SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________to________.
Commission File No. 0-23900
IDM ENVIRONMENTAL CORP.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
New Jersey 22-2194790
- --------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
396 Whitehead Avenue, South River, New Jersey 08882
---------------------------------------------------
(Address of principal executive offices)
(908) 390-9550
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act 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
----- -----
As of August 12, 1996, 8,968,067 shares of Common Stock of the issuer were
outstanding.
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
INDEX
Page
Number
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995................................................ 3
Consolidated Statements of Operations - For the six months
ended June 30, 1996 and June 30, 1995............................ 4
Consolidated Statements of Operations - For the three months
ended June 30, 1996 and June 30, 1995............................ 5
Consolidated Statements of Cash Flows - For the six months
ended June 30, 1996 and June 30, 1995............................ 6
Notes to Consolidated Financial Statements....................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................. 12
SIGNATURES................................................................. 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1996 1995
----------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 2,920,814 $ 83,286
Accounts receivable, net of
allowance for doubtful
accounts of $200,000 7,777,938 6,616,130
Notes receivable - current 1,804,113 1,596,559
Inventory 1,482,517 1,482,517
Costs and estimated earnings
in excess of billings 669,851 3,634,052
Prepaid expenses 628,812 710,706
Bonding deposits 500,000 883,163
Deferred income taxes 1,326,992 652,600
Recoverable income taxes 1,095,167 1,114,442
Due from officers 57,263 548,488
Other current assets 52,916 55,238
----------- ------------
Total Current Assets 18,316,383 17,377,181
----------- ------------
Notes Receivable - long term 1,596,559 1,596,559
Deferred Issuance Costs, net 49,237 506,586
Property, Plant and Equipment, net 2,943,696 2,547,406
----------- -----------
$22,905,875 $22,027,732
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 354,905 $ 327,974
Accounts payable and accrued expenses 5,017,295 5,836,510
Billings in excess of costs and
estimated earnings 194,032 919,575
----------- -----------
Total Current Liabilities 5,566,232 7,084,059
----------- -----------
Long-Term Debt 801,628 4,004,142
----------- -----------
Commitments and Contingencies
Stockholders' Equity:
Common stock, authorized 20,000,000
shares $.001 par value, issued
and outstanding 8,660,317 in 1996
and 5,783,334 in 1995 8,660 6,200
Additional paid-in capital 22,762,280 13,693,895
Retained earnings (deficit) (6,232,925) (2,760,564)
----------- -----------
16,538,015 10,939,531
----------- -----------
$22,905,875 $22,027,732
=========== ===========
The accompanying notes are an integral part of theses financial statements
3
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended June 30,
-----------------------------
1996 1995
----------- -----------
Revenue:
Sale of equipment $ 152,800 $ 979,548
Contract income 10,750,245 17,435,204
Sale of scrap 328,746 170,185
----------- -----------
11,231,791 18,584,937
----------- -----------
Cost of Sales:
Cost of equipment sales 72,844 388,054
Direct job costs 11,374,924 15,648,259
----------- -----------
11,447,768 16,036,313
----------- -----------
Gross Profit (loss) (215,977) 2,548,624
----------- -----------
Operating Expenses:
General and administrative expenses 3,590,010 3,736,485
Depreciation and amortization 382,245 225,924
----------- -----------
3,972,255 3,962,409
----------- -----------
Income (Loss) from Operations (4,188,232) (1,413,785)
Other Income (Expense):
Interest income(expense) 15,871 178,249
----------- -----------
Income (Loss) before Provision
(Credit) for Income Taxes (4,172,361) (1,235,536)
Provision (Credit) for Income Taxes (700,000) (490,000)
----------- -----------
Net Income (Loss) $(3,472,361) $ (745,536)
=========== ===========
Earnings (Loss) per Share:
Primary earnings (loss) per share $ (0.50) $ (0.13)
=========== ===========
Fully diluted earnings (loss) per share $ (0.50) $ (0.13)
=========== ===========
Primary common shares outstanding 7,006,780 5,783,334
=========== ===========
Fully diluted common shares outstanding 7,006,780 5,783,334
=========== ===========
The accompanying notes are an integral part of theses financial statements
4
