U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997.
TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________ .
Commission File No. 0-24490
AQUAGENIX, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 65-0419263
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices)
(305) 975-7771
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
The number of shares outstanding of the issuer's Common Stock, $.01
Par Value, as of May 5, 1997 was 4,232,791.
Transitional Small Business Disclosure Format: Yes No x
Page 1 of 15 Pages
AQUAGENIX, INC.
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1: Financial Statements
Consolidated Balance Sheets as of March 31, 1997
and December 31, 1996 (unaudited) 3
Consolidated Statements of Operations for the three
months ended March 31, 1997 and March 31, 1996
(unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1997 and March 31, 1996
(unaudited) 5
Notes to Consolidated Financial Statements 6-7
Item 2: Management's Discussion and Analysis or Plan of
Operation 8-12
PART II. OTHER INFORMATION 13-14
SIGNATURES 15
Page 2
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
Assets 1997 1996
(Unaudited)
<C> <C>
Current assets:
Cash and cash equivalents $ 607,529 $ 890,731
Marketable securities 0 158,492
Accounts receivable, net of allowance
for doubtful accounts of $107,436
and $88,541, respectively 1,058,615 1,064,151
Inventories 538,131 339,114
Prepaid expenses and other 561,495 490,740
Total current assets 2,765,770 2,943,228
Accounts receivable, non-current 1,269,909 1,269,909
Property and equipment, net 2,562,680 2,450,154
Intangible assets, net 4,882,796 4,946,027
Deferred financing costs, net 148,632 154,276
Other assets 306,527 267,233
Total assets $ 11,936,314 $ 12,030,827
Liabilities and Stockholders' Equity
Current liabilities:
Short term borrowings - acquisitions $ 0 $ 200,000
Borrowings under credit agreement 578,161 404,415
Current maturities of long-term debt 178,576 166,168
Accounts payable 860,357 709,870
Net liabilities of discontinued operations 228,275 350,076
Other current liabilities 245,497 322,582
Total current liabilities 2,090,866 2,153,111
Long-term debt, net of current maturities 5,363,129 5,326,769
Total liabilities 7,453,995 7,479,880
Stockholders' equity:
Preferred stock, par value $.01,
1,000,000 shares authorized,
no shares issued and outstanding 0 0
Common stock, par value $.01, 10,000,000
shares authorized, 4,229,691 and
4,163,391 shares issued and outstanding,
respectively 42,297 41,634
Additional paid-in capital 12,985,545 12,671,620
Accumulated deficit (8,336,068) (7,938,330)
Unearned compensation (209,455) (230,058)
Unrealized gain on securities 0 6,081
Total stockholders' equity 4,482,319 4,550,947
Total liabilities and stockholders'equity $ 11,936,314 $ 12,030,827
The accompanying notes are an integral part of the Consolidated Financial Statements
Page 3
</TABLE>
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1997 1996
<C> <C>
Revenues - Continuing operations $ 2,893,519 $ 2,402,592
Costs and expenses:
Costs of services 1,619,746 1,227,251
Selling, general and administrative 1,246,788 703,844
Depreciation and amortization 226,542 142,264
Total costs and expenses 3,093,076 2,073,359
Operating (loss) income (199,557) 329,233
Interest income 5,430 41,311
Interest expense (203,611) (163,863)
(Loss) income from continuing operations before income (397,738) 206,681
Income tax benefit 0 0
(Loss) income from continuing operations (397,738) 206,681
Discontinued operations:
Change in allowance for estimated phase-out losses
from environmental remediation segmen 0 869,507
Net (loss) income $ (397,738) $ 1,076,188
(Loss) income per weighted average common share:
Continuing operations $ (0.09) $ 0.06
Discontinued operations 0.00 0.25
Net (loss) income $ (0.09) $ 0.31
Weighted average common shares outstanding 4,187,408 3,450,026
The accompanying notes are an integral part of the Consolidated Financial Statements
Page 4
</TABLE>
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1997 1996
<C> <C>
Cash flows from operating activities:
Net (loss) income $ (397,738) $ 1,076,188
Adjustments to reconcile net (loss)
income to net cash used in operating
activities:
Depreciation and amortization 226,542 142,264
Loss on sale of property and equipment 51,758 12,011
(Gain) on sale of securities (9,785) 0
Provision for doubtful accounts 24,485 26,368
Discontinued operations (121,801) (1,620,200)
