<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
________________________________________________________________________________
For Quarter Ended June 30, 1996 Commission File Number 0-20404
ENVIROGEN, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-2899415
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4100 QUAKERBRIDGE ROAD
PRINCETON RESEARCH CENTER
LAWRENCEVILLE, NJ 08648
-----------------------
(Address of principal executive offices)
(609) 936-9300
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of June 30, 1996 was 12,868,640.
________________________________________________________________________________
<PAGE>
ENVIROGEN, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
----
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at June 30, 1996 and
December 31, 1995 (Unaudited) 3
Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 1996 and 1995 (Unaudited) 4
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1995 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General 8
Results of Operations 8
Liquidity and Capital Resources 10
Other Matters 11
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 12
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE PAGE 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
ENVIROGEN, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $5,015,145 $3,748,197
Accounts receivable-trade, net 2,778,683 1,575,664
Unbilled revenue 1,772,085 1,338,232
Inventory 58,172
Prepaid expenses and other current assets 204,680 160,481
------------- -------------
Total current assets 9,828,765 6,822,574
Property and equipment, net 1,402,626 1,119,090
Restricted cash 399,082 309,300
Investment in and advances to joint venture 360,350 181,563
Intangible assets, net 1,447,147 26,099
Long term accounts receivable 322,345
Other, principally deposits 121,222 126,607
------------- ------------
Total assets $13,881,537 $8,585,233
============= ============
LIABILITIES
Current liabilities:
Accounts payable $1,125,275 $772,089
Accrued expenses and other liabilities 1,171,408 613,691
Deferred revenue 361,767 424,588
Current portion of note payable 4,509 4,333
Current portion of capital lease obligations 43,164 103,020
Preferred Stock dividends payable 14,583
------------- ------------
Total current liabilities 2,706,123 1,932,304
============= ============
Deferred rent 30,556 48,890
Note payable, net of current portion 1,988 4,287
Capital lease obligations, net of current portion 18,210 7,774
------------- ------------
Total liabilities 2,756,877 1,993,255
============= ============
Redeemable Cumulative Convertible
Preferred Stock 1,728,621
STOCKHOLDERS' EQUITY
Common stock 129,281 90,495
Additional paid-in capital 31,971,975 24,100,394
Accumulated deficit (20,970,646) (19,321,582)
Less: Treasury stock (5,950) (5,950)
------------- ------------
Total stockholders' equity 11,124,660 4,863,357
------------- ------------
Total liabilities, redeemable cumulative convertible
preferred stock and stockholders' equity $13,881,537 $8,585,233
============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
ENVIROGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- --------------------------
1996 1995 1996 1995
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Commercial operations $2,794,263 $1,475,245 $ 5,017,518 2,503,144
Research and development services 399,267 349,204 850,536 838,344
------------ ----------- ------------ ------------
Total revenues 3,193,530 1,824,449 5,868,054 3,341,488
------------ ----------- ------------ ------------
Cost of commercial operations 2,569,548 1,265,747 4,684,707 2,221,476
Provision for contract claim 362,053 400,000
Research and development costs 553,379 497,035 1,153,319 1,140,928
General and administrative expenses 472,628 392,548 909,917 801,974
Marketing expenses 236,205 288,502 459,012 575,557
------------ ----------- ------------ ------------
Total costs and expenses 4,193,813 2,443,832 7,606,955 4,739,935
------------ ----------- ------------ ------------
Other income (expense):
Interest income 24,125 58,033 60,352 87,359
Interest expense (6,765) (7,584) (12,844) (15,899)
Equity in gain (loss) of joint
venture (12,844) (13,087) 78,787 (13,087)
Other, net (600) 13,961
------------ ----------- ------------ ------------
Other income, net 4,516 36,762 126,295 72,334
------------ ----------- ------------ ------------
Net loss (995,767) (582,621) (1,612,606) (1,326,113)
Preferred stock dividends (14,583) (29,167) (36,458) (29,167)
------------ ----------- ------------ ------------
Net loss applicable to Common Stock ($1,010,350) ($611,788) ($1,649,064) ($1,355,280)
============ =========== ============ ============
Net loss per share applicable to
Common Stock ($0.09) ($0.08) ($0.16) ($0.18)
============ =========== ============ ============
Weighted average number of shares of
Common Stock outstanding 10,805,890 7,550,880 10,093,463 7,522,518
============ =========== ============ ============
</TABLE>
The accompanying note is an integral part of these consolidated condensed
financial statements.
