SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED NOVEMBER 30, 1996.
[ ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM DECEMBER 1, 1996 TO FEBRUARY 28, 1996.
Commission File Number: 0-13041
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ENVIRONMENTAL PLUS, INCORPORATED
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(Exact name of registrant as specified in its charter)
Texas 75-1939021
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(State or other jurisdiction of (IRS Employer
incorporation or organization Indentification No.)
Route 1, Box 41, Overton, Texas 75684
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(Address of principal executive offices) (Zip Code)
(903) 834-6965
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(Registrant's telephone number, including area code)
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(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 Sections 13 or 15(d) of the Securities Exchange Act
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
40,371,873 shares of Common Stock, no par value
- -----------------------------------------------------------------
(The number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date)
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets
<TABLE>
<CAPTION>
Six Months Ended February 28, 1997 August 31, 1996
<S> <C> <C>
ASSETS
CURRENT
Cash $ 17,235 $ 10,561
Accounts receivable - trade 41,700 47,250
Note receivable 208,936 201,369
Inventory 21,777 43,256
Other 2,461 16,833
--------- ---------
Total current assets 292,109 319,269
NOTE RECEIVABLE 76,000 76,000
PROPERTY, PLANT AND EQUIPMENT 138,251 144,586
Other
Goodwill and organization costs- net 54,350 57,168
--------- ---------
$ 560,710 $ 597,023
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 31,615 $ 31,771
Accrued liabilities 1,616 ---
Line of Credit 33,000 33,000
Notes payable 18,000 18,000
--------- ---------
Total current liabilities $84,231 $82,771
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, (100,000,000 authorized;
$1.00 par, 1,024,000 shares outstanding
respectively) 466,600 466,600
Common stock (100,000,000 shares authorized,
$.001 par, 40,329,136 and 37,735,285 shares
issued and outstanding respectively) 40,328 40,328
Paid in capital 666,886 610,224
Deficit (697,335) (602,900)
--------- ---------
Total Stockholders' Equity $ 476,479 $ 514,252
--------- ---------
$560,710 $597,023
</TABLE>
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUE
Sales $ 20,054 $ --- $ 241,807 $ ---
Interest 8,611 --- 16,111 ---
Total 28,665 257,918 ---
COST OF SALES (4,616) 205,860 ---
GENERAL AND ADMINISTRATIVE
Depreciation and Amortization 4,669 --- 9,153 ---
Advertisement --- --- 900 ---
Interest and bank charges 2,120 --- 3,143 ---
Supplies 80 --- 684 ---
Accounting and auditing 22,600 --- 23,500 ---
Legal 31,343 --- 31,343 ---
Utilities and Telephone 465 --- 1,840 ---
Salaries - officers 37,500 --- 75,000 ---
Travel --- --- 683 ---
Sales Tax 9 --- 246 ---
Other administrative expenses --- $ 4,000 --- 4,000
----------- ----------- ---------- ----------
TOTAL GENERAL AND ADMINISTRATIVE $ 98,786 $ 4,000 $ 146,492 $ 4,000
NET INCOME (LOSS) BEFORE INCOME (65,506) (4,000) (94,435) (4,000)
TAXES AND EXTRAORDINARY ITEM
INCOME TAXES --- --- --- ---
NET INCOME (LOSS) BEFORE (65,506) (4,000) (94,435) (4,000)
EXTRAORDINARY ITEM
EXTRAORDINARY ITEM - FORGIVENESS --- 4,603 --- 4,603
OF DEBT
NET INCOME (LOSS) (65,506) 603 (94,435) 603
PER SHARE DATA
Net income (loss) per share --- --- --- ---
Weighted average shares
outstanding 40,371,873 38,247,785 38,378,609 38,247,785
</TABLE>
<PAGE>
Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Cash Flows from Operating
Activities:
Income (Loss) from operations $ (65,506) $ 603 $ (94,435) $ 603
Adjustments to reconcile income
(loss) from operations to cash
provided by (used in) operating
activities:
Depreciation and
amoritization 4,669 --- 9,153 ---
Imputed Officers' Salaries 19,162 --- 56,662 ---
Change in assets and
liabilities:
Increase in accounts
receivable - trade 204,416 --- 5,550 ---
Decrease in inventory (21,777) --- 21,479 ---
Decrease in other
assets 11,872 --- 14,372 ---
Increase in accounts
payable (138,472) (8,524) 1,460 (8,524)
---------- ---------- ---------- ----------
Net Cash Flows Provided by
(used in) Operating Activities $ 14,364 $ (7,921) $ 14,241 $ (7,921)
CASH FLOWS FROM INVESTING
ACTIVITIES --- --- --- ---
CASH FLOWS FROM FINANCING
ACTIVITIES:
Sale of common shares --- 7,500 --- 7,500
Collection of note receivable 2,433 --- 2,433 ---
Loan on note receivable (10,000) --- (10,000) ---
Net Cash Flows Provided by
(used in) Financing Activities (7,567) 7,500 (7,567) 7,500
INCREASE (DECREASE) IN CASH 6,797 (421) 6,674 (421)
Cash at beginning of period 10,438 421 10,561 421
CASH AT END OF PERIOD $ 17,235 $ --- $ 17,235 $ ---
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS:
GENERAL
The Company's results of operations for the quarter ended
February 28, 1997 and the six month period ended February 28,
1997 were significantly affected by the Company's acquisition in
July 1996 of substantially all of the assets of Gulf Coast
Cooling Tower Services, Inc. ("GCCTS"), a company engaged in the
industrial cooling tower services business and to a lesser
degree, the acquisition on or about June 1, 1996 of all of the
issued and outstanding shares of common stock of Fire Zap, Inc.
