<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1996.
[ ] Transition Report Under to Section 13 or 15(d) of the
Exchange Act for the transition period from _______ to______.
Commission File Number 1-10361
NDE ENVIRONMENTAL CORPORATION
-----------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 95-3634420
-------- ----------
(State of Incorporation) (IRS Employer Identification No.)
8906 Wall Street, Suite 306, Austin, Texas 78754
------------------------------------------------
(Address of Principal Executive offices)
Issuer's telephone number, including area code (512) 719-4633
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 shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past ninety days.
YES X NO
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
CLASS OUTSTANDING AT MAY 10, 1996
----- ---------------------------
Common 7,978,610
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
This report consists of ______ sequentially numbered pages.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C> <C>
PART I Financial Information..................................... 3
ITEM 1 Financial Statements (Unaudited).......................... 3
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995...................... 3
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1996 and 1995................ 5
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 ............... 6
Notes to Condensed Consolidated Financial Statements...... 8
ITEM 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 11
PART II Other Information......................................... 14
ITEM 6 Exhibits and Reports on Form 8K........................... 14
Signatures................................................ 21
</TABLE>
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
ASSETS (Unaudited) (Note)
<S> <C> <C>
CURRENT ASSETS
Cash $ 16,347 $ 327,035
Trade accounts receivable, less allowance for doubtful
accounts of $374,957 in 1996 and $289,512 in 1995 1,533,980 2,162,593
Inventories 287,226 175,173
Prepaid expenses and other current assets 151,267 245,645
----------- -----------
TOTAL CURRENT ASSETS 1,988,820 2,910,446
EQUIPMENT AND IMPROVEMENTS, net of accumulated
depreciation of $6,331,973 in 1996 and $6,004,770 in 1995 3,866,847 4,027,037
INTANGIBLE ASSETS
Patents, net of accumulated amortization of $243,316
in 1996 and $232,042 in 1995 443,079 454,353
License, net of accumulated amortization of $233,894
in 1996 and $215,940 in 1995 685,223 703,177
Other Intangibles, net of accumulated amortization of
$141,395 in 1996 and $130,265 in 1995 31,241 42,371
Deposits and other assets 92,459 92,459
----------- -----------
$ 7,107,669 $ 8,229,843
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes to condensed consolidated financial statements.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 974,094 $ 751,944
Accrued liabilities 1,072,202 1,322,457
Accrued payroll and payroll taxes 426,873 636,369
Current maturities of notes payable and
financing agreement 1,448,452 2,018,442
----------- ------------
TOTAL CURRENT LIABILITIES 3,921,621 4,729,212
Long Term Debt, less Current Portion (See Note 3) 4,221,000 3,739,653
----------- ------------
TOTAL LIABILITIES 8,142,621 8,468,865
----------- ------------
STOCKHOLDERS' EQUITY (SEE NOTE 2)
Series AAA Convertible Preferred Stock, $.0001 par value;
authorized, 400 shares; issued and outstanding 1 share
stated at liquidation value of $5,000 per share 5,000 5,000
Common stock, $.0001 par value; authorized, 10,000,000
shares; issued and outstanding 2,496,356 shares at
March 31, 1996, and 2,274,420 December 31, 1995 249 227
Common stock subscribed; 5,482,254 shares (Note 2) 1,303,410 1,303,410
Additional paid-in capital 25,221,764 25,115,717
Accumulated deficit (27,565,375) (26,663,376)
----------- ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,034,952) (239,022)
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,107,669 $ 8,229,843
=========== ============
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes to condensed consolidated financial statements.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
REVENUES - Testing services 2,562,367 $ 2,165,082
COSTS AND EXPENSES
Cost of sales and testing services 1,760,349 1,475,154
Selling, general and administrative 1,453,222 1,403,499
Provision for doubtful accounts 71,632 51,226
----------- -----------
TOTAL COSTS AND EXPENSES 3,285,203 2,929,879
----------- -----------
OPERATING LOSS $ (722,836) $ (764,797)
Other income (expense):
Interest income 0 136
Interest expense (179,163) (201,590)
----------- -----------