Net change in operating assets and
liabilities (254,613) 298,756
Net cash used in operating activities (481,152) (64,613)
Cash flows from investing activities:
Proceeds from sale of marketable securities 162,196 624,187
Proceeds from sale of property and equipment 8,000 10,196
Cash paid for acquisitions, net of cash
acquired (3,664) 0
Purchase of property and equipment (216,551) (239,564)
Net cash (used in) provided by investing
activities (50,019) 394,819
Cash flows from financing activities:
Net proceeds under credit agreements 173,746 0
Proceeds from other borrowings 0 54,211
Payment of credit agreements 0 (127,902)
Payment of notes payable and long-term debt (240,365) (85,934)
Deferred financing costs 0 (47,765)
Distribution to stockholder 0 (45,391)
Issuance of common stock 314,588 32,500
Net cash provided by (used in) financing 247,969 (220,281)
activities
Cash and cash equivalents:
(Decrease) increase (283,202) 109,925
Beginning balance 890,731 720,888
Ending balance $ 607,529 $ 830,813
Supplemental cash flow information:
Cash paid for interest 56,623 9,783
Cash received for income tax refund 131,764 0
Supplemental disclosures of cash flow information:
Interest paid $ 99,444 $ 59,696
Income taxes refunded (paid) $ 0 $ 131,764
The accompanying notes are an integral part of the Consolidated Financial Statements
Page 5
</TABLE>
AQUAGENIX, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements, which
are for interim periods, do not include all disclosures provided in
the audited annual consolidated financial statements. These unaudited
consolidated financial statements should be read in conjunction with
the consolidated financial statements and the footnotes thereto,
together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996
of Aquagenix, Inc. (the "Company"), as filed with the Securities
and Exchange Commission. The December 31, 1996 financial statements
were derived from audited consolidated financial statements, but do
not include all disclosures required by generally accepted accounting
principles. The accompanying financial statements have been restated
for the comparative period to include the accounts of Green Pastures,
Inc. which was acquired on December 31, 1996 and accounted for as a
pooling of interests.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (which are of a normal
recurring nature) necessary for a fair presentation of the financial
position and results of operations. The results of operations for
the interim periods are not necessarily indicative of the results to
be expected for the full year.
2. Subsequent Event
During 1996, the Company issued 100,000 options to purchase common
stock of the Company to a firm as consideration for financial
consulting services rendered. On May 2, 1997, these stock options
were exercised by the party and the Company issued 100,000 shares
of the common stock of the Company for an aggregate amount of
$500,000. The proceeds from this equity placement will primarily
be used to finance working capital and acquisitions.
On April 25, 1997, the Company filed a Registration Statement on
Form S-8 relating to the increase in the number of shares available
for issuance under the Employee Stock Option Plan and the Amended
and Restated Directors Stock Option Plan (the "Amended Directors
Plan") from 550,000 to 1,250,000 shares, following the written
consent of the majority of the holders of the Company's common
stock as of December 31, 1996. The Directors Plan was amended
in May 1996 to (i) increase the number of shares available for
issuance thereunder from 50,000 shares to 250,000 shares; (ii)
empower the Directors Stock Option Committee to determine the
annual amount of options to be granted to a non-employee director;
(iii) enable all options granted be exercisable in two equal
instalments each on the first and second anniversary dates
following the date of the grants; and (iv) terminate automatically
any unexercised portion of the options on the date the optionee
ceases to be a director of the Company except upon death whereupon
the options will expire within sixty days.
3. Earnings Per Share
Earnings (loss) per common shares were computed by dividing net
income (loss) by the weighted average number of shares outstanding.
Common share equivalents resulting from options and warrants have
not been included for the loss per share computation for three
months ended March 31, 1997 since their effect would be anti-dilutive.
