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 MAY 31, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________
TO _____________.
Commission File Number: 0-13041
-------
TTI INDUSTRIES, INCORPORATED
(F/K/A ENVIRONMENTAL PLUS, INC.)
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1939021
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
3838 Oak Lawn Avenue, Dallas, Texas 75219
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 520-1702
- -----------------------------------------------------------------
(Registrant's telephone number, including area code)
ENVIRONMENTAL PLUS, INC., Route 1, Box 41, Overton, Texas 75684
- -----------------------------------------------------------------
(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:
4,043,354 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:
TTI INDUSTRIES, INCORPORATED
(F/K/A ENVIRONMENTAL PLUS, INCORPORATED)
AND SUBSIDIARIES
Consolidated Balance Sheets
May 31, 1998 (Unaudited) and August 31, 1997
<TABLE>
<CAPTION>
May 31, August 31,
1998 1997
- -----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 12 $ 19,226
Accounts receivable - trade -- 12,880
Note receivable -- 55,210
Inventory -- 53,128
Other 20,000 9,495
--------- ---------
Total current assets 20,012 149,939
NOTE RECEIVABLE -- 195,184
PROPERTY, PLANT AND EQUIPMENT - NET -- 136,059
OTHER
Goodwill and organization costs- net -- --
--------- ---------
$ 20,012 $ 481,182
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 20,012 71,083
Accrued expenses -- 5,605
Line of credit and term notes -- 60,240
Notes payable and due to related parties -- 37,809
--------- ---------
Total Current Liabilities $ 20,012 $ 174,737
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, (100,000,000 authorized;
$1.00 par, 1,024,000 shares issued and
outstanding, respectively) -- 466,600
Common stock (100,000,000 shares
authorized, $.001 par, 41,049,000
shares issued and outstanding as of
August 31, 1997 and 4,043,354 shares
issued and outstanding) 40,328 40,328
Paid-in Capital 960,512 644,084
Accumulated deficit (1,000,840) (844,567)
--------- ---------
Total Stockholders' Equity -- 306,445
--------- ---------
$ 20,012 481,182
========= =========
</TABLE>
<PAGE>
ENVIRONMENTAL PLUS, INCORPORATED
AND SUBSIDIARIES
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three months ended Nine months ended
May 1998 May 1997 May 1998 May 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Sales $ 0 $ 240,574 $ 18,272 $ 482,381
Interest 319 9,717 16,394 25,828
---------- ---------- --------- ---------
Total 319 250,291 34,666 508,209
COST OF SALES - 183,436 10,522 389,296
GENERAL AND ADMINISTRATIVE
Depreciation and amortization 2,502 4,578 8,927 13,732
Payroll taxes - - 338 -
Interest and bank charges 1,082 3,621 5,649 6,764
Supplies - 241 699 924
Professional fees 20,159 11,284 65,141 66,127
Taxes and licenses 1,533 980 2,063 1,226
Utilities and telephone 89 1,318 1,432 3,158
Salaries and benefits - 37,500 10,806 112,500
Travel - 1,007 650 1,690
Insurance - - 5,107 -
Bad Debts 69,083 - 69,083 -
Other Administrative
Expenses 9,753 3,895 10,522 4,795
---------- --------- ---------- ---------
Total General and
Administrative 104,201 64,424 180,417 210,917
NET INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY ITEM (103,882) 2,431 (156,273) (92,004)
INCOME TAXES - - - -
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (103,882) 2,431 (156,273) (92,004)
EXTRAORDINARY ITEM -
FORGIVENESS OF DEBT - - - -
NET INCOME (LOSS) (103,882) 2,431 (156,273) (92,004)
PER SHARE DATA:
Net income (loss)
per share (.03) - - -
Weighted Average shares
outstanding 4,043,354 40,329,136 4,043,354 40,329,136
</TABLE>
<PAGE>
ENVIRONMENTAL PLUS, INCORPORATED
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
May 1997 May 1997 May 1998 May 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) from operations $(103,882) $ 2,431 $(156,273) $ (92,004)
Adjustments to reconcile income (loss)
from operations to cash provided by
(used in) operating activities:
Depreciation and amortization 2,502 4,578 8,927 13,732
Imputed officers' salaries - 35,679 - 92,342
Reserve for bad debts 69,083 - 69,083 -
Change in assets and liabilities:
Increase in accounts receivable - trade 344 (174,730) 9,506 (169,180)
(Increase) decrease in inventory 47 (3,389) (200) 18,088
Decrease in other assets - (1,536) (15,315) 12,836
Increase (Decrease) in accounts payable
and accrued expenses (43,233) (25,167) (27,559) (23,707)
--------- --------- --------- ----------
Net cash flows used in operating activities (75,179) (162,134) (111,831) (147,893)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of capital assets - (375) - -
Shareholder contribution to capital 30,491 - 30,491 -
Sale of Subsidiaries (3,205) - (3,205) -
Net Cash Flows Provided by (used in)
Investing Activities 27,286 (375) 27,286 (375)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit and
notes payable - 150,000 - 150,000
Retirement of debt - - (39,785) -
