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 Three Months Ended Commission File Number
September 30, 1997 33-87284-N4
THERMO-MIZER ENVIRONMENTAL CORP.
528 Oritan Avenue
Ridgefield, NJ 07657
Tel: 201-941-5805
Delaware 22-2312917
(State of Incorporation) (I.R.S. Employer Identification No.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
At October 31, 1997, the latest practicable date, there were 3,396,023 shares of
Common Stock outstanding, $.001 par value.
<PAGE>
THERMO-MIZER ENVIRONMENTAL CORP.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements:
Condensed Balance Sheets
September 30, 1997 and June 30, 1997 3
Condensed Statements of Operations
for the three months ended
September 30, 1997 and 1996 5
Condensed Statements of Cash Flows
for the three months ended
September 30, 1997 and 1996 6
Condensed Statement of Stockholders
Equity for the three months ended
September 30, 1997 7
Notes to Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
PART II. OTHER INFORMATION
2
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THERMO-MIZER ENVIRONMENTAL CORP.
CONDENSED BALANCE SHEETS
ASSETS
September 30, June 30,
1997 1997
------------- ----------
(Unaudited)
Current Assets:
Cash $1,751,667 $ 234,006
Other time deposits 375,000 375,000
Contracts receivable-net of allowance
of $30,000 in both periods 800,701 960,045
Inventories 384,704 378,284
Unbilled receivables 40,721 27,976
Prepaid expenses and other 103,955 258,894
---------- ----------
Total Current Assets 3,456,748 2,234,205
Property and Equipment - net 122,641 135,209
Other Assets 980,414 750,182
---------- ----------
Total Assets $4,559,803 $3,119,596
========== ==========
See Notes to Condensed Financial Statements.
3
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THERMO-MIZER ENVIRONMENTAL CORP.
CONDENSED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
1997 1997
------------- ----------
(Unaudited)
Current Liabilities:
Notes payable:
Bank $ 375,000 $ 375,000
Convertible 1,450,000
Accounts payable - trade 424,952 381,988
Billings in excess of revenues 114,513 82,653
Accrued expenses and other 179,488 259,899
----------- -----------
Total Current Liabilities 2,543,953 1,099,540
----------- -----------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, $.001 par value,
25,000,000 shares authorized; 3,396,309
and 2,717,500 shares issued and
outstanding 3,396 2,717
Additional paid-in capital 4,205,416 3,831,094
Deficit (1,998,882) (1,619,675)
----------- -----------
Total 2,209,930 2,214,136
Less - Note receivable (160,000) (160,000)
Treasury Stock-at cost (34,080) (34,080)
----------- -----------
Stockholders' Equity-net 2,015,850 2,020,056
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,559,803 $ 3,119,596
=========== ===========
See Notes to Condensed Financial Statements.
4
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THERMO-MIZER ENVIRONMENTAL CORP.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
1997 1996
----------- -----------
Contract and other revenues $ 736,091 $ 488,610
Cost of revenues 627,542 480,133
----------- -----------
Gross profit 108,549 8,477
----------- -----------
Expenses:
Personnel and related costs 115,302 138,578
Selling and administrative expenses 325,608 197,010
Product development costs 44,957 74,236
----------- -----------
Total expenses 485,867 409,824
----------- -----------
Operating loss (377,318) (401,347)
Nonoperating costs - net 1,111 (422,814)
----------- -----------
Loss from operations (376,207) (824,161)
Income taxes - net 3,000
----------- -----------
Net loss $ (379,207) $ (824,161)
=========== ===========
Loss per share $ (.13) $ (.43)
=========== ===========
Weighted average number of common and
common equivalent shares outstanding 3,000,832 1,897,564
=========== ===========
See Notes to Condensed Financial Statements.
5
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THERMO-MIZER ENVIRONMENTAL CORP.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
1997 1996
----------- -----------
Cash flows from operating activities:
Net loss $ (379,207) $ (824,161)
Adjustments to reconcile net earnings
to net cash provided by operating
Activities:
Write-off of consulting agreement 95,000
Nonrecurring charges 104,375
Amortization of financial
public relations fee 139,993
Depreciation and amortization 12,568 19,838
Decrease in net operating assets 294,307 78,394
----------- -----------
Net cash provided by (used in)
Operating activities 67,661 (526,554)
----------- -----------
Cash flows (used in )investing activities:
Loan to APC (93,750)
Purchase of property and equipment (50,570)
----------- -----------
Total (144,320)
----------- -----------
Cash flows from financing activities:
Proceeds from convertible debt 1,450,000
----------- -----------
Net increase (decrease) in cash 1,517,661 (670,874)
Cash and cash equivalents - beginning 234,006 2,181,092
----------- -----------
Cash and cash equivalents - ending $ 1,751,667 $ 1,510,218
=========== ===========
See Notes to Condensed Financial Statements.
6
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<TABLE>
THERMO-MIZER ENVIRONMENTAL CORP.
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
Common Additional Accumulated Treasury Note
Stock Paid-in Capital Deficit Stock Receivable Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 1, 1997 $ 2,717 $ 3,831,094 $(1,619,675) $ (34,080) $ (160,000) $ 2,020,056
Issuance of equity securities 679 374,322 375,001
Net loss (379,207) (379,207)
----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30, 1997 $ 3,396 $ 4,205,416 $(1,998,882) $ (34,080) $ (160,000) $ 2,015,850
=========== =========== =========== =========== =========== ===========
See Notes to Condensed Financial Statements.
