U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
? 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 November 30, 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 WA 98108
(Address of Principal Executive Offices)
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__
10Q for Quarter Ending 2/28/96, 8/31/96, 11/30/96 & 2/28/97 were not
filed.
Common stock, no par value, 1,682,065 shares outstanding as of
01/06/98.
<PAGE>
Table of Contents
PART I - Financial Information Page No.
Item 1 Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Operations 4
Notes to Financial Statement 5
Item 2 Management Discussion & Analysis of 5
Financial Condition & Results of Operations
PART II - Other
Legal Proceedings 5
PART III - Working Capital 6
PART IV - Stockholders' Equity 6
PART V - Reports on Form 8K 6
Signatures 6
</PAGE>
<PAGE>
Part I - Financial Information
Environmental Testing Technologies, Inc. & its Subsidiaries
Balance Sheet
11/30/97 5/31/97
Unaudited Audited
ASSETS
Current Assets
Cash $ -0- $ -0-
Accounts Receivable - net of allowances 525,587 247,684
Other current assets 120,999 35,037
------------ ------------
TOTAL current assets 646,586 282,721
Property, Plant & Equipment 2,474,323 2,373,015
Less accumulated depreciation <1,996,069> <1,932,241>
--------------- -------------
- -
Property, Plant & Equip. (Net) 478,254 440,774
Other Assets
Deposits 21,092 18,548
------------- -------------
TOTAL ASSETS $1,145,932 $ 742,043
LIABILITIES & STOCKHOLDER'S DEFICIT
Current Liabilities
Line of Credit $ 357,539 $ 175,679
Accounts Payable 331,689 250,778
Accrued Liabilities 202,486 142,500
Current portion of long term debt 661,763 604,511
-------------- -------------
- -
TOTAL current liabilities 1,553,477 1,173,468
Long Term Debt 160,047 226,551
Redeemable Preferred Stock 176,957 176,958
Stockholder's (Deficit) Equity
Preferred Stock 100,000 100,000
Common Stock (no par value) 752,557 677,557
Accumulated deficit <1,597,106> <1,612,491>
--------------- ------------
- --
TOTAL Stockholder's Deficit <744,549> <834,934>
------------ ----------
- --
TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT $1,145,932 $ 742,043
</PAGE>
<PAGE>
Environmental Testing Technologies, Inc. & its Subsidiaries
Statement of Operations
<TABLE>
3 Months Ended 6 Months Ended
11/30/97 11/30/96 11/30/97 11/30/96
<S>
<C>
<C>
<C>
<C>
Sales
$801,601
$473,565
$1,335,28
6
$941,197
Cost of Sales
590,616
336,945
885,845
663,357
Gross Profit
210,985
136,620
449,441
277,840
Operating Expenses:
Selling,General& Administrative
159,654
164,280
340,597
346,748
Operating Income <Loss>
51,331
<27,660>
108,844
<68,908>
Other Income <Expense>
Interest
49,102
39,741
88,833
74,880
Other Expenses
1,761
5,164
4,625
11,745
Total Other Expenses
50,863
44,905
93,458
86,625
Net Income <Loss> Before Income
Taxes
468
<72,565>
15,386
<155,533>
Income Taxes
- -0-
- -0-
- -0-
- -0-
Net Income <Loss>
$468
<$72,565>
$15,386
<$155,533>
Net Income <Loss> per Share
- -0-
<$.05>
$.01
<$.10>
Weighted Average Shares
Outstanding
1,682,065
1,598,315
1,675,877
1,598,315
</TABLE>
</PAGE>
<PAGE>
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,
1997.
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 six months ended November 30, 1997, and November 30,
1996, were $1,335,286 and $941,197 respectively. The sales increase
of $394,089, or 41%, was attributable to a resurgence in basic
nondestructive testing revenues stimulated by the current demand for
increased aircraft shipments by the Boeing Company, and by revenues
generated from the acquisition of Worldwide Tank Services assets in
July 1997.
Cost of sales for the six months ended November 30, 1997, and November
30, 1996, were $885,845 and $277,840 respectively. The cost of sales
resulted in gross profits of $449,441 and $277,840 respectively, or a
61% increase in gross profits in 1997 over the comparable 1996 period.
The increase in gross profit is attributable to higher sales levels
and improved utilization of manpower as well as improved pricing.
Selling, general and administrative expenses remained constant between
the periods with only a slight decrease in 1997 expenses of $340,597
from comparable 1996 expense levels of $346,748.
Other expense is principally interest expense and late payment
penalties. This increased slightly from $86,625 in 1996 to $93,458 in
1997. The increase is due to the financing costs of higher accounts
receivable levels created by higher revenue levels in 1997 as compared
to 1996.
Net income <loss> for the six month period ended November 30, 1997,
was $15,386, which compares favorably to the November 30, 1996, loss
of <$155,533>. The improved overall profitability is attributable to
higher revenue levels while holding selling, general and
administrative expenses at a constant period to period comparable
level.
</PAGE
<PAGE>
PART II - Other Information
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 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.
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 its negative
working capital position.
PART IV - Stockholders' Equity
The negative stockholders' equity at November 30, 1997, of $744,549
shows an improvement over the year ended May 31, 1997, balance of
$834,934. The improvement in Stockholders' equity was caused by the
profit generated during the six month period and by the acquisition of
Worldwide Tank Services assets acquired for Common Stock valued at
$75,000.00.
The Company continues to seek new equity financing to cure this
negative working position.
PART V - Exhibits and Reports on Form 8K
Form 8K regarding a change in accountants was filed on August 15,
1997.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf, by the
undersigned, thereunto duly authorized:
ENVIRONMENTAL TESTING TECHNOLOGIES, INC.
January 8, 1998 S/S
______________________________________________________________
Date George B. Maitland, VP Finance
January 8, 1998 S/S
__________________________________________________________________
Date Lee G. Connel, Director
</PAGE>