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
---------------------------
1996 1995
----------- ----------
Revenue:
Sale of equipment $ 152,800 $ 465,757
Contract income 5,348,496 12,002,006
Sale of scrap 263,699 107,945
----------- -----------
5,764,995 12,575,708
----------- -----------
Cost of Sales:
Cost of equipment sales 72,844 167,767
Direct job costs 5,127,419 10,106,087
----------- -----------
5,200,263 10,273,854
----------- -----------
Gross Profit 564,732 2,301,854
----------- -----------
Operating Expenses:
General and administrative expenses 1,937,227 1,832,834
Depreciation and amortization 171,084 129,297
----------- -----------
2,108,311 1,962,131
----------- -----------
Income (Loss) from Operations (1,543,579) 339,723
Other Income (Expense):
Interest income(expense) 13,046 81,303
----------- -----------
Income (Loss) before Provision (Credit)
for Income Taxes (1,530,533) 421,026
Provision (Credit) for Income Taxes (260,000) 170,000
----------- -----------
Net Income (Loss) (1,270,533) $ 251,026
=========== ===========
Earnings (Loss) per Share:
Primary earnings (loss) per share $ (0.17) $ 0.04
=========== ===========
Fully diluted earnings (loss) per share $ (0.17) $ 0.04
=========== ===========
Primary common shares outstanding 7,372,627 5,783,334
=========== ===========
Fully diluted common shares outstanding 7,372,627 5,783,334
=========== ===========
The accompanying notes are an integral part of theses financial statements
5
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
---------------------------------
1996 1995
------------ ------------
Cash Flows from Operating Activities:
Net income (loss) $(3,472,361) $ (745,536)
Adjustments to reconcile net income
(loss) to net cash (used in) operating
activities:
Deferred Taxes (674,392) -
Depreciation and amortization 382,245 225,924
Decrease (Increase) In:
Accounts receivable (1,161,808) 402,971
Inventory - 318,590
Notes receivable (207,554) -
Costs and estimated earnings in
excess of billings 2,964,201 (2,691,985)
Prepaid expenses and other
current assets 81,894 (233,358)
Bonding deposits 383,163 529,682
Recoverable income taxes 19,275 14,037
Due from officers (179,355) -
Other current assets 2,322 -
Increase (Decrease) In:
Accounts payable and accrued
expenses (751,903) (1,643,561)
Billings in excess of costs and
estimated earnings (725,543) 611,572
Income taxes payable - (477,600)
----------- -----------
Net cash (used in) operating
activities (3,339,816) (3,689,264)
----------- -----------
Cash Flows from Investing Activities:
Acquisition of property, plant
and equipment (538,523) (474,361)
Increase (decrease) of officers loans - (129,048)
----------- -----------
Net cash (used in) investing
activities (538,523) (603,409)
----------- -----------
Cash Flows from Financing Activities:
Principal payments and current
maturities of long-term debt (197,521) (85,826)
Issuance of common stock upon exercise
of stock options and warrants 6,913,388 -
----------- -----------
Net cash provided by (used in)
financing activities 6,715,867 (85,826)
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 2,837,528 (4,378,499)
Cash and Cash Equivalents, beginning
of period 83,286 5,068,325
----------- -----------
Cash and Cash Equivalents, end of year $ 2,920,814 $ 689,826
=========== ===========
Supplementary Disclosures of Cash
Flow Information:
Cash paid during the year for:
Interest expense $ 24,833 $ 11,676
=========== ===========
Supplemental Disclosure of Noncash
Investing and Financing Activities:
Property, plant and equipment financing $ 163,605 $ 16,421
=========== ===========
Conversion of convertible promissory
notes to common stock $ 2,157,457 -
=========== ===========
The accompanying notes are an integral part of theses financial statements
6
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The interim consolidated financial statements are prepared pursuant to the
requirements for reporting on Form 10-Q. These statements include the
accounts of IDM Environmental Corp. and its majority owned subsidiary
companies. The December 31, 1995 balance sheet data was derived from
audited financial statements but does not include all disclosures required
by generally accepted accounting principles. The interim financial
statements and notes thereto should be read in conjunction with the
financial statements and notes included in the Company's Form 10-K for the
year ended December 31, 1995. In the opinion of management, the interim
financial statements reflect all adjustments of a normal recurring nature
necessary for a fair statement of the results for the interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full year
ending December 31, 1996.
