SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of
Report: July 3, 1996
(Date of earliest event reported)
GLOBAL SPILL MANAGEMENT, INC.
Exact name of registrant as specified in its charter
Nevada 0-20317 88-0270266
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State of other jurisdiction of Commission File No. I.R.S. Employer
incorporation or organization ID No.
37-61 39th Street, Long Island City, New York 11101
(Address of principal executive offices)
Registrants telephone number, including area code: (718) 482-7878
27 Wells Road, Parker Ford, Pennsylvania 19457
(Former name or former address if changed since last report)
<PAGE>
Item 1. Changes in Control of the Registrant
On July 3, 1996 as of June 28, 1996, as a direct result of the
transactions referred to in Item 2 hereof, Karl Schwab, principal
shareholder of Begonia Corp., became a "control person" of the
Registrant as that term is defined in the Securities Act of 1933, as
amended. Mr. Schwab's status as a control person arises from the
issuance of 4,000,000 shares of the Registrants Common Stock
(approximately 56% of the total issued and outstanding Common
Shares) to Begonia Corp. Additionally with the consummation of the
transactions referred to in Item 2, Coy Eklund and Carleton D. Burtt
resigned as directors of the Registrant. Karl Schwab and Roger A.
Imperial were appointed directors in their please and stead.
Additionally, Mr. Schwab was appointed President and Chairman of the
Board of the Registrant.
Mr. Schwab has been President of Phoenix Wrecking Corp.
("Phoenix") since its inception in 1988. Prior thereto he was President
of Cayuga Wrecking. Mr. Imperial is an executive with Accordia
Northeast/New York Region. Mr. Imperial is a graduate of St. John's
University and St. John's School of Law, he has served on the Board of
Trustees of the New Jersey Highway Authority and as special counsel to
the Governor of New York to Joint Legislation Committee on States
Regulation. He also serves as a member of the Board of Trustees of
Catholic Charities of New York City.
Item 2. Acquisition and Deposition of Assets
On July 3, 1996 as of June 28, 1996, the Registrant, pursuant to
unanimous vote of the Board of Directors, acquired, in exchange for
6,000,000 Shares of its Common Stock, all of the issued and outstanding
Common Shares of Phoenix from the latter's existing Shareholders.
While Phoenix had more than five shareholders, two-thirds of the shares
were owned by Begonia Corp., a corporation in which Karl A. Schwab
is the principal shareholder and sole director. None of the other the
shareholders of Phoenix were affiliated with Begonia and/or Mr.
Schwab nor were any one of them officers, directors or employees of
Phoenix. Moreover, none of the ten other Shareholders became, as a
result of the aforementioned exchange of stock, owners of record or
beneficially of 5% or more of the issued and outstanding capital shares
of the registrant. In order to consummate the transaction the Registrant,
pursuant to shareholder consent, amended its Certificate of Incorporation
so as to increase its authorized common shares from 1,333,333 to
25,000,000.
<PAGE>
Phoenix is a solid waste management, environmental abatement
and specialty contracting company focusing on, site and facility
remediation. Its services include:
Solid Waste Management -- Transfer, resource recovery,
transportation, disposal of non-hazardous waste and demolition
of residential and commercial facilities.
Industrial Demolition, Dismantling and Abatement --
Demolition and/or dismantling of facilities or structures
including oil refineries, thermal cracking units, bridges, chemical
plants and other industrial and commercial facilities. Included in
such endeavors are the draining of liquid wastes, asbestos
removal, lead paint removal and removal and disposal or sale of
equipment and scrap materials.
Hazardous Waste Services -- On-site treatment, containment,
incineration and excavation and removal.
The above described services may be used individually or in
combination designed to meet the specific needs of its customer.
Phoenix's staff is divided into two departments: demolition and
environmental abatement. The demolition department combines top-
notch operators and engineers experienced in all phases of commercial
and industrial wrecking, while the abatement department consists of
licensed, certified professionals specifically trained in the removal of
asbestos and other hazardous waste, in strict accordance with local, state
and federal regulations.
Industrial Demolition, Dismantling and Abatement Services
Demolition and dismantling projects result from a myriad of
reasons including obsolescence of facility, retooling, fire, consolidation
of operations and relocation. In addition, site remediation., particularly
in the case of environmental contamination of a site, frequently requires
demolition or dismantling of a contaminated facility.
