<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 23, 1999
---------------
OMEGA ENVIRONMENTAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Commission File Number 0-20267
DELAWARE 91-1499751
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
550 KIRKLAND WAY, SUITE 200, KIRKLAND, WASHINGTON 98033
PO BOX 3005 BOTHELL, WASHINGTON 98041-3005
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
425-739-2072
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
- -------------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Since May 2, 1997, Registrant is operating under the protection of
the United States Bankruptcy Code as a debtor-in-possession.
ITEM 5. OTHER EVENTS
UNAUDITED FINANCIAL STATEMENT INFORMATION
On August 23, 1999, the Registrant filed unaudited financial
statement information as of and for each of the months ended June
30, 1999 and May 31, 1999 with related notes with the United
States Bankruptcy Court. Attached as an exhibit is the balance
sheet information, statement of operations information, statement
of cash flows information and related notes to financial statement
information which was included in the bankruptcy filing referred
to above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
c) EXHIBITS
99.1 Unaudited Comparative Balance Sheet Information,
Comparative Statement of Operations Information and
Comparative Statement of Cash Flow Information as of and
for each of the months ended June 30, 1999 and May 31,
1999 with related Notes to Financial Statement
Information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OMEGA ENVIRONMENTAL, INC.
(Registrant)
Date: August 23, 1999 /s/ Donald E. Condit
-----------------------------------------
Donald E. Condit
Chief Financial Officer
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
Debtor In Possession Case #97-06084
Comparative Balance Sheet Information
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JUNE 30, 1999 MAY 31, 1999 JUNE 30, 1999 MAY 31, 1999
ESD ESD CHANGE CORPORATE CORPORATE CHANGE
------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 27,425 - 27,425 133,606 28,488 105,118
Restricted cash held in escrow 2,752,067 2,749,612 2,455 -
Accounts receivable
A/R--trade 11,486,800 10,824,022 662,778 - - -
A/R--interco - - - - - -
A/R--employees 12,464 5,850 6,614 - - -
A/R--supplemental 1,261,071 1,367,675 (106,604) -
A/R--misc. 11,579 11,005 574 1,554,094 1,274,094 280,000
Allowance for doubtful accounts (1,797,900) (1,900,887) 102,987 (1,076,094) (1,076,094) -
------------------------------------------ ----------------------------------------
Accounts receivable, net 10,974,014 10,307,665 666,349 478,000 198,000 280,000
------------------------------------------ ----------------------------------------
Costs and earnings in excess of billings 4,994,450 5,384,009 (389,559) -
Prepaid expenses 54,125 70,418 (16,293) 239,187 310,176 (70,989)
Other current assets - -
------------------------------------------ ----------------------------------------
TOTAL CURRENT ASSETS 18,802,081 18,511,704 290,377 850,793 536,664 314,129
------------------------------------------ ----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,504,303 2,497,448 6,855 - - -
Automotive equipment 974,407 1,116,385 (141,978) - - -
Office furniture and equipment 989,641 976,124 13,517 34,872 34,872 -
Leasehold improvements 107,729 107,729 - - - -
------------------------------------------ ----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,576,080 4,697,686 (121,606) 34,872 34,872 -
Accum. Depreciation (3,491,981) (3,607,596) 115,615 (33,920) (33,779) (141)
------------------------------------------ ----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,084,099 1,090,090 (5,991) 952 1,093 (141)
------------------------------------------ ----------------------------------------
Long-term accounts receivable - Other (Texas) - 2,426 (2,426) - - -
Reserve for Long-term accounts receivable - -
------------------------------------------ ----------------------------------------
Long-term accounts receivable - Other
(Texas), net - 2,426 (2,426) - - -
Other Assets 125,849 127,449 (1,600) 41,622 41,622 -
Investment & Intercompany in Subsidiaries - 74,375,431 74,375,431 -
------------------------------------------ ----------------------------------------
TOTAL ASSETS 20,012,029 19,731,669 280,360 75,268,798 74,954,810 313,988
========================================== ========================================
POST PETITION CURRENT LIABILITIES
Accounts payable 537,694 575,103 (37,409) 31,697 28,663 3,034
Line of Credit 24,100,477 23,547,852 552,625
Accrued expenses, excluding bankruptcy costs 722,751 707,204 15,547 12,306 12,306 -
Accrued bankruptcy costs 1,105,873 996,926 108,947
Estimated claims against cash held in escrow 2,590,569 2,588,114 2,455 - - -
Intercompany - BNYFC 7,430,958 6,976,147 454,811 (17,645,804) (17,196,722) (449,082)