4
<PAGE>
ENVIROGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------
1996 1995
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($1,612,606) ($1,326,113)
Adjustments to reconcile net loss to cash
used by operating activities:
Depreciation and amortization 455,099 282,169
Provision for doubtful accounts 41,400 30,000
Equity in (earnings) loss of joint venture (78,787) 13,087
Other 549
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (485,382) 13,140
(Increase) decrease in unbilled revenue 111,132 (337,337)
(Increase) in prepaid expenses and other assets (13,701) (60,020)
Decrease in inventory 1,031
(Increase) in restricted cash (89,782)
Increase (decrease) in accounts payable (27,737) 46,953
Increase in accrued expenses and other liabilities 52,701 131,551
Increase (decrease) in deferred revenue (62,821) 77,465
---------------- ---------------
Net cash used by operating activities (1,708,904) (1,129,105)
---------------- ---------------
Cash flows from investing activities:
Capital expenditures (139,975) (40,537)
Investment in and advances to joint venture (100,000) (51,750)
Purchase of MWR, Inc. (1,319,018)
Proceeds from sale of property and equipment 1,600
---------------- ---------------
Net cash used in investing activities (1,557,393) (92,287)
---------------- ---------------
Cash flows from financing activities:
Debt repayment (2,123) (1,961)
Capital lease principal repayments (84,322) (65,592)
Net proceeds from issuance of Common Stock 4,656,376
Net proceeds from issuance of Redeemable
Cumulative Convertible Preferred Stock 3,457,242
Net proceeds from exercise of stock options 14,355 7,478
Cash dividends paid on Redeemable Cumulative
Convertible Preferred Stock (51,041)
---------------- ---------------
Net cash used in financing activities 4,533,245 3,397,167
---------------- ---------------
Net increase in cash and cash equivalents 1,266,948 2,175,775
Cash and cash equivalents at beginning of period 3,748,197 2,465,387
Cash and cash equivalents at end of period $5,015,145 $4,641,162
================ ===============
Supplemental disclosures of cash flow information:
- --------------------------------------------------
Cash paid for interest $10,361 $15,750
================ ===============
Cash paid for income taxes $1,250 $0
================ ===============
</TABLE>
Supplemental disclosures of non-cash investing and financing activities:
- ------------------------------------------------------------------------
- -The Company entered into capital lease obligations amounting to $22,350 and
$35,226 for the six months ended June 30, 1996 and 1995, respectively.
- -In February 1996, the Company purchased MWR, Inc. for $1,319,018 in cash and
456,500 shares of Common Stock valued at $1,511,015.
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
ENVIROGEN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations.
The financial information presented reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods. The results for the interim periods are not necessarily
indicative of the results to be expected for the entire year.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Form 10-K for the fiscal year ended December 31, 1995.
2. ACQUISITION OF MWR, INC.
------------------------
On February 9, 1996, the Company purchased all of the outstanding capital stock
of MWR, Inc. for approximately $2,830,000. The purchase price included 456,500
shares of Company Common Stock valued at approximately $1,511,000. MWR is a
provider of in situ remediation services with particular expertise in soil vapor
extraction. The acquisition has been accounted for by the purchase method of
accounting. The excess of the aggregate purchase price over the fair market
value of net assets acquired of approximately $1,283,000 resulted in goodwill of
$1,051,000 and a covenant not to compete of $232,000. These are being amortized
over 10 and 5 years, respectively.