Dismantling is the precise disassembly of a manufacturing or
production facility on a piece-by-piece basis in order to recover
equipment as complete operating units in order to recover equipment as
complete operating units capable of reinstallation. Demolition is the
precise science of destruction of facilities in defined areas. The
Company's engineers are pioneers in the advanced technology of
implosion - the inward burst of an exploding substance to demolish a
structure. Certain demolition projects also require the removal of
asbestos and other hazardous wastes as well as their cleanup and
removal.
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Hazardous Waste Services
On-site remediation involves treating hazardous materials at the
customer's site or the excavation and removal thereof. Excavation and
removal involves the excavation of contaminated materials for
containment, on-site treatment or off-site disposal. As part of its quality
control, the Company regularly monitors excavated materials to verify
consistency with contaminants identified in the remediation plan.
The Stock Purchase Agreement between the Registrant and the
Shareholders of Phoenix contains mutual representation and warranties
regarding the asset, liabilities and operations of both corporations.
These warranties survived the closing.
The transactions described above was at arms-length. No
relationship or association existed between any of the shareholders of
Phoenix and any officers, directors or control persons of the Registrant.
As a condition of the Stock Purchase Agreement, the Registrant
agreed to:
(i) Amend its Certificate of Incorporation so as to increase
the authorized common shares from 1,333,333 to 25,000,000; and
(ii) dispose of all of its subsidiaries except for Environmental
Disposal Option Corporation ("EDOC") on or before June 28, 1996.
The Registrant further represented its liabilities after the sale of
all of its subsidiaries, except EDOC, would not exceed $150,000 and
that no warrants, rights or offerings of any kind, nature or description
would, as of June 28, 1996, be issued and outstanding.
On June 28, 1996, the Registrant, in combination with Meridian
Bank, its principal lender, disposed of all of its subsidiaries except
EDOC. As a result of such disposition, the obligations to Meridian
Bank was satisfied in full as were all notes issued by the Registrant in
connection with the acquisition of said subsidiaries. Moreover, all
liabilities except for $150,000 in sundry payables were satisfied in full.
Item 7. Financial Statement and Exhibits
(a) to be filed by Amendment on or before August 30, 1996;
(b) Pro Forma Financial Information
<PAGE>
The following unaudited pro forma condensed consolidated
financial statements are filed with this report:
Phoenix Wrecking Corporation's Unaudited
Balance Sheet as of March 31, 1996 Page F-1
Phoenix Wrecking Corporation's Unaudited
Statement of Earnings for Nine Months ended
March 31, 1995 Page F-2
Notes to Financial Statements Page F-3
All other Pro Forma Financials will be filed by amendment not
later than 8/30/96.
The Registrant will file the pro forma consolidated financial
statement of the Registrant reflecting the financial position of the
Registrant after giving effect to the acquisition of Phoenix and the sale
of the subsidiaries of the Registrant discussed in Item 2. The Registrant
intends on filing the pro forma information as soon as practicable but in
no event later than the 60 days from the date hereof.
The unaudited financial statements of Phoenix are included
herein for illustrative purposes only and are not necessarily indicative of
the future financial position of future results of operations of the
Registrant.
(c) Exhibits
No. Description
2.1 Stock Purchase and Exchange Agreement dated June 27, 1996 by and
among Registrant and Shareholders of Phoenix. (Registrant hereby
agrees to furnish supplementary to the Securities and Exchange
Commission upon request a copy of any omitted Schedule referred in
the Agreement)
2.2 Certificate to change number of authorized shares of Common Stock
(pursuant to Section 78.207 of the General Corporation Law of the
State of Nevada) dated June 28, 1996 filed July 3, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Global Spill Management, Inc.
