U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------ ------------
Commission File Number 0-19260
RENTECH, INC.
(Name of small business issuer in its charter)
Colorado 84-0957421
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
1331 17th Street, Suite 720
Denver, Colorado 80202
(Address of principal executive offices)
Issuer's telephone number, including area code:
(303) 298-8008
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 X . No .
The number of shares outstanding of each of the issuer's classes of
common equity, as of September 30, 1996: common stock - 15,125,116.
This report consists of 14 pages, including one page constituting the
cover page.<PAGE>
<PAGE>
PAGE 2
RENTECH, INC.
FORM 10-QSB QUARTERLY REPORT
<TABLE>
<CAPTION>
Table of Contents
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of September 30, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the nine months
and the three months ended September 30, 1996 and September
30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statement of Stockholders' Equity for
the nine months ended September 30, 1996 . . . . . . . . . . 6
Consolidated Statement of Cash Flows for the nine
months ended September 30, 1996 and September 30, 1995 . . . 7
Notes to the Consolidated Financial Statements . . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Change in Securities - None.
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 14
Item 5. Other Information - None.
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14
(a) Exhibits - None
(b) Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE>
<TABLE>
<PAGE>
PAGE 3
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
<S> <C> <C>
September 30, December 31,
ASSETS 1996 1995
Current Assets
Cash and cash equivalents $ 210,486 $ 15,908
Restricted cash, current portion 25,000 25,000
License fee receivable 120,000 -0-
Accounts receivable 78,456 237,070
Advances and other current assets 175,137 4,272
----------- -----------
Total Current Assets 609,079 282,250
----------- -----------
Property and Equipment
Equipment, net of accumulated
depreciation of $94,620 and
$75,744 as of September 30, 1996
and December 31, 1995, respectively 57,156 76,032
----------- -----------
Other Assets
Licensed technology, net of accumulated
amortization of $715,464 and $543,907
as of September 30, 1996 and December 31,
1995 respectively 2,715,684 2,887,241
Synhytech plant held for sale 99,500 199,500
Deposits and other 7,276 9,709
----------- -----------
Total Other Assets 2,822,460 3,096,450
----------- -----------
Total Assets $ 3,488,695 $ 3,454,732
=========== ===========
See notes to the consolidated financial statements.<PAGE>
<PAGE>
PAGE 4
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 51,905 $ 620,255
Accrued liabilities 41,800 50,154
----------- -----------
Total Current Liabilities 93,705 670,409
----------- -----------
Stockholders' Equity
Preferred stock - $10 par value; 1,000,000
shares authorized; none issued and
outstanding
Common stock - $.01 par value; 100,000,000
shares authorized; 15,125,116 and
9,956,868 shares issued and outstanding
as of September 30, 1996 and December 31,
1995 151,249 99,567
Additional paid-in capital 10,966,934 9,994,002
Accumulated deficit (7,723,193) (7,309,246)
-----------
Total Stockholders' Equity 3,394,990 2,784,323
----------- -----------
Total Liabilities and Stockholders' Equity $ 3,488,695 $ 3,454,732
=========== ===========
</TABLE>
See notes to the consolidated financial statements.<PAGE>
<PAGE>
PAGE 5
<TABLE>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues $ 56,668 $ 192,254 $ 56,668 $ 1,574,758
License fees 120,000 -0- 240,000 -0-
---------- ---------- ---------- -----------
Total Revenue 176,668 192,254 296,668 1,574,758
---------- ---------- ---------- -----------
COSTS OF SALES:
Cost of contracts 48,168 157,448 48,168 1,228,296
---------- ---------- ---------- -----------
GROSS PROFIT 128,500 34,806 248,500 346,462
---------- ---------- ---------- -----------
EXPENSES:
General and Administrative 197,114 322,586 553,733 864,210
Property and Sales Taxes 6,000 6,000 16,000 33,000
Depreciation and Amortization 63,510 81,127 190,433 242,605
---------- ---------- ---------- -----------
Total Expenses 266,624 409,713 760,166 1,139,815
---------- ---------- ---------- -----------
