|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: BEAR STEARNS COMPANIES INC, S-3, 1998-11-06 |
Next: EATON VANCE MUNICIPALS TRUST, N-30D, 1998-11-06 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported) NOVEMBER 13, 1997
RECONVERSION TECHNOLOGIES, INC.
(exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-23100 22-2649848
(Commission File Number) (IRS Employer Identification No.)
2 HENDERSONVILLE ROAD, SUITE E, ASHEVILLE, NORTH CAROLINA 28803
(Address of principal executive offices)
(704) 255-0307
(Registrant's telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
a. Financial Statements of Business Acquired
The financial statements of Keystone Laboratories, Inc. as of
June 30, 1997 and for the year then ended, together with the
audit report of Guest & Company, P.C. dated May 19, 1998 is
attached as Exhibit A.
b. Pro Forma Financial Information
Pro forma financial schedules are attached hereto as Exhibit B
c. Exhibits
Exhibit A - Keystone Laboratories, Inc. audited financial
statement as of June 30, 1997 and for the year then ended.
Exhibit B - Pro forma financial schedules:
Pro forma combining balance sheet as of September 30,
1997
Pro forma journal entries as of September 30, 1997
Pro forma combining operating statement for the
three months ended September 30, 1997
Pro forma combining operating statement for the year
ended June 30, 1997.
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 hereunto duly authorized.
RECONVERSION TECHNOLOGIES, INC.
Date: October 30, 1998 By: /s/Joel C. Holt
---------------------------------
Joel C. Holt, President and
Principal Accounting Officer
<PAGE> 1
KEYSTONE LABORATORIES, INC.
Financial Statements
June 30, 1997
(With Independent Auditor's Report Thereon)
[GUEST & COMPANY LOGO]
PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE> 2
[GUEST & COMPANY LOGO]
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Keystone Laboratories, Inc.:
We have audited the accompanying balance sheet of Keystone Laboratories, Inc. as
of June 30, 1997, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Keystone Laboratories, Inc. at
June 30, 1997, and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
/s/ Guest & Company, P.C.
May 19, 1998
Tulsa, Oklahoma
<PAGE> 3
KEYSTONE LABORATORIES, INC.
Balance Sheet
June 30, 1997
ASSETS
<TABLE>
Current assets:
<S> <C>
Cash $165,285
Accounts receivable 51,092
Investments 1,371
Prepaid expenses 9,864
Deferred income tax asset (note 3) 82,380
--------
Total current assets 309,992
--------
Machinery and equipment (note 2):
Lab machinery and equipment 456,916
Computer equipment 69,161
Furniture and fixtures 20,728
--------
546,805
Less accumulated depreciation and amortization 402,728
--------
Net machinery and equipment 144,077
--------
$454,069
========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 4
KEYSTONE LABORATORIES, INC.
Balance Sheet, Continued
June 30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
Current liabilities:
<S> <C>
Current installments of long-term debt (note 2) $ 22,936
Accounts payable 21,638
Accrued expenses 28,240
---------
Total current liabilities 72,814
---------
Long-term debt, excluding current installments
(note 2) 83,275
---------
Total liabilities 156,089
---------
Stockholders' equity (note 6):
Common stock, no par value. Authorized
3,000 shares; issued 3,000 shares 10
Additional paid-in capital 597,835
Deficit (299,865)
---------
Total stockholders' equity 297,980
Commitments (note 4)
---------
$ 454,069
=========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
KEYSTONE LABORATORIES, INC.
Statement of Operations
Year Ended June 30, 1997
<TABLE>
<S> <C>
Net sales $ 1,446,137
Cost of sales 435,708
-----------
Gross profit 1,010,429
Selling, general, and administrative expenses 1,172,501
-----------
Operating loss (162,072)
-----------
Other deductions - interest expense (12,387)
-----------
Net loss before income taxes (174,459)
Income taxes (note 3) 53,044
-----------
Net loss $ (121,415)
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
KEYSTONE LABORATORIES, INC.
