U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-17776
LEAK-X ENVIRONMENTAL CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 23-2823596
(State or other jurisdiction of (IRS Employer Identi-
incorporation or organization) fication Number)
790 East Market Street, Suite 270, West Chester, PA 19382
(Address of Principal Executive Offices) (Zip Code)
(610) 344-3380
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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
The number of shares of Common Stock, par value $.001 per share,
outstanding as of November 10, 2000 is 990,126 shares.
Transitional Small Business Disclosure Format:
Yes X No
<TABLE>
CONSOLIDATED BALANCE SHEETS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited) (Unaudited)
<S> <C> <C>
ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 72 $ 15,056
Accounts receivable, net 454,637 610,350
Estimated earnings in excess of billings 1,262 5,703
Other current assets 38,950 28,508
Net assets of discontinued operations 450,000 450,000
TOTAL CURRENT ASSETS $ 944,921 1,109,617
PROPERTY AND EQUIPMENT, NET 39,683 55,475
OTHER ASSETS - Deposits 10,064 6,269
TOTAL ASSETS $ 994,668 $1,171,361
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE
CURRENT LIABILITIES
LIABILITIES NOT SUBJECT TO COMPROMISE
Accounts payable and accrued expenses $ 336,804 $ 833,107
Unearned revenue 7,888 48,532
Note payable 16,830 457,000
Current portion of long term debt 100,000 131,250
Net liabilities of discontinued operations 366,898 416,425
TOTAL CURRENT LIABILITIES 828,420 1,886,314
Liabilities Subject To Compromise (Note 2) 1,041,711 0
TOTAL LIABILITIES $1,870,131 $1,886,314
STOCKHOLDERS' EQUITY
Common stock $.001 par value:
5,000,000 shares authorized,
990,126 issued and outstanding 990 990
Additional paid-in capital 8,310,195 8,310,195
Accumulated deficit (9,186,648) (9,026,138)
TOTAL STOCKHOLDERS' EQUITY (875,463) (714,953)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 994,668 $1,171,361
See notes to consolidated financial statements
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
<CAPTION>
Three Months Ended September 30,
2000 1999
<S> <C> <C>
Revenues $ 344,813 $ 793,704
Cost of revenues 180,611 421,975
Gross profit 164,202 371,729
Selling, general and administrative expenses 236,408 390,258
Operating loss (72,206) (18,529)
Other income (438) (851)
Interest expense 50 9,447
Net loss before reorganization items
and income taxes (71,818) (27,125)
Reorganization items:
Professional Fees (30,000) -------
Net loss before income taxes (101,818) (27,125)
Income taxes 658 1,941
Net Loss $ (102,476) $ (29,066)
Weighted average number of shares of common
stock outstanding - Basic and Diluted 990,126 990,126
Net loss per share: ($0.10) ($0.03)
See notes to consolidated financial statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
2000 1999
<S> <C> <C>
Revenues $1,570,600 $2,856,649
Cost of revenues 881,569 1,656,165
Gross profit 689,031 1,200,484
Selling, general and
administrative expenses 765,727 1,183,252
Operating income/(loss) (76,696) 17,232
Other income (1,384) (1,709)
Interest expense 13,210 21,189
Net loss before reorganization items and
income taxes (88,522) (2,248)
Reorganization Items:
Professional Fees (70,860) -------
(70,860) 0
Net loss before income taxes (159,382) (2,248)
Income taxes 1,128 5,660
Net loss $ (160,510) $ (7,908)
Weighted average number of shares of common
stock outstanding - basic and diluted 990,126 990,126
Net loss per share: ($0.16) ($0.01)
See notes to consolidated financial statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
2000 1999
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (160,510) $ (7,907)
Adjustments to reconcile net loss to net cash
used by operating activities of continuing operations:
Depreciation 23,700 29,100
Changes in assets and liabilities:
Accounts receivable 116,341 833,061
Costs and estimated earnings in excess of billings 4,442 70,519
Other current assets (10,442) (2,247)
Accounts payable 134,520 (803,031)
Billings in excess of cost (40,644) (76,674)
Liabilities subject to compromise (27,363) -------
Accrued expenses and other liabilities 22,870 (71,136)
NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES OF
CONTINUING OPERATIONS 62,914 (28,315)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,909) (11,883)
Increase in other assets, net (3,795) -------
NET CASH USED BY INVESTING ACTIVITIES OF
CONTINUING OPERATIONS (11,704) (11,883)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advance/(repayment) on line-of-credit (30,636) 166,731
Reclassification of negative cash balance 16,830 -------
Principal payments on pre-petition debt
authorized by court (30,000) -------
Payments on short-term debt (18,750) (100,000)
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES
OF CONTINUING OPERATIONS (62,556) 66,731
NET CASH PROVIDED/(USED) BY CONTINUING OPERATIONS (11,346) 26,533
NET CASH USED IN DISCONTINUED OPERATIONS (3,638) (28,275)
NET DECREASE IN CASH (14,984) (1,742)
CASH, beginning of the period 15,056 1,742
CASH, end of the period $ 72 $ 0
See notes to consolidated financial statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(UNAUDITED)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements
of Leak-X Environmental Corporation (the "Company") have been
prepared in accordance with the American Institute of Certified
Public Accountants Statement of Position 90-7: "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7")
and generally accepted accounting principles applicable to
a going concern, which principles, except as otherwise disclosed,
assume that assets will be realized and liabilities will be
discharged in the normal course of business. The Company's sole
operating subsidiary, Lexicon Environmental Associates, Inc.