LOSS FROM OPERATIONS (138,124) (374,907) (511,666) (793,353)
---------- ---------- ---------- -----------
OTHER INCOME (EXPENSE):
Gain (Loss) on sale of assets (100,000) 14,919 (100,000) (240,329)
Gain (Loss) on foreign currency -0- (9,584) -0- (7,255)
Other income 101,792 1,199 211,783 10,949
Interest income 2,059 3,480 3,593 16,771
Interest expense (12,317) (1,003) (17,659 (3,120)
---------- ---------- ---------- -----------
Total Other Income (Expense) (8,466) 9,011 97,717 (222,984)
---------- ---------- ---------- -----------
NET LOSS $ (146,590) $ (365,896) $(413,949) $(1,016,337)
========== ========== ========= ===========
Weighted average number
of shares outstanding 11,109,053 9,806,868 10,409,809 9,806,868
Per Share Income (Loss) $(0.01) $(0.04) $(0.04) $(0.11)
</TABLE>
See notes to the consolidated financial statements.<PAGE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
Additional
Par Paid-In Accumulated
Shares* Value Capital Deficit
------- ----- ---------- ------------
<S> <C> <C> <C> <C>
Balances,
December 31, 1995 9,956,868 $ 99,567 $ 9,994,002 $(7,309,244)
Net loss for the nine
months ended
September 30, 1996 (413,949)
Common Stock Issuances 5,168,248 51,682 972,932
---------- -------- ---------- -----------
Balances, September 30, 1996
(unaudited) 15,125,116 $151,249 $10,966,934 $(7,723,193)
========== ======== =========== ===========
</TABLE>
See notes to the consolidated financial statements.<PAGE>
<PAGE>
PAGE 7
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited)
1996 1995
---- ----
<S> <C> <C>
Operating Activities
Net Income (Loss) $(413,949) $(1,016,337)
Adjustments to reconcile net loss to net cash
provided (used in) operating activities:
Allowance for loss on sale of assets 100,000 230,000
Other income (135,792) -0-
Foreign currency translation -0- 5,550
Depreciation and amortization 190,433 242,605
Changes in operating assets and liabilities:
(Increase) Decrease in license fee receivable (120,000) -0-
(Increase) Decrease in accounts receivables 158,614 (783,720)
(Increase) Decrease in other current assets (170,863) (6,653)
(Increase) Decrease in deposits and other assets 2,433 (18,980)
Increase (Decrease) in billings in excess of
costs and estimated earnings on
uncompleted contracts -0- (109,393)
Increase (Decrease) in accounts payable
and other accrued expenses (440,912) 349,005
--------- -----------
Net Cash Provided By (Used in) Operating Activities: (830,036) (1,107,923)
--------- -----------
Investing Activities
Proceeds from sale of assets -0- 251,275
Net Cash Provided By (Used in) Investing Activities: -0- 251,275
--------- -----------
Financing Activities
Common Stock issued in lieu of payment of cash 256,709 -0-
Proceeds from Note Payable-CMPS&F -0- 142,487
Proceeds from issuance of common stock 767,905 -0-
Proceeds from notes payable 827,500 -0-
Repayments of notes payable (827,500) -0-
Payment on capital lease obligation -0- (804)
--------- -----------
Net Cash Provided (Used) by Financing Activities 1,024,614 141,683
--------- -----------
Increase (Decrease) in Cash
And Cash Equivalents 194,578 (714,965)
Cash and Cash Equivalents,
Beginning of Period 15,908 890,717
--------- -----------
Cash and Cash Equivalents,
End of Period $ 210,486 $ 175,752
========= ===========
</TABLE>
See notes to consolidated financial statements.<PAGE>
<PAGE>
PAGE 8
RENTECH, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. The accompanying statements should be read
in conjunction with the audited financial statements included in the
Company's annual report on Form 10-KSB for 1995. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the full calendar year
ending December 31, 1996. All dollar amounts included herein are in U.S.
dollars, unless otherwise indicated. The financial statements are
presented on an accrual basis.
2. Significant Accounting Policies
Consolidation - The consolidated financial statements include the accounts
of the Company and its wholly-owned foreign subsidiary, Future Fuels Pty
Limited (Future Fuels). All material intercompany accounts and
transactions have been eliminated in consolidation. Future Fuels, an
Australian company organized on March 31, 1988, was engaged in the business
of developing process plants that use the Company's proprietary technology
before its liquidation for accounting purposes during December 1995.