Intercompany payables - - - -
------------------------------------------ ----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 11,281,972 10,846,568 435,404 7,604,549 7,389,025 215,524
Intercompany Notes Payable 9,202,397 9,202,397 - -
Pre Petition Accounts Payable Preference
Payments - 145,142 145,142
Pre Petition Liabilities 969,759 969,759 - 2,637,103 2,637,103 -
Pre Petition Estimated Construction Claims - -
------------------------------------------ ----------------------------------------
TOTAL LIABILITIES 21,454,128 21,018,724 435,404 10,386,794 10,026,128 360,666
------------------------------------------ ----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 121,289 121,289 -
Additional paid in capital 14,557,677 14,557,677 - 128,204,630 128,204,630 -
Treasury Stock A-P-I-C (562,506) (562,506) -
Retained earnings - prior (11,012,975) (11,012,975) - (49,321,103) (49,321,103) -
Y-T-D net income pre petition (8,531) (8,531) - (895,498) (895,498) -
Y-T-D net income post petition (4,978,270) (4,823,226) (155,044) (12,664,808) (12,618,130) (46,678)
------------------------------------------ ----------------------------------------
TOTAL SHAREHOLDERS' EQUITY (1,442,099) (1,287,055) (155,044) 64,882,004 64,928,682 (46,678)
------------------------------------------ ----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 20,012,029 19,731,669 280,360 75,268,798 74,954,810 313,988
========================================== ========================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
Debtor In Possession Case #97-06084
Comparative Balance Sheet Information
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JUNE 30, 1999 MAY 31, 1999 JUNE 30, 1999 MAY 31, 1999
CONTINUING CONTINUING DISCONTINUED DISCONTINUED
OPERATIONS OPERATIONS CHANGE OPERATIONS OPERATIONS CHANGE
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 161,031 28,488 132,543 - 52,927 (52,927)
Restricted cash held in escrow 2,752,067 2,749,612 2,455 -
Accounts receivable
A/R--trade 11,486,800 10,824,022 662,778 3,814,327 3,815,152 (825)
A/R--interco - - - - - -
A/R--employees 12,464 5,850 6,614 -
A/R--supplemental 1,261,071 1,367,675 (106,604) -
A/R--misc. 1,565,673 1,285,099 280,574 - - -
Allowance for doubtful accounts (2,873,994) (2,976,981) 102,987 (2,919,415) (2,915,738) (3,677)
---------------------------------------- ----------------------------------------
Accounts receivable, net 11,452,014 10,505,665 946,349 894,912 899,414 (4,502)
---------------------------------------- ----------------------------------------
Costs and earnings in excess of billings 4,994,450 5,384,009 (389,559) -
Prepaid expenses 293,312 380,594 (87,282) 2,800 2,800 -
Other current assets - - - - - -
---------------------------------------- ----------------------------------------
TOTAL CURRENT ASSETS 19,652,874 19,048,368 604,506 897,712 955,141 (57,429)
---------------------------------------- ----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,504,303 2,497,448 6,855 1,000 1,000 -
Automotive equipment 974,407 1,116,385 (141,978) - - -
Office furniture and equipment 1,024,513 1,010,996 13,517 - - -
Leasehold improvements 107,729 107,729 - - - -
---------------------------------------- ----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,610,952 4,732,558 (121,606) 1,000 1,000 -
Accum. Depreciation (3,525,901) (3,641,375) 115,474 - - -
---------------------------------------- ----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,085,051 1,091,183 (6,132) 1,000 1,000 -
---------------------------------------- ----------------------------------------
Long-term accounts receivable - Other (Texas) - 2,426 (2,426) - - -
Reserve for Long-term accounts receivable - - - -
---------------------------------------- ----------------------------------------
Long-term accounts receivable - Other
(Texas), net - 2,426 (2,426) - - -
Other Assets 167,471 169,071 (1,600) - - -
Investment & Intercompany in Subsidiaries 74,375,431 74,375,431 - -
---------------------------------------- ----------------------------------------
TOTAL ASSETS 95,280,827 94,686,479 594,348 898,712 956,141 (57,429)
======================================== ========================================
POST PETITION CURRENT LIABILITIES
Accounts payable 569,391 603,766 (34,375) 60,109 8,314 51,795
Line of Credit 24,100,477 23,547,852 552,625
Accrued expenses, excluding bankruptcy costs 735,057 719,510 15,547 9,579 9,579 -
Accrued bankruptcy costs 1,105,873 996,926 108,947
Estimated claims against cash held in escrow 2,590,569 2,588,114 2,455
Intercompany - BNYFC (10,214,846) (10,220,575) 5,729 10,214,846 10,220,575 (5,729)
Intercompany payables - - - - - -
---------------------------------------- ----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 18,886,521 18,235,593 650,928 10,284,534 10,238,468 46,066