Shareholder loans 34,132 - 34,132 -
Collection of note receivable 6,345 - 75,984 -
Loan on note receivable - - 65,331 (10,000)
Net cash flows provided by financing activities 40,477 167,451 65,331 159,884
Increase (Decrease) in Cash (7,376) 4,942 (19,214) 11,616
Cash, beginning of period 7,388 17,235 19,226 10,561
--------- --------- --------- ----------
Cash, end of period $ 12 $ 22,177 $ 12 $ 22,177
</TABLE>
<PAGE>
ENVIRONMENTAL PLUS, INCORPORATED
AND SUBSIDIARIES
Notes to Financial Statements
May 31, 1998
- ----------------------------------------------------------------
NOTE 1 - STATEMENT BY MANAGEMENT CONCERNING INTERIM FINANCIAL
INFORMATION
The financial information for May 31, 1998, included herein is
unaudited and does not include all information and footnotes
required by generally accepted accounting principles for complete
financial statements; however, such information reflects all
adjustments which are, in the opinion of management, necessary
to a fair statement of the results for the interim period. It
is suggested, however, that the accompanying financial statements
be read in conjunction with the financial statements and notes
thereto incorporated by reference in the Company's August 31,
1997 Annual Report on Form 10-K.
NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION
During the nine months ended May 31, 1998, the Company used cash
to pay interest expense in the amount of $5,766. No cash was
paid for income taxes.
NOTE 3 - NONCASH INVESTING AND FINANCING TRANSACTIONS
The Company sold all capital stock of its wholly owned
subsidiary, Gulf Coast Towers and Fire Zap, Inc., in exchange for
all of the outstanding shares of the Company's Series A
convertible preferred stock, $1.00 par value per share, which was
issued in connection with the Company's acquisition of such
subsidiaries. The capital stock of the wholly owned subsidiaries
was sold at the book value of the net assets of the respective
companies, therefore no gain or loss was recognized by the
Company. The transaction resulted in a $466,600 charge to the
preferred stock account and a $265,936 credit to additional paid-
in capital. All previously outstanding preferred shares were
canceled. Cash and cash equivalents included in the net assets
of the subsidiaries at the time of the exchange totaled $3,205.
The Company adopted amendments to the Articles of Incorporation
to effect a reverse stock split in which each share of common
stock of the Company currently issued and outstanding or held in
treasury would be reclassified and exchanged into one-tenth of a
share of new common stock of the Company, thereby reducing the
number of issued and outstanding shares of common stock of the
Company from 40,433,549 to 4,043,354, and the par value of each
share of the Company's common stock was increased from $0.001 to
$0.01 per share.
<PAGE>
The Company agreed to grant to a shareholder owning fifty-eight
percent of the Company's common stock a warrant to acquire up to
1.5 million shares of common stock (calculated following the
reverse stock split) with an exercise price of $0.04445 per share
in exchange for $20,000. The transaction resulted in a $20,000
credit to additional paid-in capital and the balance sheet at
May 31, 1998, includes, in other current assets, a receivable for
$20,000.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS:
GENERAL
- -------
The Company has incurred operating losses over the last
two years which raised substantial doubt about the Company's
ability to continue as a going concern. Effective January 15,
1998, and as part of management's plan to have the Company
continue to operate in the foreseeable future, a Stock Purchase
Agreement was entered into among Terminator Technologies, Inc.
("TTI"), a Texas corporation, the Company and various
shareholders of the Company (the "Agreement"). The transaction
contemplated by the Agreement and the terms thereof, closed on
May 6, 1998. As a result of the Agreement, TTI and its designees
became the new controlling shareholder(s) and control group of
the Company, through the purchase of the majority shares of the
Company from certain shareholders, including past management
shareholders. As part of the Agreement, among other things, the
Company consummated a reverse stock split of its shares on the
bases of 1-for-10. As a result of the reverse split and the
transaction contemplated thereby, the Company's outstanding
shares decreased from 40,433,549 ($.001 par value) shares of
common stock and 749,000 ($1.00 par value) shares of preferred
stock issued and outstanding to zero (0) issued and outstanding
shares of preferred stock and 4,043,354 ($.01 par value) shares
of common stock issued and outstanding. TTI and its designees
own approximately 2,362,282 shares (58%) of the issued and
outstanding common stock. The selling shareholders and the
Company received $105,003 and $20,000, respectively, in proceeds
from the sale of shares and a warrant to TTI.