</TABLE>
7
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
NOTE 1--BASIS OF PRESENTATION
The accompanying condensed interim financial statements for the three-month
periods ended September 30, 1997 and 1996 are unaudited and include all
adjustments considered necessary by Management for a fair presentation. The
results of operations realized during an interim period are not necessarily
indicative of results to be expected for a full fiscal year. These financial
statements should be read in conjunction with the information filed as part of
the Company's Annual Report on Form 10-KSB.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Company's principal accounting and financial reporting
policies is as follows:
Revenue Recognition
Contract revenues are recognized on the percentage-of-completion method by
multiplying total contract revenue by the estimated percentage of contract
completion. Changes in job performance, job conditions, and estimated
profitability, including those arising from contract penalty provisions and
final contract settlements, may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Earnings are
also charged with a provision for doubtful accounts based on a review of
collectibility.
Service and other revenue amounted to $77,092 during the three months ended
September 30, 1997 and $58,563 during the three months ended September 30, 1996
and is recognized when the service is performed.
Inventories
Inventories consist principally of parts and components for use in
contracts and are stated at the lower of cost or market. Cost is determined
using the first-in, first-out cost flow assumption.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using straight-line and accelerated methods based upon
the estimated useful lives of the related assets as follows:
Furniture and fixtures 5 years
Vehicles 7 years
Machinery and equipment 5-7 years
Expenditures for repairs and maintenance are charged to expense as
incurred.
Statement of Cash Flows
For the purposes of this statement, investments and time deposits having an
initial term of 90 days or less are considered to be cash equivalents.
8
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Product Development Costs
Product development costs are charged to operations as incurred.
Loss Per Share
Loss per common and common equivalent share are calculated by dividing net
income by the weighted average number of common and common equivalent shares
outstanding during the period. The assumed exercise of outstanding warrants and
options would have been antidilutive and, therefore, were excluded from the
calculation of loss per share in all periods presented.
Warranty Costs
The Company's policy is to warrant parts on new installations for one year
from start-up of the system. The cost of parts used in installations is
generally not a material component of the total installation costs. The
Company's policy is to accrue expenses related to warranty costs when the
related revenue is recognized.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. The principal assumptions inherent in the
accompanying financial statements relate to estimated percentages of contract
completion. Actual results may differ from those estimates. All liabilities are
recorded at approximate fair values.
Revenue and Credit Concentration
A significant portion of the Company's revenue is derived from a small
number of systems contracts performed for customers located principally in the
New York Metropolitan Area. Accordingly, a substantial portion of the Company's
accounts receivable at September 30, 1997 is due from customers in the
pharmaceutical or commercial real estate industry operating in the New York
Metropolitan area.
Reclassifications
Certain 1996 amounts and balances have been reclassified to conform to the
1997 presentation.
NOTE 3--ACQUISITION OF LAMINAIRE CORPORATION
On October 16, 1997 the Company acquired all of the outstanding shares of
Common Stock of Laminaire Corporation ("Laminaire") from Garay LLC for a
purchase price of $3,200,000, subject to adjustment based on Laminaire's
operating performance during the period immediately prior to the acquisition.
Laminaire, based in Rahway, New Jersey, manufactures and distributes cleanroom
products and also produces a variety of electronic circuit boards. The purchase
price consisted of a cash payment of $1,000,000, a convertible promissory note
in the principal amount of $2,200,000 (the "First Note") and a promissory note
with a principal amount to be determined (the "Second Note").
The First Note bears interest at the rate of 10% per annum and is payable
in 60 equal monthly installments
9
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of principal and interest of $33,830 commencing November 16, 1997 with a final
payment of principal of $1,000,000 due on October 16, 2002. The First Note is
convertible into shares of Common Stock at a conversion price per share equal to
the average closing bid price for the five trading days prior to the closing of
the acquisition. The First Note becomes convertible for a period of two years
commencing April 16, 1998 in amounts not exceeding $500,000 for each four-month
period. The holder of the First Note is entitled to demand registration of the
Common Stock issuable upon conversion of the First Note on one occasion at the
Company's expense commencing April 16, 1999 and is also entitled to piggyback
registration for such shares of Common Stock with respect to any registration
statement filed by the Company with the exception of a registration statement to
be filed in connection with any of the securities issued in connection with
obtaining the financing for the Company's acquisition of Laminaire.
The Second Note will be in a principal amount equal to the difference
between (a) the Stockholders' Equity (as defined) of Laminaire as of September
30, 1997 minus $200,000 minus (b) the Stockholders' Equity of Laminaire as of
September 30, 1996. In the event that the adjustment to the purchase price is
negative, the principal amount of the First Note will be reduced by such amount.
The Second Note, which bears interest at the rate of 15% per anum, is due on
March 31, 1998.
The Company's obligations under the First and Second Notes are secured
by first priority security interests in the real property and all tangible and
intangible personal property, including inventory and accounts receivable, of
Laminaire and the inventory and equipment of the Company and a subordinate
security interest in the accounts receivable of the Company. The subordinate
security interest is subordinate to the interests of the holders of convertible
debentures and convertible promissory notes in the principal amount of $550,000.
The agreements underlying the First and Second Notes also contain restrictions
on the Company's ability to transfer cash from Laminaire and require the Company
to comply with various financial ratios.
In conjunction with the acquisition of all of the outstanding common stock
of Laminaire, the Company paid all of Laminaire's obligations, amounting to
approximately $1,100,000, to Corestates National Bank ("Corestates") under a
mortgage secured by Laminaire's interest in its real property and building
located in Rahway, New Jersey. Laminaire has used the building located as its
principal office and manufacturing facility. The Company anticipates continuing
Laminaire's operations at such location and will relocate the Company's
principal executive offices from Ridgefield, New Jersey to the Laminaire
facility.
Garay LLC, the seller of the common stock of Laminaire, is a New Jersey
limited liability company which is partially owned by Charles J. Garay . Charles
J. Garay is a director of Laminaire and became a director of the Company on
October 28, 1997. He is also serving as a consultant to Laminaire through
January 16, 1998.
The funds utilized by the Company to purchase the common stock of Laminaire
and satisfy Laminaire's obligations to Corestates were obtained from the
issuance of (i) Common Stock of the Company for aggregate consideration of
$200,000 and (ii) convertible promissory notes and debentures for the balance.
