<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) September 9, 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 September 9, 1999, the Registrant filed unaudited financial
statement information as of and for each of the months ended July 31,
1999 and June 30, 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 July 31, 1999 and June 30, 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: September 9, 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)
JULY 31, 1999 JUNE 30, 1999 JULY 31, 1999 JUNE 30, 1999
ESD ESD CHANGE CORPORATE CORPORATE CHANGE
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 66,227 27,425 38,802 18,663 133,606 (114,943)
Restricted cash held in escrow 2,731,270 2,752,067 (20,797) -
Accounts receivable
A/R--trade 11,054,072 11,486,800 (432,728) - - -
A/R--interco - - - - - -
A/R--employees 5,501 12,464 (6,963) - - -
A/R--supplemental 1,261,071 1,261,071 - -
A/R--miscellaneous 11,579 11,579 - 1,554,094 1,554,094 -
Allowance for doubtful accounts (1,727,293) (1,797,900) 70,607 (1,076,094) (1,076,094) -
---------------------------------------- ----------------------------------------
Accounts receivable, net 10,604,930 10,974,014 (369,084) 478,000 478,000 -
---------------------------------------- ----------------------------------------
Costs and earnings in excess of billings 4,623,053 4,994,450 (371,397) -
Prepaid expenses 69,281 54,125 15,156 179,668 239,187 (59,519)
Other current assets - -
---------------------------------------- ----------------------------------------
TOTAL CURRENT ASSETS 18,094,761 18,802,081 (707,320) 676,331 850,793 (174,462)
---------------------------------------- ----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,452,411 2,504,303 (51,892) - - -
Automotive equipment 891,042 974,407 (83,365) - - -
Office furniture and equipment 994,579 989,641 4,938 34,872 34,872 -
Land, Building, and leasehold improvements 107,729 107,729 - - - -
---------------------------------------- ----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,445,761 4,576,080 (130,319) 34,872 34,872 -
Accum. Depreciation (3,415,782) (3,491,981) 76,199 (34,022) (33,920) (102)
---------------------------------------- ----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,029,979 1,084,099 (54,120) 850 952 (102)
---------------------------------------- ----------------------------------------
Other Assets 125,849 125,849 - 41,622 41,622 -
Investment & Intercompany in Subsidiaries - 74,375,431 74,375,431 -
---------------------------------------- ----------------------------------------
TOTAL ASSETS 19,250,589 20,012,029 (761,440) 75,094,234 75,268,798 (174,564)
---------------------------------------- ----------------------------------------
---------------------------------------- ----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 284,847 537,694 (252,847) 34,588 31,697 2,891
Line of Credit 24,002,111 24,100,477 (98,366)
Accrued expenses, excluding bankruptcy costs 654,227 722,751 (68,524) 12,306 12,306 -
Accrued bankruptcy costs 1,205,873 1,105,873 100,000
Estimated claims against cash held in escrow 2,499,851 2,590,569 (90,718) - - -
Intercompany - BNYFC 7,432,519 7,430,958 1,561 (17,613,707) (17,645,804) 32,097
Pre Petition Accounts Payable Preference
Payments - 277,653 145,142 132,511
---------------------------------------- ----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 10,871,444 11,281,972 (410,528) 7,918,824 7,749,691 169,133
Intercompany Notes Payable 6,956,599 9,202,397 (2,245,798) -
Pre Petition Liabilities 969,759 969,759 - 2,637,103 2,637,103 -
Pre Petition Estimated Construction Claims - -
---------------------------------------- ----------------------------------------
TOTAL LIABILITIES 18,797,802 21,454,128 (2,656,326) 10,555,927 10,386,794 169,133
---------------------------------------- ----------------------------------------
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 (9,028,340) (11,012,975) 1,984,635 (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 (5,068,019) (4,978,270) (89,749) (13,008,505) (12,664,808) (343,697)
---------------------------------------- ----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 452,787 (1,442,099) 1,894,886 64,538,307 64,882,004 (343,697)
---------------------------------------- ----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 19,250,589 20,012,029 (761,440) 75,094,234 75,268,798 (174,564)
---------------------------------------- ----------------------------------------
---------------------------------------- ----------------------------------------
</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)
JULY 31, 1999 JUNE 30, 1999 JULY 31, 1999 JUNE 30, 1999
CONTINUING CONTINUING DISCONTINUED DISCONTINUED
OPERATIONS OPERATIONS CHANGE OPERATIONS OPERATIONS CHANGE
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash 84,890 161,031 (76,141) - - -