Date: July 10, 1996 By: /s/ Karl Scwab
Karl Schwab, President and
Chairman of the Board
<PAGE>
PHOENIX WRECKING CORPORATION
PRO FORMA
STATEMENT OF INCOME & RETAINED EARNINGS
9 - MONTHS ENDING 3/31/95
REVENUE $ 8,247,631
LESS:
Cost of Revenue $ 6,324,638
GROSS PROFIT $ 1,922,993
General & Admins. Expense $ 1,126,392
INCOME BEFORE TAXES $ 796,601
Provision For Income Taxes $ -262,454
NET INCOME $ 534,147
Retained Earnings 6/30/95 $ 4,588,128
Retained Earnings 3/31/96 $ 5,122,275
<PAGE>
PHOENIX WRECKING CORPORATION
PRO-FORMA
BALANCE SHEET
MARCH 31, 1996
ASSETS
Current Assets:
Cash 36,768
Accounts Receivable, net allowance
for doubtful accounts of $108,624 2,063,872
Inventory (See Note) 383,000
Unbilled Receivables (See Note) 513,000
Total Current Assets 2,996,640
Fixed Assets:
Land & Building (See Note) 540,000
Machinery & Equipment (Net of Depreciation) 1,031,452
Equipment under Capital Lease 295,457
Small Tools 165,325
Total Fixed Assets 2,032,234
Notes Receivable (See Note) 1,920,000
Prepaid Rent (See Note) 1,413,999
TOTAL ASSETS 8,362,873
<PAGE>
PHOENIX WRECKING CORPORATION
PRO-FORMA
BALANCE SHEET
MARCH 31, 1996
ASSETS
Current Assets:
Cash $ 36,768
Accounts Receivable, net of allowance
for doubtful accounts of $ 108,624 2,063,872
Inventory (See Note) 383,000
Unbilled Receivables (See Note) 513,000
Total Current Assets $ 2,996,640
Fixed Assets:
Land & Building (See Note) $ 540,000
Machinery & Equip't (Net of Depreciation) 1,031,452
Equip't under Capital Lease 295,457
Small Tools 165,325
Total Fixed Assets $ 2,032,234
Notes Receivable (See Note) $ 1,920,000
Prepaid Rent (See Note) 1,413,999
TOTAL ASSETS $ 8,362,873
LIABILITIES & STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts Payable - Trade $ 457,750
Notes Payable 328,620
Leases Payable 185,762
Corporate Income Tax Payable 262,454
Payroll Taxes 527,650
Total Liabilities $ 1,762,236
Subordinate Debt / Begonia Corp (See Note) $ 1,128,362
STOCKHOLDER'S EQUITY:
Capital Stock $ 350,000
Retained Earnings 5,122,275
Total Stockholder's Equity $ 5,472,275
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ 8,362,873
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1: INVENTORY CONSISTS OF:
Railroad ties, rails and scrap valued at $450,000 less $127,000 owed to
New York City Transit Authority plus gravel and sundry salvaged items
valued at $60,000.
COSTS OF REVENUE:
Beginning Inventory $ 225,000
Labor, Supplies and
Equipment Rental $ 6,482,638
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$ 6,707,638
LESS:
Ending Inventory $ 383,000
TOTAL $ 6,324,638
NOTE 2: UNBILLED RECEIVABLES:
Company incurs payroll and related expenses on contracts prior to
billing customers. Management estimates this to be $513,000.
NOTE 3: LAND & BUILDING
Phoenix acquired a property in Hamtramck, Mich., previously owned by
"Cook Family Foods, Ltd." the property consists of 124,146 square feet
or 2.85 Acres +. The improvements on the property includes two
buildings, one built in 1948 of 72,000 sq. ft., and one built in 1991 of
18,800 sq. ft. The Property is paved and fenced by Chain Link fencing.
The zoning is "M H Heavy Manufacturing", City of Hamtramck, Mich.,
48212, located at 8800 Conant & 3827 Oliver. And is located in close
proximity to I-75 and I-94. The property was acquired by "Phoenix" on
March 3, 1994 in exchange for the company's providing remedial
services to Cook Family Foods, Ltd., which cost PWC $40,000. An
additional investment of approximately $500,000 required to remedy
environmental problems on the property.
<PAGE>
NOTE 4: NOTES RECEIVABLE:
The company has lent or taken for work performed, notes from three
companies that management is confident of collection. The notes
mature in 3 years from January 1, 1996 and bear an interest rate of 10%
per annum. The notes are Interest-Only during the term, paid semi-
annually in arrears. The principal is due at the end of the 3-year period
but can be paid earlier at the debtors option.
NOTE 5: PREPAID RENT
The National Railroad Passenger Association, (AMTRAK), entered into
an agreement with the company in October, 1993 wherein they agreed to
exchange remedial services for prepaid rent credit through October 1,
1999. The Authority valued this rent at $404,000.00 per year. The
property is comprised of 8 acres located at 37-61 39th Street, Long
Island City, New York, 11101. The property is at the foot of the 59th
Street Bridge and has a 6,000-foot office building on the premises.
NOTE 6: SUBORDINATED DEBT - BEGONIA CORP.
The Begonia Corporation has loaned Phoenix Wrecking Corporation
$1,128,362 on a subordinated basis as of March 31, 1996.
The 3-year note is payable Interest-Only in arrears annually. The note is
dated August 10, 1995. The entire principal is due in August, 1998
