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Previous: U S ENVIRONMENTAL INC, 10QSB, 1998-10-01 |
Next: NETWORK GENERAL CORPORATION, 15-12G, 1998-10-01 |
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number 0-17963
U.S. ENVIRONMENTAL, INC.
-----------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 11-2906904
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8130 66th Street North, Suite 6, Pinellas Park, Florida 33781
--------------------------------------
(Address of Principal Executive Offices)
(727) 548-4300
--------------
(Issuer's Telephone Number)
Check whether the issuer: (1) 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 a
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 outstanding of the Issuer's Common Stock, $.0001
Par Value, as of March 31, 1998 was 86,353,394.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
Index
Page
----
Part I - Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
March 31, 1998 and September 30, 1997.......................... 1
Consolidated Statements of Operations -
Three months and six months ended March 31, 1998 and 1997...... 2
Consolidated Statements of Cash Flows -
Six months ended March 31, 1998 and 1997....................... 3
Notes to Consolidated Financial Statements....................... 4
Part II - Other Information
Item 1. Legal Proceedings................................................. 5
Signatures....................................................... 5
i
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
----------------- ----------------
----------------- ----------------
(unaudited)
<S> <C> <C>
Assets
Current assets
Cash $ 392 $ 18,179
Prepaid expenses - 16,667
----------------- ----------------
----------------- ----------------
Total current assets 392 34,846
----------------- ----------------
----------------- ----------------
Property and equipment 252,319 252,319
Less accumulated depreciation 14,564 14,564
----------------- ----------------
----------------- ----------------
237,755 237,755
----------------- ----------------
----------------- ----------------
Other assets
Marketable securities - at lower of aggregate cost or market - -
License, net of accumulated amortization 1,226,599 1,226,599
Patent, net of accumulated amortization - -
Prepaid rent and other assets 36,252 19,585
----------------- ----------------
----------------- ----------------
1,262,851 1,246,184
----------------- ----------------
----------------- ----------------
Total assets 1,500,998 1,518,785
================= ================
================= ================
Liabilities and Stockholders' Equity
Current liabilities
Notes payable:
Shareholders - -
Others - -
Accounts payable & accrued expenses 266,926 7,582
Current portion of notes payable and long-term debt 178,000 178,000
Accrued interest 75,020 75,020
----------------- ----------------
----------------- ----------------
Total current liabilities 519,946 260,602
----------------- ----------------
----------------- ----------------
Long-term debt, net of current maturities
Notes payable, net of current maturities 32,000 42,000
Stock payable 125,127 125,127
----------------- ----------------
----------------- ----------------
Total long-term debt, net of current maturities 157,127 167,127
----------------- ----------------
----------------- ----------------
Total Liabilities 677,073 427,729
----------------- ----------------
----------------- ----------------
Stockholders' equity
Common stock, par value $.0001
Authorized 100,000,000 shares,
86,353,394 and 81,453,394 issued and outstanding, respectively 8,635 8,145
Additional paid-in capital 5,776,862 5,728,352
Deficit accumulated during the development stage (4,961,572) (4,645,441)
----------------- ----------------
----------------- ----------------
Total stockholders' equity 823,925 1,091,056
----------------- ----------------
----------------- ----------------
Total liabilities and stockholders' equity $ 1,500,998 $ 1,518,785
================= ================
================= ================
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
February 18, 1988
For the Three Months Ended For the Six Months Ended (Inception) to
------------------------------- ------------------------------- ----------------
March 31, March 31, March 31, March 31, March 31,
1998 1997 1998 1997 1998
------------- -------------------------- ------------ ----------------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Revenue from demonstration fees $ - $ 5,000 $ - $ 5,000 $ 280,000
------------- ------------ ------------- ------------ ------------
Development stage expenses
Research and development - - - - 169,020
General and administrative 185,187 67,872 316,130 160,587 2,822,148
Depreciation and amortization - 4,253 - 9,851 1,600,464
------------- ------------ ------------- ------------ ------------
Total development stage expenses 185,187 72,125 316,130 170,438 4,591,632
------------- ------------ ------------- ------------ ------------
Net development stage expenses 185,187 67,125 316,130 165,438 4,311,632
------------- ------------ ------------- ------------ ------------
Other income (expense)
Interest expense - (3,512) - (3,512) (144,796)
Interest income - - - - 2,162
Miscellaneous income - - - - 2,500
Loss on impairment of assets - - - - (798,658)
------------- ------------ ------------- ------------ ------------
Total other income (expense) - (3,512) - (3,512) (938,792)
------------- ------------ ------------- ------------ ------------
Net loss before income taxes and
extraordinary gain (185,187) (70,637) (316,130) (168,950) (5,250,424)
Income taxes
Deferred income tax benefit - - - - 112,700
------------- ------------ ------------- ------------ ------------
Net loss before extraordinary gain (185,187) (70,637) (316,130) (168,950) (5,137,724)
Extraordinary gains