Translation of Foreign Currencies - Assets and liabilities of the Company's
foreign subsidiary, Future Fuels, are translated at the rate of exchange in
effect on the balance sheet date; income and expenses, in general, are
translated at the average rates of exchange prevailing during the year.
Transaction gains and losses as a result of exchange rate changes on
transactions denominated in currencies other than the functional currency
are included in determining net income for the period incurred.
Licensed Technology - Capitalized investment in licensed technology
represents costs incurred by the Company primarily for the purpose of
demonstrating the Company's proprietary technology to prospective
licensees, which it licenses to third parties under various fee
arrangements. These capitalized costs are being amortized using the
straight line method over 15 years.
Synhytech Plant Held for Sale - The Synhytech plant held for sale is
recorded at the lower of cost or net realizable value.
Equipment - Equipment is stated at cost and depreciated using the straight-
line method over the estimated useful lives of the assets, which range from
five to seven years. Maintenance and repairs are expensed as incurred.
Major renewals and improvements are capitalized and assets replaced are
retired. When property and equipment are retired or otherwise disposed of,
the asset and accumulated depreciation are removed from the accounts and
the resulting profit or loss is reflected in income.
Investments - Long-term investments in common stock are accounted for under
the cost method of accounting.
<PAGE>
PAGE 9
Revenue Recognition - The Company reports its contract revenue on fixed-
priced contracts using the percentage-of-completion method of accounting
measured by the percentage of job costs incurred to date to the latest
estimated cost to complete for each project. Job costs incurred prior to
the Company's entering into a contract are expensed as incurred and
excluded from the percentage-of-completion calculation.
Contract costs include all direct material, labor, travel and other costs
directly related to contracts and indirect costs. Indirect costs include
all other costs indirectly related to contract completion such as indirect
labor, supplies, tools and equipment rental.
Research and Development Costs - Research and development costs are charged
to expense as incurred.
Net Income (Loss) Per Share - The net loss per share of common stock is
determined using the weighted-average number of shares outstanding during
the period according to rules of the Securities and Exchange Commission.
Options for common stock and warrants are not considered in the computation
of net loss per share as their inclusion would be antidilutive.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
For the nine months and the three months ended September 30, 1996, the
Company recorded losses of $413,949 and $146,590, respectively, which
reflect smaller losses than for the comparable periods in 1995. The loss
for the nine months ended September 30, 1996 includes a non-recurring and
non-cash other income item of $108,791 derived from the offset of an
accrued liability that has been determined not payable, and a $27,000
accounts payable reduction due to a settlement agreement. The loss for the
nine months ended September 30, 1996 also includes a non-cash loss
allowance of $100,000 compared to a non-cash loss allowance of $230,000 on
the sale of the Synhytech assets sold during the second quarter of 1995.
The comparable losses excluding these non-recurring non-cash items are
$449,740 and $786,337 for the September 30, 1996 and 1995 comparable nine
month periods.
During the nine months and three months ended September 30, 1996, the
Company had revenues of $296,668 and $176,668 respectively compared to
$1,574,758 and $192,254 for the comparable periods of 1995. The reduced
revenues during the current period reflect the termination of the
subcontract of Future Fuels Pty Limited, a wholly-owned subsidiary that was
liquidated during 1995 for accounting purposes, for the Henan Project in
China. See the following section entitled "Liquidity and Capital
Resources" for further details regarding the Henan Project and liquidation
of Future Fuels. During the nine months ended September 30, 1996, the
Company recorded $240,000 in license fees from Donyi Polo Petrochemicals,
Ltd., which has licensed the Company's technology for use in a gas
conversion plant under development in Arunachal Pradesh, India. Donyi Polo
purchased the Company's Synhytech plant located at Pueblo, Colorado during
the first quarter of 1995, dismantled it, and shipped it in 1996 to
Arunachal Pradesh, India, for reassembly. The Company has licensed its
technology to Donyi Polo to operate the plant as a commercial gas
conversion facility. No license fees were received during the first nine
months of 1995.
Cost of contracts decreased to $48,168 during the three and nine month
periods ended September 30, 1996 compared to $157,448 and $1,228,296 for
the comparable periods of 1995. The reduction in the 1996 periods of both
contract revenue and cost of contracts is due to the discontinuation of the
Henan Project contract and the resulting liquidation of Future Fuels for
accounting purposes during 1995. Cost of contracts represents the direct
costs associated with the performance of contracts for projects.
