
December 31, December 31,
----------------------------------------------------------
1997 1996 1997 1996
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
REVENUE $ 208,369 $ 115,648 $ 103,881 $ 28,348
OPERATING EXPENSES
Professional and other consulting fees 1,318,163 504,176 626,234 216,606
General and administrative 1,203,867 1,008,579 730,799 254,039
Research and development 875,000 186,350 - -
Salaries, wages and related fringe
benefits 427,929 386,825 (40,588) 131,060
Depreciation and amortization 237,002 239,179 78,334 79,827
Valuation adjustment of High Temperature
Vitrification Systems - 1,156,328 - 1,156,328
------------- ------------ ------------ -----------
4,061,961 3,481,437 1,394,779 1,837,860
------------- ------------ ------------ -----------
Loss From Operations (3,853,592) (3,365,789) (1,290,898) (1,809,512)
OTHER INCOME (EXPENSE)
Miscellaneous income 24,975 18,962 41,826 6,167
Interest Income 2,993 - (5,251) -
Interest expense (91,440) (3,400) (54,225) (2,015)
------------- ------------ ------------ -----------
(63,472) 15,562 (17,650) 4,152
------------- ------------ ------------ -----------
LOSS BEFORE MINORITY INTEREST (3,917,064) - (1,308,548) -
MINORITY INTEREST 364,853 - 364,853 -
------------- ------------ ------------ -----------
Net Loss $ (3,552,211) $ (3,350,227) $ (943,695) $(1,805,360)
============= ============ ============= ===========
Loss Per Common Share $ (0.17) $ (0.17) $ (0.04) $ (0.09)
============= ============ ============= ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 21,160,588 19,166,928 21,160,588 19,501,627
============= ============ ============= ===========
</TABLE>
See notes to financial statements.
3
<PAGE>
SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
-----------------------------------------------------
<TABLE>
<CAPTION>
Foreign
Common Stock Additional Currency
------------------------ Paid-in Accumulated Translation
Shares Amount Capital Deficit Adjustment Total
------------- --------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1996 18,525,569 $1,853 $17,897,081 $ (7,349,683) $ 856,606 $11,405,857
PERIOD ENDED DECEMBER 31, 1996
Exercise of stock options under
stock option plans for cash 559,000 57 1,088,059 - - 1,088,116
Issuance of common stock for cash 384,332 38 1,182,812 - - 1,182,850
Issuance of common stock for legal fees 32,726 3 91,175 - - 91,178
Foreign currency translation adjustment - - - - (1,200,258) (1,200,258)
Net loss - - - (3,350,227) - (3,350,227)
---------- ------ ----------- ------------ ------------ -----------
BALANCE, DECEMBER 31, 1996 (unaudited) 19,501,627 $1,951 $20,259,127 $(10,699,910) $ (343,652) $ 9,217,516
========== ====== =========== ============ ============ ===========
BALANCE, MARCH 31, 1997 21,142,188 $2,115 $26,538,439 $(12,906,183) $ (484,008) $13,150,363
PERIOD ENDED DECEMBER 31, 1997
Exercise of stock options under
stock option plans for cash 18,400 2 13,795 - - 13,797
Foreign currency translation adjustment - - - - (227,976) (227,976)
Net loss - - - (3,552,211) - (3,552,211)
---------- ------ ----------- ------------ ------------ -----------
BALANCE, DECEMBER 31, 1997 (Unaudited) 21,160,588 $2,117 $26,552,234 $(16,458,394) $ (711,984) $ 9,383,973
========== ====== =========== ============ ============ ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996
----------------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,552,211) $(3,350,227)
Adjustments to reconcile net loss to net
cash used in operating activities:
Valuation adjustment of High Temperature
Vitrification Systems - 1,156,328
Depreciation and amortization 237,002 239,179
Foreign currency translation 500,175 (1,190,148)
Changes in assets and liabilities:
Prepaid expenses and sundry receivables (600,109) 30,982
Deposits (248,609) 2,637
Accounts payable (222,914) (98,253)
Accrued expenses (182,781) (3,407)
----------- -----------
Net Cash Used In Operating Activities (4,069,447) (3,212,909)
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (552,474) (66,652)
Advances for High Temperature Vitrification Systems (5,826,797) (567,953)
----------- -----------
Net Cash Used In Investing Activities (6,379,271) (634,605)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances to related party 6,029 70,112
Proceeds from notes payable - bank 2,345,670 -
Proceeds from Government Subsidy 2,355,682 -
Proceeds on loans payable - stockholder - 325,281
Proceeds on notes payable - debentures 2,457,000 1,011,500
Proceeds from issuance of common stock 13,797 2,362,144
Increase in minority interest 25,000 -
Payments on loans payable - stockholder (214,487) -
----------- -----------
Net Cash Provided By Financing Activities 6,988,691 3,769,037
EFFECT OF EXCHANGE RATE CHANGES ON CASH (728,151) (10,110)
----------- -----------
Net (Decrease) Increase In Cash (4,188,178) 3,261,640
CASH - BEGINNING OF PERIOD 4,188,278 200,351
----------- -----------
CASH - END OF PERIOD $ 100 $ 3,461,991
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid during the period for interest $ 90,011 $ 3,400
=========== ===========
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
The Company issued 32,726 shares of common stock in
exchange for legal services aggregating $91,178 during
the nine months ended December 31, 1996.