NET LOSS $ (901,999) $ (966,251)
=========== ===========
NET LOSS PER SHARE $ (0.38) $ (0.66)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
2,403,722 1,467,564
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(901,999) $(966,251)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED
IN OPERATING ACTIVITIES:
Gain on Sale of Assets (143,690) --
Depreciation 327,203 320,399
Amortization of discount on notes payable 34,814 38,272
Amortization of intangibles 40,358 41,193
Provision for doubtful accounts 68,882 51,226
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Trade receivables 559,731 158,634
Inventories (183,191) 4,057
Prepaid expenses 94,378 133,668
Deposits 0 (50)
Accounts payable 222,150 75,385
Accrued liabilities (246,505) (58,144)
Accrued payroll and accrued payroll taxes (107,177) (98,007)
Accrued Restructure Costs -- --
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (235,046) (299,618)
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
INVESTING ACTIVITIES
Proceeds from sale of equipment 179,391 --
Additions to equipment and improvements (131,576) (162,949)
--------- ---------
Net cash provided by investing activities 47,815 (162,949)
FINANCING ACTIVITIES
Pay down of SVB Line of Credit (346,908) (155,012)
Principal payments under note and capital
lease payable (376,549) (61,422)
Proceeds from issuance of notes payable 600,000 500,000
--------- ---------
Net cash provided by financing activities (123,457) 283,566
Net (decrease) in cash (310,688) (179,001)
Cash and cash equivalents at beginning of
period 327,035 244,491
--------- ---------
Cash and cash equivalents at end of period $ 16,347 $ 65,490
========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ 135,572 $ 55,035
========= =========
Income taxes -- --
========= =========
</TABLE>
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: ACCOMPANYING UNAUDITED FINANCIAL STATEMENTS
Basis of Presentation: The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial reporting and with the instructions
to Form 10-QSB. Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, the accompanying unaudited financial
statements for the three months ended March 31, 1996 and 1995 contain all
adjustments, consisting of only normal recurring accruals, necessary to present
fairly the financial position of the Company as of March 31, 1996 and 1995 and
the results of operations and cash flows for the three months then ended.
For further information refer to the consolidated financial statements and
footnotes included in the Company's annual report on Form 10-KSB for the year
ended December 31, 1995. The results of operations for the Company's interim
periods are not necessarily indicative of the results to be expected for the
entire year.
Certain amounts shown in the 1995 financial statements have been
reclassified to conform to the 1996 presentation.
NOTE 2: Stockholders' Equity
In January 1995, the Company raised $500,000 from Proactive Partners L.P.
("Proactive") and Lagunitas Partners L.P. ("Lagunitas") in exchange for a
promissory note (the "Bridge Note"). The note bore interest at prime plus 4%
and became due, after extension, on May 31, 1995. In June of 1995, the
Company completed a restructuring of the Bridge Note and Proactive's and
Lagunitas's portion of the promissory note payable to stockholders. Proactive
and Lagunitas agreed to exchange the Bridge Note of $500,000 plus accrued
interest of $25,644, their promissory note, which was $273,038 plus accrued
interest of $4,728, and cash of $500,000 for 260.7 shares of the Company's
Series DDD Convertible Preferred Stock. This Series DDD Preferred Stock was
never issued. In April 1996, pursuant to the 1995 Recapitalization Agreement
Amendment between the Company and Proactive and Lagunitas, 5,482,254 shares of
Common Stock were issued in lieu of the Series DDD Convertible Preferred Stock
identified above. As this stock had not been issued at March 31, 1996, it is
recorded in the accompanying financial statements as Common Stock Subscribed.
As discussed is Note 3, in March 1996, the Company entered into Secured
Promissory Note Agreements with Proactive and Lagunitas in the amounts of
$425,000 and $175,000, respectively, which are due April 1, 1997. These notes
bear interest at a rate of 8% and are immediately convertible into a new series
of Preferred Stock. The new series of Preferred Stock is convertible into
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
4,800,000 shares of Common Stock upon approval by the shareholders of an
increase in the total number of authorized shares of Common Stock.