Intercompany Notes Payable 9,202,397 9,202,397 - 2,074,827 2,074,827 -
Pre Petition Accounts Payable Preference
Payments 145,142 - 145,142 - - -
Pre Petition Liabilities 3,606,862 3,606,862 - 12,168,899 12,168,899 -
Pre Petition Estimated Construction Claims - - - 2,000,000 2,000,000 -
---------------------------------------- ----------------------------------------
TOTAL LIABILITIES 31,840,922 31,044,852 796,070 26,528,260 26,482,194 46,066
---------------------------------------- ----------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 121,289 121,289 - 5,454,120 5,454,120 -
Additional paid in capital 142,762,307 142,762,307 - 39,347,007 39,347,007 -
Treasury Stock A-P-I-C (562,506) (562,506) - - - -
Retained earnings - prior (60,334,078) (60,334,078) - (51,671,367) (51,671,367) -
Y-T-D net income pre petition (904,029) (904,029) - (941,907) (941,907) -
Y-T-D net income post petition (17,643,078) (17,441,356) (201,722) (17,817,401) (17,713,906) (103,495)
---------------------------------------- ----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 63,439,905 63,641,627 (201,722) (25,629,548) (25,526,053) (103,495)
---------------------------------------- ----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 95,280,827 94,686,479 594,348 898,712 956,141 (57,429)
======================================== ========================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
Debtor In Possession Case #97-06084
Comparative Balance Sheet Information
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
JUNE 30, 1999 MAY 31, 1999
COMBINED COMBINED
FINAL FINAL CHANGE
------------------------------------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash 161,031 81,415 79,616
Restricted cash held in escrow 2,752,067 2,749,612 2,455
Accounts receivable
A/R--trade 15,301,127 14,639,174 661,953
A/R--interco - - -
A/R--employees 12,464 5,850 6,614
A/R--supplemental 1,261,071 1,367,675 (106,604)
A/R--misc. 1,565,673 1,285,099 280,574
Allowance for doubtful accounts (5,793,409) (5,892,719) 99,310
------------------------------------------
Accounts receivable, net 12,346,926 11,405,079 941,847
------------------------------------------
Costs and earnings in excess of billings 4,994,450 5,384,009 (389,559)
Prepaid expenses 296,112 383,394 (87,282)
Other current assets - - -
------------------------------------------
TOTAL CURRENT ASSETS 20,550,586 20,003,509 547,077
------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,505,303 2,498,448 6,855
Automotive equipment 974,407 1,116,385 (141,978)
Office furniture and equipment 1,024,513 1,010,996 13,517
Leasehold improvements 107,729 107,729 -
------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,611,952 4,733,558 (121,606)
Accum. Depreciation (3,525,901) (3,641,375) 115,474
------------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,086,051 1,092,183 (6,132)
------------------------------------------
Long-term accounts receivable - Other (Texas) - 2,426 (2,426)
Reserve for Long-term accounts receivable - - -
------------------------------------------
Long-term accounts receivable - Other (Texas), net - 2,426 (2,426)
Other Assets 167,471 169,071 (1,600)
Investment & Intercompany in Subsidiaries 0 0 -
------------------------------------------
TOTAL ASSETS 21,804,108 21,267,189 536,919
==========================================
POST PETITION CURRENT LIABILITIES
Accounts payable 629,500 612,080 17,420
Line of Credit 24,100,477 23,547,852 552,625
Accrued expenses, excluding bankruptcy costs 744,636 729,089 15,547
Accrued bankruptcy costs 1,105,873 996,926 108,947
Estimated claims against cash held in escrow 2,590,569 2,588,114 2,455
Intercompany - BNYFC - - -
Intercompany payables - - -
------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 29,171,055 28,474,061 696,994
Intercompany Notes Payable - - -
Pre Petition Accounts Payable Preference Payments 145,142 - 145,142
Pre Petition Liabilities 15,775,761 15,775,761 -
Pre Petition Estimated Construction Claims 2,000,000 2,000,000 -
------------------------------------------
TOTAL LIABILITIES 47,091,958 46,249,822 842,136
------------------------------------------
SHAREHOLDERS' EQUITY
Common stock at par 121,289 121,289 -
Additional paid in capital 124,465,227 124,465,227 -
Treasury Stock A-P-I-C (562,506) (562,506) -
Retained earnings - prior (112,005,445) (112,005,445) -
Y-T-D net income pre petition (1,845,936) (1,845,936) -
Y-T-D net income post petition (35,460,479) (35,155,262) (305,217)
------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (25,287,850) (24,982,633) (305,217)
------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,804,108 21,267,189 536,919
==========================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
Debtor In Possession Case #97-06084
Comparative Statement of
Operations Information
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED MONTH ENDED MONTH ENDED
