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:June 30,1997File 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 or15(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
June 30, 1997:
Common stock, $.00001 par value - 43,643,565 shares outstanding.
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
June 30, 1997
INDEX
PART I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS (Unaudited)
Balance Sheets -
June 30, 1997 and December 31, 1996 3-4
Statement of Income -
Six Months Ended June 30, 1997 and 1996 5
Three Months Ended June 30, 1997 and 1996 6
Statement of Cash Flows -
Six Months Ended June 30, 1997 and 1996 7-8
Notes to Financial Statements 9
Item II - MANAGEMENT'S DISCUSSION AND ANALYSIS 10-11
PART II - OTHER INFORMATION 12
SIGNATURES 12
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
BALANCE SHEET
ASSETS
6/30/97 12/31/96
Unaudited Audited
CURRENT ASSETS:
Cash $ 28,314 $ 19,174
Cash - Restricted 27,500 27,500
Trade Accounts Receivable (Net of
allowance for doubtful accounts
of $23,566 & $29,563) 212,093 266,065
Other Receivables 29,975 69,912
Inventories 15,056 17,779
Prepaid Expendable Supplies 14,246 18,993
Other Prepaid Expenses 5,856 12,752
Total Current Assets 333,040 432,175
FIXED ASSETS:
Property, Equipment & Improvements
(Net of Accumulated Depreciation &
Amortization of $1,568,573 & $1,467,315) 921,860 1,027,102
Leased Property under Capital Leases
(Amortization of $362,005 & $345,141) 128,881 141,758
Non Expendable Stock, Parts & Drums 139,368 139,368
Total Fixed Assets, Net 1,190,109 1,308,228
OTHER ASSETS:
Security Deposits 12,406 12,406
Patent (Net of Accumulated Amortization
of $10,566 & $9,968) 9,763 10,361
Capitalized Permit Costs 95,580 95,580
Total Other Assets 117,749 118,347
TOTAL ASSETS $1,640,898 $1,858,750
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
BALANCE SHEET
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
6/30/97 12/31/96
Unaudited Audited
CURRENT LIABILITIES:
Accounts Payable - Trade $ 504,050 $491,156
Accrued Expenses 69,471 157,270
Taxes Withheld & Accrued 11,746 13,127
Current Portion of Long - Term
Debt 60,000 81,637
Current Portion of Capital Lease
Obligations 76,043 77,773
Total Current Liabilities 721,310 820,963
LONG-TERM LIABILITIES:
Long - Term Lease Obligations 226,907 228,885
Total Long - Term Liabilities 226,907 228,885
STOCKHOLDERS' EQUITY (DEFICIT) :
Com. Stock par value .00001 per sh.
Authorized - 500,000,000 shares
Issued & Outstanding
June 30, 1997 - 43,643,565 437 434
Dec. 31, 1996 - 43,405,546
Capital in Excess of Par Value 4,397,860 4,344,671
Retained Earnings (Deficit) (3,705,616) (3,536,203)
Total Stockholders' Equity (Deficit) 692,681 808,902
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT) $ 1,640,898 $ 1,858,750
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
STATEMENT OF INCOME
(Unaudited)
SIX MONTHS ENDED
6/30/97 6/30/96
REVENUES $ 930,345 $ 930,480
LESS: Cost of Operations 669,544 666,820
Gross Profit 260,801 263,660
LESS: General & Admin. Expenses 413,027 422,407
Advertising 0 2,423
Operating Income (Loss) (152,226) (161,170)
OTHER INCOME (EXPENSES):
Interest Income 500 495
Interest Expense (16,012) (6,478)
Income Tax Provision (1,674) (2,008)
NET INCOME (LOSS) $ (169,412) $ (169,161)
Number of Shares Outstanding 43,643,565 42,672,213
Earnings Per Share from Operations $ (.0035) $ (.0037)
Earnings Per Share - Net Income (Loss) $ (.0039) $ (.0040)
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
STATEMENT OF INCOME
(Unaudited)
THREE MONTHS ENDED
6/30/97 6/30/96
REVENUES $ 507,074 $ 445,268
LESS: Cost of Operations 321,845 327,312
Gross Profit 185,229 117,956
LESS: General & Admin. Expenses 169,291 208,418
Advertising 0 1,162
Operating Income (Loss) 15,938 (91,624)
OTHER INCOME (EXPENSES):
Interest Income 500 288
Interest Expense (7,690) (2,957)
Income Tax Provision (600) (630)
NET INCOME (LOSS) $ 8,148 $ (94,923)
Number of Shares Outstanding 43,643,565 42,672,213
Earnings Per Share from Operations $ .0001 $ (.0021)
Earnings Per Share - Net Income (Loss) $ .0002 $ (.0022)
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
STATEMENT OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
6/30/97 6/30/96
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 990,314 $ 921,935
Cash Paid to Suppliers & Employees (987,915) (912,815)
Interest & Dividends Received 500 495
Interest Paid (16,012) (5,272)
Income Taxes Paid (699) (3,595)
Net Cash Provided (Used) by
Operating Activities (13,812) 748
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Purchases of Equipment 0 (18,148)
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 (12,936)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sale of Stock &
Warrants 48,297 27,000
Repayment of Long-Term Debt &
Capital Lease Obligations (25,345) (25,874)
Net Cash Provided (Used) by Financing
Activities 22,952 1,126
NET INCREASE (DECREASE) IN CASH 9,140 (11,062)
CASH at Beginning of Period 19,174 11,025
CASH at End of Period $ 28,314 $ (37)<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10 - Q
JUNE 30, 1997
STATEMENT OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
6/30/97 6/30/96
RECONCILIATION OF NET INCOME TO NET
CASH FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ (169,412) $(169,161)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 118,119 141,237
Amortization 598 598
Consulting & Professional Fees Paid in Stock 0 30,000
Accounts Payable Paid in Stock 4,893 0
Bad Debts (5,997) 854
(Increase) Decrease :
Trade Accounts Receivable 59,969 (61,811)
Other Receivables 39,937 0
Inventories 2,724 (1,484)
Prepaid Expenses & Deposits 11,643 9,724
Increase (Decrease) in:
Accounts Payable 12,894 62,781
Withholding Taxes Payable (1,381) (953)
Accrued Expenses (87,799) (11,037)
$ (13,812) $748
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
JUNE 30, 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 six months ended June 30, 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:
6/30/97 12/31/96
Shipping Supplies $ 6,170 $ 7,821
Reagents 8,886 9,958
$ 15,056 $ 17,779
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
JUNE 30, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
STATEMENTS AND NOTES SET FORTH ELSEWHERE IN THIS REPORT.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1997
AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996
Total revenues for the six months ended June 30, 1997 were unchanged at
$930,345 as compared to $903,480 for the same period in 1996. The Company
noted that waste related income rose by 2%, while the sale of manufactured
equipment decreased by the same amount.
