FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Qtr. Ended: March 31,1997 File No.: 2-20954-NY
KBF POLLUTION MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2687588
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1110 FARMINGDALE ROAD NORTH LINDENHURST NEW YORK 11757
(Address of principal executive offices)
(516) 225-0007
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 . No X .
Indicate the number of shares outstanding of each of the registrant's classes
of stock as of March 31, 1997:
Common stock, $.00001 par value - 43,405,546 shares outstanding.
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KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
March 31, 1997
INDEX
PART I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS (Unaudited)
Balance Sheets -
March 31,1997 and December 31, 1996 3-4
Statement of Income -
Three Months Ended March 31,1997 and 1996 5
Statement of Cash Flows -
Three Months Ended March 31, 1997 and 1996 6-7
Notes to Financial Statements 8
Item II - MANAGEMENT'S DISCUSSION AND ANALYSIS 9
PART II - OTHER INFORMATION 10
SIGNATURES 10
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KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
MARCH 31, 1997
BALANCE SHEET
ASSETS
3/31/97 12/31/96
Unaudited Audited
CURRENT ASSETS:
Cash $ 21,075 $ 19,174
Cash - Restricted 27,500 27,500
Trade Accounts Receivable (Net of
allowance for doubtful accounts
of $25,969 & $29,563) 233,723 266,065
Other Receivables 46,600 69,912
Inventories 13,069 17,779
Prepaid Expendable Supplies 14,246 18,993
Other Prepaid Expenses 8,099 12,752
Total Current Assets 364,312 432,175
FIXED ASSETS:
Property, Equipment & Improvements
(Net of Accumulated Depreciation &
Amortization of $1,517,942 & $1,467,315) 976,476 1,027,102
Leased Property under Capital Leases
(Amortization of $353,573 & $345,141) 133,326 141,758
Non Expendable Stock, Parts & Drums 139,368 139,368
Total Fixed Assets, Net 1,249,170 1,308,368
OTHER ASSETS:
Security Deposits 12,406 12,406
Patent (Net of Accumulated Amortization
of $10,267 & $9,968) 10,062 10,361
Capitalized Permit Costs 95,580 95,580
Total Other Assets 118,048 118,347
TOTAL ASSETS $1,731,530 $1,858,750
See accompanying notes to financial statements
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KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
MARCH 31, 1997
BALANCE SHEET
LIABILITIES & STOCKHOLDERS' EQUITY
3/31/97 12/31/96
Unaudited Audited
CURRENT LIABILITIES:
Accounts Payable - Trade $ 618,624 $ 491,156
Accrued Expenses 136,282 157,270
Taxes Withheld & Accrued 10,688 13,127
Current Portion of Long - Term
Debt 60,000 81,637
Current Portion of Capital Lease
Obligations 76,844 77,773
Total Current Liabilities 902,438 820,963
LONG-TERM LIABILITIES:
Long - Term Lease Obligations 209,432 228,885
Total Long - Term Liabilities 209,432 228,885
STOCKHOLDERS' EQUITY :
Com. Stock par value .00001 per sh.
Authorized - 500,000,000 shares
Issued & Outstanding
March 31, 1997 - 43,405,546 434 434
Dec. 31, 1996 - 43,405,546
Capital in Excess of Par Value 4,334,234 4,344,671
Retained Earnings (Deficit) (3,715,008) (3,536,203)
Total Stockholders' Equity 619,660 808,902
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT) $ 1,731,530 $ 1,858,750
See accompanying notes to financial statements.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
MARCH 31, 1997
STATEMENT OF INCOME
(Unaudited)
THREE MONTHS ENDED
3/31/97 3/31/96
REVENUES $ 422,027 $ 485,212
LESS: Cost of Operations 347,699 339,507
Gross Profit 74,328 145,705
LESS: General & Admin. Expenses 243,357 213,987
Advertising 379 1,261
Operating Income (Loss) (169,408) ( 69,543)
OTHER INCOME (EXPENSES):
Interest Income 0 207
Interest Expense (8,322) ( 3,520)
Income Tax Provision (1,074) ( 1,378)
NET INCOME (LOSS) $ (178,804) $ ( 74,234)
Number of Shares Outstanding 42,432,546 42,432,213
Earnings Per Share from
Operations $ (.0040) $ (.0016)
Earnings Per Share - Net
Income (Loss) $ (.0042) $ (.0017)
See accompanying notes to financial statements.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
MARCH 31, 1997
STATEMENT OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
3/31/97 3/31/96
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 457,963 $ 498,956
Cash Paid to Suppliers & Employees (405,387) (482,046)
Interest & Dividends Received 0 207
Interest Paid (8,182) ( 3,237)
Income Taxes Paid (474) (3,595)
Net Cash Provided (Used) by
Operating Activities 43,920 10,285
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Purchases of Equipment 0 (16,784)
Cash Purchases of Intangible &
Other Assets 0 (3,745)
Cash Provided by Surrender of Life Insurance 0 8,957
Net Cash Provided (Used) in Investing