Restricted cash held in escrow 2,731,270 2,752,067 (20,797) 20,861 - 20,861
Accounts receivable
A/R--trade 11,054,072 11,486,800 (432,728) 4,224,542 3,814,327 410,215
A/R--interco - - - - - -
A/R--employees 5,501 12,464 (6,963) -
A/R--supplemental 1,261,071 1,261,071 - -
A/R--miscellaneous 1,565,673 1,565,673 - - - -
Allowance for doubtful accounts (2,803,387) (2,873,994) 70,607 (3,044,355) (2,919,415) (124,940)
---------------------------------------- -----------------------------------------
Accounts receivable, net 11,082,930 11,452,014 (369,084) 1,180,187 894,912 285,275
---------------------------------------- -----------------------------------------
Costs and earnings in excess of billings 4,623,053 4,994,450 (371,397) -
Prepaid expenses 248,949 293,312 (44,363) 2,800 2,800 -
Other current assets - - - - - -
---------------------------------------- -----------------------------------------
TOTAL CURRENT ASSETS 18,771,092 19,652,874 (881,782) 1,203,848 897,712 306,136
---------------------------------------- -----------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,452,411 2,504,303 (51,892) 1,000 1,000 -
Automotive equipment 891,042 974,407 (83,365) - - -
Office furniture and equipment 1,029,451 1,024,513 4,938 - - -
Land, Building, and leasehold improvements 107,729 107,729 - - - -
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,480,633 4,610,952 (130,319) 1,000 1,000 -
Accum. Depreciation (3,449,804) (3,525,901) 76,097 - - -
---------------------------------------- -----------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,030,829 1,085,051 (54,222) 1,000 1,000 -
---------------------------------------- -----------------------------------------
Other Assets 167,471 167,471 - - - -
Investment & Intercompany in Subsidiaries 74,375,431 74,375,431 - -
---------------------------------------- -----------------------------------------
TOTAL ASSETS 94,344,823 95,280,827 (936,004) 1,204,848 898,712 306,136
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 319,435 569,391 (249,956) 58,851 60,109 (1,258)
Line of Credit 24,002,111 24,100,477 (98,366)
Accrued expenses, excluding bankruptcy costs 666,533 735,057 (68,524) 79,555 9,579 69,976
Accrued bankruptcy costs 1,205,873 1,105,873 100,000 -
Estimated claims against cash held in escrow 2,499,851 2,590,569 (90,718) 20,807
Intercompany - BNYFC (10,181,188) (10,214,846) 33,658 10,181,188 10,214,846 (33,658)
Pre Petition Accounts Payable Preference
Payments 277,653 145,142 132,511 -
---------------------------------------- -----------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 18,790,268 18,886,521 (241,395) 10,340,401 10,284,534 35,060
Intercompany Notes Payable 6,956,599 9,202,397 (2,245,798) 4,320,625 2,074,827 2,245,798
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 29,353,729 31,695,780 (2,487,193) 28,829,925 26,528,260 2,301,665
---------------------------------------- -----------------------------------------
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 (58,349,443) (60,334,078) 1,984,635 (53,656,003) (51,671,368) (1,984,635)
Y-T-D net income pre petition (904,029) (904,029) - (941,907) (941,907) -
Y-T-D net income post petition (18,076,524) (17,643,078) (433,446) (17,828,294) (17,817,405) (10,889)
---------------------------------------- -----------------------------------------
TOTAL SHAREHOLDERS' EQUITY 64,991,094 63,439,905 1,551,189 (27,625,077) (25,629,553) (1,995,524)
---------------------------------------- -----------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 94,344,823 95,280,827 (936,004) 1,204,848 898,712 306,136
---------------------------------------- -----------------------------------------
---------------------------------------- -----------------------------------------
</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)
JULY 31, 1999 JUNE 30, 1999
COMBINED COMBINED
FINAL FINAL CHANGE
------------------------------------------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash 84,890 161,031 (76,141)
Restricted cash held in escrow 2,752,131 2,752,067 64
Accounts receivable
A/R--trade 15,278,614 15,301,127 (22,513)
A/R--interco - - -
A/R--employees 5,501 12,464 (6,963)
A/R--supplemental 1,261,071 1,261,071 -
A/R--miscellaneous 1,565,673 1,565,673 -
Allowance for doubtful accounts (5,847,742) (5,793,409) (54,333)
------------------------------------------------
Accounts receivable, net 12,263,117 12,346,926 (83,809)
------------------------------------------------
Costs and earnings in excess of billings 4,623,053 4,994,450 (371,397)
Prepaid expenses 251,749 296,112 (44,363)
Other current assets - - -
------------------------------------------------
TOTAL CURRENT ASSETS 19,974,940 20,550,586 (575,646)
------------------------------------------------
PROPERTY AND EQUIPMENT
Field equipment 2,453,411 2,505,303 (51,892)