Page 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
General
Aquagenix, Inc. (the "Company"), through its wholly-owned subsidiaries,
provides aquatic and industrial vegetation management services to both
governmental and commercial customers in Florida, Georgia, North and
South Carolina, Arizona, Alabama and Tennessee. The Company's continued
emphasis on quality service, internal growth and the selective acquisition
of privately held waterway and vegetation management companies in the
Sunbelt region of the United States has resulted in the Company becoming
the largest provider of aquatic and industrial vegetation management
services in the United States with annual revenues of approximately
$11,500,000 for 1996. The Company's services consist primarily of the
control of aquatic weeds, algae and exotic plants, brush and noxious
tree control, wetland planting and restoration, installation of floating
fountains and aeration systems and the stocking of fish for game and
plant and insect control.
In April 1997, the Company established a new branch office in Birmingham,
Alabama as the Company has started to provide industrial vegetation
mangement services in that region. The expansion of its network of
branches into Alabama will help further develop alliances with the
utility companies in that area and increase the Company's ability to
capitalize on the beginning of large-scale outsourcing of non-core
utility services by utility companies throughout the country.
In 1997, the Company commenced its lake products catalog business
through a wholly-owned subsidiary which is based out of Arizona.
The catalog comprises a large variety of lake products including
the Company's own line of Desert Rain floating fountains, aeration
systems and components, chemical application equipment, weed cutters,
water test kits and sampling equipment, chemicals and fish which have
been selected based on the Company's expertise in the management of
surface water resources. Inventory stocking for the catalog sales has
just begun and to date, revenues derived from catalog sales have not
been material.
Results of Operations
Three Months Ended March 31, 1997 Compared to Three Months Ended
March 31, 1996
Revenues. The Company's revenues increased by $490,927, or 20.4%,
from $2,402,592 during the three months ended March 31, 1996 to
$2,893,519 during the three months ended March 31, 1997. The
increase in revenues was primarily attributable to an increase
in both aquatic and industrial vegetation management contracts
as a result of the acquisitions of Aquatic Dynamics, Inc. (the
"ADI Acquisition") in December 1996 and Aquatic and Right of Way
Control, Inc. (the "ARC Acquisition") in June 1996 and the intensive
marketing efforts targeted at electric and power utilities and
governmental agencies.
Cost of services. Cost of services increased by $392,495,
or 32.0%, from $1,227,251 during the three months ended March 31,
1996 to $1,619,746 during the three months ended March 31, 1997.
The increase in cost of services was mainly attributable to increased
chemical, labor, insurance and fuel costs which was directly a result
of the Company's expanding operations which included the cost of
services of the recently acquired Arizona operations of $246,026.
As a percentage of revenues, cost of services have increased from
51.1% in the first quarter of 1996 to 56.0% in the first quarter of
1997. The reduced gross margin was mainly attributable to higher
chemical and labor costs as a result of the higher mix of industrial
vegetation management contracts in the first quarter of 1997 as
compared to the corresponding quarter of 1996. For the three months
ended March 31, 1997 and 1996, industrial vegetation management
services accounted for approximately 8.3% and 6.2%, respectively, of
the Company's total revenues. Gross margins from industrial vegetation
management contracts are generally lower than the aquatic vegetation
management contracts as they involve a higher usage of chemicals and
also due to the fact that the majority of the industrial vegetation
work are carried out in the second and third quarters of the year due
to the climatic conditions of the locations of its industrial customers.
With the increase in the number of technical staff for industrial
vegetation services, this resulted in a higher percentage of labor
costs to revenues from industrial vegetation contracts in the first
quarter of the year.
Selling, general and administrative. Selling, general and
administrative expense increased by $542,944, or 77.1%, from $703,844
during the three months ended March 31, 1996 to $1,246,788 during the
three months ended March 31, 1997. The increase in selling, general
and administrative expenses was due mainly to the assimilation of the
operations of the three businesses acquired in 1996, increased salaries
for the Company's officers and sales and accounting personnel, increased
recruitment costs, higher travel, business promotion expenses and office
rental and increased corporate expenses associated with the sourcing of
financing arrangements and private placements which includes travel and
public relations expenses, legal fees and stock registration costs.