("Lexicon") filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code ("Chapter 11") on May 2, 2000 (the
"Filing"). Lexicon is presently operating its business as a
debtor-in-possession subject to the jurisdiction of the United
States Bankruptcy Court for the Southern District of New York
(the "Bankruptcy Court").
With respect to the unaudited consolidated financial
statements for the three-month and nine-month periods ended
September 30, 2000 and the three-month and nine-month periods ended
September 30, 1999, it is the Company's opinion that all necessary
adjustments (consisting of normal ands recurring adjustments) have
been included to present a fair statement of results for the
interim periods.
These statements should be read in conjunction with the
Company's financial statements (Form 10-K) for the fiscal year
ended December 31, 1999. Refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999.
Operating results for the nine-month period ended September 30,
2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000.
These financial statements have not been reviewed in
accordance with Statement of Auditing Standards (SAS) 71, Interim
Financial Information. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting practices have been
condensed or omitted, pursuant to the general rules and regulations
promulgated by the Securities and Exchange Commission.
The Company's ability to continue as a going concern is
dependent upon consummation of the Company's amended plan of
reorganization by the Bankruptcy Court, the ability to obtain
additional financing, when needed, the achievement of profitable
operations and the resolution of the uncertainties of the
reorganization case discussed in Note 2. The Company experienced
significant revenue decline during Fiscal 2000 and 1999.
Note 2. Reorganization Case
In the Chapter 11 case, certain claims against the Debtor in
existence prior to the filing of the petition for relief under the
federal bankruptcy laws are stayed while the Debtor continues
business operations as Debtor-in-Possession. These claims are
reflected in the September 30, 2000 balance sheet as "liabilities
subject to compromise." Additional claims (liabilities subject to
compromise) may arise subsequent to the filing date resulting from
rejection of executory contracts, including leases, and from the
determination by the court (or agreed to by parties in interest) of
allowed claims for contingencies and other disputed amounts.
Claims secured against the Debtor's assets ("secured claims") also
are stayed, although the holders of such claims have the right to
move the court for relief from the stay. Secured claims are
secured primarily by an interest in the Debtor's accounts receivable.
The principal categories of claims classified as "Liabilities
Subject to Compromise" are identified below. Secured debt includes
the outstanding balance on the Company's Loan with First Union
National Bank ("First Union"). The Company has applied $30,000 of
adequate protection payments through September 30, 2000 on this
outstanding loan balance since the filing date in accordance with
the cash collateral order signed by the Bankruptcy Court. Priority
tax claims include unemployment and sales tax liabilities.
Employee claims include reimbursables due to employees. Bank fees
and interest include interest accrued through May 1, 2000 and fees
related to the default under the Company's loan agreement with
First Union. Trade includes all other normal operating liabilities
outstanding as of the date of the Filing. All amounts presented
below may be subject to future adjustments depending on Bankruptcy
Court actions, further developments with respect to disputed
claims, determination as to the security of certain claims, the
value of any collateral securing such claims, or other events.
LIABILITIES SUBJECT TO COMPROMISE
Secured debt, 9.5%, secured by accounts receivable $ 396,364
Priority tax claims 10,089
Priority employee claims 20,516
Bank fees and interest 31,227
Trade and other miscellaneous claims 583,515
1,041,711
The Debtor received approval from the Bankruptcy Court to pay
or otherwise honor certain of its prepetition obligations,
including payroll withholdings and other payroll-related trust fund
monies. The Debtor believes that there was insufficient collateral
to cover the amount of the secured claims at the time of the
Filing; therefore, the debtor has discontinued accruing interest on
these obligations. Contractual interest on these obligations
amounted to $36,117, which is $16,483 in excess of reported
interest expense. Refer to Note 4 for further discussion of the
secured debt.