Concurrent with the closing of the acquisition of Laminaire on October 16,
1997, the Company issued 326,521 shares of its Common Stock to a single
investor, the Optimum Fund, for aggregate consideration of $200,000 pursuant to
Regulation S under the Securities Act of 1933, as amended.
Concurrent with the closing of the acquisition of Laminaire, the Company
issued convertible debentures (the "Debentures") to three investors in the
principal amount of $300,000 pursuant to Regulation S under the Securities Act
of 1933, as amended. The Company will pay interest to the holders of the
Debenture at the rate of 5% per annum. Interest on the Debentures is payable in
cash or Common Stock of the Company, at the Company's discretion. The
Debentures, which are unsecured, are convertible into shares of the Company's
Common Stock at any time beginning 41 days after the date of issuance, at a
price per share equal to the lesser of 70% of the average closing bid price for
the five trading days preceding: (i) the date of conversion or (ii) the date of
closing, October 16, 1997.
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<PAGE>
Concurrent with the closing of the acquisition of Laminaire, the Company
issued convertible promissory notes ( the "Convertible Notes") to Norwood
Venture Corp. in the principal amount of $500,000 pursuant to Regulation D under
the Securities Act of 1933, as amended. The Company is obligated pay interest to
the holders of the Convertible Notes at the rate of 10% per annum. The Company's
obligations under the Debentures are secured by a first lien (except for an
existing lien to secure indebtedness in the principal amount of $50,000) in the
Company's accounts receivable and a lien that is second in priority to that of
Garay LLC, the seller of the common stock of Laminaire, with respect to the
inventory and equipment of the Company and the accounts receivable, inventory
and equipment of Laminaire. Laminaire also executed a guaranty in favor of
Norwood with respect to the Company's obligations under the Convertible Notes.
The Convertible Notes are convertible into shares of the Company's Common Stock
at any time at a price per share equal to the lesser of 70% of the average
closing bid price for the five trading days preceding (i) the date of conversion
or (ii) the date of closing, October 16, 1997. The Company agreed to register
the shares of Common Stock issuable upon conversion of the Convertible Note
under the Securities Act of 1933, as amended.
Subsequent to June 30, 1997 but prior to the closing of the Laminaire
acquisition, the Company issued convertible debentures (the "First Debentures")
to ten investors, in the aggregate principal amount of $1,450,000 pursuant to
Regulation S under the Securities Act of 1933, as amended. The Company is
obligated to pay interest to the holders of the FirstDebentures at the rate of
5% per annum. Interest on the First Debentures is payable in cash or Common
Stock of the Company, at the Company's discretion. The Company's obligations
under $50,000 principal amount of the Debentures are secured by a lien on the
Company's accounts receivable. The First Debentures are convertible into shares
of the Company's Common Stock at any time commencing 41 days after the date of
issuance, at a price per share equal to the lesser of 70% of the average closing
bid price for the five trading days preceding (i) the date of conversion or (ii)
the date of closing. In the event that the First Debentures are not converted
prior to their respective maturity dates, the Company has the option to satisfy
its obligations under $50,000 principal amount of the First Debentures on such
maturity date by the payment of cash or the issuance of Common Stock at the
Conversion Price. Through September 30, 1997, holders of $250,000 principal
amount of First Debentures had converted their debentures into 501,252 shares of
the Company's Common Stock.
The Company also borrowed $200,000 from an individual investor. The terms
and conditions of such borrowing have not yet been finalized.
The acquisition of Laminaire will be accounted for as a purchase in
accordance with Opinion Number 16 of the Accounting Principles Board and,
accordingly, the accompanying Condensed Statement of Operations for the Three
Months Ended September 30, 1997 does not include any amounts related to
Laminaire. The following unaudited pro forma operating data assumes that the
acquisition of Laminaire had taken place as of the beginning of July 1, 1996
(fiscal 1997) and 1995 (fiscal 1996), respectively. The data combines the
operating results of the Company's fiscal year with corresponding data from
Laminaire's calendar year and gives effect to (i) the amortization of purchase
adjustments and goodwill and (ii) incremental interest expense associated with
the financing arrangements. No effect has been giving to assumed cost savings
brought about by the consolidation of the two entities.
1997 1996
----------- -----------
Net revenues $ 8,777,632 $ 8,185,390
Cost of sales 6,635,974 5,712,061
Gross profit 2,141,658 2,473,329
Operating expenses 3,322,865 2,428,859
Nonoperating expenses 480,221 18,657
Income (loss) before taxes (1,858,292) (136,873)
Income taxes-net 19,607 55,493
Net income (loss) $(1,877,899) $ (81,380)
11
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NOTE 4--INCOME TAXES
The Company has established reserves for the entire benefit associated with
the unused Federal income tax loss carryforwards.
NOTE 5--OTHER ASSETS
Other assets consist of the following at September 30, 1997 and June 30,
1997, respectively:
9/30/97 6/30/97
-------- --------
Retainages $224,561 $223,424
Deferred acquisition costs 344,474 282,272
Rights and miscellaneous 189,134 198,619
Deferred debt expenses 202,500 --
Other 19,745 45,867
-------- --------
Total $980,414 $750,182
======== ========
Rights and miscellaneous set forth above consist of:
9/30/97 6/30/97
-------- --------
American Process Controls, Inc $114,299 $114,299
Enersave, Inc. 74,835 84,320
-------- --------
Total $189,134 $198,619
======== ========
In August 1996, the Company made a noninterest-bearing loan of $93,750
(which was subsequently increased to $114,299 to American Process Controls, Inc.
