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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 March 31, 1997
[ ] 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 March 31, 1997: common stock - 16,705,616.
This report consists of 15 pages, including one page constituting
the cover page.
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RENTECH, INC.
FORM 10-QSB QUARTERLY REPORT
Table of Contents
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1997
and September 30, 1996 3
Consolidated Statements of Operations for the
three and six months ended March 31, 1997 and
March 31, 1996 5
Consolidated Statements of Stockholders' Equity for
the six months ended March 31, 1997 6
Consolidated Statements of Cash Flows for the six
months ended March 31, 1997 and March 31, 1996 7
Consolidated Notes to the Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
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 - None.
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
(a) Exhibits - None
(b) Reports on Form 8-K 13
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<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, September 30,
1997 1996
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 118,137 $ 210,486
Restricted cash, current portion -0- 25,000
Accounts receivable 303,024 198,457
Property tax receivable -0- 71,813
Stock subscription receivable -0- 50,000
Inventory 75,425 -0-
Advances and other current assets 21,195 23,511
----------- -----------
Total Current Assets 517,781 579,267
----------- -----------
Property and Equipment, net of accumulated
depreciation of $107,010 and $94,620 as of
March 31, 1997 and September 30, 1996,
respectively 139,164 57,156
----------- -----------
Other Assets
Licensed technology, net of accumulated amor-
tization of $829,836 and $715,464 as of March
31, 1997 and September 30, 1996 respectively 2,601,312 2,715,684
Goodwill, net of accumulated amortization of
$3,150 at March 31, 1997 1,194,744 -0-
Synhytech plant held for sale 99,500 99,500
Deposits and other 25,000 7,276
----------- -----------
Total Other Assets 3,920,556 2,822,460
----------- -----------
Total Assets $ 4,577,501 $ 3,458,883
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 108,674 $ 53,948
Accrued liabilities 137,325 68,759
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Total Current Liabilities 245,999 122,707
----------- -----------
Long Term Liabilities
Note Payable 300,000 -0-
----------- -----------
Commitments
Stockholders' Equity
Preferred stock - $10 par value; 1,000,000
shares authorized; 130,000 issued and
outstanding at March 31, 1997; redemption
of $12.50 per share plus dividends in
arrears of $175,069 as of March 31, 1997 1,300,000 -0-
Common stock - $.01 par value; 100,000,000
shares authorized; 16,705,616 shares issued
and outstanding as of March 31, 1997 and
14,975,116 shares issued and outstanding
as of September 30, 1996 167,053 149,748
Additional paid-in capital 10,813,706 10,888,152
Accumulated deficit (8,249,257) (7,701,724)
----------- -----------
Total Stockholders' Equity 4,031,502 3,336,176
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,577,501 $ 3,458,883
=========== ===========
See notes to consolidated financial statements.
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<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
March 31, March 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Retail sales $ 104,568 $ -0- $ 104,568 $ -0-
Contract revenues 5,249 -0- 5,249 209,412
License fees -0- 120,000 -0- 120,000
--------- --------- ---------- -----------
Total Revenue 109,817 120,000 109,817 329,412
--------- ---------- ---------- -----------
COSTS OF SALES:
Cost of sales 37,811 -0- 37,811 -0-
Cost of contracts -0- -0- -0- 732,059
--------- ---------- ---------- -----------
GROSS PROFIT 72,006 120,000 72,006 (402,647)
--------- ---------- ---------- -----------
EXPENSES:
Operating expenses 22,662 -0- 22,662 -0-
General and administrative 274,347 221,752 469,671 492,253
Loss on disposal of subsidiary -0- -0- -0- 500,908
Depreciation and Amortization 62,752 63,337 126,262 126,847
Research and development 2,315 -0- 2,315 -0-
--------- ---------- ----------- -----------
Total Expenses 362,076 285,089 620,910 1,120,008
LOSS FROM OPERATIONS (290,070) (165,089) (548,904) (1,522,655)
OTHER INCOME (EXPENSE):
Investment -0- -0- -0- (75,000)
Interest income 200 781 1,494 2,538
Interest expense (123) (2,762) (123) (8,439)
Other income -0- 1,200 -0- 1,200
Total Other Income (Expense) 77 (781) 1,371 (79,701)
NET LOSS (289,993) (165,870) (547,533) (1,602,356)
Dividend requirements on Preferred
Stock 175,069 -0- 175,069 -0-
--------- ---------- ---------- -----------
LOSS APPLICABLE TO COMMON STOCK $(465,062) $ (165,870) $ (722,602) $(1,602,356)
========= ========== ========== ===========
Weighted average number
of shares outstanding 16,152,126 10,006,868 15,552,092 9,981,868
Per Share Loss $(0.03) $(0.02) $(0.05) $(0.16)
See notes to consolidated financial statements.