Statement of Stockholders' Equity
Year Ended June 30, 1997
<TABLE>
<CAPTION>
TOTAL
STOCK-
ADDITIONAL HOLDERS'
COMMON PAID-IN EQUITY
STOCK CAPITAL DEFICIT (NOTE 6)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balances at June 30, 1996 $ 10 597,835 (178,450) 419,395
Net loss -- -- (121,415) (121,415)
-------- -------- -------- --------
Balances at June 30, 1997 $ 10 597,835 (299,865) 297,980
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 7
KEYSTONE LABORATORIES, INC.
Statement of Cash Flows
Year Ended June 30, 1997
INCREASE IN CASH
<TABLE>
Cash flows from operating activities:
<S> <C>
Cash received from customers $ 1,603,404
Cash paid to suppliers and employees (1,377,791)
Interest paid (12,387)
Income taxes paid --
-----------
Net cash provided by operating activities 213,226
-----------
Cash flows from investing activities:
Capital expenditures (26,065)
Purchase of investments (1,371)
-----------
Net cash used by investing activities (27,436)
-----------
Cash flows from financing activities:
Repayment of long-term debt (22,218)
Repayment of capital leases (52,216)
-----------
Net cash used by financing activities (74,434)
-----------
Net increase in cash 111,356
Cash, beginning of year 53,929
-----------
Cash, end of year $ 165,285
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 8
KEYSTONE LABORATORIES, INC.
Statement of Cash Flows, Continued
Year Ended June 30, 1997
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
<TABLE>
<S> <C>
Net loss $(121,415)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 94,688
Decrease in accounts receivable 157,267
Uncollectible note receivable written off 168,715
Increase in deferred income tax asset (53,044)
Debt paid on behalf of Keystone by another company (20,000)
Increase in prepaid expenses (95)
Increase in accrued expenses (12,890)
---------
Net cash provided by operating activities $ 213,226
=========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Uncollectible note receivable written off $ 168,715
Debt paid on behalf of Keystone by another company (20,000)
</TABLE>
See accompanying notes to financial statements.
<PAGE> 9
KEYSTONE LABORATORIES, INC.
Notes to Financial Statements
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) NATURE OF OPERATIONS
Keystone Laboratories, Inc. located in Asheville, North Carolina,
provides drug screening and confirmatory drug testing services.
(b) MACHINERY AND EQUIPMENT
Owned machinery and equipment are stated at cost and are
depreciated using the straight-line method over the estimated
useful lives of the respective assets.
(c) INCOME TAXES
Deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and their respective
tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income for the period that
includes the enactment date.
(d) USE OF ESTIMATES
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues and expenses. Such estimates primarily relate
to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual results
may differ from estimated amounts.
<PAGE> 10
KEYSTONE LABORATORIES, INC.
Notes to Financial Statements, Continued
(2) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<S> <C>
Note payable to bank with
interest at 2.0% above the
prime rate as published in
the Wall Street Journal
(8.5% at June 30, 1997),
payable in monthly
installments of $2,707 plus
accrued interest with unpaid
principal balance due June
14, 2001; secured by certain
equipment of the Company $ 106,211
Less current installments 22,936
---------
Long-term debt, excluding current
installments $83,275
=======
</TABLE>
The aggregate maturities of long-term debt for the period ending June 30,
2001 are as follows: 1998, $22,936; 1999, $24,912; 2000, $27,657; and
2001, $30,706.
(3) INCOME TAXES
Income tax expense (benefit) consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
-------- -------- --------
<S> <C> <C> <C>
Federal $ -- (67,249) (67,249)
State -- 14,205 14,205
-------- -------- --------
$ -- (53,044) (53,044)
======== ======== ========
</TABLE>
2
<PAGE> 11
KEYSTONE LABORATORIES, INC.
Notes to Financial Statements, Continued
(3) INCOME TAXES, CONTINUED
Actual income tax benefit applicable to earnings before income taxes is
reconciled with the "normally expected" federal income tax benefit as
follows:
<TABLE>
<S> <C>
"Normally expected" income tax benefit $(59,316)
Increase (decrease) in taxes resulting from:
State income taxes, net of federal income
tax effect 13,118
Deduction of items in different periods for
financial accounting and income tax
purposes (7,432)
Nondeductible meals 586
--------
Actual income tax benefit $(53,044)
========
</TABLE>
The net deferred tax asset at June 30, 1997 is comprised of a net
operating loss carryforward benefit in the amount of $82,380.