</TABLE>
See notes to financial statements.
5
<PAGE>
SEILER POLLUTION CONTROL SYSTEMS, INC.
--------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared 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. 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 nine months ended December 31, 1997
are not necessarily indicative of the results that may be expected for the year
ending March 31, 1998. The unaudited consolidated financial statements should
be read in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
March 31, 1997.
NOTE 2 - NOTES PAYABLE
The Company received $2,457,000 from the sale of 7% cumulative
convertible debentures during the third quarter pursuant to a registration under
Regulation D. Fifty percent of the debentures are convertible into shares of
common stock at the option of the debenture holder at the lesser of (a) 120%
of the 5 day average closing bid price for the 5 trading days immediately
preceding the closing date, or (b) 75% of the 5 day average closing bid price
for the 5 trading days immediately preceding the applicable conversion date for
any conversion dates that are after the earlier of the registration effective
date or 120 days following the closing date.
The purchaser may convert the debentures into common stock at the
lesser of (1) 120% of the five day average bid price for the 5 trading days
immediately preceding the closing date or (b) 65% of the 5 day average closing
bid price for the 5 trading days immediately preceding the applicable conversion
date for any conversion dates that after 120 days following the closing date.
The remaining 50% of the debentures may be converted at 75% or 65% of
the five day average closing bid price within or without 120 days following the
closing date respectively.
Interest on the debenture is payable in cash or common stock upon
conversion, at the option of the Company.
NOTE 3 - SUBSEQUENT EVENTS
On January 15, 1998, the Company filed an S-3 Registration Statement
with the Securities and Exchange Commission which covers the offering for resale
shares of common stock with a par value of $.0001 dollars per share as it
relates to the convertible debentures in note 2. To date, none of the debentures
has been converted.
6
<PAGE>
SEILER POLLUTION CONTROL SYSTEMS, INC.
--------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
NOTE 4 - MINORITY INTEREST
Prior to November 30, 1997 the Company's wholly-owned Swiss
subsidiary, SEPC AG owned 90% of the German company STSB GmbH and Dr. Gerold
Weser, Seiler Vice President of European Operations and President of STSB GmbH,
owned the remaining 10%. On November 30, 1997, Dr. Weser contributed capital to
Seiler STSB in exchange for an additional 40% interest in the company, which
reduced Seiler AG's ownership interest in STSB to 50%. As a result of this
transaction, the minority interest has been adjusted to reflect Dr. Weser's
additional ownership interest in Seiler STSB.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Results of Operations -- December 31, 1997 vs. December 31, 1996
- ----------------------------------------------------------------
The Company experienced a net loss before minority interest for the
three months ended December 31, 1997, of $1,308,548 as compared to a net loss of
$1,805,360 for the three months ended December 31, 1996. The Company's net loss
for the nine months ended December 31, 1997 was $3,917,064 before minority
interest as compared to a net loss of $3,350,227 for the nine months ended
December 31, 1996. The change in the net loss for these periods is primarily the
result of additional consulting, marketing and promotion expenses related to
demonstrations and presentation of the HTV systems as well as research and
development costs related to these systems.