On February 6, 1996, 201,936 shares of Common Stock were issued as the
Company's contribution to its employee's 401(k) plan. The annual contribution
is made at the Company's discretion. The Company has elected not to make a
discretionary contribution for the current plan year.
On February 28, 1996, the Company issued 20,000 shares of Common Stock to
Protank, Inc. ("Protank") pursuant to a binding settlement agreement which was
reached in November 1995. The Company had been sued by Protank for alleged
breach of contract and intentional misrepresenation regarding the Company's
performance under a license arrangement. There are no further stock transfers
due under the settlement agreement.
NOTE 3: Debt
On February 13, 1996, in exchange for its promissory notes, the Company
received $175,000 each from Proactive and from Lagunitas. The notes bore
interest at the rate of Prime plus 2% and became due June 12, 1996. In March
1996, in order to effect the restructure of the $2,450,000 note payable to
Gilbarco, Inc. (see "Gilbarco" below), the Company received an additional
$250,000 from Proactive. In exchange for this $250,000 and for the $175,000
notes described above, the Company issued debentures to Proactive and Lagunitas
in the amounts of $425,000 and $175,000 respectively (the "1996 Funding
Agreement"). The debentures have an interest rate of 8%. Principal and accrued
interest are due April 1, 1997. The debentures are immediately convertible into
a new series of preferred shares having a conversion into 4,800,000 shares of
the Company's Common Stock, contingent upon shareholder approval of an increase
in the number of shares of Common Stock authorized.
On March 27, 1995, the Company entered into a financing agreement (the
"Financing Agreement") with Silicon Valley Bank ("SVB") that provides for the
financing of accounts receivable up to $1,500,000 based on eligible accounts
receivable balances, as defined, not to exceed 80% of gross receivable
balances. Advances under the Financing Agreement originally accrued interest at
1.75% per month plus an administative fee of 0.5% per month. Effective January
25, 1996, the interest rate was reduced to 1.25% per month plus an
administrative fee of 0.5%. In March 1996, the Financing Agreement was renewed
for a one-year term to March 1997.
In April 1994, the Company purchased certain assets, primarily vehicles
and test equipment, from Gilbarco Environmental Services Division ("Gilbarco").
This purchase was financed in part by a $2,450,000 six-year note bearing
interest at prime minus 1%, which was collateralized by the assets acquired. In
March 1996 the Company entered into an agreement with Gilbarco to amend the
$2,450,000 note agreement. This amendment provided for revised terms including
a down payment of $256,000 due on or before March 29, 1996. This down payment
was funded by additional debt obtained from Proactive Partners (see Note 2
above). Per the amendment, the remaining Gilbarco debt will be forgiven in
total upon the receipt by Gilbarco of any one of the following repayment
incentive amounts as of the indicated dates. If none of the following
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
repayment incentive amounts are paid by the indicated dates, the balance of the
Gilbarco note becomes due in full on July 1, 1997. The repayment incentive
amounts are as follows: $256,000 by June 30, 1996; $384,000 by September 30,
1996; $512,000 by December 31, 1996; $640,000 by March 31, 1997; or $768,000 by
June 30, 1997.
At December 31, 1995, the Company had outstanding six separate notes
comprising subordinated debt in the aggregate amount of $517,365 which was due
in five equal annual installments beginning in April 1996. In exchange for an
increase in the interest rate from 8% to 10%, the Company has negotiated
extensions to the payment date of these notes as follows: Two of the notes
aggregating $324,609 will be due in equal annual installments over five years
beginning October 5, 1996; four of the notes aggregating $192,756 will be due
in equal annual installments over three years beginning October 5, 1996. In
addition, the expiration date of warrants to purchase 126,433 shares of the
Company's Common Stock has been extended an additional three years.