The Company has available unused net operating loss carryforwards of
approximately $197,000, which will expire in 2017, but are expected to be
utilized in the next year.
(4) COMMITMENTS
The Company leases automobiles, equipment and office space under
noncancelable operating leases expiring from March 1998 to April 2003.
Future minimum lease payments under the leases as of June 30, 1997 are:
<TABLE>
<CAPTION>
Year ended June 30,
<S> <C> <C>
1998 $ 77,009
1999 70,364
2000 66,896
2001 61,789
2002 63,343
2003 54,355
--------
$ 393,756
=========
</TABLE>
3
<PAGE> 12
KEYSTONE LABORATORIES, INC.
Notes to Financial Statements, Continued
(4) COMMITMENTS, CONTINUED
Total rental expense related to the above mentioned leases was $75,600 for
the year ended June 30, 1997.
The Company also entered into several noncancellable maintenance and
service contracts expiring from October 1997 to August 1998. Future
payments required under these contracts as of June 30, 1997 are:
<TABLE>
<CAPTION>
Year ended June 30,
<S> <C> <C>
1998 $ 67,981
1999 1,684
----------
$ 69,665
==========
</TABLE>
Total expense related to the above mentioned contracts was $77,153 for the
year ended June 30, 1997.
(5) CONCENTRATION OF CREDIT RISK
At June 30, 1997, the Company maintained cash balances in a financial
institution which exceeded the insured limits of the Federal Deposit
Insurance Corporation.
(6) SUBSEQUENT EVENT
On November 13, 1997, the United Bankruptcy Court for the Northern
District of Oklahoma confirmed the Plan of Reorganization (the Plan) of
Reconversion Technologies, Inc. (Retek), a publicly traded company. As
part of the Plan, all outstanding shares of the Company will be acquired
by Retek in exchange for common stock of Retek as it is reorganized by the
Plan. The shareholders of the Company are also shareholders of Retek. The
exchange of shares occurred on December 3, 1997 in a transaction accounted
for by Retek as a purchase. Proforma financial information is not
presented due to the minimal assets and operations of Retek as of and for
the year ended June 30, 1997.
4
<PAGE> 1
Reconversion Technologies, Inc.
Pro Forma Combining Balance Sheet
September 30, 1997
<TABLE>
<CAPTION>
Pro forma Pro forma
ReTech Keystone adjustments Elimination consolidated
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 1,900 $ 86,515 $ 88,415
Marketable securities 47,167 47,167
Accounts receivable 48,129 48,129
Due from employees and -
related parties 74,000 74,000
Prepaid expenses 9,863 <4> 60,000 69,863
Deferred income taxes 72,380 72,380
---------------------------- -------------------------------------------------
1,900 338,054 60,000 399,954
Property and equipment, net 135,135 135,135
Due from Liquidating Trust
of Reconversion Tech-
nologies of Texas, Inc. 100,000 100,000
Investment in KLI <6> 597,845 (597,845) -
Prepaid contract <4> 60,000 60,000
---------------------------- -------------------------------------------------
101,900 473,189 717,845 695,089
============================ =================================================
Current portion of long-term debt 22,935 22,935
Accounts payable 2,907,347 21,638 <5> (2,899,191) 29,794
Accrued expenses 28,240 <7> 218,340 246,580
Obligations expected to be
paid with common stock <5> 2,899,191 2,899,191
---------------------------- -------------------------------------------------
2,907,347 72,813 218,340 3,198,500
Long-term debt less current 74,875 74,875
Stockholders' deficit:
Preferred stock 3,036,223 <2> (3,036,223) -
Common stock 1,137 10 <1> (992) (10) 939
<2> 124
<3> 30
<4> 100
<5> 290
<6> 250
Paid-in capital 10,252,819 597,835 <1> 992 (597,835) 598,310
<2> 3,036,099
<3> 35,970
<4> 119,900
<5> 2,898,901
<6> 597,595
<7> (16,343,966)
Deficit (16,095,626) (272,344)<3> (36,000) (278,344)
<7> (218,340)
<7> 16,343,966
---------------------------- -------------------------------------------------
(2,805,447) 325,501 (12,726,930) 320,905
Stock subscription receivable <5> (2,899,191) (2,899,191)
---------------------------- -------------------------------------------------
(2,805,447) 325,501 (15,626,121) (2,578,286)
---------------------------- -------------------------------------------------
101,900 473,189 (15,407,781) 695,089
============================ =================================================
</TABLE>
Exhibit B
<PAGE> 2
Reconversion Technologies, Inc.