The operating results of the acquisition are included in the Company's
consolidated results of operations from the date of acquisition. The following
pro forma financial information assumes the acquisition occurred at the
beginning of the periods presented and does not purport to be indicative of what
would have occurred had the acquisition been made as of those dates or of
results which may occur in the future.
<TABLE>
<CAPTION>
Six Months
Year Ended Ended
December 31, 1995 June 30, 1996
----------------- ---------------
<S> <C> <C>
Net revenues $12,740,698 $ 5,589,287
Net loss ($ 2,745,200) ($ 1,646,381)
Net loss per share applicable to
Common Stock ($ 0.34) ($ 0.16)
</TABLE>
6
<PAGE>
3. PRIVATE PLACEMENT OF COMMON STOCK
---------------------------------
On May 24, 1996, the Company successfully completed the private placement of
2,000,000 shares of Common Stock resulting in net proceeds of $4,656,376. Allen
& Company Incorporated ("Allen & Company"), a principal stockholder of the
Company, acted as the placement agent. Allen & Company received a placement fee
of $300,000 and was reimbursed for certain legal fees and other expenses. In
connection therewith, the Company issued seven-year warrants to purchase 200,000
shares of the Company's Common Stock at $2.50 per share. An officer of Allen &
Company is a director of the Company.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the Company's
unaudited consolidated financial statements and notes thereto included in this
Quarterly Report and the consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10-K for the fiscal year ended December 31,
1995.
GENERAL
- -------
The source of the Company's revenues to date includes (i) commercial sales of
the Company's biological degradation systems, (ii) remediation services,
including both in situ and ex situ bioremediation, and (iii) funds received from
third parties and government agencies to conduct specific research and
development programs. While the Company has realized significant commercial
revenues for several years from remediation services, it has only recently seen
the first substantial revenues from sales of full-scale biological degradation
systems for the treatment of contaminated air and water streams. Although great
strides have been made in the commercialization of these systems, significant
expenditures will be required for continued research and development, additional
marketing activities and ultimately the development of manufacturing
capabilities for the further commercialization of the Company's biodegradation
systems. The amount and timing of such expenditures will vary depending on
several factors, including the progress of development and testing, funding
from third parties, the level of enforcement of environmental regulations by
federal and state agencies, technological advances, changing competitive
conditions and determinations with respect to the commercial potential of the
Company's systems. The amount and timing of such expenditures can not be
predicted.
Results Of Operations
- ---------------------
Six Months Ended June 30, 1996 Compared to
- ------------------------------------------
Six Months Ended June 30, 1995
- ------------------------------
For the six months ended June 30, 1996, the Company reported revenues of
$5,868,054, an increase of 76% from the same period in 1995. The net loss in the
period increased 22% to $1,649,064 from $1,355,280 in the same period in 1995,
while the net loss per share was $0.16 compared to $0.18 in the same period in
1995. The calculation of per share amounts for 1996 includes shares issued in a
financing in the second quarter of 1996.
Commercial revenues increased 100% to $5,017,518 from $2,503,144 in the same
period in 1995, while revenues from corporate and government research and
development contracts increased 1% to $850,536 from $838,344 in the same period
in 1995. The increase in commercial revenues is due primarily to increased
systems sales by the Company's Commercial Air Group related to the ABTCo
biofilter project combined with revenues from the Company's MWR subsidiary which
was acquired in February 1996. Revenues from remediation activities accounted
for 73% of the Company's commercial revenues in the six-month period ended June
30, 1996.
Revenues from corporate and government research and development contracts
remained relatively flat as revenues from numerous new projects offset the loss
of revenues due to the conclusion in December 1995 of PCB work the Company
performed for the Texas Eastern Company. The Company recorded initial revenues
during the first half of 1996 under a new Phase I grant from the
8
<PAGE>
Department of Energy and a new Phase I grant from the National Science
Foundation.