Payroll costs have increased substantially mainly due to the building
of a strong managerial team which includes the recent recruitment of a
chief compliance officer for training of technical staff and monitoring
of compliance with environmental regulations, a regional sales manager
for utility and industrial sales, a management information systems
manager and additions to the sales and accounting team. The increase in
selling, general and administrative expenses also included the operating
expenses of the two new offices in Georgia and Arizona established in
December 1996 which amounted to approximately $187,000. As a percentage
of revenues, such expenses have increased from 29.3% for the three months
ended March 31, 1996 to 43.7% for the corresponding period in 1997. This
was mainly attributable to the increased level of infrastructure spending
coupled with the lower level of revenues from industrial vegetation
management services typically generated in the first quarter of the year.
In addition, there was also a one-time loss on disposal of equipment
which amounted to approximately $52,000.
Depreciation and amortization. Depreciation and amortization expense
increased from $142,264 in the first quarter of 1996 to $226,542 in the
first quarter of 1997. Such expense as a percentage of revenues
increased from 5.9% for the quarter ended March 31, 1996 to 7.8% for
the corresponding quarter in 1996. This increase reflected the
depreciation of the additional application equipment, namely the
"spra-buggies", and the computer equipment purchased during the three
months ended March 31, 1997. In addition, there was an increase in
amortization relating to intangibles acquired from the ADI and ARC
acquisitions.
Interest income. Interest income decreased by $35,881 from $41,311
for the first quarter of 1996 to $5,430 for the corresponding quarter of
1997. The decrease in interest income was consistent with the lower
average cash balances in 1997 as compared to 1996.
Interest expense. Interest expense increased by $39,748 from $163,863
during the three months ended March 31, 1996 to $203,611 during the three
months ended March 31, 1997 primarily as a result of increased bank
borrowings.
Quarterly results. The net loss of $397,738 incurred by the Company
for the three months ended March 31, 1997 was mainly attributable to the
increased technical and managerial staff in anticipation of securing more
industrial vegetation management contracts over the next two years as a
result of the growing trend in the outsourcing of work by governmental
and quasi-governmental agencies and private utility companies, coupled
with the relatively lower level of revenues from industrial vegetation
management services which are cyclically lower in the first and fourth
quarters of the year. The revenues of the first quarter of 1997 continue
to indicate the growth potential of the Company's aquatic and industrial
vegetation management business, especially in its industrial vegetation
management business, with the Company securing several new utility
contracts in early 1997. With the increase in the sales force and the
addition of large and established utility companies on the Company's
track record, marketing efforts are being targeted at electric and power
utilities, telephone and railroad companies, transportation departments
and industrial sites to further expand the customer and revenue bases.
Liquidity and Capital Resources
Working capital. Working capital (excluding net liabilities of
discontinued operations), which consists principally of cash and
accounts receivable , was $1,140,193 at December 31, 1996, compared
to $903,179 at March 31, 1997. The decrease in working capital was
mainly attributable to the net loss incurred for the three months
ended March 31, 1997, resulting in lower cash balances and increased
bank borrowings as compared to December 31, 1996. Of the Company's
accounts receivable outstanding at December 31, 1996 and March 31,1997,
approximately $336,000 (31.6%) and $253,000 (23.9%) were due from five
customers, respectively. The decrease was primarily due to collections
made on the larger outstanding balances as of December 31, 1996 relating
to non-recurring contracts. The collection period for accounts
receivable was approximately 33 days as of March 31, 1997 as compared
to 32 days at December 31, 1996. At March 31, 1997, the Company's
allowance for doubtful debts was $107,436 which the Company believes
is currently adequate to cover anticipated losses.
At March 31, 1997, the Company has loan agreements with SunTrust Bank,
Miami, N.A.("SunTrust") which provided for borrowings under a revolving
line of credit of up to $750,000, a 15-year loan in the principal amount
of $94,144 collaterized by certain real property and an equipment loan
in the principal amounts of $47,787. At March 31, 1997, an aggregate
of $672,999 was outstanding under the loan agreements, of which $578,161
was outstanding under the line of credit, $88,536 was outstanding under
the 15-year loan and $6,302 was outstanding under the equipment loan.