("AAPC"), the proceeds from which were used to fund the development of a working
temperature-activated steam trap alarm device (the "Product"). The loan is
collateralized by all of APC's assets. The Company has the right to receive 45%
of APC's common stock in full satisfaction of such loan plus the (i) exclusive
right to sell the Product in the Heating, Ventilation and Air Conditioning
market and (ii) nonexclusive right to sell the product in all other markets. APC
is required to sell the Product to the Company at a price equivalent to 120% of
APC's manufacturing costs. The Company believes that additional costs must be
incurred to complete the Product's design and testing and has advised APC that
it is currently unwilling to advance such funds. The Company has proposed that
APC obtain alternative financing in sufficient amount as to repay the amounts
due to the Company and complete the Product. No assurance can be given that APC
will be successful in such efforts.
In July 1996, the Company and Enersave, Inc. ("Enersave") entered into an
agreement under which the Company acquired, for $100,000, all of Enersave's
rights to provide all necessary performance metering and billing services
pursuant to certain energy service contracts between Enersave and certain public
utility companies. The acquisition price will be amortized based on actual
billings.
NOTE 5--OTHER
Selling and Administrative expenses for the three months ended September
30, 1997 includes a charge of $139,993 relating to financial public relations
services. These costs, which are largely noncash in nature, were incurred to
establish name recognition and liquidity for the Company's stock after the
Company's underwriter ceased operations shortly after the initial public
offering and were necessary to assist the Company in obtaining financing for the
Laminaire
12
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acquisition.
The caption "Nonoperating Costs - net" for the three months ended September
30, 1996 consisted principally of costs associated, directly or indirectly, of
terminating the Company's underwriting agreement. The caption also included a
$40,000 postemployment cost for a retiring director.
13
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information set forth herein contains "forward-looking statements" which
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy. No
assurance can be given that the future results covered by the forward-looking
statements will be achieved. The Company cautions readers that important factors
may affect the Company's actual results and could cause such results to differ
materially from forward-looking statements made by or on behalf of the Company.
Such factors include, but are not limited to, changing market conditions, the
impact of competitive products, pricing, acceptance of the Company's products in
development and other risks detailed herein and in other filings that the
Company makes with the Securities and Exchange Commission.
General
The Company's operations, prior to the acquisition of Laminaire, have been
dominated by systems contracts with customers in the pharmaceutical and chiller
control industries. Fluctuations in sales, revenues and operating results can
and did occur because of the timing of such contracts since certain larger
contracts require greater amounts of vendors' materials and use of
subcontractors than do other contracts. Generally, gross margins are lower on
those contracts which require the purchase of significant amounts of vendor
materials and services compared with contracts which are more engineering or
labor intensive. In addition, the Company's engineering staff is capable of
serving a significant volume of business. Thus, engineering costs do not
fluctuate at the same rate as revenues. This means that if revenues increase,
gross profits will increase at a faster rate than revenue. The reverse is true
if revenues were to decrease below the breakeven point.
Because of the Company's historical emphasis on systems sales, a
substantial portion of its revenue was derived from a relatively few number of
contracts. In general, the Company had less than 50 open contracts in a fiscal
quarter of which fewer than ten comprise more than 50 percent of revenues for
that quarter. This also means that a small number of customers made up a large
percentage of sales. For the fiscal quarter ended September 30, 1997, sales to
four customers accounted for 82% of total sales with individual customers
comprising 39%, 19%, 13% and 11%, respectively, of total sales.
The Company believes that it is beneficial to implement a strategy designed
to reduce its dependence on large contracts by increasing its focus on product
sales and service. Its product development efforts have resulted in the recent
introduction of three new products. The acquisition of Laminaire accelerates
this strategy because Laminaire is a product-driven business with a product line
that potentially can be enhanced by modified versions of certain of the
Company's newly-introduced products. Because of the acquisition of Laminaire,
most historical relationships between costs and revenues set forth below will
not be indicative of such relationships in the future.
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Results of Operations
Comparison of the Three Months Ended September 30, 1997 and 1996:
<TABLE>
Description Sep-97 % Sep-96 % Difference % Diff.
<S> <C> <C> <C> <C> <C> <C>
Contract and other revenues $736,091 100.0% $488,610 100.0% $247,481 50.7%
Cost of revenues 627,542 85.3% 480,133 98.3% 147,409 30.7%
Gross profit 108,549 14.7% 8,477 1.7% 100,072 1180.5%
Expenses:
Personnel and related costs 115,302 15.7% 138,578 28.4% (23,276) (16.8%)
Selling and administrative expenses 325,608 44.2% 197,010 40.3% 128,598 65.3%
Product development costs 44,957 6.1% 74,236 15.2% (29,279) (39.4%)
Total expenses 485,867 66.0% 409,824 83.9% 76,043 18.6%
Operating loss (377,318) (51.3%) (401,347) (82.1%) 24,029 (6.0%)
Other-net 1,111 0.2% (422,814) (86.5%) 423,925
Loss from operations (376,207) (51.1%) (824,161) (168.7%) 447,954
Income taxes-net 3,000 0.4% 3,000
Net loss (379,207) (51.5%) (824,161) (168.7%) 444,954
</TABLE>
The Company completed an initial public offering of its common stock and
warrants in March 1996. Thereafter, it commenced implementing a strategy
designed to make it a product and service, rather than a systems driven
business. This strategy required it to make a variety of investments in human
resources, management systems and product development which negatively impacted
earnings during the fiscal year ended June 30, 1997. The investments included
(i) expanding the Company's product and software development capabilities, (ii)
hiring new financial, engineering, sales and marketing professionals, (iii)
conducting an analysis of the Company's marketplace, and (iv) acquiring the
rights to certain new products which the Company believes fit well into the
Company's overall strategy.
The Company believed that it would begin to realize the benefits of these
investments during fiscal 1997. However, operations for the fiscal year ended
June 30, 1997 and the Three Months Ended September 30, 1997 were adversely
impacted by two sets of circumstances. First, certain of the Company's principal
customers significantly and unexpectedly reduced their capital spending. These
cutbacks resulted in the Company's actual volume of work for the periods being
significantly below the level planned and was insufficient to cover overhead.