2. On June 28, 1996 IDM granted to Arle L. Pierro a non qualified option for
50,000 shares of its Common Stock at $3.23125 per share pursuant to a
consulting agreement that expires on June 30, 1997.
3. On July 11, 1996, effective June 30, 1996, IDM entered into an exclusive
license agreement with LIFE INTERNATIONAL PRODUCTS (Life) pursuant to which
IDM shall market and employ Life's patented environmental remediation
technology for long term bioremediation of contaminated groundwater
throughout North America. IDM also acquired a ten percent interest in Life
for $1,250,000.
4. On July 19, 1996, IDM, through a newly formed 90% owned subsidiary,
Continental Waste Conversion International, Inc. ("International"), entered
into an agreement with Continental Waste Conversion, Inc. ("CWC") pursuant
to which International acquired, in exchange for a 10% interest in
International, the exclusive worldwide rights (excluding Canada) to the
proprietary Kocee Gas Generator waste treatment technology that converts
municipal solid waste, including tires and plastics, into electrical
energy. IDM has committed to loan up to $1,350,000 over a four month period
to International to carry on its waste-to-energy business. At closing, IDM
made an initial loan of $600,000 to International repayable upon demand
with interest at 9.25%. In addition, IDM, through a wholly-owned subsidiary
of International loaned $160,000 (Canadian) to CWC repayable in 18
consecutive installments commencing January 1, 1997 with interst at 7.5%
per annum.
7
<PAGE>
5.
The consolidated financial statements have been prepared on the basis of
the percentage of completion method of accounting. Under this method
contract revenue is determined by applying to the total estimated income on
each contract, a percentage which is equal to the ratio of contract costs
incurred to date to the most recent estimate of total costs which will have
been incurred upon the completion of the contract. Costs and estimated
earnings in excess of billings represents additional earnings over
billings, based upon percentage completed, as outlined above. Similarly,
billings in excess of costs and estimated earnings represent excess of
amounts billed over income recognized. Actual results can differ from the
estimates especially on government contracts because of the uncertainties
inherent in the estimation process as it relates to long term contracts.
Losses anticipated on government contracts and commercial contracts,
excluding period costs, should be charged to operations as soon as they are
evident. Starting in the first quarter of 1996 the Company recognized
revenues equivalent to its costs incurred on two government contracts in
Los Alamos, New Mexico and Oak Ridge, Tennessee, based on unapproved change
orders. In the case of the Los Alamos contract with the Los Alamos National
Laboratory, the Company submitted 28 individual change orders (of which 7
were subsequently approved). A final comprehensive change order in the
amount of $2,798,000 was submitted in November of 1996. Lab personnel
informally rejected our request and the Company reversed all revenues based
on the unapproved change orders in the fourth quarter of 1996. The Company
is aggressively pursuing its claims. Future revenues will be recognized
when these claims are finally settled. The Company also experienced
significant cost overruns on several contracts which were originally
recognized in the third and fourth quarters based on a change in an
accounting estimate principal. Based on the Company's discussions with the
SEC accounting staff, the Company has agreed to restate its quarterly
financial statements for the year "because recognizing change orders as
revenues was tantamount to recognizing gain contingencies which is
expressly prohibited by SFAS 5"; and, "because the cost overruns should
have been foreseeable and accrued in prior quarters." The amount for the
year has not changed, just the allocation to each quarter. The disclosure
requirements of the APB opinion number 20 of earnings (loss) per share, net
income (loss), and income tax (credit) are as follows:
<TABLE>
<CAPTION>
1996