In addition, pursuant to the Agreement, and with shareholder
approval, the Company sold substantially all of its assets to Mr.
George Davis in exchange for Mr. Davis' transfer to the Company
of 599,000 shares of preferred ($1.00 par value) stock by Mr.
Davis. Additionally, TTI purchased from the Company a warrant to
purchase up to 1,500,000 additional common shares at $.04445 per
share.
In addition, as a result of the transactions contemplated
by the Agreement, and with the Shareholder approval, the Company
changed its name to TTI Industries, Inc.
On May 6, 1998, at a duly convened meeting of the Company's
Board of Directors, Messrs. Davenport and White resigned as
officers and directors of the Company, Mr. Davis resigned as
President of the Company, and Messrs. Frank Harrison and Joe
Nicholson were elected as directors and Mr. Harrison was
elected as President and Chief Executive Officer of the Company.
<PAGE>
A copy of the Agreement between TTI, the Company and
certain of its shareholders has been filed with the Company's
Annual Report on Form 10-KSB for the year ended August 31, 1997
and is specifically incorporated herein by reference.
At a duly noticed and conducted special meeting of the
shareholders of the Company held on April 17, 1998, the
shareholders approved the following proposals by an
affirmative vote of 33,842,837 and 32,701,991, respectively:
1. A proposal to approve and adopt amendments to the
Articles of Incorporation of the Company to effect
a reverse stock split in which each share of common
stock of the Company currently issued and outstanding
or held in the treasury would be reclassified and
exchanged into one-tenth (1/10) of a share of new
Common Stock of the Company thereby reducing the
number of issued and outstanding shares of Common
Stock of the Company from 40,433,459 to 4,043,354
(adjusted for the rounding of any fractional shares
up to the nearest whole share), and the par value of
each share of the Company's Common Stock would be
increased from $0.001 to $0.01 per share, and (ii)
change the name of the Company to "TTI Industries,
Incorporated."; and
2. A proposal to approve the Company's sale of
substantially all of its assets resulting from the
sale of the capital stock of (a) Gulf Coast Towers,
Inc., a wholly owned subsidiary of the Company, to
George Davis, Chairman of the Board of the Company,
in exchange for all of his outstanding shares (599,000)
of the Company's Series A convertible preferred stock,
$1.00 par value per share, which were issued in
connection with the Company's acquisition of the assets
currently operated by GCT from Mr. Davis, and
(b) FireZap, Inc., a wholly owned subsidiary of the
Company, to H. Wayne Franklin in exchange for all of
his outstanding shares (150,000) of Company Preferred
Stock which were issued in connection with the Company's
acquisition of FZI from Mr. Franklin.
On April 30, 1998, the Company completed the transactions
regarding FZI and GCT as referenced in Proposal 2 adopted by the
shareholders on April 17, 1998. Effective May 1, 1998 the
Company changed its name to TTI Industries, Incorporated,
effected the 10 to 1 reverse stock split, and changed its trading
symbol to TTIA. The transaction which is the subject of the
Agreement between TTI, the Company and certain of its
shareholders closed on May 6, 1998.
<PAGE>
The Company's results of operations for the quarter and nine
months ended May 31, 1998 were significantly affected by the
Company's discontinuation of the business of construction and
repair of industrial cooling towers ("Past Business") and the
consummation of the Agreement between certain company
shareholders and Terminator Technologies, Inc., and the sale of
substantially all of its assets to Mr. George Davis in exchange
for Mr. Davis' transfer to the Company of 599,000 shares of
preferred ($1.00 par value) stock (the "TTI Transaction").
Effective May 6, 1998, the TTI Transaction was closed and
subsequent to that date and the close of the quarter ended May
31, 1998 the Company did not engage in any reverse or income
producing activities.
As a result of the TTI Transaction, new management was
appointed the Company discontinued existing operations, changed
its name to TTI Industries, Inc., and commenced plans for new
operations. The Company intends to focus operations in the
acquisition, production and sale of innovative pest control
products for home and garden with an emphasis on products that
are (i) safe for children, pets and wildlife, (ii)
environmentally friendly, (iii) low cost, and (iv) are packaged
in attractive animal-shaped designs. There can be no assurance
that the Company will be successful in this effort. Virtually
all of the Company's revenues for the quarter and nine months
ended May 28, 1998 were derived from operations resulting from
the operations discontinued during the quarter.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's working capital (deficit) at May 31, 1998 was
zero (0) compared to $250,191 at May 31, 1997 and $(24,798) at
August 31, 1997. Cash and cash equivalent decreased to $12 at
May 31, 1998 as compared to $22,177 at May 31, 1997 and $19,226
at August 31, 1997. The decrease in cash and cash equivalents
for the quarter and nine months ended May 31, 1998 was primarily
the result of the TTI Transaction and the Company's
discontinuation of its Past Business.