Note 3. Discontinued Operations
Net assets of discontinued operations at September 30, 2000
consist of accounts receivable of $450,000. Net liabilities of
discontinued operations at September 30, 2000 include accounts
payable and accrued expenses of $346,251 and $20,647, respectively.
Note 4. Debt
As a result of the Filing, substantially all the debt
outstanding at May 2, 2000 was classified as liabilities subject to
compromise (Note 2). Adequate protection payments of $7,500 per
month have been included in the cash collateral order which was
authorized by the Bankruptcy Court. These monthly payments are
scheduled to continue until Plan of Reorganization has been
approved. Generally, interest on pre-petition debt ceases to
accrue upon the filing of a petition under the Bankruptcy Code.
Contractual interest expense not recorded on certain pre-petition
debt (the "Loan Agreement") totaled $16,483 as of September 30,
2000.
Note 5. Reorganization Items
The Company incurred $70,860 of professional fees associated
with the Chapter 11 proceedings. These fees represent estimates of
expenses incurred, primarily for legal services provided to the
Company and the creditors committee (which are required to be paid
by the Company while in Chapter 11).
Note 6. Debtor-In-Possession
The following is the condensed financial statements for Lexicon
from the date of its Chapter 11 filing through September 30, 2000.
Lexicon Environmental Associates, Inc.
(Debtor-In-Possession)
Balance Sheet
September 30, 2000
Total Assets
Cash $ 72
Accounts Receivable 454,637
Intercompany Receivable 1,492,876
Other Current Assets 38,343
Total Current Assets 1,969,097
P,P&E, net 39,683
Other Assets 10,064
Total Assets $2,018,845
Total Liabilities and Stockholders' Equity
Accounts Payable $ 154,110
Other Liabilities 110,366
Total Current liabilities 264,476
Liabilities subject to compromise 1,041,711
Stockholders' Equity
Common Stock 2
Retained earnings 712,656
Total Stockholders' Equity 712,658
Total Liabilities and Stockholders' Equity $2,018,845
Lexicon Environmental Associates, Inc.
(Debtor-in-Possession)
Statement of Operations
May 3, 2000 - September 30, 2000
Revenues $ 737,153
Cost of revenues 422,031
Gross profit 315,122
Selling, general & administrative expenses 349,424
Operating Loss (34,301)
Other Income (884)
Interest expense 83
Intercompany interest income (17,500)
Net loss before reorganization items
and income tax expense (16,000)
Reorganization items:
Professional fees (85,860)
Net loss before income tax expense (101,860)
Income tax expense 872
Net Loss (102,732)
Lexicon Environmental Associates, Inc.
(Debtor-in-Possession)
Statement of Cash Flows
May 3, 2000 - September 30, 2000
Cash flows from operating activities:
Cash received from customers $ 761,469
Cash paid to suppliers and employees (751,117)
Interest paid (17)
Net cash provided by operating activities
before reorganization items 10,335
Operating cash flows from reorganization items:
Professional fees paid for services rendered in
connection with the Chapter 11 proceeding ------
Net cash used by reorganization items ------
Net cash provided by operating activities 10,335
Cash flows from investing activities:
Increase in other assets - deposits (6,068)
Increase in Property, Plant & Equipment (267)
Net cash used by investing activities (6,335)
Cash flows from financing activities:
Negative cash balance reclassed to S-T Debt 16,830
Principal payments on prepetition debt
authorized by court (30,000)
Net cash used by financing activities (13,170)
Net increase in cash (9,170)
Cash, beginning of period 9,242
Cash, end of period $ 72
Reconciliation of net loss to net cash provided by
operating activities
Net loss $ (102,632)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation 13,000
Intercompany activity (40,717)
Changes in assets and liabilities:
Accounts receivable (1,142)
Other current assets 44,756
Intercompany activity (11,102)
Accounts payable 68,547
Prepetition liabilities (27,108)
Other current liabilities 66,732
Net cash provided by operating activities $ 10,335
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations
Quarter Ended September 30, 2000 Compared to the Quarter Ended
September 30, 1999
The Company's sole operating subsidiary, Lexicon, filed a
petition for relief under Chapter 11 of the federal bankruptcy laws
on May 2, 2000. Lexicon is currently operating its business as a
Debtor-In-Possession.