<PAGE>
PAGE 10
Gross profit increased by 269% and decreased by 28% to $128,500 and
$248,500 for the three and nine month periods ended September 30, 1996
compared to $34,806 and $346,462 for the three and nine month periods ended
September 30, 1995. This reduction is also primarily due to the
discontinuation of the Henan Project contract by Future Fuels Pty Limited.
General and administrative expenses decreased by 42% and 37% to
$197,114 and $553,733 for the three and nine month periods ended September
30, 1996, compared to the same periods in 1995. A significant portion of
the reductions of $125,742 and $310,477 are due primarily to reductions of
$94,259 and $163,383 resulting from elimination of the Future Fuels general
and administrative expenses during 1996 due to its discontinuation of
operations in 1995. The remaining reduction is due to decreases in
Synhytech holding costs, legal fees, and travel expenses.
Property taxes are significantly less during the 1996 periods due to
the sale of a major portion of the Synhytech Plant assets to Donyi Polo
Petrochemicals Ltd. during 1995. During 1996 the plant has been dismantled
and removed from its site at Pueblo, Colorado.
Depreciation and amortization decreased to $63,510 and $190,433 for
the three and nine month periods ended September 30, 1996, a decrease of
21% in both periods, from $81,127 and $242,605 for the comparable periods
ended September 30, 1995. The reductions are due primarily to the
liquidation of Future Fuels and the write off of approximately $800,000 of
associated goodwill during 1995 that was to be amortized over the next 12
years.
Loss from operations for the nine month period ended September 30,
1996 was reduced by 36% to a loss of $511,666 from the $793,353 loss
reported for the comparable nine month period of 1995. The reduction of
the contract profit during 1996 was offset by $240,000 in license fees and
a $379,649 reduction of 1996 total expenses. No additional license fees
are expected during the remainder of 1996. The loss from operations for
the three months ended September 30, 1996 decreased by 64% or $236,783 to
$138,124 from $374,907 for the three months ended September 30, 1995. The
decrease in loss from operations for the three month period in 1996,
compared to the same periods in 1995, primarily reflects the
discontinuation of the business of Future Fuels and decreases in Synhytech
holding costs and travel expenses.
Gain (loss) on sale of assets reflects the sale of the Synhytech plant
at a non-cash loss of approximately $100,000 during 1996 and $230,000
during 1995 as well as a non-cash loss of approximately $10,329 on the
sales of individual components of the plant during the first nine months of
1995. The remaining value of the Synhytech assets held for sale,
consisting of buildings remaining at the site, is valued at $99,500 at
September 30, 1996.
Gain (loss) on foreign currency during 1995 was related to the
consolidation of the Company's financial statements with those of Future
Fuels, which was liquidated during December 1995 for accounting purposes.
Other income during the nine months ended September 30, 1996 consists
primarily of three items. The first is a $108,791 income item due to a
reduction in an accrued liability that has been deemed to be not payable.
The second is a prior period property tax refund of $71,813 due to the
Company. The third item is a reduction of a prior period account payable
in the amount of $27,000.
Interest income was nearly five times greater during the first nine
months of 1995 as compared to the first nine months of 1996 because of the
Company's completion of a private placement of its restricted common stock
during the third quarter of 1994 which netted $1,117,054.
<PAGE>
PAGE 11
Interest expense during the first nine months of 1996 was over five
times that of the first nine months of 1995 due to additional interest
charges on trade accounts payable and convertible notes payable.
Liquidity and Capital Resources.
The Company has incurred losses since its inception. At September 30,
1996, the Company had working capital of $515,374 as compared to a working
capital deficit of $388,159 at December 31, 1995. The increase of $903,533
or 233% in working capital is due to the issuance of 1,174,822 shares of
common stock as payment of debts totaling $1,024,614. During the third
quarter of 1996 the Company also borrowed $787,000 in the form of
convertible notes payable. On September 20, 1996 these Notes plus interest
were converted into 3,993,426 shares of the Company's common stock.
Because of these stock issuances the Company is able to report a $515,374
working capital balance at September 30, 1996.