As a result of the TTI Transaction and the cessation of the
Company's Past Business (i) the Company's trade accounts
receivable at May 31, 1998 were reduced to zero (0) compared to
216,430 at August 31, 1997, and $12,880 at May 31, 1997, (ii) the
Company's inventory levels were zero (0) at May 31, 1998 compared
to $25,166 at May 31, 1997 and $53,128 at August 31, 1997, and
(iii) trade accounts payable were $20,012 at May 31, 1998,
compared to zero (0) at May 31, 1997 and 71,083 at August 31,
1997.
<PAGE>
The Company made no capital acquisitions or improvement
expenditures during the nine-month period ended May 31, 1998.
The Company has no present ability to finance proposed operations
and will seek a capital infusion to do so. The Company has no
present arrangements for such financing and there can be no
assurance that it can make such arrangements.
RESULTS OF OPERATIONS
- ---------------------
As a result of the TTI Transaction revenue from sales and
other sources for the quarter and nine months ended May 31, 1998
were $319 and $34,660, respectively compared to $250,291 and
$508,209 respectively for the same periods of fiscal 1997.
Similarly, again as the result of the TTI Transaction, the
costs of sales for the quarter ended May 31, 1998 was -0- as
compared to $183,436 during the same period of fiscal 1997. The
costs of sales for the nine months ended May 31, 1998 was $10,522
as compared to $389,296 for the same period in fiscal 1997.
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 officers $50,000.
Salaries and benefits for the quarter ended May 31, 1998 was -0-
as compared to an imputed $37,500 for the three months ended May
31, 1997. The SEC staff has determined that the historical
statement of operations should reflect all costs of doing
business. Accordingly, officers' salaries for 1997 and 1998 were
imputed based on the actual number of months in operation during
those years. No officers' salaries were paid during the quarter
ended May 31, 1998.
General and Administrative expenses, which includes salaries
and benefits discussed above, increased during the quarter ended
May 31, 1998 to $104,201 from $64,424 during the quarter ended
May 31, 1997. This increase is attributable to allocation of bad
debts.
The Company has no material commitments for capital
expenditures as of the end of its latest fiscal period. As
further discussed above, the Company has changed the focus of its
operations.
<PAGE>
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
- ----------------------------------------------------
Forward-looking statements in this report, including
without limitation, statements relating to the adequacy of the
Company's resources and any anticipated changes on the Company's
business following the consummation of the Stock Purchase
Agreement, are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks
and uncertainties, including without limitation, potential
quarterly fluctuation in sales; risks associated with
acquisitions and expansion, and other risks and uncertainties
indicated from time to time in the Company's filings with the
Securities and Exchange Commission.
YEAR 2000 COMPLIANCE
- --------------------
The Company is aware of the issues associated with the
programming code in existing computer systems and software as
the millennium (year 2000) approaches. The Company intends
to address problems with the "year 2000" issue during the
fiscal year ending August 31, 1998. Management has not yet
assessed the "year 2000" compliance expense and related
potential effect on the Company's earnings.
<PAGE>
PART II
Items 1. - 5.
No "other" information required.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K.
No Reports on Form 8-K were filed by the Company during
the quarter ended May 31, 1998.
<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.
TTI INDUSTRIES, INC.
July 15, 1998 /s/ FRANK HARRISON
-------------------------------------
Chief Executive Officer and President
<PAGE>
INDEX TO EXHIBITS
------------------
EXHIBIT NO. DOCUMENT DESCRIPTION
----------- --------------------
27.1 Financial Data Schedule (filed herewith)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TERMINATOR TECHNOLOGIES, INCORPORATED FOR THE NINE
MONTHS ENDED MAY 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> MAY-31-1998
<CASH> 12
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,012
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,012
<CURRENT-LIABILITIES> 20,012
<BONDS> 0
0
0
<COMMON> 40,328
<OTHER-SE> (40,328)
<TOTAL-LIABILITY-AND-EQUITY> 20,012
<SALES> 18,272
<TOTAL-REVENUES> 34,666
<CGS> 10,522
<TOTAL-COSTS> 10,522
<OTHER-EXPENSES> 180,417<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0<F2>
<INCOME-PRETAX> (156,273)
<INCOME-TAX> 0
<INCOME-CONTINUING> (156,273)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (156,273)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes $5,649 in interest expense.
<F2>$5,649 of Interest Expense is included in "Other Expenses" line item.
</FN>
</TABLE>