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<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 1997
(Unaudited)
Preferred Stock Common Stock Additional
Par Par Paid-In Accumulated
Shares Value Shares Value Capital Deficit
------ ----- ------ ----- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Balances,
September 30, 1996 -0- $ -0- 14,975,106 $149,748 $10,888,152 $(7,701,724)
Issuance of Preferred
Stock, net of offering
costs of $194,785 for
cash 130,000 1,300,000 (194,785)
Issuance of Common
Stock for cash 1,730,500 17,305 120,339
Net loss for the six
months ended March 31,
1997 (547,533)
------- ---------- ---------- -------- ----------- ----------
Balances, March 31,
1997
(unaudited) 130,000 $1,300,000 16,705,616 $167,053 $10,813,706 $(8,249,257)
======= ========== ========== ======== =========== ===========
</TABLE>
See notes to consolidated financial statements.
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<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 1997 and 1996
(Unaudited)
1997 1996
---- ----
<S> <C> <C>
Operating Activities
Net Income (Loss) $ (547,533) $(1,602,356)
Adjustments to reconcile net loss to net cash
provided (used in) operating activities:
(Loss) on investment -0- 75,000
(Loss) on disposal of subsidiary -0- 500,908
(Loss) on contracts -0- 732,059
Depreciation and amortization 126,262 126,847
Bad debt expense -0- 103,930
Changes in operating assets and liabilities
net of business acquisition:
(Increase) Decrease in restricted cash 25,000 25,000
(Increase) Decrease in accounts receivables (104,567) 139,804
(Increase) Decrease in property tax receivable 71,813 -0-
(Increase) Decrease in inventories 8,553 -0-
(Increase) Decrease in advances and other
current assets 2,316 18,765
Increase (Decrease) in accounts payable
and other accrued expenses 123,292 (226,936)
--------- -----------
Cash Provided By (Used in) Operating Activities: (294,864) (106,979)
---------- ----------
Investing Activities
Purchase of business (1,060,269) -0-
Purchase of equipment (12,351) -0-
Receipts for deposits and other (17,724) 6,536
---------- -----------
Net Cash Provided (Used) by Investing Activities (1,090,344) 6,536
---------- -----------
Financing Activities
Proceeds from issuances of Preferred Stock 1,105,215 -0-
Proceeds from issuances of Common Stock 137,644 50,000
Proceeds from stock subscription receivable 50,000 -0-
--------- -----------
Net Cash Provided (Used) by Financing Activities 1,292,859 50,000
---------- -----------
Increase (Decrease) in Cash
And Cash Equivalents (92,349) (50,443)
Cash and Cash Equivalents,
Beginning of Period 210,486 175,752
---------- -----------
Cash and Cash Equivalents,
End of Period $ 118,137 $ 125,309
========== ===========
See notes to consolidated financial statements.
</TABLE>
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RENTECH, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
1. Basis of Presentation
The accompanying unaudited 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 September 30, 1996 transition report on Form 10-KSB. 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 three and six months ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the full fiscal year ending September 30, 1997. 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
Okon, Inc. - The financial statements include the accounts of the
Company and its wholly-owned subsidiary, Okon, Inc. ("Okon"). All
material intercompany accounts and transactions have been eliminated.
Okon was purchased during March 1997 and is in the business of retail
paint sales.
Future Fuels Pty Limited - The 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. 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.
Excess of Cost Over Net Assets Acquired - The excess of cost over
net assets acquired, which relate to the acquisition of Okon, is being
amortized over 15-year period using the straight-line method.
Long-Lived Assets - Long-lived assets, identifiable intangibles, and
excess of cost over net assets acquired are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. If the expected future cash flow from the
use of the asset and its eventual disposition is less than the carrying
account of the asset, an impairment loss is recognized and measured using
the asset's fair value.
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.
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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.
Revenues from Okon's operations are recognized as income at the time
the order is shipped.
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.
Change of Fiscal Year - The Company changed its year end period from
December 31 to September 30 effective September 30, 1996. The period
ended September 30, 1996 is a transition period consisting of nine
months.