NOTE 4: Foreign Operations
In February 1996, the Company completed a licensing and equipment sale
transaction with a group in South Korea. The agreement calls for the sale by
the Company of certain tank testing equipment to the Korean group along with a
license to utilize the Company's Suretest technology in Korea. In return, the
Company received $179,390 and, on an ongoing basis, will receive test report
analysis fees.
A similar transaction was signed in April 1996 by the Company with a group
in Eastern Canada in the amount of $74,200.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company had a net loss of $901,999 for the three months ended March
31, 1996, compared to a net loss of $966,251 for the three months ended March
31, 1995. An explanation of the variances between periods for each of the major
categories follows.
The following table reflects the percentage relationship to net sales of
certain items included in the company's statement of operations for the three
month periods ended March 31, 1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Revenues 100% 100%
Costs and Expenses
Cost of Sales and Testing 68% 68%
Selling, General and Administrative 57% 65%
Provision for Doubtful Accounts 3% 2%
Interest Expense 7% 9%
--- ---
Total Costs and Expenses 135% 144%
--- ---
Net Loss 35% (44)%
=== ===
</TABLE>
Revenues
Revenues for the three months ended March 31, 1996 were $2,562,367, an
increase of $397,285, or 18%, compared to the three months ended March 31, 1995.
Average revenue per van day (revenue from domestic UST testing and tank
management divided by van days worked) increased from approximately $963 for the
three months ended March 31, 1995 to $1,008 for the three months ended March 31,
1996, while total volume increased by 1%, from 2,153 van days worked in the
first quarter of 1995 to 2,180 in the first quarter of 1996. The increase in
revenue per van day was due to testing multiple sites per van per day.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Cost of Sales and Testing Services
Cost of sales and testing services for the three months ended March 31,
1996 was $1,760,349 (68% of revenue), an increase of $285,195, or 19%, compared
to $1,475,154 (68% of revenue), for the three months ended March 31, 1995. The
increase in cost of sales was due primarily to the increase in the number of
van days sold. The cost of sales as a percent of revenues did not change. The
gross margin was $802,018 (32% of revenue) for 1996, compared to $689,928 (32%
of revenue) for 1995. The gross margin percentage was comparable to the prior
year.
Selling, General and Administrative
Selling, general and administrative expense for the three months ended March
31, 1996 was $1,453,222 (57% of revenue), an increase of $49,723 or 4%,
compared to the three months ended March 31, 1995. The increase in selling,
general, and administrative expenses was due to the addition of staff for the
Compliance Management division.
Provision for Doubtful Accounts
The provision for doubtful accounts for the three months ended March 31, 1996
was $71,632, or 3% of sales, compared to $51,226, which was 2% of sales, for
the three months ended March 31, 1995. The increase of $20,406 was due to an
increase in sales.
Interest Expense
Interest expense for the three months ended March 31, 1996 was $179,163, a
decrease of $22,427, or 11%, compared to the three months ended March 31, 1995.
The decrease is due to decreased amortization of the discount on notes
payable.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Net Loss
For the three months ended March 31, 1996, the Company incurred a net loss
of $901,999, a decrease of $64,252, or 7% compared to the net loss of $966,251
for the three months ended March 31, 1995. The decrease in net loss was due to
an increase in revenue per van day as described above.
Liquidity and Capital Resources
At March 31, 1996, the Company had a working capital deficit of
$1,932,801, compared to a working capital deficit of $1,818,766 at December
31, 1995.
At March 31, 1996, the Company had outstanding long-term debt (including
current maturities but not including the amounts borrowed under the Financing
Agreement) of $4,539,153 compared to $4,280,888 at December 31, 1995. During
the quarter the Company received $425,000 from Proactive and $175,000 from
Lagunitas in exchange for its promissory notes. These notes bear interest at
the rate of 8% and are due April 1, 1997. It is the intention of the Company to
convert these notes to equity, pending stockholder approval of an increase in
the number of common shares authorized. These funds were used to finance
operations and to provide the down payment required under the Gilbarco
restructure agreement. See Note 3.