Sources and Uses of Capital
- ---------------------------
The Company made payments aggregating $5,826,797 and $2,504,042 for
the nine and three month periods ended December 31, 1997 related to the
construction of the HTV system. The Company funded these capital expenditures
and operating losses through loans from The Dresdner Bank aggregating $2,345,670
for the nine month period, as well as the sale of convertible debentures
aggregating $2,457,000, subsidies from the German government as well as existing
cash reserves.
The Company expects to incur substantial expenditures to complete the
HTV systems, including operations start-up costs, and to develop and market
additional systems. Management's plans to generate additional resources include
consideration of the sale of additional equity securities, alliances or joint
venture agreements with entities interested in the Company's HTV systems,
project financing agreements or other business transactions which would generate
sufficient resources to assure continuation of the Company's operations.
Current Projects
- ----------------
Since the groundbreaking in May, 1997, for the Company's commercial
HTV System in Freiberg, Germany, construction continues on schedule for the
$12.7 million US (18.6 DM) project. Site preparation and system installation
have been completed. The Freiberg system is currently being tested. The Company
anticipates the testing will be completed by February 28, 1998, and the plant's
commercial operations will commence immediately thereafter.
Seiler's work continued throughout the past year as a subcontractor on
a Radian International, Inc. contract with the United States Air Force. The
contract lays the foundation for installation of the Company's first
vitrification facility in the United States. The United States Air Force has
increased the Company's existing testing contract to test additional Department
of Defense waste streams. The new contract is valued at approximately $75,000.
As a result of this project, Seiler was granted a waste recycling exempt status
by the California Environmental Protection Agency, which permits the Company to
place an HTV System anywhere in the state. A site has been selected, and the
facility is expected to be completed by the end of 1998. The Company has
already begun the process of securing long-term customers for the California
system.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations (Continued)
-------------------------
Seiler received approval in May, 1997 from the Coshocton, Ohio Solid
Waste District of its request to construct a pilot industrial high temperature
vitrification recycling facility in Coshocton Industrial Park. The Company is
currently building the pilot HTV System plant and anticipates that the building
which will house the pilot plant will be completed by Spring, 1998. The pilot
system is expected to be installed and operational by the end of 1998. The
company's pilot plant will be operated to provide important information to
determine the suitability of different wastes for Seiler vitrification; develop
formulations for HTV System processing; ascertain the proper energy balance; and
supply preliminary air testing.
The Coshocton pilot facility will have a capacity to process up to 600
tons of wastes per year at a rate of 55 to 220 pounds per hour. Costs for the
building and land are being financed through Bridge Street Development
Corporation in Newcomerstown, Ohio. The Company's application to the area's
Four-County Solid Waste District requesting $150,000 in grants was approved in
July, 1997; the Solid Waste District's grant will not have to be repaid by the
Company. Between December, 1998 and June 1999, the Company expects to house a
commercial Seiler HTV System in this same building with a capacity to process
approximately 2200 pounds per hour.
The Company held its annual meeting of shareholders November 12, 1997,
in Columbus, Ohio. Discussions centered around the Company's ongoing transition
from a start-up structure to a commercial operation, and the related strategies
of managing growth and obtaining additional capital to infuse into the Company.
Negotiations are currently underway with two recycling centers in
Berlin/Brandenburg and Saxony, Germany. In addition, the largest German car
manufacturer has contracted with Seiler to conduct tests on industrial and
hazardous wastes produced by their operations.
Seiler is currently negotiating with two large French incinerator and
toxic waste facility operators. A contract was signed with a major incinerator
operator for Seiler to test flyash in September 1997.
9
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable
Item 2. Changes in Securities.
(c) On November 18 and November 28, 1997, the Company sold in two
private placements a total of $3 million principal amount of its 7% Convertible
Debentures. The placement agent in each placement was Rolcan Finance Ltd.,
London. The Debentures were sold for cash, and the Company paid commissions of
$148,000 and $171,000 regarding the two placements. The Company also paid a
finder's fee of $30,000 and legal fees aggregating $11,000 in connection with
the placements. In selling the Debentures, the Company relied upon the exemption
from registration of the securities provided by Section 4(2) of the Securities
Act of 1933, as amended, a sale not involving any public offering. The sale of
the Debentures was made to two persons, each of which is a sophisticated
investor without the need for the protection that registration under the
Securities Act would provide. The securities were marked with a legend which
indicates that the securities were restricted, having been issued in an exempt
transaction. For a discussion of the terms of conversion of the Debentures, see
Note 2 "Notes Payable" in the Notes to Financial Statements, above. Of the net
proceeds from the sale of the Debentures, $49,000 were used to repay a portion
of the Company's indebtedness, and $2,591,000 were used for the construction of
the HTV System in Freiberg, Germany.