Total costs and expenses increased 60% to $7,606,955 in the first half of 1996
from $4,739,935 in the same period in 1995, due primarily to the increased cost
of commercial services and products associated with the higher commercial
revenue levels. The cost of commercial operations increased 111% to $4,684,707
due to higher revenue levels, a greater proportion of which were attributable to
lower margin systems sales. Research and development expenses increased 1% to
$1,153,319. General and administrative expenses increased 13% to $909,917 due
largely to the increased amortization of intangible assets associated with the
acquisition of MWR in February 1996. The $400,000 provision for contract claim
is the estimated cost to repair and restart the previously disclosed Nylonge
system failure. While the ultimate responsibility for these expenses has not
yet been determined, the Company is actively pursuing reimbursement of these
expenses from third parties. However, there can be no assurance that any such
recoveries will be attained. Marketing expenses decreased 20% due primarily to
reduced personnel related costs combined with other cost reduction efforts.
Interest income decreased by 31% to $60,352 due to the decreased average cash
available for investment resulting from the Company's continuing loss position
combined with the cash utilized in the Company's acquisition of MWR, Inc.
Equity in gain of joint venture increased to $78,787 for the six-month period
ended June 30, 1996 from a loss of $13,087 due to the Company's participation in
the financial results of CVT America. Prior to the conversion of the Company's
convertible preferred stock in May 1996, the Company recorded preferred
dividends of $36,458 in 1996.
Three Months Ended June 30, 1996 Compared to
- --------------------------------------------
Three Months Ended June 30, 1995
- --------------------------------
For the three months ended June 30, 1996, the Company reported revenues of
$3,193,530, an increase of 75% from the same period in 1995. The net loss in
the period increased 65% to $1,010,350 from $611,788 in the same period in 1995,
while the net loss per share was $0.09 compared to $0.08 in the same period in
1995. The calculation of per share amounts for 1996 includes shares issued in a
financing in the second quarter of 1996.
Commercial revenues increased 89% to $2,794,263 from $1,475,245 in the same
period in 1995, while revenues from corporate and government research and
development contracts increased 14% to $399,267 from $349,204 in the same period
in 1995. The increase in commercial revenues is due primarily to increased
systems sales by the Company's Commercial Air Group related to the ABTCo
biofilter project combined with revenues from the Company's MWR subsidiary which
was acquired in February 1996. Revenues from remediation activities accounted
for 73% of the Company's commercial revenues in the three-month period ended
June 30, 1996.
Revenues from corporate and government research and development contracts
increased 14% due primarily to an increase in the number of government grant
projects including the Company's Phase II Department of Energy SBIR, Phase II
Department of Defense SBIR and Phase II National Science Foundation SBIR. The
Company recorded initial revenues during the second quarter of 1996 from a Phase
I grant from the National Science Foundation.
9
<PAGE>
Total costs and expenses increased 72% to $4,193,813 in the second quarter of
1996 from $2,443,832 in the same period in 1995. The cost of commercial
operations increased 103% to $2,569,548 due to higher revenue levels, a greater
proportion of which were attributable to lower margin systems sales. Research
and development expenses increased 11% to $553,379 due primarily to the
increased revenues from corporate and government research and development
contracts. General and administrative expenses increased 20% to $472,628 due
primarily to the increased amortization of intangible assets associated with the
acquisition of MWR in February 1996. Approximately $362,000 of the $400,000
estimated cost to repair and restart the previously disclosed Nylonge system
failure was recognized in the second quarter of 1996. While the final
responsibility for these expenses has not yet been determined, the Company is
actively pursuing reimbursement of these expenses from third parties. However,
there can be no assurance that any such recoveries will be attained. Marketing
expenses decreased 18% to $236,205 due primarily to reduced personnel related
costs combined with other cost reduction efforts.
Interest income decreased by 58% to $24,125 due to the decreased average cash
available for investment as a result of the Company's continuing losses combined
with the cash utilized in the acquisition of MWR in February 1996. Prior to the
conversion of the Company's convertible preferred stock in May 1996, the Company
recorded preferred dividends of $14,583 for the three-month period ended June
30, 1996.