The Company's financial outlook was seriously worsened in the fourth
quarter of 1995 when a contract dispute arose between the Company's
Australian subsidiary, Future Fuels Pty Ltd., and the Australian joint
venture composed of Energy Equipment Pty Ltd. and CMPS&F Pty Ltd. The
joint venture had let a subcontract to Future Fuels to provide basic
engineering design and operating data to the joint venture for construction
of the Henan Project in China. As a result of the dispute, the subcontract
was suspended in 1995 and considered terminated at year end for accounting
purposes. The discontinuance of Future Fuels' subcontract for the Henan
Project deprived the Company of what it had expected to be the major source
of its income through 1998. The contract was for a total of approximately
$10.9 million, of which approximately $1,431,000 had been received. Future
Fuels was owed approximately $356,000 by the joint venture when the
subcontract was deemed terminated, and does not expect to recover that sum
from the joint venture. As a result of the discontinuation, and ultimate
termination for accounting purposes, of Future Fuels' contract for the
Henan Project, the operations of Future Fuels were closed, the employees
and independent contractors discharged, and the business wound up in late
1995. In February 1996, Future Fuels filed for liquidation under
Australian law. On March 21, 1996, a trustee was appointed to liquidate
the assets and discharge the liabilities to the extent of the assets. The
liabilities of Future Fuels exceed the value of its assets, and the
Company, as sole shareholder and major creditor, does not expect to receive
any distribution from the liquidation of the subsidiary.
During the current quarter of 1996 the Company received net proceeds
of $787,000 from a private placement of its common stock. The Company
issued its 10% convertible promissory notes that were converted into
3,993,426 shares of its common stock on September 20, 1996 at $0.20 per
share. By conversion, the note holders became entitled to stock purchase
warrants authorizing purchase of additional shares of common stock at $.25
per share through September 20, 1997. The number of shares subject to a
warrant are equal to the number of shares a note holder received upon
conversion of his note. The Company has caused all the shares acquired
upon conversion of the notes and exercise of the stock purchase warrants to
be registered under the Securities Act of 1933, as amended.
The funds from the private placement are expected to be adequate to
fund the Company's operations at the current reduced level into the first
quarter of 1997. In order to provide working capital for periods beyond
that time, the Company expects to conduct additional private placements of
its common stock or other securities in exchange for cash, assets or
businesses that generate net profits. The Company is actively seeking such
opportunities and pursuing its business plan to diversify into other
fields. The Company's ability to continue operations depends upon whether
it can accomplish such acquisitions and generate operating income from
other fields of business before its operating capital is exhausted.
<PAGE>
PAGE 12
The Company intends to continue to license its gas conversion
technology and expects to realize income from license fees and construction
subcontracts for the Arunachal Pradesh project in India and from other
projects that it seeks in India and elsewhere. Approximately $65,000 from
work on the Company's engineering contract for the Arunachal Pradesh
project in India is expected over the next 12 months. Additional income
from the gas conversion technology is not anticipated until after startup
and production from the plant, which is not expected before late 1997.
There are no assurances that additional capital can be raised or that
assets or other businesses that generate operating income to the Company
can be realized in time or in amounts adequate to enable the Company to
continue its operations as a going concern, or that operating profits will
be ultimately derived from the gas conversion technology.
Analysis of Cash Flow
As discussed under "Results of Operations,"the Company had net losses
during the first nine months of $413,949 in 1996 and $1,016,337 in 1995.
The 1995 non-cash expenses include the allowance for loss on sale of assets
of $230,000, a foreign currency translation of $5,550, and depreciation and
amortization of $161,478. This compares to a $100,000 loss recorded on the
sale of assets during 1996, no foreign currency translation during 1996,
and a 21% reduction in the 1996 depreciation expense due to the liquidation
of Future Fuels and the write off of the associated goodwill. The 1996
period also includes a $108,791 non-cash income item derived from the
offset of an accrued liability that is deemed to be not payable, and a
$27,000 reduction in accounts payable due to a settlement agreement.
Changes in operating assets and liabilities include a $120,000
increase in license fees receivable and a $158,614 increase in accounts
receivable during 1996 compared to no increases in license fees receivable
and a $783,720 increase in accounts receivable for 1995. The decrease
reflects payments received during 1996.