Automotive equipment 891,042 974,407 (83,365)
Office furniture and equipment 1,029,451 1,024,513 4,938
Land, Building, and leasehold improvements 107,729 107,729 -
------------------------------------------------
TOTAL PROPERTY & EQUIP., AT COST 4,481,633 4,611,952 (130,319)
Accum. Depreciation (3,449,804) (3,525,901) 76,097
------------------------------------------------
TOTAL PROPERTY & EQUIP., NET 1,031,829 1,086,051 (54,222)
------------------------------------------------
Other Assets 167,471 167,471 -
Investment & Intercompany in Subsidiaries 0 0 -
------------------------------------------------
TOTAL ASSETS 21,174,240 21,804,108 (629,868)
------------------------------------------------
------------------------------------------------
POST PETITION CURRENT LIABILITIES
Accounts payable 378,286 629,500 (251,214)
Line of Credit 24,002,111 24,100,477 (98,366)
Accrued expenses, excluding bankruptcy costs 746,088 744,641 1,447
Accrued bankruptcy costs 1,205,873 1,105,873 100,000
Estimated claims against cash held in escrow 2,520,658 2,590,569 (69,911)
Intercompany - BNYFC - - -
Pre Petition Accounts Payable Preference Payments 277,653 145,142 132,511
------------------------------------------------
TOTAL POST PETITION CURRENT LIABILITIES 29,130,669 29,316,202 (185,533)
Intercompany Notes Payable - - -
Pre Petition Liabilities 15,775,761 15,775,761 -
Pre Petition Estimated Construction Claims 2,000,000 2,000,000 -
------------------------------------------------
TOTAL LIABILITIES 46,906,430 47,091,963 (185,533)
------------------------------------------------
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 (112,005,446) (112,005,446) -
Y-T-D net income pre petition (1,845,936) (1,845,936) -
Y-T-D net income post petition (35,904,818) (35,460,483) (444,335)
------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (25,732,190) (25,287,855) (444,335)
------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 21,174,240 21,804,108 (629,868)
------------------------------------------------
------------------------------------------------
</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
JULY 31, 1999 JUNE 30, 1999 JULY 31, 1999 JUNE 30, 1999
ESD ESD CHANGE CORPORATE CORPORATE CHANGE
------------------------------------------ --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,151,924 1,271,321 (119,397) - - -
Cost of Sales 804,794 974,659 (169,865) - - -
------------------------------------------ --------------------------------------------
Gross Profit 347,130 296,662 50,468 - - -
Selling, General, and Administrative 405,068 415,914 (10,846) 94,884 85,098 9,786
------------------------------------------ --------------------------------------------
Income (Loss) From Operations (57,938) (119,252) 61,314 (94,884) (85,098) (9,786)
Other Income (Expense):
I/C Interest Income (Expense) (67,568) (63,829) (3,739) 67,568 63,829 3,739
Interest Expense - (3) 3 (216,381) (203,276) (13,105)
Interest Income - - - -
Gain (loss) on Asset Disposition 35,757 26,649 9,108 - - -
Other Expense - 1,391 (1,391) - 280,000 (280,000)
------------------------------------------ --------------------------------------------
Total Other (Expense) (31,811) (35,792) 3,981 (148,813) 140,553 (289,366)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (89,749) (155,044) 65,295 (243,697) 55,455 (299,152)
Bankruptcy Administrative Expenses (100,000) (102,133) 2,133
------------------------------------------ --------------------------------------------
Net Income (Loss) (89,749) (155,044) 65,295 (343,697) (46,678) (297,019)
------------------------------------------ --------------------------------------------
------------------------------------------ --------------------------------------------
</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
JULY 31, 1999 JUNE 30, 1999 JULY 31, 1999 JUNE 30, 1999
CONTINUING CONTINUING DISCONTINUED DISCONTINUED
OPERATIONS OPERATIONS CHANGE OPERATIONS OPERATIONS CHANGE
------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1,151,924 1,271,321 (119,397) 0 0 0
Cost of Sales 804,794 974,659 (169,865) 0 0 0
------------------------------------------- -------------------------------------------
Gross Profit 347,130 296,662 50,468 0 0 0
Selling, General, and Administrative 499,952 501,012 (1,060) 0 0 0
------------------------------------------- -------------------------------------------
Income (Loss) From Operations (152,822) (204,350) 51,528 0 0 0
Other Income (Expense):
I/C Interest Income (Expense) 0 0 0 0 0 0
Interest Expense (216,381) (203,279) (13,102) 0 0 0
Interest Income 0 0 0 0
Gain (loss) on Asset Disposition 35,757 26,649 9,108 - 0 0
Other Expense 0 281,391 (281,391) (10,889) (103,495) 92,606
------------------------------------------- -------------------------------------------
Total Other (Expense) (180,624) 104,761 (285,385) (10,889) (103,495) 92,606
