U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(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 August 31, 1997
Commission file number 1-10069
ENVIRONMENTAL TESTING TECHNOLOGIES, INC.
Washington 93-0845837
(State of Incorporation) (IRS Employer ID No.)
7500 Perimeter Road South
Seattle, Washington 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 ____ NO __X__
Common stock, no par value, $1,663,315 shares outstanding as of
10/18/97
<PAGE>
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
</PAGE>
<PAGE>
Part I - Financial Information
Environmental Testing Technologies, Inc. & its subsidiaries
Balance Sheet
08/31/97 5/31/97
Unaudited Audited
- -------------------------------------------------------------------
ASSETS
Current Assets
Cash $ -0- $ -0-
Accounts Receivable
- net of allowances 295,028 247,684
Other current assets 37,697 35,037
------------ ------------
TOTAL current assets 332,725 282,721
Property, Plant & Equipment
Building & leasehold improvements 2,373,015 2,373,015
Less accumulated depreciation <1,962,072> <1,932,241>
------------ ------------
Property, Plant & Equip. (Net) 410,943 440,774
Other Assets
Deposits 33,686 18,548
------------- -------------
TOTAL ASSETS $777,354 $742,043
LIABILITIES & STOCKHOLDER'S DEFICIT
Current Liabilities
Line of Credit $ 211,698 $ 175,679
Accounts Payable 234,514 250,778
Accrued Liabilities 171,318 142,500
Current portion of long term debt 619,681 604,511
----------- -----------
TOTAL current liabilities 1,237,211 1,173,468
Long Term Debt 183,201 226,551
Redeemable Preferred Stock 176,958 176,958
Stockholder's (Deficit) Equity
Preferred Stock 100,000 100,000
Common Stock (no par value) 677,557 677,557
Accumulated deficit <1,597,573> <1,612,491>
------------ ------------
TOTAL Stockholder's Deficit <820,016> <834,934>
TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT $777,354 $742,043
</PAGE
<PAGE>
Environmental Testing Technologies, Inc. & its subsidiaries
Statement of Operations
3 Months Ended 3 Months Ended
August 31, 1997 August 31, 1996
- ---------------------------------------------------------------
Sales $533,685 $467,632
Cost of Sales 295,229 326,412
------------ --------------
Gross Profit 238,456 141,220
Operating Expenses:
Selling, General
& Administrative 180,943 182,468
Operating Income <Loss> 57,513 <41,248>
Other Income <Expense>:
Interest 39,731 35,139
Other Expenses 2,864 6,580
------------ -------------
Total Income <Loss>
Before Income Taxes 42,595 41,720
Federal Income Tax 0 0
Net Income <Loss> 14,918 <82,968>
Net Income <Loss> Per Share <.01> <.05>
------------- -------------
Weighted Average
Shares Outstanding 1,663,315 1,535,315
</PAGE>
<PAGE>
Notes to Condensed Consolidated Financial Statements
Item 1 - The unaudited consolidated financial statements and
elated 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, 997.
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 three months ended August 31, 1997 and August 31,
1996, were $533,685 and $467,632 respectively. The sales increase
of $66,053.00, or 14%, was attributable to a resurgence in basic
nondestructive testing revenues stimulated by the current demand
for increase aircraft shipments by the Boeing Company.
Cost of sales for the three months ended August 31, 1997 and
August 31, 1996, were $295,229 and $326,412 respectively. The
cost of sales resulted in gross profits of $238,456 and $141,220
respectively, or an increase of 68.9% in 1997 over 1996. The
increased gross profit is attributable to better utilization of
manpower and improved pricing.
Selling, general and administrative expenses remained constant
between the two comparable periods with only slight reduction for
the 1996 expense of $182,468 to a 1997 expense of $180,943.
Other expense is principally interest expense and remains
consistent at the same levels with only a change from 1996 expense
of $41,720 to a 1997 expense of $42,595.
Net income <loss> for the 3 months ended August 31, 1997, was
$14,918 and for the 3 months ended August 31, 1996, was a loss of
<$82,968>. The increase in profitability is attributable to
higher sales levels and better utilization of manpower.
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 a suit filed by Mr. Anton Kurtz, the
owner of the Class A Preferred Stock. ETT is one of the
defendents 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.
PART III - Working Capital
The continuing lack of working capital raises substantial doubt
about the Company's ability to continue as a going concern.
The Company continues to seek new financing to cure this negative
working capital problem.
PART IV - Stockholders' Equity
The negative stockholders' equity at August 31, 1997, of $820,016>
shows a slight improvement from the May 31, 1997, balance of
<$834,934> and is caused by the profit generated for the 3 months
ended August 31, 1997.
The Company continues to seek new equity financing to cure this
negative working position.
Item 6 Exhibits and Reports on Form 8K
No reports on Form 8K were filed for the 3 month period ending
August 31, 1997.
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.
____________________ s/s G.B. Maitland
Date George B. Maitland, VP Finance
____________________ s/s L.G. Connel
Date Lee G. Connel, Director
</PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> AUG-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 247,684
<ALLOWANCES> 20,644
<INVENTORY> 0
<CURRENT-ASSETS> 282,721
<PP&E> 440,774
<DEPRECIATION> 1,932,241
<TOTAL-ASSETS> 742,043
<CURRENT-LIABILITIES> 1,173,468
<BONDS> 0
<COMMON> 677,557
176,958
100,000
<OTHER-SE> (1,612,491)
<TOTAL-LIABILITY-AND-EQUITY> 742,043
<SALES> 1,844,021
<TOTAL-REVENUES> 579,645
<CGS> 1,264,376
<TOTAL-COSTS> 1,916,593
<OTHER-EXPENSES> (197,413)
<LOSS-PROVISION> (72,572)
<INTEREST-EXPENSE> (178,259)
<INCOME-PRETAX> (269,985)
<INCOME-TAX> 0
<INCOME-CONTINUING> (269,985)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (269,985)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)
</PAGE>
