U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [Fee Required]
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the Quarter Ended February 28, 1996
Commission file number 1-10069
ENVIRONMENTAL TESTING TECHNOLOGIES, INC.
(formerly Peripheral Systems, Inc.)
Washington 93-0845837
(State of Incorporation) (IRS Employer ID No.)
7500 Perimeter Road South
Seattle, WA 98108
(Address of principal executive offices) (Zip Code)
206-763-1919
(Telephone Number)
Check whether the registrant filed all documents and reports to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after the
distribution of securities under a plan confirmed by the bankruptcy court.
YES __X__ NO _____
Common stock, no par value, 1,511,315 shares outstanding as of 4/1/96
Table of Contents Page
PART I - Financial Information Page No.
Item 1 Condensed Consolidated Balance Sheet 1
Condensed Consolidated Statement of Operations 2
Notes to Financial Statement 3
Item 2 Management Discussion & Analysis of 4
Financial Condition & Results of Operations
PART II - Other
Item 1 Legal Proceedings 5
Item 2 Reports on Form 8K 5
Signatures 6
Part I - Financial Information
Environmental Testing Technologies, Inc. & its subsidiaries
Balance Sheet
2/29/96 5/31/96
Unaudited Audited
ASSETS
Current Assets
Cash $7,876 $12,659
Accounts Receivable - net of allowances 233,457 535,299
Other current assets 56,334 225,570
-------- ---------
TOTAL current assets 297,667 773,528
Property, Plant & Equipment
Building & leasehold improvements 115,912 126,178
Machinery & equipment 1,965,457 2,205,328
Vehicles & office trailers 242,052 325,943
Furniture & fixtures 60,405 86,112
Less accumulated depreciation <1,746,396> <1,735,668>
-------- ----------
Property, Plant & Equip. (Net) 637,430 1,007,893
Other Assets
Deposits 21,241 30,058
-------- ----------
TOTAL ASSETS $956,338 $1,811,479
LIABILITIES & STOCKHOLDER'S DEFICIT
Current Liabilities
Line of Credit $143,434 $522,452
Accounts Payable 399,027 370,284
Accrued Liabilities 156,460 164,473
Current portion of long term debt 636,190 529,041
--------- ---------
TOTAL current liabilities 1,332,054 1,586,250
Long Term Debt 188,089 222,389
Income Tax Payable 5,000 175,000
Redeemable Preferred Stock 176,958 176,958
Stockholder's (Deficit) Equity
Preferred Stock 100,000 200,000
Common Stock (no par value) 635,557 608,557
Accumulated deficit <1,484,377> <1,357,675>
---------- ----------
TOTAL Stockholder's Deficit <748,820> <549,118>
---------- ----------
TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT $956,338 $1,811,479
========== ==========
Environmental Testing Technologies, Inc. & its subsidiaries
Statement of Operations
9 Months 9 Months
Ended Ended
2/29/96 2/28/95
Sales $1,415,636 $2,411,676
Cost of Sales 1,059,019 1,557,072
---------- ----------
Gross Profit 356,617 854,604
Operating Expenses:
Selling, General & Administrative 575,970 650,032
Operating Income <Loss> <219,353> 204,572
Other <Income> Expense:
Interest 116,275 108,014
Net Loss on Discontinued Operations 34,920 75,802
Gain on Sale of Discontinued Business <73,846> 0
Favorable Federal Tax Settlement <170,000> 0
Total Income <Loss> Before Income Taxes <126,702> 20,756
Federal Income Tax 0 0
--------- ----------
Net Income <Loss> <$126,702> $20,756
========= ==========
Net Income <Loss> Per Share NIL NIL
Weighted Average Shares Outstanding 1,489,623 1,386,315
Notes to Condensed Consolidated Financial Statements
Item 1 - The unaudited consolidated financial statements and related notes have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations. The accompanying consolidated financial statements and related
notes should be read in conjunction with the audited financial statements of the
Company, and notes thereto, for the fiscal year ended May 31, 1995.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the results of the interim periods presented.
Item 2 - Management's Discussion and Analysis of Financial Condition & Results
of Operations
Sales for the nine months ended February 29, 1996 and February 28, 1995, were
$1,415,636 and $2,411,676 respectively. The sales reductions of $996,040 was
the result of an abnormal decline in business at ETT: X-Ray,Inc., coupled with
the near disappearance of TankTek business caused when its main operations
manager left the Company and taking TankTek's business's with him. TankTek is
recouping its lost customers and ETT: X-Ray Inc. continues at a lower sales
level.
Cost of Sales for the 9 months ended February 29, 1996 and February 28, 1995
were $1,059,019 and $1,557,072 respectively. These cost of sales resulted in
gross profits of $356,617 in 1996 and $854,604 in 1995. The gross profits were
lowered in 1996 then in 1995 for these significant reasons: lower sales levels;
retaining personnel in anticipation of near term service orders; and finally
poor pricing and job cost control which in part led to TankTek's management
leaving. ETT: X-Ray Inc. has reduced its personnel to current need levels and
TankTek's bidding and job cost control are now yielding positive results.
Selling, general and administrative expenses have been reduced from $650,032
in 1995 to $575,970 in 1996.
Interest expense increased from $108,014 in 1995 to $116,275 in 1996.
Net loss on discontinued operations, February 8, 1996 for $34,920.00 are for
February 28, 1996 -$75,802.00- reflects the operating results of
Accu-Inspect Inc. for the period. Accu-Inspect's assets were sold in June
1995. Environmental Testing Technologies received debt relief and a note for
the sale of Accu-Inspect's assets of $202,000.00, income is not recorded on this
note until the cash has been received by the Company.
Gain on sale of discontinued business of $73,846 recognizes the cash recovered
and liabilities assumed by the buyer for the sale of Accu-Inspect Inc.
assets.
Favorable Federal income tax settlement gain of $170,000.00 reflects the
favorable settlement reached with the Internal Revenue Service in February 1996.
Net loss income for the nine months ended February 29, 1996 was $126,702
compared to a $20,756 profit recorded for the nine months ended 2/28/95. The
loss was attributable to TankTek Inc. problems and the defunt merger with
North American Inspection Inc. last summer.
PART II - Other Information
1. Legal Proceedings.
The Company is not a party to any material pending legal proceedings other than
ordinary routine litigation incidental to the business, except for (1) a suit
filed by Mr. Anton Kurtz, the owner of the Class A Preferred Stock. ETT is one
of the defendants in this suit and intends to vigorously defend against this
suit on a number of grounds and does not expect Mr. Kurtz to prevail in his
assertions and in connection with its merger agreement.
Environmental Testing Technologies Inc. has filed a suit against North American
Inspection Inc., its offices, owners and against C. Rod Brashears, formerly a
member of the Company's Board of Directors and manager of TankTek Inc. claiming
damages in excess of $1,000,000. The defendants have counter claimed for
$200,000 in damages. The Company is vigorously defending against the counter
claims and feels the counter claim is without merit and expects to prevail in
its claims against the defendants.
Item 6 Exhibits and Reports on Form 8K
No reports on Form 8K were filed for the 6 month period ending February 28, 1996
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf, by the undesigned, thereunto duly
authorized:
ENVIRONMENTAL TESTING TECHNOLOGIES, INC.
__________________________________________________________________
Date George B. Maitland, VP Finance
__________________________________________________________________
Date Lee G. Connel, Director
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