Item 3. Defaults upon Senior Securities.
Not applicable
Item 4. Submission of Matters to a Vote of Security-Holders.
The Company held its annual meeting of shareholders in Columbus, Ohio
on November, 12 1997. At the meeting the Company's four nominees, Gerold Weser,
Werner Heim, Alan B. Sarko, and Niklaus Seiler, were elected as directors to
serve until the Company's 1998 annual meeting. Shareholder approval was also
given to increase the number of authorized shares of Common Stock from
25,000,000 to 35,000,000. The only other matter considered at the meeting was
ratification of the Board's selection of Schneider Downs & Co., Inc. as
independent auditors for the year ending March 31, 1998. The Board's selection
was ratified by the shareholders as follows: 14,347,874 votes were cast for
ratification; 56,950 votes were cast against ratification; 12,655 votes
abstained; and zero votes were broker non-votes.
Item 5. Other Information.
Not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 3 - Certificate of Amendment of Certificate of Incorporation
Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K. None.
10
<PAGE>
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 February 14, 1998 Seiler Pollution Control Systems, Inc.
----------------- --------------------------------------
(Registrant)
By: /s/ Alan B. Sarko
----------------------------------
Vice President and Chief Financial Officer
11
<PAGE>
Exhibit 3
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/10/1997
971423636 - 2006551
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SEILER POLLUTION CONTROL SYSTEMS, INC.
Seiler Pollution Control Systems, Inc., a corporation organized in the
State of Delaware (the "Company") and existing under and by virtue of the
General Corporation Law of the State of Delaware, 8 Del. C. Section 101 et. seq.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors held on May 20,
1997, the Board of Directors duly adopted a resolution setting forth a proposed
amendment to the Certificate of Incorporation of said Company and recommending
that the amendment be considered by the shareholders at the next Annual Meeting
of Shareholders. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Board recommends to the shareholders
that the Company's Certificate of Incorporation be amended
to increase the number of authorized shares of Common Stock
from 25,000,000 shares to 35,000,000 shares and that the
matter be voted upon at the 1997 Annual Meeting of Shareholders.
SECOND: That the holders of a majority of the outstanding shares of
Common Stock of the Company adopted the proposed amendment at a duly called
Annual Meeting of Shareholders held on November 12, 1997.
THIRD: Accordingly, Article FOURTH of the Certificate of Incorporation
of the Company be, and it hereby is, amended in its entirety to read as set
forth below:
<PAGE>
FOURTH: The total number of shares of stock
which the Corporation shall have authority to
issue is Thirty five Million (35,000,000). The
par value of each of said shares is $.0001. All
such shares are of one voting class and are shares
of common stock without cumulative voting rights
and without preemptive rights.
FOURTH: That said amendment has been duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Seiler Pollution Control Systems, Inc., has
caused this Certificate to be executed by its Vice-President and Secretary this
9th day of December, 1997.
SEILER POLLUTION CONTROL SYSTEMS, INC.
/s/ Alan B. Sarko
By:-----------------------------------
Name: Alan B. Sarko
Title: Vice-President and Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SEILER POLLUTION CONTROL SYSTEMS, INC. AND
SUBSIDIARIES AS OF DECEMBER 31, 1997, AS WELL AS THE RELATED CONSOLIDATED
STATEMENTS OF OPERATIONS, CHANGES IN STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE
NINE MONTHS THEN ENDED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 807,175
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 807,275
<PP&E> 910,744
<DEPRECIATION> 2,186
<TOTAL-ASSETS> 22,360,934
<CURRENT-LIABILITIES> 3,582,889
<BONDS> 4,434,250
0
0
<COMMON> 2,117
<OTHER-SE> 9,381,856
<TOTAL-LIABILITY-AND-EQUITY> 22,360,934
<SALES> 0
<TOTAL-REVENUES> 208,369
<CGS> 0
<TOTAL-COSTS> 4,061,961
<OTHER-EXPENSES> 63,472
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,552,211)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,552,211)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,552,211)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> (0.17)
</TABLE>