The Company increased its selling efforts and augmented its marketing resources
that resulted in a significant increase in its bidding and proposal activity.
Although Management is optimistic about the Company's prospects for being
awarded certain of these proposed contracts, no assurance can be given that it
will be successful in this regard. Secondly, the Company introduced a new
product in fiscal 1997 and performed two major contracts that incorporated such
product. The Company required longer than expected to identify and is attempting
to correct certain problems which arose in connection with the operation of this
new product which resulted in it incurring a substantial loss during the periods
on one of these contracts and significantly reduced margins on the other. The
loss was caused because significant amounts of engineering labor and
subcontractor assistance was required on these jobs to analyze and address the
problems. Both of these contracts are expected by Management to be completed
before December 31, 1997, and all estimated losses have been accrued. The
Company also did not make a meaningful penetration into the targeted Continuous
Emissions Monitoring ("CEM") business or obtain significant contracts from new
customers despite increased marketing efforts. In part, Management believes that
this inability to penetrate the marketplace was caused by delays of governmental
bodies to release specific regulations in this area. No further efforts will be
undertaken to penetrate this market in the foreseeable future.
In January 1997, the Company made certain reductions in its workforce to
permit it to approach breakeven at lower levels of sales activity. The Company
also believes that it has identified the problems in its new product and that
similar problems will not recur on future installations of this product.
Nevertheless, the Company is not receiving a
15
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sufficient quantity of new orders to permit its traditional core business to
operate at a profitable level in the next few fiscal quarters. In addition,
expenses of approximately $140,000 associated with a financial public relations
program are included in the caption "Selling and Administrative" for the three
months ended September 30, 1997. These costs, which are largely noncash in
nature, were incurred to establish name recognition and liquidity for the
Company's stock after the Company's underwriter ceased operations shortly after
the initial public offering and were necessary to assist the Company in
obtaining financing for the Laminaire acquisition.
The Company's strategy is to reduce its dependence on large contracts by
increasing its focus on product sales. No assurance can be given that the
Company will be successful in these efforts. However, in October 1997 the
Company acquired Laminaire Corporation. Management believes that the acquisition
of Laminaire, a product-driven manufacturer and distributor of clean room
products which also produces a variety of electronic circuit boards and has
annual sales in excess of $6,000,000, represents a critical element in its
effort to make this transition and stabilize its financial condition. A
significant portion of its management, marketing and technical resources will be
focused towards integrating and, where possible, expanding and enhancing the
Laminaire business. This refocusing could result in a transition away from the
Company's core niches and contract orientation.
The Company also incurred greater levels of subcontractor and material
costs during the first quarter of 1997 than was anticipated. Contracts with high
level of subcontractor and material costs are generally less profitable than
engineering intensive contracts.
The caption "Nonoperating Costs - net" for the three months ended September
30, 1996 consisted principally of costs associated, directly or indirectly, of
terminating the Company's underwriting agreement. The caption also included a
$40,000 postemployment cost for a retiring director.
The Company has established reserves for the entire benefit associated with
the unused income tax loss carryforwards because the Company must realize income
in the future to utilize such carryforwards.
Liquidity and Capital Resources
On October 16, 1997 the Company acquired all of the outstanding shares of
Common Stock of Laminaire Corporation ("Laminaire") from Garay LLC for a
purchase price of $3,200,000, subject to adjustment based on Laminaire's
operating performance during the period immediately prior to the acquisition.
Laminaire, based in Rahway, New Jersey, manufactures and distributes cleanroom
products and also produces a variety of electronic circuit boards. The purchase
price consisted of a cash payment of $1,000,000, a convertible promissory note
in the principal amount of $2,200,000 (the "First Note") and a promissory note
with a principal amount to be determined (the "Second Note").
Seller Financing
The First Note bears interest at the rate of 10% per annum and is payable
in 60 equal monthly installments of principal and interest of $33,830 commencing
November 16, 1997 with a final payment of principal of $1,000,000 due on October
16, 2002. The First Note is convertible into shares of Common Stock at a
conversion price per share equal to the average closing bid price for the five
trading days prior to closing. The First Note becomes convertible for a period
of two years commencing April 16, 1998 in amounts not exceeding $500,000 for
each four month period. The holder of the First Note is entitled to demand
registration of the Common Stock issuable upon conversion of the First Note on
one occasion at the Company's expense commencing April 16, 1999 and is also
entitled to piggyback registration for such shares of Common Stock with respect
to any registration statement filed by the Company with the exception of a
registration statement to be filed in connection with any of the securities
issued in connection with obtaining the financing for the Company's acquisition
of Laminaire.
16
<PAGE>
The Second Note will be in a principal amount equal to the difference
between (a) the Stockholders' Equity (as defined) of Laminaire as of September
30, 1997 minus $200,000 minus (b) the Stockholders' Equity of Laminaire as of
September 30, 1996. In the event that the adjustment to the purchase price is
negative, the principal amount of the First Note will be reduced by such amount.
The Second Note, which bears interest at the rate of 15% per anum, is due on
March 31, 1998.
The Company's obligations under the First and Second Notes are secured by
first priority security interests in the real property and all tangible and
intangible personal property, including inventory and accounts receivable, of
Laminaire and the inventory and equipment of the Company and a subordinate
security interest in the accounts receivable of the Company. The subordinate
security interest is subordinate to the interests of the holders of convertible
debentures and convertible promissory notes in the principal amount of $550,000.
The agreements underlying First and Second Notes also contain restrictions on
the Company's ability to transfer cash from Laminaire and require the Company to
comply with various financial ratios.