------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Income (Loss) before Provision
(Credit) for Income Taxes 1,056,585 9,324 (4,370,625) (7,693,128) (10,997,844)
Change (3,698,413) (1,539,857) 1,461,925 3,776,345 -
---------- ---------- ---------- ---------- -----------
Amount Restated (2,641,828) (1,530,533) (2,908,700) (3,916,783) (10,997,844)
Provision (Credit) for Income
Taxes 210,000 2,000 (772,000) (1,290,000) (1,850,000)
Change (650,000) (262,000) 282,000 630,000 -
---------- ---------- ---------- ---------- -----------
Amount Restated (440,000) (260,000) (490,000) (660,000) (1,850,000)
Net Income (Loss) 846,585 7,324 (3,598,625) (6,403,128) (9,147,844)
Change (3,048,413) (1,277,857) 1,179,925 3,146,345 -
---------- ---------- ---------- ---------- -----------
Amount Restated (2,201,828) (1,270,533) (2,418,700) (3,256,783) (9,147,844)
Earning (Loss) Per Share 0.13 - (0.41) (0.85) (1.13)
Change (0.46) (0.17) 0.14 0.49 -
---------- ---------- ---------- ---------- -----------
Amount Restated (0.33) (0.17) (0.27) (0.36) (1.13)
</TABLE>
8
<PAGE>
Item 2. Management's Discussion and Analysis Of Financial Condition And Results
Of Operations.
Material Changes in Results Of Operations
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities Exchange Act of
1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth in this
report.
Second Quarter of 1996 Compared with Second Quarter of 1995
The Company's total revenues decreased by approximately 54.2% from $12,576,000
for the quarter ended June 30, 1995 to $5,765,000 for the quarter ended June 30,
1996. Contract service income decreased during the quarter by 55.5% from
$12,002,000 in 1995 to $5,675,000 in 1996. The decrease in contract service
income and total revenues is attributable to the completion of the Company's
services during the quarter in connection with the FFC-Jordan Fertilizer
Project. The relative work load in connection with the commencement of the
FFC-Jordan Fertilizer Project during the second quarter of 1995 and the
subsequent completion of such project during the second quarter of 1996 resulted
in substantially higher revenues being reported during the early phase of the
project. The Surplus equipment and scrap sales revenues decreased by 27.6% from
$574,000 in 1995 to $416,000 in 1996. The decrease in surplus equipment and
scrap sales revenues was attributable to varying product mix and lower volume in
1996.
Direct job costs decreased by approximately 49.3% from $10,106,000 for the
quarter ended June 30, 1995 to $5,127,000 for the same period in 1996. The
primary elements of such decrease in job costs were job salaries and material
and supplies. The decrease in job costs was attributable to the decrease in
contract service revenues during the quarter. Cost of equipment sales decreased
from $168,000 in 1995 to $73,000 in 1996. The decrease in cost of equipment
sales was attributable to varying product mix and lower volume in 1996.
While total revenues decreased by 54.2% for the quarter, general and
administrative expenses increased from $1,833,000 during the quarter ended June
30, 1995 to $1,937,000 during the same period in 1995. The increase in general
and administrative expense was primarily attributable to an increase in salaries
due to hiring additional personnel.
In addition to its operating income and expenses, the Company reported net
interest income of $13,000 for the quarter ended June 30, 1996 as compared to
net interest income of $81,000 for the same period in 1995. The decrease in net
interest income/expense was attributable to $25,000 in interest expense which
accrued on $1,750,000 of indebtedness which remained outstanding during most of
the quarter out of the $5,000,000 of convertible notes issued in the third
quarter of 1995 and an increase in interest expense due to the additional
$450,000 in equipment financing compared to the same period last year.
As a result of the foregoing, the Company reported a loss before taxes of
$1,531,000 and net loss of $1,271,000 for the quarter ended June 30, 1996 as
compared to a income before taxes of $421,000 and net income of $251,000 for the
same quarter in 1995.