The Company's net loss was $102,476, or ($0.10) per share, for
the quarter ended September 30, 2000 (the "2000 Quarter"), as
compared to a net loss of $29,066, or ($0.03) per share, for the
quarter ended September 30, 1999 (the "1999 Quarter"). The loss in
the 2000 Quarter is primarily attributable to a decrease in
revenues and an increase in legal fees as a result of the Chapter
11 proceeding. Revenues decreased $448,891, or 56%, to $344,813
for the 2000 Quarter, as compared to $793,704 for the 1999 Quarter.
Part of this decrease in revenues is due to the fact that the 1999
Quarter included $165,000 of revenues from temporary labor who were
hired in 1999 to work on various Y2K issues at the Company's
client. The remaining decrease in revenues is due to lower overall
sales volume.
The Company's gross margin increased to 47.6% in the 2000
Quarter, as compared to 46.8% in the 1999 Quarter. The 2000
Quarter had a higher percentage of traditional labor revenues
which contribute a higher gross margin than temporary labor,
subcontractors and reimbursables.
Selling, general, and administrative ("SG&A") expenses
decreased 39%, or $153,849, to $236,409 for the 2000 Quarter, as
compared to $390,258 in the 1999 Quarter. This decrease is
primarily attributable to actions taken to reduce the Company's
expenses. In August 1999, the Company initiated a cost reduction
program, primarily reductions in marketing expenses and personnel
layoffs. The 2000 Quarter reflects these actions in its lower
overall SG&A expenses. The Company's focus is to incur minimum
expenses in order to preserve its working capital for growth within
the Company's operating subsidiary.
The Company incurred lower interest expense of $50 in the 2000
Quarter, as compared to $9,446 in the 1999 Quarter, due to the
discontinuance of accruing interest on all the pre-petition debt
under the Chapter 11 proceeding. Reorganization items included
$30,000 of professional fees related to the Chapter 11 proceeding.
Income tax expense of $658 in the 2000 Quarter was lower than
income tax expense of $1,941 in the 1999 Quarter due to lower
income levels.
Nine Months Ended September 30, 2000 Compared to the Nine Months
Ended September 30, 1999
The Company's net loss was $160,510, or ($0.16) per share, for
the nine months ended September 30, 2000 (the "2000 Period"), as
compared to a net loss of $7,908, or ($0.01) per share, for the
nine months ended September 30, 1999 (the "1999 Period"). The loss
in the 2000 Period is primarily attributable to a decrease in
revenues and an increase in legal fees as a result of the Chapter
11 proceeding. Revenues decreased $1,286,049, or 45%, to
$1,570,600 for the 2000 Period, as compared to $2,856,649 for the
1999 Period. Part of this decrease in revenues is due to the fact
that the 1999 Quarter included $413,000 of revenues from temporary
labor who were hired in 1999 to work on various Y2K issues at the
Company's client. The remaining decrease in revenues is due to
lower overall sales volume.
The Company's gross margin improved to 43.9% in the 2000
Period, as compared to 42.0% in the 1999 Period. The 2000 Period
had a higher percentage of traditional labor revenues which
contribute a higher gross margin than temporary labor,
subcontractors and reimbursables.
SG&A expenses decreased 35%, or $417,525, to $765,727 for the
2000 Period, as compared to $1,183,252 in the 1999 Period. This
decrease is primarily attributable to actions taken to reduce the
Company's expenses. In August 1999, the Company initiated a cost
reduction program, primarily reductions in marketing expenses and
personnel layoffs. The 2000 Period reflects these actions in its
lower overall SG&A expenses. The Company's focus is to incur
minimum expenses in order to preserve its working capital for
growth within the Company's operating subsidiary.
The Company incurred lower interest expense of $13,210 in the
2000 Period, as compared to $21,189 due to the Chapter 11
proceeding. Because the Company's secured lender is under
collateralized, the Company is no longer accruing interest expense
on this obligation. Reorganization items included $70,860 of
professional fees related to the Chapter 11 proceeding. Income tax
expense of $1,127 in the 2000 Period was lower than income tax
expense of $5,660 in the 1999 Period due to higher Fiscal 1998
expenses which were recorded in Fiscal 1999.
Liquidity and Capital Resources
The Company provided $62,914 of cash from operating activities
of continuing operations in the 2000 Period, as compared to
utilizing $28,315 of cash from operating activities in the 1999
Period. The net loss of $160,510 in the 2000 Period was higher
than the net loss of $7,907 in the 1999 Period. The 2000 Period
included a $116,341 decrease in accounts receivable and a $134,520
increase in accounts payable, as compared to a decrease of $833,061
in accounts receivable and a decrease of $803,031 in accounts
payable in the 1999 Period. The 2000 Period represents declining
sales and the 1999 Period represented a significant change in
accounts receivable and accounts payable, primarily due to the
decrease in revenues from construction management services.