The Company has been able to restructure much of its long-term debt,
including the amounts payable to Gilbarco. See Note 3 above. The Company also
was able to restructure the payment schedule of its subordinated debt; annual
payments are now due in October as opposed to April. See Note 3. During the
quarter the Company's Financing Agreement was renewed for a one-year term to
March 1997.
At March 31, 1996, the Company had $318,513 of debt that matures within
the next twelve months, not including amounts due under the Financing
Agreement. Management of the Company expects that additional cash will be
required to fund the operations of the Company. Although management of the
Company is devoting substantial effort to the pursuit of funding sources, there
is no assurance that such efforts will continue to be successful.
If the Company's cash flow from operations and other capital resources
are insufficient to meet its debt requirements, the Company may be required to
take other actions including cost reduction measures, dispositions of assets or
a combination of these and other actions which are currently not foreseeable.
Such actions could have an adverse effect on the Company's financial condition
and results of operations.
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Liquidity and Capital Resources - Continued
In January and February 1995, the Company received loans of $200,000 and
$300,000, respectively, from Proactive Partners in exchange for its promissory
note. The note is due May 31, 1995; it is the intention of the Company to
convert this note to equity, and discussions are currently in process toward
that intention. Although there can be no assurances, the Company believes that
this conversion will occur. See Note 4 to Condensed Consolidated Financial
Statements.
At March 31, 1995, the Company has $1,030,807 of debt that matures within
the next twelve months, and management of the Company expects that additional
cash will be required to fund the operations of the Company. Although
management of the Company is devoting substantial effort to the pursuit of
funding sources, there is no assurance that such efforts will continue to be
successful.
If the Company's cash flow from operations and other capital resources are
insufficient to meet its debt maturities, the Company may be required to take
other actions including cost reduction measures, dispositions of assets or a
combination of these and other actions which are not currently foreseeable.
Such other actions could have an adverse effect on the Company's financial
condition and results of operations.
PART II OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed herewith or incorporated herein
by reference:
No. Exhibit
10.36 Rights Agreement, dated July 10, 1990, between NDE Testing and
the Series A Purchasers (incorporated by reference from Exhibit
28.9 to the July, 1990 8-K)
10.37 Registration Rights Agreement, dated July 10, 1990, between the
registrant and the Series A Purchasers (incorporated by reference
from Exhibit 28.10 to the July, 1990 8-K).
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K - CONTINUED
10.59 Series AAA and BBB Preferred Stock and Secured Convertible Note
Purchase Agreement (the "Purchase Agreement"), dated as of May 26,
1992, among the Registrant, its subsidiary, JLR Holdings, Inc.
("JLR"),Spears Benzak Salomon & Farrell ("SBSF"), Proactive
Partners, L.P. ("Proactive"), Lagunitas Partners, L.P.
("Lagunitas"), and other purchasers of the Initial Convertible
Secured Notes issued by the Registrant pursuant to the Purchase
Agreement (the "Purchasers"); and the Approval and Addendum, dated
as of June 22, 1992, among the Registrant, and other Purchasers
represented by it, Proactive, Lagunitas, JLR, Josephthal Lyon &
Ross Incorporated ("Josephthal"), John R. Mastandrea, Kaneb
Services, Inc. ("KSI"), and Kaneb Metering Corporation ("KMC");
together with the following exhibits to that Purchase Agreement
(incorporated by reference from Exhibit to the Registrants current
report on Form 8-K filed July 17, 1992, the ("July 1992 8-K")).
10.60 Conversion and Exchange Agreement and Consent, dated as of May 26,
1992, among the Registrant and holders of the Registrant's
outstanding Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock (incorporated by reference from
Exhibit 10.02 to the July 1992 8-K).
10.61 Voting Agreement, dated as of May 26, 1992, among the Registrant,
RLR, Josephthal, SBSF, Proactive, Lagunitas, KSI, KMC and SBSF NDE
Group, Limited Partnership; Cancellation of Voting Agreement and
Release, dated May 26, 1992, among KSI, KMC and John R.