Advances under the line of credit are based on certain borrowing formulas
relating to eligible accounts receivable. Interest accrues at 1.5% above
prime for the line.
In April 1997, the Company entered into loan agreements with Capital Bank
which provided for borrowings under a revolving line of credit of up to
an aggregate of $750,000 and a three-year term loan of $250,000 secured
by a long-term receivable. Advances under the line of credit are based
on certain borrowing formula relating to eligible accounts receivable.
Interest accrues at the rates of 1-1/4% above prime for the line of credit
and 9.5% for the three-year term loan. Substantially all of the Company's
assets are pledged to Capital Bank as collateral. This new line of credit
replaced the line with SunTrust and the amount outstanding under the
SunTrust's revolving line of credit was fully repaid in April 1997.
Capital Commitments As of March 31, 1997, the Company has capital
commitments to purchase 35 specialized application equipment known as
"Spra-Buggies" over the next 19 months at a purchase price of
approximately $27,000 per equipment. The Company anticipates that these
capital expenditures will be funded by a combination of cash flows from
private placements and loans from equipment financing companies.
Cash flows from operating activities. For the three months ended
March 31, 1997, the Company's cash flows used in operations was $481,152
as compared to $64,613 for the three months ended March 31, 1996. Of
the net cash used in operating activities for the three months ended
March 31, 1997, $359,351 were used in continuing operations as compared
to net cash generated from operations of $686,080 for the three months
ended March 31, 1996. The increase in cash flows used in continuing
operations was primarily attributable to the net loss incurred for the
three months ended March 31, 1997 and an increase in inventories of
$199,017 mainly due to the expanded operations and the commencement of
the catalog business in Arizona.
Cash flows from investing activities. Cash used in investing
activities in the three months ended March 31, 1997 was $50,019 compared
to net cash provided by investing activities of $394,819 for the three
months ended March 31, 1996. The decrease was mainly attributable to
lower proceeds from sale of marketable securities which was offset by
the purchase of equipment and computers for three months ended March 31,
1997.
Cash flows from financing activities. Net cash provided by
financing activities was $247,969 during the three months ended March
31, 1997 compared to net cash used of $220,281 during the three months
ended March 31, 1996. The increase was primarily attributable to
additional borrowings under revolving line of credit with SunTrust and
proceeds from the issuance of common stock which was derived from the
exercise of 50,000 stock options by an investor for an aggregate amount
of $250,000 and the exercise of stock options by employees and a director
of the Company. The Company repaid a total of $240,365 of its debts which
included the instalment note of $200,000 relating to the ADI Acquisition.
During 1996, the Company issued 100,000 options to purchase common stock
of the Company to a firm as consideration for financial consulting
services rendered. On May 2, 1997, these stock options were exercised
by the party and the Company issued 100,000 shares of the common stock
of the Company for an aggregate amount of $500,000. The proceeds from
this equity placement will primarily be used to finance working capital
and acquisitions.
Pursuant to the Company's intial public offering, the Company issued
1,437,500 shares of common Stock and 1,437,500 warrants (the "Warrants")
to purchase 1,437,500 shares of common stock. On April 2, 1997, the
Company filed a Registration Statement on Form S-3 covering the issuance
and public sale of shares of common stock issuable upon the exercise
of the Warrants. The Warrants are exercisable at $6.00 per share,
subject to adjustment in certain circumstances, at any time until
September 12, 1999. The Warrants are redeemable by the Company, upon
notice of not less than 30 days, at a price of $.10 per Warrant, provided
that the closing bid price of the common stock on all 20 trading days
ending on the third day prior to the day the Company gives notice has
been at least 130% ($7.80) of the then effective exercise price of the
Warrants. The Company will receive an aggregate of $8,625,000 if all
the Warrants are exercised.