Liquidity and Capital Resources
- -------------------------------
The Company has funded its operations to date primarily through public offerings
and private placements of equity securities, research and development agreements
with major industrial companies, research grants from government agencies and
revenues from commercial services and sales of biological degradation systems.
At June 30, 1996 the Company had cash and cash equivalents of $5,015,145 and
working capital of $7,122,642. Additionally, the Company had restricted cash of
$399,082 that was being used to collateralize bonds for large commercial
projects. Cash and cash equivalents increased by $1,266,948 from December 31,
1995 to June 30, 1996 due to the net proceeds of $4,656,376 from the May 1996
private placement of Common Stock which offset the cash payment of $1,319,018
for the purchase of MWR, Inc. in February 1996, cash used by operations of
$1,708,904, capital expenditures of $139,975, an advance to affiliate of
$100,000, capital lease principal repayments of $84,322 and cash dividends on
preferred stock of $51,041. The Company expects to incur additional capital
expenditures in connection with the continued development and commercialization
of its technologies. The timing and amount of such expenditures will fluctuate
depending on the timing of field tests, systems development activity, the
rapidity with which the Company's biodegradation systems can be further
commercialized and the availability of capital. Furthermore, future projects
may require the Company to set aside additional capital to collateralize
performance bonds.
Revenue from certain of the Company's contracts is recognized as services are
provided and costs are incurred. For fixed-price contracts, revenue is
recognized on the percentage-of-completion method, measured by the percentage
relationship of costs incurred from contract inception to date to the estimated
total costs for each contract. The asset "Unbilled revenue" represents revenues
recognized in excess of amounts billed. Correspondingly, the liability
"Deferred revenue" represents billings in excess of costs and estimated
earnings. The balance in these accounts will fluctuate depending on a number of
factors, including the number and size of fixed-price contracts, contract terms
and other timing and cost issues. At June 30, 1996, unbilled revenue was
$433,853 greater than at December
10
<PAGE>
31, 1995 due primarily to the acquisition of MWR. Deferred revenue decreased by
$62,821 in the same period due to the timing of billings.
Accounts receivable increased by $1,203,019 from December 31, 1995 to June 30,
1996 primarily due to the acquisition of MWR and the timing of billings for the
ABTCo project. Accounts payable increased by $353,186 and accrued expenses and
other liabilities increased by $557,717 in the same period due primarily to the
acquisition of MWR.
The Company will continue to incur operating losses during the period of
development and commercialization of its technologies relating to the treatment
of hazardous wastes and industrial pollutants. Although it is unable to predict
with certainty, the Company believes it will have sufficient capital to meet its
operating requirements at least through the intermediate term. If the Company is
unable to obtain continued funding for the development of these technologies
through research and development agreements and increased commercial revenues,
it will be necessary to obtain funding from other sources. There can be no
assurance that the Company will be able to obtain additional funds to meet its
capital requirements or, if successful, the terms of such financing may not be
advantageous to the Company.