Six Months Ended June 30, 1996 Compared with Six Months Ended June 30, 1995
Total revenues decreased by approximately 59.6% from $18,585,000 for the six
months ended June 30, 1995 to $11,232,000 for the same period in 1996. Contract
service income decreased during the period by 58.4% from $17,435,000 in 1995 to
$10,750,000 in 1996. Surplus equipment and scrap sales revenues decreased 58.1%
from $1,150,000 in 1995 to $482,000 in 1996. See the quarterly comparison for
discussion of the factors contributing to the decrease in revenues.
Direct job costs decreased by approximately 27.3% from $15,648,000 for the six
months ended June 30, 1995 to $11,375,000 for the same period in 1996. See the
quarterly comparison for a discussion of the factors contributing to the
decrease in direct job costs.
9
<PAGE>
Cost of equipment sales decreased from $388,000 in 1995 to $73,000 in 1996. The
decrease in cost of equipment sales was attributable to varying product mix and
lower volume.
General and administrative expenses decreased 3.9% from $3,736,000 during the
six months ended June 30, 1995 to $3,590,000 during the same period in 1996. The
decrease was primarily attributable to two refunds in the first quarter of
insurance refunds totaling $90,000 as a result of audits on prior years
premiums.
The Company reported a decrease in net interest income/(expense) from $178,000
for the six months ended June 30, 1995 to $16,000 for the same period in 1995.
See the quarterly comparison for a discussion of the factors contributing to the
increase in net interest income/(expense).
As a result of the foregoing, the Company reported loss before taxes of
$4,172,000 and net loss after tax of $3,472,000 for the six months ended June
30, 1996 as compared to a loss before taxes of $1,236,000 and a net loss after
taxes of $746,000 for the same period in 1995.
Material Changes in Financial Condition, Liquidity and Capital Resources.
At June 30, 1996, the Company had a backlog totaling approximately $52 million
compared to a backlog of approximately $58 million at June 30, 1995. The largest
component of the Company's backlog at June 30, 1996 was $25 million for a paper
plant relocation to the People's Republic of China.
In addition to its existing backlog, the Company is presently bidding on, and
intends to bid on numerous projects to replace revenues from projects which will
be completed during 1996 and to increase the total dollar volume of projects
under contract. Management anticipates that the Company's efforts to bid on and
secure new contracts will focus on projects which can be readily serviced from
the three regional offices opened by the Company during 1994 and 1995. In
addition, the Company has submitted proposals on several large international
plant relocation projects. The Company's regional offices, particularly the Oak
Ridge, Tennessee and Los Alamos, New Mexico offices are strategically located in
areas having a high concentration of prospective public and private remediation
sites. While bidding to perform services at such sites is expected to be highly
competitive, management believes that the Company's existing presence on
projects at these locations combined with its proven expertise and resources
will enhance the Company's chances of successfully bidding on substantial new
projects.
The Company had working capital of $12,750,000, including cash and cash
equivalents balances of $2,921,000 at June 30, 1996. This compares to working
capital of $10,293,000 and a cash balance of $83,000 at December 31, 1995. The
increase in working capital and cash is attributable to the exercise of warrants
and options totaling $6,913,000 during the period less the $3,472,000 loss for
the six months.
Approximately $500,000 of the Company's working capital at June 30, 1996
consisted of a cash performance bond which the Company had posted in connection
with the performance of a project which is expected to be released during
August.
Additionally, $1,483,000 of the Company's working capital at June 30, 1996
consisted of surplus equipment inventory. Such inventory level compares to the
same amount at December 31, 1995.
The Company has available at December 31, 1995 approximately $2,350,000 in
operating loss carry-forwards that may be applied against future taxable income.
They expire in the year 2010. Based on the reported loss to date it will take
approximately $3.9 million dollars in future taxable income to recover the
reported deferred tax asset.
At June 30, 1996, the Company's only long term debt other than the convertible
notes was $657,000 in installment debt secured by job equipment.