Mastandrea; and Modification Agreement and Consent, dated as of
May 26, 1992, among the Registrant, its subsidiary, KSI and KMC
(incorporated by reference to Exhibit 10.03 from the July 1992
8-K).
10.62 Settlement Agreement dated as of May 26, 1992, among the
Registrant, its subsidiary and John R. Mastandrea; together with
the following exhibits thereto (incorporated by reference to
Exhibit 10.04 to the July 1992 8-K).
10.63 Non-Competition and Non-Solicitation Agreement, dated as of May
26, 1992, among the Registrant, its subsidiary and John R.
Mastandrea (incorporated by reference to Exhibit 10.05 to the July
1992 8-K).
10.64 Consulting and Services Agreement, dated as of May 26, 1992, among
the Registrant, John R. Mastandrea and Advanced Leak Detection
Corporation ("LAD"); and Addendum to Consulting Services
Agreement, dated as of June 4, 1992, among the Registrant, John R.
Mastandrea and LAD (incorporated by reference to Exhibit 10.06 to
the July 1992 8-K).
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NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K - CONTINUED
10.65 Third Amended and Restated Registration Rights Agreement, dated as
of May 26, 1992, among the Registrant and certain holders of the
Registrant's securities (incorporated by reference to Exhibit
10.07 to the July 1992 8-K).
10.66 Security Agreement, dated as of May 26, 1992, among the
Registrant, its subsidiary and the Purchasers (incorporated by
reference to Exhibit 10.08 to the July 1992 8-K).
10.67 Form of Initial Convertible Secured Note of the Registrant
(incorporated by reference to Exhibit 10.09 to the July 1992 8-K).
10.68 Form of Secured Convertible Note of the Registrant (incorporated
by reference to Exhibit 10.10 to the July 1992 8-K).
10.69 Form of Warrant Certificate with respect to the warrants to be
issued by the Registrant pursuant to the Purchase Agreement
(incorporated by reference to Exhibit 10.11 to the July 1992
8-K).
10.70 1989 New Warrant Agreement, dated as of April 30, 1992, among the
Registrant, Josephthal and other holders of warrants issued by the
Registrant in connection with its initial public offering in 1989;
together with (a) Exhibit A, the form of New Warrant Certificate
for the warrants issued pursuant to the foregoing agreement; and
(b) Exhibit B, Third Amended and Restated Registration Rights
Agreement (incorporated by reference to Exhibit 10.12 to the July
1992 8-K).
10.71 Form of BBB Convertible Secured Note issued by the Registrant
pursuant to the Purchase Agreement; and BBB Security Agreement,
dated as of May 26, 1992, among the Registrant, its subsidiary and
the holders of the foregoing secured notes (incorporated by
reference to Exhibit 10.13 to the July 1992 8-K).
10.72 Asset Purchase Agreement dated January 8, 1993 between the
Registrant and ProEco. The Registrant will furnish supplementally
to the Commission upon request a copy of any omitted schedule or
exhibit to this Exhibit 2.1 and Exhibits 2.2 and 2.3 (incorporated
by reference to Exhibit 2.1 to the Registrant's current report on
Form 8-K filed January 22, 1993, the ("January 1993 8-K")).
10.73 License Agreement dated January 8, 1993 between the Registrant and
ProEco (incorporated by reference to Exhibit 2.2 to the January
1993 8-K).
10.74 Form of Non competition Agreement dated January 8, 1993 entered
into between the Registrant and each of ProEco, ProEco's
stockholders and ProEco's affiliate, EcoAm, Inc. (incorporated by
reference to Exhibit 2.3 to the January 1993 8-K).
Page 16
<PAGE> 17
NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K - CONTINUED
10.75 Shareholder Rights Agreement dated January 8, 1993, between the
Registrant and ProEco (incorporated by reference to Exhibit 28.2
to the January 1993 8-K).