Other Matters
- -------------
As of December 31, 1995, the Company had a net operating loss carryforward of
approximately $17,600,000 for federal income tax reporting purposes available to
offset future taxable income, if any, through 2010. The timing and manner in
which these losses may be utilized are limited under Section 382 of the Internal
Revenue Code of 1986, as amended, as a result of certain ownership changes with
respect to the Company to date, and may be further limited in the event of
additional ownership changes.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123 "Accounting for Stock Based Compensation" ("SFAS
123"). In October 1995, SFAS 123 established financial and reporting standards
for stock based compensation plans. The Company anticipates adopting the
disclosure only provision of this standard during 1996.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on May 23, 1996 and in
connection therewith, proxies were solicited by management pursuant to
Regulation 14 under the Securities Exchange Act of 1934. The total number of
outstanding shares of Common Stock and Series C Convertible Preferred Stock
("Preferred Stock") entitled to vote at the meeting was 9,461,007 and 140,000,
respectively. Each share of Common Stock was entitled to one vote and each
share of Preferred Stock was entitled to ten votes for an aggregate of
10,861,007 possible votes. Holders of Common Stock and Preferred Stock voted
together as a single class. At the meeting the following matters (not including
ordinary procedural matters) were submitted to a vote to the stockholders, with
the results indicated below:
1. Election of directors to serve until the 1997 Annual Meeting. The following
-------------------------------------------------------------
persons, all of whom were serving as directors and were management's nominees
for reelection, were reelected. Jeffrey J. Collinson did not stand for
reelection. There was no solicitation in opposition to such nominees. The
tabulation of votes was as follows:
<TABLE>
<CAPTION>
Nominee For Withheld
------- --- --------
<S> <C> <C>
James A. Courter 8,838,507 80,150
Harcharan S. Gill 8,839,507 79,150
Robert F. Hendrickson 8,839,507 79,150
Robert F. Johnston 8,839,507 79,150
Seymour L. Meisel 8,838,507 80,150
Robert C. Miller 8,839,507 79,150
</TABLE>
2. Approval to amend the Company's 1990 Incentive Stock Option and Non-Qualified
-----------------------------------------------------------------------------
Stock Option Plan. The Plan was amended to increase the aggregate maximum
------------------
number of shares which may be issued from 1,400,000 to 2,000,000 and to
increase the aggregate maximum number of shares of Common Stock for which
options may be granted to any individual participant from 200,000 to 500,000.
The tabulation of votes was as follows:
<TABLE>
<CAPTION>
For Against Abstentions
--- ------- -----------
<S> <C> <C>
6,987,202 300,509 28,150
</TABLE>
12
<PAGE>
3. Approval to Amend the Company's 1993 Directors' Non-Qualified Stock Option
--------------------------------------------------------------------------
Plan. The Plan was amended to (i) change the eligibility requirements to
-----
include all Non-Employee Directors, (ii) increase the annual option grant to
each Non-Employee Director from 500 to 5,000 shares of Common Stock and to
the Chairman of the Board of Directors from 500 to 7,500 shares of Common
Stock, and (iii) increase the number of shares of Common Stock for which
options may be granted from 100,000 to 250,000. The tabulation of votes was
as follows:
<TABLE>
<CAPTION>
For Against Abstention
--- ------- ----------
<S> <C> <C>
7,159,073 137,413 19,875
</TABLE>
4. Ratification of independent auditors. The appointment of Coopers & Lybrand
-------------------------------------
L.L.P. as the Company's independent auditors was ratified. The tabulation of
votes was as follows:
<TABLE>
<CAPTION>
For Against Abstentions
--- ------- -----------
<S> <C> <C>
8,756,031 9,800 6,475
</TABLE>
ITEM 5. OTHER INFORMATION
The Company's Board of Directors elected Peter J. Neff as a member of the Board.
Mr. Neff will fill a newly created seat.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - None.
(b) Reports on Form 8-K
On May 31, 1996 the Company filed a Report on Form 8-K reporting the
conversion of 140,000 shares of Preferred Stock into 1,400,000 shares of
Common Stock and certain other matters.
13
<PAGE>
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.
ENVIROGEN, INC.
(Registrant)
Date: August 12, 1996 By: /s/ Harcharan S. Gill
--------------------------------------
Harcharan S. Gill
President and Chief Executive Officer
/s/ Patricia A. McQueary
--------------------------------------
Patricia A. McQueary
Controller
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,015,145
<SECURITIES> 0
<RECEIVABLES> 2,999,351
<ALLOWANCES> 220,668
<INVENTORY> 58,172
<CURRENT-ASSETS> 9,828,765
<PP&E> 5,701,766
<DEPRECIATION> 4,299,140
<TOTAL-ASSETS> 13,881,537
<CURRENT-LIABILITIES> 2,706,123
<BONDS> 0
0
0
<COMMON> 129,281
<OTHER-SE> 10,995,379
<TOTAL-LIABILITY-AND-EQUITY> 13,881,537
<SALES> 0
<TOTAL-REVENUES> 5,868,054
<CGS> 0
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</TABLE>