Discontinued operations. Net liabilities of discontinued operations
decreased from $350,076 as of December 31, 1996 to $228,275 as of March
31, 1997. This decrease was mainly due to the settlement of certain
accounts payable and the utilization of the provision for phase-out
losses relating to legal fees incurred for the collection of accounts
receivable of the discontinued operations and amounts paid to an ex-
employee under a settlement agreement entered into in 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
On April 16, 1997, the Company appointed Mr. John P. Hart as
the president and chief executive officer of Aquagenix Land-
Water Technologies, Inc., the largest subsidiary of the Company.
Mr. Hart, who has a twenty-five year financial and marketing
background with the brokerage firm of Merrill Lynch, was most
recently the vice president and director of the southern region
of the international engineering consulting firm of Metcalf &
Eddy where he led the firm through significant growth in
Florida, Georgia and Texas. He also has an extensive public
service record, serving nearly two decades as an elected city
and county official of numerous civic and political associations,
including president of the Florida Association of Counties.
The appointment of Mr. Hart is a major step in realizing the
Company's business strategy by gaining access to industrial
clients and firmly positioning the Company to capture a
meaningful share of the outsourced market for municipal services.
On April 25, 1997,the Company filed a Registration Statement
on Form S-8 relating to the increase in the number of shares
available for issuance under the Employee Stock Option Plan
and the Amended and Restated Directors Stock Option Plan (the
"Amended Directors Plan") from 550,000 to 1,250,000 shares,
following the written consent of the majority of the holders
of the Company's common stock as of December 31, 1996. The
Directors Plan was amended in May 1996 to (i) increase the
number of shares available for issuance thereunder from 50,000
shares to 250,000 shares; (ii) empower the Directors Stock
Option Committee to determine the annual amount of options to
be granted to a non-employee director; (iii) enable all options
granted be exercisable in two equal instalments each on the
first and second anniversary dates following the date of the
grants; and (iv) terminate automatically any unexercised
portion of the options on the date the optionee ceases to be
a director of the Company except upon death whereupon the
options will expire within sixty days.
Pursuant to the Company's intial public offering, the Company
issued 1,437,500 shares of common stock and 1,437,500 warrants
(the "Warrants") to purchase 1,437,500 shares of common stock.
On April 2, 1997, the Company filed a Registration Statement
on Form S-3 covering the issuance and public sale of shares of
common stock issuable upon the exercise of the Warrants. The
Warrants are exercisable at $6.00 per share, subject to
adjustment in certain circumstances, at any time until September
12, 1999. The Warrants are redeemable by the Company, upon
notice of not less than 30 days, at a price of $.10 per Warrant,
provided that the closing bid price of the common stock on all
20 trading days ending on the third day prior to the day the
Company gives notice has been at least 130% ($7.80) of the then
effective exercise price of the Warrants. The Company will
receive an aggregate of $8,625,000 if all the Warrants are
exercised.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Description
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AQUAGENIX, INC.
Date: May 15, 1997 By: /s/ Andrew P. Chesler
Andrew P. Chesler,
Chairman of the Board,
Chief Executive Officer,
President and Treasurer
(Principal Executive Officer)
Date: May 15, 1997 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCEHDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS AS OF MARCH 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 607,529
<SECURITIES> 0
<RECEIVABLES> 1,166,051
<ALLOWANCES> 107,436
<INVENTORY> 538,131
<CURRENT-ASSETS> 2,765,770
<PP&E> 3,840,755
<DEPRECIATION> 1,278,075
<TOTAL-ASSETS> 11,936,314
<CURRENT-LIABILITIES> 2,090,866
<BONDS> 0
0
0
<COMMON> 42,297
<OTHER-SE> 4,440,022
<TOTAL-LIABILITY-AND-EQUITY> 11,936,314
<SALES> 0
<TOTAL-REVENUES> 2,893,519
<CGS> 0
<TOTAL-COSTS> 1,619,746
<OTHER-EXPENSES> 1,448,845
<LOSS-PROVISION> 24,485
<INTEREST-EXPENSE> 198,191
<INCOME-PRETAX> (397,738)
<INCOME-TAX> 0
<INCOME-CONTINUING> (397,738)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (397,738)
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