JUNE 30, 1999 MAY 31, 1999 JUNE 30, 1999 MAY 31, 1999
ESD ESD CHANGE CORPORATE CORPORATE CHANGE
------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,271,321 1,321,330 (50,009) - - -
Cost of Sales 974,659 906,237 68,422 - - -
------------------------------------------ ----------------------------------------
Gross Profit 296,662 415,093 (118,431) - - -
Selling, General, and Administrative 415,914 351,794 64,120 85,098 81,200 3,898
------------------------------------------ ----------------------------------------
Income (Loss) From Operations (119,252) 63,299 (182,551) (85,098) (81,200) (3,898)
Other Income (Expense):
I/C Interest Income (Expense) (63,829) (63,217) (612) 63,829 63,217 612
Interest Expense (3) (4) 1 (203,276) (206,473) 3,197
Interest Income - - - -
Gain (loss) on Asset Disposition 26,649 500 26,149 - - -
Other Expense 1,391 - 1,391 280,000 50,000 230,000
------------------------------------------ ----------------------------------------
Total Other (Expense) (35,792) (62,721) 26,929 140,553 (93,256) 233,809
Net Income (Loss) Before Bankruptcy
Administrative Expenses (155,044) 578 (155,622) 55,455 (174,456) 229,911
Bankruptcy Administrative Expenses (102,133) (108,551) 6,418
------------------------------------------ ----------------------------------------
Net Income (Loss) (155,044) 578 (155,622) (46,678) (283,007) 236,329
========================================== ========================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
Debtor In Possession Case #97-06084
Comparative Statement of
Operations Information
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED MONTH ENDED MONTH ENDED
JUNE 30, 1999 MAY 31, 1999 JUNE 30, 1999 MAY 31, 1999
CONTINUING CONTINUING DISCONTINUED DISCONTINUED
OPERATIONS OPERATIONS CHANGE OPERATIONS OPERATIONS CHANGE
----------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,271,321 1,321,330 (50,009) 0 0 0
Cost of Sales 974,659 906,237 68,422 0 0 0
----------------------------------------- ------------------------------------------
Gross Profit 296,662 415,093 (118,431) 0 0 0
Selling, General, and Administrative 501,012 432,994 68,018 0 0 0
----------------------------------------- ------------------------------------------
Income (Loss) From Operations (204,350) (17,901) (186,449) 0 0 0
Other Income (Expense):
I/C Interest Income (Expense) 0 0 0 0 0 0
Interest Expense (203,279) (206,477) 3,198 0 0 0
Interest Income 0 0 0 0
Gain (loss) on Asset Disposition 26,649 500 26,149 - 0 0
Other Expense 281,391 50,000 231,391 (103,495) (1,661) (101,834)
----------------------------------------- ------------------------------------------
Total Other (Expense) 104,761 (155,977) 260,738 (103,495) (1,661) (101,834)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (99,589) (173,878) 74,289 (103,495) (1,661) (101,834)
Bankruptcy Administrative Expenses (102,133) (108,551) 6,418 0 0 0
----------------------------------------- ------------------------------------------
Net Income (Loss) (201,722) (282,429) 80,707 (103,495) (1,661) (101,834)
========================================= ==========================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
Debtor In Possession Case #97-06084
Comparative Statement of
Operations Information
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED
JUNE 30, 1999 MAY 31, 1999
COMBINED COMBINED
FINAL FINAL CHANGE
---------------------------------------------
Sales 1,271,321 1,321,330 (50,009)
Cost of Sales 974,659 906,237 68,422
---------------------------------------------
Gross Profit 296,662 415,093 (118,431)
Selling, General, and Administrative 501,012 432,994 68,018
---------------------------------------------
Income (Loss) From Operations (204,350) (17,901) (186,449)
Other Income (Expense):
I/C Interest Income (Expense) 0 0 0
Interest Expense (203,279) (206,477) 3,198
Interest Income 0 0 0
Gain (loss) on Asset Disposition 26,649 500 26,149
Other Expense 177,896 48,339 129,557
---------------------------------------------
Total Other (Expense) 1,266 (157,638) 158,904
Net Income (Loss) Before Bankruptcy
Administrative Expenses (203,084) (175,539) (27,545)
Bankruptcy Administrative Expenses (102,133) (108,551) 6,418
---------------------------------------------
Net Income (Loss) (305,217) (284,090) (21,127)
=============================================
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC. EXHIBIT 99.1
Debtor in Possession Case # 97 - 06084
COMPARATIVE COMBINED STATEMENT OF CASH FLOWS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED
JUNE 30, 1999 MAY 31, 1999 CHANGE
------------- ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($305,217) ($284,090) ($21,127)
Adjustments to reconcile net loss to net cash (used in) provided
by operating activities:
Depreciation 53,608 56,881 (3,273)
Write off of accounts receivable 2,426 0 2,426