New Accounting Pronouncement - On March 3, 1997, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS No. 128"). This
pronouncement provides a different method of calculating earnings per
share than is currently used in accordance with Accounting Board Opinion
("APB") No. 15, "Earnings Per Share." SFAS 128 provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic earnings
per share includes no dilution and is computed by dividing income
available to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the earnings of
an entity, similar to fully diluted earnings per share. SFAS No. 128 is
effective for financial statements issued for periods ending after
December 15, 1997. Its implementation is not expected to have a material
effect on the consolidated financial statements.
3. Business Acquisition - On March 14, 1997, the Company acquired the
assets of Okon for $1,050,000 in cash, a $300,000 note due to the seller
and $13,919 in acquisition costs. The $300,000 note accrues interest at
9%. Accrued interest on the note is due on March 14, 1998. Commencing
on April 1, 1998, the note is payable in monthly principal payments of
$25,000 plus interest until the note is paid in full. The acquisition of
Okon is recorded using the purchase method.
The purchase price for Okon is allocated as follows:
Inventories $ 83,878
Property and equipment 82,147
Excess of cost over net assets acquired 1,197,894
-------------
Total purchase price $ 1,363,919
=============
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4. Stockholders' Equity - During March 1997, the Company completed the
sale of 130,000 shares of its Series 1997-A Convertible Preferred Stock.
The Company received net proceeds of $1,105,215 after paying $194,785 in
offering costs. The preferred shares are convertible into shares of the
Company's common stock at an average price of $.21 per share or into
common stock at a price that is 70% of the average closing bid price of
the common stock for the five trading days preceding the date of each
conversion, whichever is less. Dividends are payable on the preferred
stock at 15% per annum, in common stock or cash, at the option of the
Company, until converted or redeemed by the Company.
During March 1997, the Company recorded an additional $167,069
dividend associated with the conversion feature of the preferred stock.
The preferred stock is converted at a discount from the market value of
the Company's common stock. Dividends in arrears on the outstanding
preferred stock total $175,069 as of March 31, 1997.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations.
For the three and six months ended March 31, 1997 the Company
recorded net losses of $289,993 and $547,533 compared to net losses of
$165,870 and $1,602,356 for the comparable periods in 1996. The net loss
for the six months ended March 31, 1996 includes a non-recurring and
non-cash loss of $500,908 resulting from the loss on disposal of Future
Fuels, $732,059 loss associated with the discontinuation of work on the
Henan Project in China and a $75,000 loss resulting from the write off of
a stock investment. The loss for the three months and six months ended
March 31, 1997 includes a non-cash dividends requirement of $175,069.
The comparable losses excluding these items are $547,533 and $294,389,
respectively, for the six-month periods ended March 31, 1997 and 1996.
During the three and six months ended March 31, 1997 the Company had
$109,817 in revenues compared to $120,000 and $329,412 for the comparable
1996 periods. The reduced revenues in the 1997 quarters reflect
discontinuation of work by Future Fuels Pty Limited, a wholly-owned
subsidiary, on its engineering design contract for the Henan Project.
See the following section entitled "Liquidity and Capital Resources" for
further details regarding the Henan Project and liquidation of Future
Fuels. Of these 1997 revenues, $104,568 were attributed to Okon for the
last two weeks of March. Only $5,249 were attributed to Rentech, and
these were billed to the India project.
Cost of sales first occurred during this current quarter due to the
acquisition of Okon, which is engaged in the retail paint business.
Cost of contracts decreased to zero during the three and six months
ended March 31, 1997 compared to zero and $732,059 for the comparable
periods of 1996. The cost of contracts represents the direct costs
associated with the performance of contracts for projects. The contract
revenue during 1996 relates to the Henan Project in China.
Gross profit was $72,006 for the three and six month periods ended
March 31, 1997 compared to a gross profit of $120,000 for the three-month
period ended March 31, 1996 and a gross loss of $402,647 for the six
months ended March 31, 1996.
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General and administrative expenses decreased by 5% to $469,671 for
the six-month period ended March 31, 1997, compared to the same period in
1996. General and administrative expenses increased by 24% to $274,347
for the three month period ended March 31, 1997 compared to the same
period in 1996. The increase is attributable to the acquisition of Okon.
Loss on disposal of subsidiary was zero during the six months of
fiscal 1997, compared to a loss of $500,908 for the six months ended
March 31, 1996. After the Henan contract was discontinued during the
three months ended December 31, 1995, Future Fuels was placed in
liquidation.