In conjunction with the acquisition of all of the outstanding common stock
of Laminaire, the Company paid all of Laminaire's obligations, amounting to
approximately $1,100,000, to Corestates National Bank ("Corestates") under a
mortgage secured by Laminaire's interest in its real property and building
located in Rahway, New Jersey. Laminaire has used the building as its principal
office and manufacturing facility. The Company anticipates continuing
Laminaire's operations at such location and will relocate the Company's
principal executive offices from Ridgefield, New Jersey to the Laminaire
facility.
Currently, Laminaire's operations appear to be generating sufficient cash
flow to service the First and Second Notes, although no assurances can be given
that this trend will continue for the term of the First and Second Notes.
Other Financings
The funds, in excess of those provided by the issuance of the notes to
Garay LLC, utilized by the Company to purchase the common stock of Laminaire and
satisfy Laminaire's obligations to Corestates were obtained from the issuance of
(i) Common Stock of the Company for aggregate consideration of $200,000 and (ii)
convertible promissory notes and debentures for the balance.
Concurrent with the closing of the acquisition of Laminaire on October 16,
1997, the Company issued 326,521 shares of its Common Stock to a single
investor, the Optimum Fund, for aggregate consideration of $200,000 pursuant to
Regulation S under the Securities Act of 1933, as amended.
Concurrent with the closing of the acquisition of Laminaire, the Company
issued convertible debentures (the "Debentures") to three investors in the
principal amount of $300,000 pursuant to Regulation S under the Securities Act
of 1933, as amended. The Company will pay interest to the holders of the
Debenture at the rate of 5% per annum. Interest on the Debentures is payable in
cash or Common Stock of the Company, at the Company's discretion. The
Debentures, which are unsecured, are convertible into shares of the Company's
Common Stock at any time beginning 41 days after the date of issuance, at a
price per share equal to the lesser of 70% of the average closing bid price for
the five trading days preceding: (i) the date of conversion or (ii) the date of
closing, October 16, 1997.
Concurrent with the closing of the acquisition of Laminaire, the Company
issued convertible promissory notes ( the "Convertible Notes") to Norwood
Venture Corp. in the principal amount of $500,000 pursuant to Regulation D under
the Securities Act of 1933, as amended. The Company is obligated pay interest to
the holders of the Convertible Notes at the rate of 10% per annum. The Company's
obligations under the Debentures are secured by a first lien (except for an
existing lien to secure indebtedness in the principal amount of $50,000) in the
Company's accounts receivable and a lien that is second in priority to that of
Garay LLC, the seller of the common stock of Laminaire, with respect to the
inventory and equipment of the Company and the accounts receivable, inventory
and
16
<PAGE>
equipment of Laminaire. Laminaire also executed a guaranty in favor of Norwood
with respect to the Company's obligations under the Convertible Notes. The
Convertible Notes are convertible into shares of the Company's Common Stock at
any time at a price per share equal to the lesser of 70% of the average closing
bid price for the five trading days preceding (i) the date of conversion or (ii)
the date of closing, October 16, 1997. The Company agreed to register the shares
of Common Stock issuable upon conversion of the Convertible Note under the
Securities Act of 1933, as amended.
Subsequent to June 30, 1997 but prior to the closing of the Laminaire
acquisition, the Company issued convertible debentures (the "First Debentures")
to ten investors, in the aggregate principal amount of $1,450,000 pursuant to
Regulation S under the Securities Act of 1933, as amended. The Company is
obligated to pay interest to the holders of the First Debentures at the rate of
5% per annum. Interest on the First Debentures is payable in cash or Common
Stock of the Company, at the Company's discretion. The Company's obligations
under $50,000 principal amount of the First Debentures are secured by a lien on
the Company's accounts receivable. The First Debentures are convertible into
shares of the Company's Common Stock at any time commencing 41 days after the
date of issuance, at a price per share equal to the lesser of 70% of the average
closing bid price for the five trading days preceding (i) the date of conversion
or (ii) the date of closing. In the event that the Debentures are not converted
prior to their respective maturity dates, the Company has the option to satisfy
its obligations under $50,000 principal amount of the First Debentures on such
maturity date by the payment of cash or the issuance of Common Stock at the
Conversion Price. Through September 30, 1997, holders of $250,000 principal
amount of First Debentures had converted their debentures into 501,252 shares of
the Company's Common Stock.
The Company also borrowed $200,000 from an individual investor. The terms
and conditions of such borrowing have not yet been finalized.
Management believes that the holders of the various convertible notes and
debentures will elect to convert all or substantially all of the principal
balance of such notes. To the extent that a portion of principal is not
converted, the Company will seek a funding source to refinance such
indebtedness. No assurance can be given that the Company will be successful in
such efforts.
Lack of Credit facilities
The Company does not have any working capital or other credit facilities.
The Company is dependent on revenue from operations and, to date, has satisfied
its obligations when due. However, it may require credit facilities or other
source of liquidity to meet the needs of its business, particularly in light of
the restrictions on the Company's ability to transfer cash generated by
Laminaire for other Corporate purposes as long as the First and Second Notes are
outstanding. No assurance can be given that it will obtain such financing or, if
available, on terms acceptable to the Company.
The Company is also seeking other complementary business acquisitions, the
financing of which is dependent on the Company's ability to locate funding on
acceptable terms. No assurances can be given that the Company will be successful
in these efforts.
Seasonality
The demand for the Company's products is not seasonal. However, lengthy
stretches of inclement weather can create delays in the performance of some
systems contracts.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statements of Financial
Accounting Standards ("SFAS")
18
<PAGE>
No. 128, "Earnings Per Share'; No. 129, "Disclosure of Information about Capital
Structure"; No. 130, "Reporting Comprehensive Income"; and No. 131, "Disclosure
about Segments of an Enterprise and Related Information." These new accounting
pronouncements are not expected to have a significant impact on the Company.