Pro Forma Journal Entries
September 30, 1997
<TABLE>
<CAPTION>
Debit Credit
<S> <C> <C>
<1>
Common stock 992
Paid-in capital 992
Record 1 for 8 reverse split of common stock
<2>
Preferred stock 3,036,223
Common stock 124
Paid-in capital 3,036,099
Record conversion of preferred stock to common stock
<3>
Director fees expense 36,000
Common stock 30
Paid-in capital 35,970
Issue 300,000 shares to directors for director fees
<4>
Prepaid expense - current 60,000
Prepaid contract - non-current 60,000
Common stock 100
Paid-in capital 119,900
Issue 1,000,000 shares of common stock for two-year
public relations contract
<5>
Accounts payable 2,899,191
Obligations expected to be paid with common stock 2,899,191
Stock subscription receivable 2,899,191
Common stock 290
Paid-in capital 2,898,901
Segregate obligations expected to be paid with common
stock and record issuance of related common stock and
stock subscription receivable pending final settlement.
<6>
Investment in KLI 597,845
Common stock 250
Paid-in capital 597,595
Record acquisition of KLI for 2,500,000 shares of common stock
</TABLE>
Exhibit B
<PAGE> 3
Reconversion Technologies, Inc.
Pro Forma Journal Entries
September 30, 1997
<TABLE>
<S> <C> <C>
<7>
Administrative expenses 218,340
Accrued expenses 218,340
Paid-in capital 16,343,966
Deficit 16,343,966
Accrue legal and professional services incurred and
recapitalize the Company
</TABLE>
Exhibit B
<PAGE> 4
Reconversion Technologies, Inc.
Pro Forma Combining Operating Statement
Three Months ended September 30, 1997
<TABLE>
<CAPTION>
Pro forma Pro forma
ReTech Keystone adjustments Elimination consolidated
<S> <C> <C> <C> <C> <C>
Sales and revenues $ - $ 429,847 $ 429,847
Cost of sales 100,098 100,098
----------------------------- -------------------------------------------------
Gross profit - 329,749 - - 329,749
Other expense (income):
Selling, general and
administrative expense 2,000 292,228 294,228
----------------------------- -------------------------------------------------
Earnings (loss) before income taxes (2,000) 37,521 - - 35,521
Deferred income taxes 10,000 10,000
----------------------------- -------------------------------------------------
Net earnings (loss) (2,000) 27,521 - - 25,521
============================= =================================================
Net earnings per share $ 0.003
================
Weighted average shares outstanding 6,894,043 2,500,000 9,394,043
============================= ================
</TABLE>
Exhibit B
<PAGE> 5
Reconversion Technologies, Inc.
Pro Forma Combining Operating Statement
Year Ended June 30, 1997
<TABLE>
<CAPTION>
Pro forma Pro forma
ReTech Keystone adjustments Elimination consolidated
<S> <C> <C> <C> <C> <C>
Sales and revenues $ - $1,446,137 $ 1,446,137
Cost of sales 435,708 435,708
---------------------------- --------------------------------------------------
Gross profit - 1,010,429 - - 1,010,429
Other expense (income):
Selling, general and
administrative expense 1,172,501 1,172,501
Interest expense 12,387 12,387
---------------------------- --------------------------------------------------
Earnings (loss) before income taxes - (174,459) - - (174,459)
Deferred income taxes (benefit) (53,044) (53,044)
---------------------------- --------------------------------------------------
Net earnings (loss) - (121,415) - - (121,415)
============================ ==================================================
Net earnings per share $ (0.013)
=================
Weighted average shares outstanding 6,894,043 2,500,000 9,394,043
============================ =================
</TABLE>
Reconversion Technologies, Inc. was in bankruptcy during the year ended June 30,
1997 and had no operations.
Exhibit B
|
|