Depreciation and amortization remained constant at approximately
$63,000 and $126,000 for both the three-month period and the six-month
periods ended March 31, 1997 and 1996.
Primarily because of reductions in expenditures, loss from
operations for the six-month period ended March 31, 1997 was reduced by
64% to a loss of $548,904 from the $1,522,655 loss reported for the
comparable six-month period of 1996.
There was no loss on investment during the 1997 six-month period
compared to a loss of $75,000 on investment during the 1996 period
related to the write off of an investment determined to have no value.
Interest income was less during the six months ended March 31, 1997,
as compared to the same period of 1996 because of the Company's use of
restricted cash.
Interest expense during the three and six months ended March 31,
1997 was significantly less compared to the same periods of 1996 due to
interest charges on trade accounts payable.
Liquidity and Capital Resources
The Company has incurred losses since its inception. At March 31,
1997, the Company had working capital of $271,782 as compared to $456,560
at September 30, 1996. The $184,778 or 40% decrease in working capital
is due to the ongoing losses from operations. During this current
quarter, the Company obtained financing through stock issuances totaling
$1,292,859 to diversify into other businesses that are expected to
generate net income to sustain the Company. The Company utilized
$1,060,269 of this cash to purchase Okon, a wholly-owned subsidiary
engaged in the manufacture of water-base sealers and stains for retail
sale. During April 1997 the Company also issued 20,000 more shares of
preferred stock, netting the Company $176,000 after offering discounts.
Although no assurances can be given, the Company is confident that its
financing, investments and operational plans are such that future needs
for cash will be provided by operations and conversion of outstanding
warrants.
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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. As a
result of the dispute, the subcontract of Future Fuels to provide basic
engineering design and operating data to the joint venture for
construction of the Henan project in China was discontinued in 1995 and
considered terminated at year end for accounting purposes. The
suspension of Future Fuels' subcontract for the Henan Project deprived
Rentech of what it had expected to be the major source of its income for
the next several years 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 Rentech, as sole shareholder and major creditor,
does not expect to receive any distribution from the liquidation of the
subsidiary.
During September 1996 the Company obtained $787,000 in operating
capital from several of its shareholders and other investors and
discharged certain indebtedness through private placements resulting in
the issuance of 3,993,426 shares of common stock at 20 cents per share.
Warrants for the purchase of 4,744,000 shares of common stock at 25 cents
per share were also issued by the Company as part of the private
placements. The warrants may be exercised until September 20, 1997.
During the current quarter ended March 31, 1997, the Company raised
$137,644 through the sale of 1,730,500 shares of common stock and
$1,105,215 through the sale of 130,000 shares of preferred stock. The
preferred stock accrues dividends at fifteen percent per annum, payable
in cash or common stock. The preferred stock is also convertible into
common stock at an average price of $.21 per share or at a price that is
70% of the average closing bid price of the common stock for the five
trading days preceding the date of conversion, whichever is less.
One of the possibilities for the new capital involves a limited
liability company called ITN/ES LLC which intends to commercially exploit
technologies that are to be contributed to the LLC. The technologies and
products to be owned by the LLC include production of thin-film
electronic substrates by deposition upon which computer chips can be
mounted; advanced processes for ceramic deposition on materials to
improve their capacity to withstand heat and wear; and utilization of
shape memory alloys that are highly advanced metals which by the proper
application of heat, cold or electrical impulse can perform a mechanical
function with precision for long periods of time. The contribution of
the technologies to the LLC depends upon the Company's contribution of
$200,000 in cash and 1,200,000 shares of common stock. Closing is
presently scheduled to occur on or before June 30, 1997. The Company is
to register its shares within 120 days after the stock is issued, and if
it has not, is required to issue an additional 400,000 shares to ITN/ES
LLC. ITN/ES LLC will not be able to commence production of its
technologies until it acquires additional capital adequate to construct a
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PAGE 12
manufacturing facility and obtain purchase contracts. Therefore,
revenues from this source are not expected in the near term. The Company
acquired the assets of Okon, Inc. during March 1997 for $1,050,000 cash
plus a $300,000 long term Note Payable, payable according to the terms of
the Company's promissory note payable over 12 monthly installments
commencing one year after closing.
On March 31, 1997 Rentech entered into an agreement to negotiate
exclusively with the Texaco Group Inc., to establish a business
relationship for the purposes of accelerating the development and
licensing of Rentech's Process Technology and to commercially exploit
this technology on a world wide basis. Though no assurances can be given
that a formal agreement will be signed, management is optimistic as to
the positive financial impact on the Company that this agreement may
have.