SFAS No. 128 requires the presentation of Basic Earnings Per Share that the
Company believes will, in its case, approximate the amounts reported as Primary
Earning Per Share. The disclosure requirements in SFAS No. 129 and 130 are not
expected to impact the Company's financial statements. The acquisition of
Laminaire is expected to result in the Company having to provide segment
information in future sets of financial statements.
19
<PAGE>
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities
See Note 3 to the Condensed Financial Statements
Item 3 Defaults on Senior Securities
None
Item 4 Submission of Matters to a Vote of Shareholders
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
Exhibits
10.18 Employment Agreement between the Company and Jon Darcy
Reports on Form 8-K
September 3, 1997 - Closing of Financing
Pursuant to Regulation S.
20
<PAGE>
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 thereunto duly authorized.
THERMO-MIZER ENVIRONMENTAL CORP.
--------------------------------
(Registrant)
/s/ Jon J. Darcy
--------------------------------
JON J. DARCY
Jon J. Darcy
President, Chief Executive Officer and Treasurer
(Principal Executive and Financial Officer)
Date: November 14, 1997
21
EXHIBIT 10.18
Employment Agreement
THIS AGREEMENT effective the 1st day of July, 1997 by and between
Thermo-Mizer Environmental Corp., a Delaware corporation with offices at 528
Oritan Avenue, Ridgefield, NJ 07657 (the "Corporation") and Jon J. Darcy
residing at 35 Victor Hugo St. Park Ridge NJ (the "Employee").
WITNESSETH
WHEREAS, the Corporation, having been organized for the purpose of engaging
in the business of manufacturing, designing, assembling and selling a family of
products used to monitor a wide variety of environmental conditions for clean
rooms, factory emissions, chillers, and other critical data on a real time basis
to assist companies in complying with environmental laws and regulations,
desires to employ Employee to devote full time to the business of the
Corporation; and
WHEREAS, Employee, understanding and accepting the conditions of employment
set forth herein, desires to be so employed.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt
whereof is hereby duly acknowledged, the parties hereto covenant and agree as
follows:
1. Employment
Corporation agrees to employ Employee and Employee agrees to be so
employed, in the capacity of Chief Executive Officer or for such other duties
and services for the Corporation as may be determined and assigned to him from
time to time by the Board of Directors. Employee shall devote his entire
knowledge and best skills to the furtherance of the business purposes of the
Corporation as shall be entrusted to him under the general rules from time to
time promulgated by the Corporation through its Board of Directors.
2. Term
Employment shall be for a term of three (3) years effective as of July 1,
1997 and terminating on June 30, 2000 unless sooner terminated by the death or
permanent disability of Employee or by written notice given by either party as
hereinafter provided. This Agreement shall be automatically extended for two (2)
additional three (3) year periods unless terminated pursuant to the provisions
of Paragraph 3. Compensation for each period of extension shall be at the same
level as in Year 3 or be increased as determined at the time of extension.
<PAGE>
3. Termination
This Agreement and the employment of the Employee may be terminated by
either party with stated cause upon 30 days' written notice given by either
party to the other within 12 months from the date of commencement of employment
hereunder, or upon 90 days' written notice with stated cause thereafter.
Termination for cause shall include, but not necessarily be limited to, the
following:
(A) Employee's failure, or refusal to perform services required of him
by the Corporation to the best of his ability;
(B) Employee's commitment of an offense of moral turpitude or offense
under federal, state or local laws;
(C) Commission by Employee of an act of disloyalty against the
Corporation or the violation by Employee of any provision of this
Agreement.
4. Board of Directors
Employee shall at all times discharge his duties in consultation with and
under the supervision of the Corporation's Board of Directors. In the
performance of his duties, Employee shall make his principal office in such
place as the Corporation's Board of Directors and Employee may from time to time
agree.
5. Compensation
Employee's compensation for services rendered to or on behalf of the
Corporation for each fiscal year for which this Agreement is in effect shall be
$135,000, $145,000 and $155,000, respectively, and shall be paid in bi-weekly
installments. The Board of Directors may, at its sole discretion, elect to
provide additional compensation from time to time based on the operating
performance of the Corporation.
In addition, the Corporation, in each fiscal year, shall provide stock
options to Employee as follows:
If Laminaire Corporation is acquired by Corporation, the employee shall be
entitled to receive the number of options determined using the following
formula:
(C) minus (A plus B)
--------------------
10
Where:
(A) equals Laminaire's 1996 gross profit. If Laminaire is not
acquired (A) will be excluded from the calculation.
2
<PAGE>
(B) equals the Corporation's fiscal 1997 gross profit.
(C) equals the reported gross profit in the current fiscal year.
For the purposes of calculation, gross profits shall be reduced by product
development costs but shall exclude all impacts associated with the amortization
of purchase adjustments recorded in conformity with Opinions No. 16 and 17 of
the Accounting Principles Board. Such formula shall be adjusted in a similar
manner to give effect to other business combinations effected by the Corporation
during the term of this Agreement.
The options to purchase shares of Corporation's Common Stock shall be
exercisable at a price of $0.50 per share. The shares of stock into which the
options are exercisable shall be registered with the Securities and Exchange
Commission on a Form S-8.
6. Expenses
(A) Reimbursements: The Corporation shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under this
Agreement. Employee shall present to the Corporation from time to time an
itemized account of such expenses in any form required by the Corporation. Such
expenses shall be subject to review by the Audit Committee of the Board of
Directors.
(B) Automobile: The Corporation recognizes Employee' s need for an
automobile for business purposes. The Corporation shall, therefore, provide
Employee with automobile expenses, including all related maintenance, repairs,
insurance, and other costs related thereto. The automobile and related costs
shall be comparable to those which Employee's current employer presently
provides to Employee.
(C) Disability: In the event any illness or accident renders Employee
totally disabled, Corporation's obligations under this Agreement shall extend
only to the end of the current contract period and terminate at that time, in a
manner, and under such conditions as the Board of Directors may then determine
in its own discretion at such time. At that time or upon termination of
employment for any reason the corporation will give to the employee the one
million dollar life insurance policy carried on the employee free of all
encumbrances.