Net Income (Loss) Before Bankruptcy
Administrative Expenses (333,446) (99,589) (233,857) (10,889) (103,495) 92,606
Bankruptcy Administrative Expenses (100,000) (102,133) 2,133 0 0 0
------------------------------------------- -------------------------------------------
Net Income (Loss) (433,446) (201,722) (231,724) (10,889) (103,495) 92,606
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
</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)
MONTH ENDED MONTH ENDED
JULY 31, 1999 JUNE 30, 1999
COMBINED COMBINED
FINAL FINAL CHANGE
----------------------------------------------
<S> <C> <C> <C>
Sales 1,151,924 1,271,321 (119,397)
Cost of Sales 804,794 974,659 (169,865)
-----------------------------------------------
Gross Profit 347,130 296,662 50,468
Selling, General, and Administrative 499,952 501,012 (1,060)
-----------------------------------------------
Income (Loss) From Operations (152,822) (204,350) 51,528
Other Income (Expense):
I/C Interest Income (Expense) 0 0 0
Interest Expense (216,381) (203,279) (13,102)
Interest Income 0 0 0
Gain (loss) on Asset Disposition 35,757 26,649 9,108
Other Expense (10,889) 177,896 (188,785)
-----------------------------------------------
Total Other (Expense) (191,513) 1,266 (192,779)
Net Income (Loss) Before Bankruptcy
Administrative Expenses (344,335) (203,084) (141,251)
Bankruptcy Administrative Expenses (100,000) (102,133) 2,133
-----------------------------------------------
Net Income (Loss) (444,335) (305,217) (139,118)
-----------------------------------------------
-----------------------------------------------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
OMEGA ENVIRONMENTAL, INC.
DEBTOR IN POSSESSION CASE #97-06084
COMPARATIVE COMBINED STATEMENT OF CASH FLOWS INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
MONTH ENDED MONTH ENDED
JULY 31, 1999 JUNE 30, 1999 CHANGE
------------- ------------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(444,335) $(305,217) $(139,118)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation 56,408 53,608 2,800
Write off of accounts receivable 2,426 (2,426)
(Gain)/Loss on sale of property and equipment (35,757) (26,649) (9,108)
Change in certain assets & liabilities:
(Increase) decrease in:
Receivables, net 83,809 (941,847) 1,025,656
Costs in excess of billings 371,397 389,559 (18,162)
Prepaids & other assets 44,363 87,282 (42,919)
Increase (decrease) in:
Accounts payable (251,214) 17,420 (268,634)
Accrued expenses 101,452 124,494 (23,042)
Other net changes in assets and liabilities (69,975) 1,600 (71,575)
------------- ------------- ----------
Total adjustments 300,483 (292,107) 592,590
------------- ------------- ----------
Net cash provided by (used in) operating activities (143,852) (597,324) 453,472
Cash flows from investing activities:
Proceeds from sale of equipment 36,734 0 36,734
Additions to property and equipment (3,168) (20,827) 17,659
------------- ------------- ----------
Net cash provided by (used in) investing activities 33,566 (20,827) 54,393
Cash flows from financing and other activities:
Net proceeds (repayments) from revolver credit loan (98,366) 687,818 (786,184)
Net proceeds from pre-petition preference payment recoveries 132,511 145,142 (12,631)
(Reduction) Increase of pre-petition liabilities 0 0 0
------------- ------------- ----------
Net cash provided by (used in) financing activities 34,145 832,960 (798,815)
------------- ------------- ----------
Net increase (decrease) in cash (76,141) 79,616 (290,950)
CASH AT BEGINNING OF PERIOD 161,031 81,415 79,616
------------- ------------- ----------
CASH AT END OF PERIOD $ 84,890 $ 161,031 $(211,334)
------------- ------------- ----------
------------- ------------- ----------
</TABLE>
See accompanying notes to financial statement information
<PAGE>
Omega Environmental, Inc.
Debtor in Possession Case #97-06084
July 31, 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 July 31, 1999, the Company's borrowings from BNY Financial Corporation
("BNYFC") were $24,002,111. Omega negotiated continuance of debtor-in-possession
financing through October 31, 1999.
Costs and Earnings in Excess of Billings
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.
During July 1999, a cash in escrow account and certain accounts receivables were
transferred from ESD to the Discontinued Operation's balance sheet totaling
$20,861 and $410,215, respectively.
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. These funds are held in escrow pending the final
determination of the amount of liens asserted by Texas tax authorities. $275,000
represents an amount receivable from two 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
recoveries which are accounted for in the long-term liabilities section of the
Corporate balance sheet. The total collected as of month end July was $277,653.