10.76 Stock Purchase Agreement, dated as of December 11, 1993, among the
Registrant, Jim R. Clare and Donald Valverde
10.77 Loan and Security Agreement, dated September 27, 1993, between the
Registrant and Silicon Valley Bank.
10.78 Amendment to Loan Agreement, dated April 7, 1994 between the
Registrant and Silicon Valley Bank
10.79 Asset Purchase Agreement, dated as of February 24, 1994, between
the Registrant and Silicon Valley Bank
10.80 Warrant Certificate to purchase 200,000 shares of the Registrant's
Common Stock issued by the Registrant to Gilbarco Inc. on April
11, 1994
10.81 Non-Interest Bearing Promissory Note, dated April 11, 1994, issued
by the Registrant to Gilbarco Inc. in the principal amount of
$400,000
10.82 Irrevocable Standby Letter of Credit, dated April 11, 1994, issued
by Silicon Valley Bank to Gilbarco Inc. securing payment of the
Non-Interest Bearing Promissory Note attached hereto as
Exhibit 10.81
10.83 Secured Promissory Note, dated April 11, 1994, issued by the
Registrant to Gilbarco Inc. in the principal amount of $2,450,000
10.84 Security Agreement, dated as of April 11, 1994, between the
Registrant and Gilbarco Inc. securing payment of the Secured
Promissory Note attached hereto as Exhibit 10.83.
10.85 Sub license Agreement, dated as of April 11, 1994, between the
Registrant and Gilbarco Inc.
10.86 Patent License Agreement, dated as of April 11, 1994, between the
Registrant and Gilbarco Inc.
10.87 Amendment to Loan and Security Agreement, dated as of March 17,
1995, between the Registrant and Silicon Valley Bank.
Page 17
<PAGE> 18
NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K - CONTINUED
10.88 Third Amendment to NDE Environmental Corporation's Secured Notes,
dated as of March 31, 1995, between the Registrant and Proactive
Partners; Spears, Benzak, Salomon, & Farrell; Dan Purjes; Peter
Sheib; Lawrence Rice; and Joan Taylor.
10.89 Second Amendment to NDE Environmental Corporation's Subordinated
Note, dated as of March 31, 1995, between the Registrant and
Spears, Benzak, Salomon, and Farrell.
10.90 First Amendment to NDE Environmental Corporation's Subordinated
Secured Promissory Note, dated as of February 28, 1995, between
the Registrant and Gilbarco, Inc.
10.91 Certificate of Designations, Preferences and Rights of Series CCC
Preferred Stock of NDE Environmental Corporation
10.92 Proxy materials for August 2, 1994 annual meeting of the
shareholders of NDE Environmental Corporation, including 1-for-10
Reverse Stock Split and Conversion of Series AAA Preferred Stock
10.93 Lease agreements dated December 10, 1993, April 1, 1994 and
April 20, 1994 between the registrant and MV Wall Street, LTD.
10.94 Promissory note, dated as of January 17, 1995, between the
Registrant and Proactive Partners, L.P.
10.95 Financing Agreement, dated as of March 27, 1995, between the
registrant and Silicon Valley Financial Services.
10.96 First Amendment of "The Promissory Note dated January 17, 1995",
Amendment dated April 30, 1995, between the registrant and the
Proactive Partners L. P.
10.97 First Amendment of the Financing Agreement between the registrant
and Silicon Valley Financial Services, dated June 20, 1995.
10.98 Notice of Conversion regarding Series AAA Preferred Stock between
the registrant and Proactive Partners, L.P.; Lagunitas Partners,
L.P.; and A. Daniel Sharplin, dated as of April 17, 1995.
10.99 Notice of Conversion regarding Series BBB Preferred Stock between
the registrant and Proactive Partners, L.P.; Lagunitas Partners,
L.P.; and A. Daniel Sharplin, dated as of April 17, 1995.
Page 18
<PAGE> 19
NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
10.100 Notice of Conversion regarding Series CCC Preferred Stock between
the registrant and Proactive Partners, L.P.; Lagunitas Partners,
L.P.; and A. Daniel Sharplin, dated as of April 17, 1995.