Statement of Cash Flows
As discussed under "Results of Operations," the Company had net
losses of $547,533 and $1,602,356, respectively, for the six months ended
March 31, 1997 and 1996. The 1996 non-cash expenses include a loss on
disposal of a subsidiary of $500,908, $732,059 loss on contracts,
$103,930 bad debt expense, and a $75,000 write off of an investment.
Depreciation and amortization of $126,762 and $126,847 for the six months
ended March 31, 1997 and 1996 were reported.
Changes in operating assets and liabilities include a $25,000
decrease in restricted cash for each period.
There was a $104,567 increase in accounts receivable during the
quarter ended March 31, 1997 due to the acquisition of Okon, compared to
a $139,804 decrease during the 1996 period.
A decrease of $71,813 in property tax receivable occurred during the
six months ended March 31, 1997, compared to zero for the comparable 1996
period.
An increase in inventories of $8,553 occurred during this current
quarter due to the acquisition of Okon, Inc. during March 1997.
Advances and other current assets decreased by $2,316 during the six
months ended March 31, 1997 compared to a $18,765 decrease for the
comparable period ended March 31, 1996.
Accounts payable increased by $123,292 during the six months ended
March 31, 1997, partially due to the acquisition of Okon, compared to a
$223,007 decrease during the 1996 period.
During the six months ended March 31, 1997, $294,864 in cash was
used by operating activities compared to a net cash usage of $106,979 for
the comparable six months of 1996.
Investing activities were made during the six months ended March 31,
1997 totaling $1,090,344, compared to $6,536 for the comparable 1996
period. During March 1997, the Company acquired Okon with approximately
$1,060,000 in cash.
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The Company financed its activities by net proceeds of $1,105,215
from the issuance of Preferred Stock, $137,644 from the issuance of
Common Stock, and $50,000 from the collection on its stock subscription
receivable during the six months ended March 31, 1997 compared to $50,000
in proceeds from common stock issuances during the six months ended March
31, 1996.
Cash decreased during the six months ended March 31, 1997 by $92,349
compared to a decrease of $50,443 for the comparable period of 1996.
These changes decreased the ending cash balance to $118,137 at March 31,
1997 from $210,486 at September 30, 1996. The 1996 changes decreased the
September 30, 1995 balance of $175,752 to $125,309 at March 31, 1996.
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PAGE 14
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. None.
Item 5. Other Information.
On March 31, 1997 Rentech, Inc. and Texaco Group Inc. signed a
Letter of Intent.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. None
(b) Form 8-K dated January 30, 1997 reporting under Item 5 an
extension of the contract to purchase Okon, Inc.
(c) Form 8-K dated February 19, 1997 reporting under Item 5 an
agreement with VenGua ("Raleigh"), Inc. to assist the
Company in raising funds to complete two pending
acquisitions, Okon and ITN, LLC.
(d) Form 8-K dated February 21, 1997 reporting under Item 5
reporting start of the commercial test phase of the
Company's development of its Thermal Heat Engine in
cooperation with ITN Energy Systems, Inc.
(e) Form 8-K dated April 3, 1997 reporting under Item 2 the
acquisition of Okon, Inc. and under Item 9 the sale of
130,000 shares of Preferred Stock.
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PAGE 15
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: May 15, 1997 By: (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
Statement of Financial Condition at March 31, 1997 (Unaudited) and the
Statement of Income for the Six Months Ended March 31, 1997 (Unaudited)
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Sep-30-1997
<PERIOD-START> Oct-01-1996
<PERIOD-END> Mar-31-1997
<CASH> 118,137
<SECURITIES> 0
<RECEIVABLES> 303,024
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 517,781
<PP&E> 246,174
<DEPRECIATION> (107,010)
<TOTAL-ASSETS> 4,577,501
<CURRENT-LIABILITIES> 245,999
<BONDS> 0
0
1,300,000
<COMMON> 167,053
<OTHER-SE> 2,564,449
<TOTAL-LIABILITY-AND-EQUITY> 4,031,502
<SALES> 109,817
<TOTAL-REVENUES> 109,817
<CGS> 37,811
<TOTAL-COSTS> 37,811
<OTHER-EXPENSES> 620,910
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 123
<INCOME-PRETAX> (547,533)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (547,533)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