Cost of sales for the six months ended June 30, 1997 and 1996 were identical
for both periods at 72%. General and administrative expenses decreased by 2%
to $413,027 for the six months ended June 30, 1997 from $422,407 for 1996.
This decrease is due to the ongoing steps taken by management to reduce costs.
The Company incurred a net loss of -$169,412 for the first six months of
1997, identical to the net loss of - $169,161 for the same period in 1996.
It should be noted that the effects of management s continued efforts to
reduce costs are more clearly evident
in managements discussion and analysis of the second quarter on page 11.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that current operations will provide adequate cash flow to
meet current obligations. The Company had a positive cash flow of $9,140
at June 30,1997. The positive cash flow, while operating at a loss
of -169,412, is indicative of the substantial excess by which depreciation
charges exceeds principle payment for long term debt, stock issued for
services, and increases in accounts payable and accrued expenses.
The Company continues to take steps, which were started in March 1994 to reduce
overhead expenses and direct costs in an effort to further improve cash flow
from operations. While this effort was interrupted in 1996,
management believes the 1997 overhead costs will continue to reflect these
reductions. In conjunction with the stipulation entered into with Apple Bank
(1996 Financial Statement Exhibit A, Note 7) the Company is considering a
more advantageous location as well as working to retain its present facility.
Management believes that the new or additional location would result in
additional business opportunities. In conjunction with this prospect, the
Company expects to incur material capital expenditures and related costs.
Management is in the process of raising additional capital for this occurrence.
There is no such assurance that such funds will be available for either
long-term or short-term, or if available, on terms which will be
acceptable to the Company.
Previous types of financing and capital resources are disclosed in the Company's
1996 10K.<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
JUNE 30, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30,1997
AS COMPARED TO THE THREE MONTHS ENDED JUNE 30,1996
Total revenues for the three months ended June 30, 1997 increased to $507,074 as
compared to $445,268 for the same period in 1996, an increase of 14%.
The Company attributes such increase in revenues due to economic conditions
and continued sales efforts. Cost of sales for the three months ended June
30, 1997 decreased to 64% of revenues from 74% of revenues for
the same period in 1996. This decrease is due to management's continued efforts
to minimize costs. General and administrative expenses decreased by 14% to
$ 169,291 for the three months ended June 30, 1997 from
$208,418 for 1996. This decrease is also due to management's continued
efforts to minimize costs. The Company incurred a net income of $8,148 for
the second quarter of 1997, as compared to the net loss of - $94,923 for the
same period in 1996, due to the decrease in costs and increased revenues
mentioned above.<PAGE>
KBF POLLUTION MANAGEMENT, INC.
FORM 10-Q
JUNE 30, 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 six months ended
June 30,1997, 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: Sept. 9, 1997 Larry Kreisler
LARRY KREISLER - PRESIDENT
Dated: Sept. 9, 1997 Kathi Kreisler
KATHI KREISLER SECRETARY /
TREASURER
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THis schedule contains financial information extracted from the unaudited
financial statements dated June 30, 1997 and is qualified in its entirety be
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 55,814
<SECURITIES> 0
<RECEIVABLES> 235,659
<ALLOWANCES> (23,566)
<INVENTORY> 15,056
<CURRENT-ASSETS> 333,040
<PP&E> 3,120,687
<DEPRECIATION> (1,930,578)
<TOTAL-ASSETS> 1,640,898
<CURRENT-LIABILITIES> 721,310
<BONDS> 0
0
0
<COMMON> 437
<OTHER-SE> 692,244
<TOTAL-LIABILITY-AND-EQUITY> 1,640,898
<SALES> 930,345
<TOTAL-REVENUES> 930,345
<CGS> 669,544
<TOTAL-COSTS> 669,544
<OTHER-EXPENSES> 414,701
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,012
<INCOME-PRETAX> (167,738)
<INCOME-TAX> 1,674
<INCOME-CONTINUING> (169,412)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (169,412)
<EPS-PRIMARY> (.004)
<EPS-DILUTED> (.004)
</TABLE>