Extraordinary gain on forgiveness of debt - 197,548 - 197,548 176,152
------------- ------------ ------------- ------------ ------------
Net loss $ (185,187) $ 126,910 $ (316,130) $ 28,598 $ (4,961,572)
============= ============ ============= ============ ============
Loss per common share
Loss before extraordinary gain - (0.002) - (0.004) (0.18)
Extraordinary gain on forgiveness of debt - 0.004 - 0.004 0.01
Net loss per common share $ (0.002) $ 0.003 $ (0.004) $ 0.001 $ (0.17)
============= ============ ============= ============ ============
Weighted average number of
common shares outstanding 81,469,917 45,909,021 81,462,785 45,344,909 28,630,372
============= ============ ============= ============ ============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
February 18, 1988,
For the Six Months Ended (Inception) to
---------------------------------- ----------------
March 31, March 31, March 31,
1998 1997 1998
--------------- --------------- ----------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (316,130) $ 28,598 $ (4,961,572)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization - 9,851 1,600,464
Extraordinary gain on forgiveness of debt - (195,196) (176,152)
Deferred income tax benefit - - (112,700)
Loss on impairment of assets - - 798,658
Issuance of common stock for services - 15,840 348,358
Issuance of common stock for termination of intermediary agreement - - 240,000
(Increase) decrease in prepaid expenses - (55,000) (32,581)
Increase (decrease) in accounts payable and accrued expenses 259,345 (51,221) 743,914
--------------- --------------- ----------------
Net cash used in operating activities (56,785) (247,128) (1,551,611)
--------------- --------------- ----------------
Cash flows from investing activities
Acquisition of property and equipment - (251,841) (260,786)
Acquisition of license agreement - - (44,327)
Acquisition of patents - - -
Acquisition of marketable securities - - (1,530)
--------------- --------------- ----------------
Net cash used in investing activities - (251,841) (306,643)
--------------- --------------- ----------------
Cash flows from financing activities
Proceeds from issuance of notes payable - - 118,600
Principal payments on notes payable (10,000) (145,777) (42,225)
Issuance of common stock, net of offering costs 49,000 150,000 1,583,271
Proceeds from issuance of convertible notes - 144,000 199,000
--------------- --------------- ----------------
Net cash provided by financing activities 39,000 148,223 1,858,646
--------------- --------------- ----------------
--------------- --------------- ----------------
Net increase (decrease) in cash (17,785) (350,746) 392
Cash beginning 18,179 351,713 -
--------------- --------------- ----------------
Cash ending $ 392 $ 967 $ 392
=============== =============== ================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of presentation
The accompanying unaudited consolidated financial statements, which are for
interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited financial statements should
be read in conjunction with the financial statements and the footnotes thereto
contained in Form 10-KSB for the fiscal period ended September 30, 1997 of U.S
Environmental, Inc. (the "Company"), as filed with the Securities and Exchange
Commission.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (which are of a normal and recurring nature) necessary
for a fair presentation of the financial statements. The results of operations
for the three months and six months ended March 31, 1998 are not necessarily
indicative of the results to be expected for the full year.
Note 2 - Per share calculations
Per share data was computed by dividing net loss by the weighted average number
of shares outstanding during the respective periods.
4
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 5. Other Information
None
Item 6. Exhibits and reports on Form 8K
None
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
U.S Environmental, Inc.
Dated : 9/30/98 /s/ Robert W. Lewis
----------------------
Robert W. Lewis
Chief Financial Officer
<PAGE>
(DEL) U.S. ENVIRONMENTAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
Computation of Earnings Per Common Share
<TABLE>
<CAPTION>
February 18, 1988,
For the Three Months Ended For the Six Months Ended (Inception) to
March 31, March 31, March 31, March 31, March 31,
------------------------------- ------------------------------- --------------
1998 1997 1998 1997 1998
-------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Shares outstanding: 86,353,394 46,001,909 86,353,394 46,001,909 86,353,394
Weighted average shares outstanding 81,469,917 45,909,021 81,462,785 34,435,163 28,630,372
Loss before extraordinary gain - (70,637) - (168,950) (5,137,724)
Extraordinary gain on forgiveness of debt - 197,548 - 197,548 176,152
Net income (loss) $ (185,187) $ 126,910 $ (316,130) $ 28,598 $ (4,961,572)
Earnings (loss) per common share:
Loss before extraordinary gain - (0.002) - (0.005) (0.18)
Extraordinary gain on forgiveness of debt - 0.004 - 0.006 0.01
Net income (loss) per share $ (0.002) $ 0.003 $ (0.004) $ 0.001 $ (0.17)
============== ============== ============= ============== =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 392
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 392
<PP&E> 237,755
<DEPRECIATION> 14,564
<TOTAL-ASSETS> 1,500,998
<CURRENT-LIABILITIES> 519,946
<BONDS> 0
0
0
<COMMON> 8,635
<OTHER-SE> 5,776,862
<TOTAL-LIABILITY-AND-EQUITY> 1,500,998
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 316,130
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (316,130)
<INCOME-TAX> 0
<INCOME-CONTINUING> (316,130)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (316,130)
<EPS-PRIMARY> (.004)
<EPS-DILUTED> (.004)
</TABLE>
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