On July 11, 1996 the company acquired a ten percent interest in Life
International Products (Life) for $1,187,500. The Company also entered into a
licensed agreement with Life whereby IDM shall market and employ Life's patented
environmental remediation technology for long term bioremediation of
contaminated groundwater throughout North America.
10
<PAGE>
On July 19, 1996, IDM, through a newly formed 90% owned subsidiary, Continental
Waste Conversion International, Inc. ("International"), entered into an
agreement with Continental Waste Conversion, Inc. ("CWC") pursuant to which
International acquired, in exchange for a 10% interest in International, the
exclusive worldwide rights (excluding Canada) to the proprietary Kocee Gas
Generator waste treatment technology that converts municipal solid waste,
including tires and plastics, into electrical energy. IDM has committed to loan
up to $1,350,000 over a four month period to International to carry on its
waste-to-energy business. At closing, IDM made an initial loan of $600,000 to
International repayable upon demand with interest at 9.25%. In addition, IDM,
through a wholly-owned subsidiary of International loaned $160,000 (Canadian) to
CWC repayable in 18 consecutive installments commencing January 1, 1997 with
interst at 7.5% per annum.
Other than funding the Company's bonding and other job costs the Company does
not anticipate any substantial demands on the liquidity or capital resources of
the Company during the following twelve months.
Management believes that the Company's working capital is sufficient to meet the
Company's anticipated needs for at least the following twelve months, including
the performance of all existing contracts of the Company. However, as the
Company is presently pursuing bids on multiple large projects, the Company may
be required to seek new bank lines of credit or other financing in order to
facilitate the performance of jobs if the volume and size of projects being
performed by the Company increases substantially. While the Company is
conducting ongoing discussions with various potential lenders with a view to
establishing available bank lines of credit if and when needed to support future
growth, the Company presently has no commitments from any bank or other lender
to provide financing if such financing becomes necessary to support growth.
11
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
*10.1 License Agreement dated June 30, 1996 with Life International
Products, Inc.
*10.2 Agreement dated July 19, 1996 with Continental Waste Conversion,
Inc.
*10.3 License Agreement dated July 18, 1996 between Continental Waste
Conversion, Inc. and Continental Waste Conversion International,
Inc.
*10.4 Promissory note in the amount of $160,000 (Canadian) dated July
22, 1996 from Continental Waste Conversion, Inc. to Continental
Waste Conversion International, Inc.
*10.5 Pledge and Security Agreement dated July 19, 1996 between
Continental Waste Conversion, Inc. and Continental Waste
Conversion International, Inc.
(b) Reports on Form 8-K
Form 8-K dated April 1, 1996 - Item 5 Reporting Adoption of a
Shareholder's Rights Plan.
- ------------------------
* Previously filed.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
IDM ENVIRONMENTAL CORP.
Dated: September 30, 1997 By: /s/ Joel Freedman
---------------------------------------
Joel Freedman, President
Dated: September 30, 1997 By: /s/ Michael B. Killeen
---------------------------------------
Michael B. Killeen, Principal
Financial and Accounting Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,920,814
<SECURITIES> 0
<RECEIVABLES> 7,977,938
<ALLOWANCES> 200,000
<INVENTORY> 1,482,517
<CURRENT-ASSETS> 18,316,383
<PP&E> 2,943,696
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,905,875
<CURRENT-LIABILITIES> 5,566,232
<BONDS> 801,628
0
0
<COMMON> 8,660
<OTHER-SE> 16,529,355
<TOTAL-LIABILITY-AND-EQUITY> 22,905,875
<SALES> 11,231,791
<TOTAL-REVENUES> 11,231,791
<CGS> 11,447,768
<TOTAL-COSTS> 11,447,768
<OTHER-EXPENSES> 3,972,255
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,172,361)
<INCOME-TAX> (900,000)
<INCOME-CONTINUING> (3,472,361)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,472,361)
<EPS-PRIMARY> (0.50)
<EPS-DILUTED> (0.50)
</TABLE>