Net cash used by investing activities of continuing operations
in the 2000 Period was $11,704, as compared to $11,883 net cash
used in the 1999 Period. Capital expenditures in the 2000 Period
of $7,909, which were primarily for computer and field equipment,
were lower than the $11,883 in the 1999 Period. The 2000 Period
included new deposits of approximately $3,795, primarily related to
the Chapter 11 proceeding.
Net cash used by financing activities of continuing operations
was $62,556 in the 2000 Period, as compared to net cash provided by
financing activities of continuing operations of $66,731 in the
1999 Period. During the 2000 Period, the Company repaid $60,636 on
its outstanding balance on its line of credit and $18,750 on its
long-term debt. The Company also reclassified a negative cash
balance to short-term note payable at September 30, 2000. During
the 1999 Period, the Company's prior cash management system, which
applied excess cash balances against its outstanding line of
credit, resulted in an increase of $166,731 on the line of credit
balance and paid out $100,000 on long-term debt.
The Company's working capital deficit of $925,210 at September
30, 2000 increased compared to the working capital deficit of
$776,697 at December 31, 1999, primarily due to the increase in
accounts payable.
The Company's operating subsidiary, Lexicon, filed a voluntary
petition for Chapter 11 Reorganization in the Unites States
Bankruptcy Court in the Southern District of New York on May 2,
2000. Lexicon received approval for use of its collections during
its cash collateral hearing held on May 12, 2000 in accordance with
its court approved budget. Lexicon has been operating as a
Debtor-In-Possession since the filing and is in the process of
preparing its Plan of Reorganization to be submitted to the
Bankruptcy Court. The Company is actively pursuing alternatives
for financing as part of its Plan, including both debt and equity
options.
Backlog at September 30, 2000 of $575,000 is lower than the
level at December 31, 1999 of $800,000, but the Company continues
to be successful in obtaining new work as it continues to complete
the ongoing projects which were booked at the beginning of the
fiscal year. The Company believes that all of the current backlog
will be completed in 2000, although, no assurance of this can be
given. Much of the Company's backlog is subject to termination at
will and rescheduling without significant penalty. The Company has
had a slight decrease in sales volume as a result of the Chapter 11
petition due to tighter financial restrictions implemented by its
clients. However, no existing contracts have been canceled, nor
have any clients been lost
The Company has not experienced any difficulties as a result
of the "Y2K" problems. The Company's internal systems are Y2K
compliant and we have not experienced any problems with vendors or
clients. While we do not expect any problems, we will continue to
monitor compliance.
Management has maintained control of overhead expenses and
operating margins. However, there is no assurance that the cost
controlling measures will be sufficient to permit the Company to
meet its financial obligations while providing capital for ongoing
operations.
The Company deems its present facilities and equipment
adequate for its immediate needs and it has no material commitments
for capital expenditures. The Company believes its present
liquidity and cash flow are not adequate for its current needs and
there can be no assurance that additional financing, whether from
debt or equity, will be available to the Company when needed on
commercially reasonable terms, or at all.
The Company's management believes that inflation has not had
a significant impact on its business during the past three years.
The statements contained herein include forward looking
statements that involve a number of risks and uncertainties. In
addition to the facts discussed, among the other factors that could
cause actual results to differ materially are the following:
enforcement of environmental regulations, business conditions, and
growth in the industry and general economy; competitive factors,
such as rival designs and prices; changes in sales mix; the ability
to raise additional capital, when needed; and the risk factors
listed from time to time in the Company's SEC reports.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On May 18, 2000 a civil action entitled George A. Nolan and
James G. Warburton, Plaintiffs vs. Leak-X Environmental
Corporation, Defendant, was filed in the Court of Common Pleas,
Chester County, Pennsylvania. The civil action seeks a sum of
$100,000 due under a Stock Purchase Agreement signed on September
30, 1998 between Messrs. Nolan and Warburton and Leak-X
Environmental Corporation. Per the Stock Purchase Agreement, a
total of $300,000 was to be paid to Messrs. Nolan and Warburton by
October 31, 2000. Messrs. Nolan and Warburton are suing for
$100,000 still due and payable under the Agreement. On June 22,
2000, the Plaintiffs filed a Motion for Summary Judgement for
$31,250 each plus interest and costs. The Company responded to
this Motion and no decision has been made at this time.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 None
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: November 14, 2000
LEAK-X ENVIRONMENTAL CORPORATION
By: /s/ Joyce A. Rizzo
Joyce A. Rizzo
Chief Executive Officer
By: /s/ Eileen E. Bartoli
Eileen E. Bartoli
Controller and
Chief Financial Officer