Other current assets increased by $170,863 during the first nine
months of 1996 compared to a $6,653 increase during the first nine months
of 1995. The increase is primarily due to a $71,813 property tax refund
and a $50,000 stock issuance receivable. Deposits and other assets
increased by $2,433 during the first nine months of 1996 compared to a
decrease of $18,980 during the comparable 1995 period. Billings in excess
of costs and estimated earnings on uncompleted contracts decreased by
$109,393 during the first nine months of 1995. With the termination of the
Henan Project contract with no other contracts in place, there were no 1996
increases or decreases in billings in excess of costs and estimated
earnings on uncompleted contracts. Accounts payable decreased by $440,912
during the first nine months of 1996 compared to a $349,005 increase during
the comparable period of 1995.
During the first nine months of 1996, $830,036 cash was used in
operating activities compared to a net cash usage of $1,107,923 for the
comparable first nine months of 1995.
There were no investing activities during the first nine months of
1996 compared to $251,275 proceeds from the sale of assets during the first
nine months of 1995.
The Company financed the majority of its activities by net proceeds of
$1,024,614 from three private placements of its common stock during the
first nine months of 1996 and notes payable for $40,500 compared to a
$142,487 note payable and a $804 capital lease reduction during 1995. In
1995, the Company's capital lease obligation was terminated through the
Future Fuels liquidation. As a result of these activities, the net cash
provided by financing activities in the nine months of 1996 was $1,024,614
compared to $141,683 during the first nine months of 1995.
<PAGE>
PAGE 13
Cash increased during the first nine months of 1996 by $194,578
compared to a decrease of $714,965 for the first nine months of 1995.
These changes increased the ending cash balance to $210,486 at September
30, 1996 from $15,908 at December 31, 1995. During the first nine months
of 1995, the $890,717 balance at December 31, 1994 decreased to $175,752 at
September 30, 1995.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Change in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's annual meeting of shareholders was held on September 19,
1996. At the meeting, Dennis L. Yakobson was elected to a term ending in
1999 as a member of the board of directors. The terms of Ronald C. Butz,
Mark S. Bohn, D. Barry McKennitt and Erich W. Tiepel as directors continue
after the meeting. The shareholders also adopted the Company's 1996 Stock
Option Plan which authorizes purchase of 500,000 shares of the Company's
common stock by employees, directors and consultants pursuant to stock
options to be granted.
The following tabulation shows the votes cast at the meeting on each
matter voted upon, including election of directors.
<TABLE>
<CAPTION>
Withheld/ Not
For Against Voted
--- --------- -----
<S> <C> <C> <C>
Election of Directors:
Dennis L. Yakobson 8,104,089 391,461 0
Approval of the 1996 Stock
Option Plan:
7,149,052 1,240,145 106,353
</TABLE>
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. None
(b) A Form 8-K dated September 4, 1996 was filed reporting completion of
the private placement of the Company's convertible promissory notes
and discharge of deferred officer salaries and past due accounts
payable.
<PAGE>
PAGE 14
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.
RENTECH, INC.
Dated: November 5, 1996 (signature)
----------------------------------
James P. Samuels
Vice President-Finance and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Statement of Financial Condition at September 30,
1996 (Unaudited) and the Condensed Consolidated Statement of Income for the
Nine Months Ended September 30, 1996 (Unaudited) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Sep-30-1996
<CASH> 210,486
<SECURITIES> 0
<RECEIVABLES> 78,456
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 609,079
<PP&E> 151,776
<DEPRECIATION> (94,620)
<TOTAL-ASSETS> 3,488,695
<CURRENT-LIABILITIES> 93,705
<BONDS> 0
<COMMON> 151,249
0
0
<OTHER-SE> 3,243,741
<TOTAL-LIABILITY-AND-EQUITY> 3,488,695
<SALES> 296,668
<TOTAL-REVENUES> 296,668
<CGS> 48,168
<TOTAL-COSTS> 48,168
<OTHER-EXPENSES> 760,166
<LOSS-PROVISION> (511,666)
<INTEREST-EXPENSE> 17,659
<INCOME-PRETAX> (413,949)
<INCOME-TAX> 0
<INCOME-CONTINUING> (413,949)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (413,949)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