Activities 0 (11,572)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sale of Stock &
Warrants 0 27,000
Repayment of Long-Term Debt &
Capital Lease Obligations (42,019) (16,044)
Net Cash Provided (Used) by Financing
Activities (42,019) 10,956
NET INCREASE (DECREASE) IN CASH 1,904 9,669
CASH at Beginning of Period 19,174 11,025
CASH at End of Period $ 21,075 $ 20,694
See accompanying notes to financial statements.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
MARCH 31, 1997
STATEMENT OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
3/31/97 3/31/96
RECONCILIATION OF NET INCOME TO NET
CASH FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ (178,804) $ ( 74,234)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 59,057 70,618
Amortization 299 299
Consulting & Professional Fees Paid
in Stock (10,437) 0
Bad Debts (3,594) (1,374)
(Increase) Decrease in:
Trade Accounts Receivable 35,936 (39,522)
Other Receivables 23,312 0
Inventories 4,710 604
Prepaid Expenses & Deposits 9,400 19,329
Increase (Decrease) in:
Accounts Payable 127,468 40,694
Withholding Taxes Payable (2,439) (856)
Accrued Expenses (20,988) (5,273)
$ 43,920 $ 10,285
See accompanying notes to financial statements.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
MARCH 31, 1997
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included.
Operating results for the three months ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1996.
NOTE 2 - INVENTORIES
Inventories are comprised of the following major categories:
3/31/97 12/31/96
Shipping Supplies $ 6,281 $ 7,821
Reagents 6,788 9,958
$ 13,069 $ 17,779
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
MARCH 31, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATION - THREE MONTHS ENDED MARCH 31, 1997
AS COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1997
Total revenues for the three months ended March 31, decreased to $422,027 as
compared to $485,212 for the same period in 1996, a decrease of 13%. The
Company attributes such decrease in revenues to the temporary loss of revenue
from a particular customer. This loss was a result of the customers own
internal technical problems, which have been completely resolved.
Cost of sales for the three months ended March 31, 1997 increased to 82% of
revenues from 70% of revenues for the same period in 1996. This increase is
the result of the decrease in sales volume mentioned above. Certain costs
relating to income are fixed resulting in an increase in the percentage of
costs to revenue.
General and administrative expenses increased by 13% to $243,357 for the three
months ended March 31, 1997 from $213,987 for 1996. This increase is primarily
due to the continuing legal and settlement costs related to the recently settled
action, and administrative salaries and expenses paid to the Acting Chief
Executive Officer, whose term ended May 1997. Management believes that
administrative expense levels are presently (post May 1997) at or below 1996
levels.
The Company incurred a net loss of -$178,804 for the first quarter of 1997, a
141% increase from the net loss of -$74,234 for the same period in 1996, due to
the increase in costs and reduced revenues mentioned above. It should be noted
that the Company has currently recovered its sales and reduced it's general and
administrative expenses. Further more, the Company is negotiating to move its
operating facility to a more advantageous location where business is more easily
obtained and costs further reduced.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
MARCH 31, 1997
PART II - OTHER INFORMATION
Item VI - Exhibits and Reports on Form 8-K
Exhibits No. Description
27 Financial Data Schedule
Reports on Form 8-K for the three months ended
March 31, 1997, there were no reports filed on
Form 8-K
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.
KBF POLLUTION MANAGEMENT, INC.
Dated: September 20, 1997 LARRY KREISLER
LARRY KREISLER - PRESIDENT
Dated: September 20, 1997 KATHI KREISLER
KATHI KREISLER - SECRETARY/
TREASURER
</PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 48,575
<SECURITIES> 0
<RECEIVABLES> 259,692
<ALLOWANCES> (25,969)
<INVENTORY> 13,069
<CURRENT-ASSETS> 364,312
<PP&E> 3,120,685
<DEPRECIATION> (1,871,515)
<TOTAL-ASSETS> 1,731,530
<CURRENT-LIABILITIES> 902,438
<BONDS> 0
0
0
<COMMON> 434
<OTHER-SE> 619,226
<TOTAL-LIABILITY-AND-EQUITY> 1,731,530
<SALES> 422,027
<TOTAL-REVENUES> 422,027
<CGS> 347,699
<TOTAL-COSTS> 347,699
<OTHER-EXPENSES> 243,736
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,322
<INCOME-PRETAX> (179,878)
<INCOME-TAX> 1,074
<INCOME-CONTINUING> (178,804)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (178,804)
<EPS-PRIMARY> (.0042)
<EPS-DILUTED> (.0042)
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