10.101 Certificate of Designation, Preferences and Rights of Series DDD
Preferred Stock of NDE Environmental Corporation.
10.102 Promissory Note, dated as of November 6, 1995, between the
Registrant and Gilbarco, Inc.
10.103 Promissory Note, dated as of , February 13, 1996, between the
Registrant and Proactive Partners, L. P.
10.104 Promissory Note, dated as of , February 13, 1996, between the
Registrant and Lagunitas Partners, L. P.
10.105 Second Amendment to NDE Environmental Corporation's Secured
Promissory Note, dated as of March 22, 1996, between Registrant
and Gilbarco, Inc.
10.106 Settlement Agreement dated as of November 30, 1995 between the
Registrant and Protank, Inc.
10.107 1996 Funding Agreement, dated as of, March 27, 1996, between the
Registrant, Proactive Partners and Lagunitas Partners, L. P.
(b) There were no reports filed on form 8-K for the quarter ended
March 31, 1996.
Exhibit 21
SUBSIDIARIES OF REGISTRANT
NDE Testing & Equipment, Inc., a Florida corporation, incorporated
on December 23, 1987, is a wholly owned subsidiary of NDE Environmental
Corporation and does business under the name NDE Testing & Equipment, Inc.
Page 19
<PAGE> 20
NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
Exhibit 21 - Continued
SUBSIDIARIES OF REGISTRANT - Continued
NDE Environmental Canada Corporation was incorporated on May 21, 1993
under the Business Corporations Act of Alberta, is a wholly owned subsidiary of
NDE Environmental Corporation and does business under the name NDE
Environmental Canada Corporation.
ProEco, Inc., a Delaware corporation, incorporated as Tank Testing
International, Inc. on March 19, 1990, changed its name to ProEco, Inc. on July
26, 1991, is a wholly owned subsidiary of NDE Environmental Corporation and
does business under the name ProEco, Inc.
EcoAm, Inc., a Florida corporation, incorporated on July 15, 1991, is a
wholly owned subsidiary of NDE Environmental Corporation and does business
under the name EcoAm, Inc.
ProEco, Ltd., a United Kingdom corporation, incorporated in October 16,
1992, as EcoAm, Ltd., is a wholly owned subsidiary of NDE Environmental
Corporation and does business under the name ProEco, Ltd.
Page 20
<PAGE> 21
NDE ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
SIGNATURE
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.
NDE ENVIRONMENTAL CORPORATION
(Registrant)
Date: May 14, 1995
---------------------------------------
A. Daniel Sharplin
President and Chief Executive Officer
Date: May 14, 1995
---------------------------------------
Eric J. (Rick) Hopkins
Vice President and Chief Financial
Officer
Page 21
<PAGE> 22
INDEX TO EXHIBITS
27 Financial Data Schedule
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</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> (33,653)
<SECURITIES> 0
<RECEIVABLES> 1,908,937
<ALLOWANCES> 374,957
<INVENTORY> 287,226
<CURRENT-ASSETS> 1,938,820
<PP&E> 10,198,820
<DEPRECIATION> 6,331,973
<TOTAL-ASSETS> 7,057,669
<CURRENT-LIABILITIES> 4,471,621
<BONDS> 0
<COMMON> 249
0
5,000
<OTHER-SE> (1,040,201)
<TOTAL-LIABILITY-AND-EQUITY> 7,057,669
<SALES> 2,562,367
<TOTAL-REVENUES> 0
<CGS> 1,760,349
<TOTAL-COSTS> 3,285,203
<OTHER-EXPENSES> 1,453,222
<LOSS-PROVISION> 71,632
<INTEREST-EXPENSE> 179,163
<INCOME-PRETAX> (901,999)
<INCOME-TAX> 0
<INCOME-CONTINUING> (901,999)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (901,999)
<EPS-PRIMARY> (1)
<EPS-DILUTED> (1)
</TABLE>