(Gain) / Loss on sale of property and equipment (26,649) 0 (26,649)
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net (941,847) 524,399 (1,466,246)
Costs in excess of billings 389,559 257,054 132,505
Prepaids & other assets 87,282 (183,333) 270,615
Increase (decrease) in:
Accounts payable 17,420 (104,548) 121,968
Accrued expenses 124,494 (315,156) 439,650
Other net changes in assets and liabilities 1,600 (14,902) 16,502
------------- ----------- -----------
Total adjustments (292,107) 220,395 (512,502)
------------- ----------- -----------
Net cash provided by (used in) operating activities (597,324) (63,695) (533,629)
Cash flows from investing activities:
Proceeds from sale of equipment 0 0 0
Additions to property and equipment (20,827) (90,545) 69,718
------------- ----------- -----------
Net cash provided by (used in) investing activities (20,827) (90,545) 69,718
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan 552,625 77,635 474,990
(Reduction) Increase of pre-petition liabilities 145,142 0 145,142
------------- ----------- -----------
Net cash provided by (used in) financing activities 697,767 77,635 620,132
------------- ----------- -----------
Net increase (decrease) in cash 79,616 (76,605) 156,221
Cash at beginning of period 81,415 158,020 (76,605)
------------- ----------- -----------
Cash at end of period $161,031 $81,415 $79,616
============= =========== ===========
</TABLE>
See accompanying notes to financial statement information
<PAGE>
EXHIBIT 99.1
Omega Environmental, Inc.
Debtor in Possession Case # 97-06084
June 30, 1999 Financial Reporting Information
Notes to Financial Statement Information
Basis of Presentation
The financial statement information presented is unaudited and does not comply
with generally accepted accounting principles. Additionally, significant
estimates were used in the preparation of this financial statement information
and actual results may vary significantly from these estimates.
BNY Financial Corporation
As of June 30, 1999, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $23,547,852. Omega successfully renegotiated continuance of
debtor-in-possession financing through October 31, 1999.
Costs and Earnings in Excess of Billing
The asset, "Costs and earnings in excess of billings" recorded on the
Environmental Services Division's balance sheet, represents estimated revenues
recognized in excess of amounts billed using the percentage of completion method
of contract accounting. In the past, as projects were completed and billed
significant write-offs of this asset were recorded in excess of reserves
provided. Management believes that as a result of improvements in project
management and time charging practices no material write-offs in excess of the
normal allocated reserves will be required in the future.
Accounts Receivable
Accounts receivable recorded on the Environmental Services Division's balance
sheet are primarily due from various State reimbursement programs for clean up
of leaking underground storage tanks. The collection period for these
receivables frequently exceeds 180 days. Due to the significant amount of time
required to collect these receivables, management is continually analyzing the
collectability of these accounts and estimated bad debts may be significantly in
excess of established reserves. The results of this analysis are not complete at
this time due to the lengthy collection time frame, and any adjustment may have
a material adverse effect on the financial statements.
<PAGE>
Accounts receivable recorded on the Discontinued Operation's balance sheet
primarily represent amounts recorded as due from customers of the company's
discontinued construction business. The amounts ultimately collected by the
company will be significantly less than net recorded amounts in part because of
set-offs, liens, bonding issues and customer disputes which may result in
refusal to pay receivable amounts or require payment or set-off of pre-petition
liabilities and claims. The amount ultimately collectible is not determinable at
this time.
Accounts receivable recorded on the Corporate balance sheet of $478,000
represents funds held in escrow at Debtor's Bankruptcy Counsel as a result of
the Petroleum Services Division (PSD) Houston branch asset sale in December 1998
totaling $148,000. The funds are held in escrow pending determination of the
amount of the tax lien asserted by Texas tax authorities. $275,000 represents an
amount receivable from two different insurance lawsuit settlements. The balance,
$55,000 represents a receivable from an investment.
Pre-Petition Accounts Payable Preference Claims
Beginning in June 1999, Omega began collecting pre-petition preference receipts
which are accounted for on the long-term liabilities section of the Corporate
balance sheet. The total collected as of month end was $145,142.