("FZI"), a company engaged in the business of developing and
marketing fire retardent products. Virtually all of the
Company's revenues for the quarter ended February 28, 1997 or the
six month period ended February 28, 1997 were derived from
operations resulting from the GCCTS acquisition. Because Kinlaw
Oil Corporation ("KOC"), the main source of Company revenue
during fiscal 1995, ceased operations in June 1995, the Company
had no revenue during the quarter ended February 29, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at February 28, 1997 was $207,878 compared
to 0 at February 28, 1996. Cash and cash equivalent had
increased to $17,235.00 during the six months ended February 28,
1997, reflecting the new course of the Company's business. Cash
and cash equivalent for the six month period ended February 28,
1996 were $421. During the quarter ended February 28, 1997, cash
was used to fund normal working capital requirements, including
efforts to market FZI products and GCCTS activities. The trade
accounts receivable for the period ended February 28, 1997 were
$41,700.00 compared to $0 for the quarter ended February 28,
1996. The Company had $21,777 in inventory during the quarter
ended February 28, 1997 compared to $0 for the quarter ended
February 28, 1996. Trade accounts payable for the quarter ended
February 28, 1997 were $31,615 compared to $10,336 for the
quarter ended February 28, 1996. The increase was due primarily
to payment of accrued expenses during the three month period.
The Company made no capital acquisitions or improvement
expenditures during the three month period ended February 28,
1997. While the Company is not anticipating any capital
expenditures over the next two quarters, any funding for
unexpected capital expenditures or improvements will be paid from
cash flows generated through operating activities. No
significant disposition of equipment occurred during the three
month period ended February 28, 1997 and none is planned during
the next three month period.
Based upon current operations and internally generated cash
flows, management believes that adequate resources will be
available to meet current and future requirements.
RESULTS OF OPERATIONS
Gulf Coast Towers, Inc., a wholly owned subsidiary of the
Company ("GCT"), has utilized the assets from GCCTS to continue
with its business. GCT is currently generating revenues pursuant
to a maintenance contract it entered into with a Texas public
utility company which continues through December 30, 1997. FZI
experienced some activity in the six months ending February 28,
1997 and contributed $18,443 in sales toward the Company's
revenue for the quarter.
Revenue and sales from other sources for the quarter ended
February 28, 1997 was $20,054 and $8,611 respectively and
$241,807 and $16,111 respectively for the six month period ended
February 28, 1997 respectively compared to $0 for the same
periods of the last fiscal year.
<PAGE>
The Company received no revenue from management fees during
the second quarter of fiscal 1996 or the second quarter of fiscal
1995. The sales revenue for the quarter ended February 28, 1997
as well as the six month period ended February 28, 1997 reflects
the Company's acquisition of the assets of GCCTS and FZI.
The cost of sales for the quarter ended February 28, 1997
was <$4,616> due to an inventory adjustment, as compared to $0
the second quarter of fiscal 1995. The cost of sales for the six
month period ended February 28, 1997 was $205,860 as compared to
$0 during the first six months of fiscal 1995.
During 1996 the officers of the Company determined that they
would not take a salary until cash flow from operations permitted
them to pay each of the three (3) officers $50,000. Therefore no
salaries were paid in 1996 and none have been paid in 1997.
Salaries and benefits for the quarter ended February 28, 1997
were an imputed $37,500 compared to $0 in the same quarter of the
last fiscal year, and for the six month period ended February 28,
1997 they are an imputed $75,000 as compared to $0 for the same
six month period for the last fiscal year. The SEC staff has
determined that the historical statement of operations should
reflect all costs of doing business. Accordingly, officers'
salaries were imputed based upon the actual months in operation
in fiscal 1996.
The Company has no material commitments for capital
expenditures as of the end of its latest fiscal period. The
Company intends to continue its efforts to engage in a merger or
acquisition with another company.
PART II
No "other" information required.
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.
ENVIRONMENTAL PLUS, INCORPORATED
/s/ J. D. Davenport
--------------------------------
J.D. DAVENPORT, President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ENVIRONMENTAL PLUS, INCORPORATED FOR THE QUARTER ENDED
FEBRUARY 28, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> AUG-31-1996
<PERIOD-END> FEB-28-1997
<CASH> 17,235
<SECURITIES> 0
<RECEIVABLES> 326,636
<ALLOWANCES> 0
<INVENTORY> 21,777
<CURRENT-ASSETS> 292,109
<PP&E> 152,275
<DEPRECIATION> 14,024
<TOTAL-ASSETS> 560,710
<CURRENT-LIABILITIES> 84,231
<BONDS> 0
0
466,600
<COMMON> 40,328
<OTHER-SE> <38,449>
<TOTAL-LIABILITY-AND-EQUITY> 560,710
<SALES> 241,807
<TOTAL-REVENUES> 257,918
<CGS> 205,860
<TOTAL-COSTS> 205,860
<OTHER-EXPENSES> 146,493
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,143
<INCOME-PRETAX> <94,435>
<INCOME-TAX> 0
<INCOME-CONTINUING> <94,435>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> <94,435>
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