(D) Notices: All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
If to Corporation Thermo-Mizer Environmental Corp., 528 Oritan Avenue
Ridgefield, NJ 07657
If to Employee Jon J. Darcy, 35 Victor Hugo St., Park Ridge N.J.
3
<PAGE>
7. Certificate of Incorporation and Bylaws
Employee agrees that the Corporation's articles of incorporation and
bylaws, together with all currently effective rules and regulations made
thereunder, are hereby included in and made a part of this Agreement. Employee
further agrees that all new rules and regulations and all resolutions affecting
employees of the Corporation generally shall modify this Agreement as if they
had been included in it and had been made a part of it from the date of its
execution.
8. Restrictions
Employee hereby covenants and agrees that:
(a) he will not personally, make, draw, accept, or endorse any
promissory note, bill of exchange, lease, contract, or other obligation for
the payment of money or its equivalent by or in the name of the
Corporation;
(b) he will not pledge the credit of the Corporation in any way
whatsoever except as he may be authorized to do so by the Corporation's
Board of Directors; and
(c) any breach of this Article 8 by him shall entitle the Corporation
to recover from him any expense in which it may become involved as a result
of such prohibited action.
9. Confidential Matters
All confidential information relating to the Corporation's business shall
be kept confidential by Employee and shall not be disclosed by him except to the
extent necessary for performance of his services and obligations as set forth
herein and in all such instances Employee will take reasonable steps to
safeguard the confidentiality of all such information.
Employee acknowledges his understanding that in the performance of his
duties and obligations hereunder he may obtain knowledge of "confidential
information" as hereinafter defined, relating to the business of the
Corporation. As used herein, "confidential information" means any information
(including, without limitation, any formula, pattern, device, plan, process or
compilation of information) which (i) is, or is designed to be, used in the
business of the Corporation or results from its research or development
activities; (ii) is private or confidential in that it is not generally known or
available to the public; and (iii) gives the Corporation an opportunity to
obtain an advantage over competitors who do not know or use it.
Employee shall not, without the prior written consent of the Corporation,
either during the term of this Agreement or after any termination thereof:
(a) use or disclose any such confidential information outside the
Corporation;
(b) publish any writing with respect thereto; or
4
<PAGE>
(c) except in the performance of his duties hereunder, remove or aid
in the removal of any such confidential information or any property or
material relating thereto from the Corporation.
10. Inventions
Employee shall promptly disclose to the Corporation any and all inventions.
improvements, machines, appliances, processes, products, or the like (all of
which are referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or jointly with others,
at any time, in furtherance or in the performance of his duties as set forth in
this Agreement.
Any and all such inventions which in any way relate to the products
manufactured, sold, or used by the Corporation, or to any methods, processes, or
apparatus used in connection with the production of such goods or materials, or
in either case which are or may be or may become capable of use in the business
of the Corporation, shall at all times and for all purposes be regarded as
acquired and held by Employee in a fiduciary capacity and solely for the benefit
of the Corporation.
With respect to all such inventions, Employee shall:
(a) treat all information with respect thereto as confidential
information within the meaning of and subject to Article 9 of this
Agreement;
(b) Keep complete and accurate records thereof which records shall be
the property of the Corporation;
(c) execute any application for letters patent of the United States
and of any and all other countries covering such inventions, and give the
Corporation, its attorneys and counsel all reasonable and requested
assistance in preparing such application;
(d) from time to time, upon the request and at the expense of the
Corporation, but without charge for services beyond the payments herein
provided for, execute all assignments or other instruments required to
transfer and assign to the Corporation (or as the Corporation may otherwise
direct)) all inventions and all patents and applications for patents
covering such inventions or otherwise required to protect the rights and
interests of the Corporation;
(e) testify in any proceedings or litigation as to all such
inventions; and
(f) in case the Corporation shall desire to keep secret any such
invention, or shall for any reason decide not to have letters patent
applied for thereon, refrain from applying for such letters patent thereon.
No termination of employment of the Employee by the Corporation or of this
Agreement shall release the Employee or his heirs or legal representatives from
complying with the foregoing
<PAGE>
obligations as to such inventions. To that extent, the terms of this Article 10
shall survive this Agreement.
11. Governing Law
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey.
12. Entire Contract
This Agreement constitutes the entire understanding and agreement between
the Corporation and the Employee with regard to all matters referred to herein.
There are no other agreements, conditions or representations, oral or written,
express or implied, with regard thereto. This Agreement may be amended only in
writing signed by both parties.
13. Non-Waiver
A day or failure by either party to exercise a right under this Agreement,
or a partial or single exercise of that right, shall not constitute a waiver of
that or any other right.
14. Assignment
This Agreement shall not be assigned by Employee except that any benefits
which inure at any time to his estate or personal representative shall be
transferable as a matter of right to such entity or entities. The Corporation
shall have the right to transfer and assign this Agreement and its rights
hereunder in its entirety in its sole discretion and, upon doing so, all of the
rights and obligations of the Corporation hereunder shall thereafter inure and
apply to its assignees and successors on condition such succeeding entity
assumes in writing at the time of any such assignment all the obligations of
Corporation hereunder.
15. Enforceability
The invalidity or unenforceability of any provision, term, or condition
hereof shall in no way effect the validity or enforceability of any other
provision or of this Agreement or of the Agreement in its entirety.
16. Restrictive Covenant
In the event that the employment of the Employee is terminated by any party
for any reason, the Employee for a period of six months from the date of the
termination shall be and hereby agrees to be prohibited from directly or
indirectly, either as a principal, agent, manager, employee, owner, partner,
stockholder, director, or officer of a corporation or otherwise from engaging or
becoming interested in , financially or otherwise, in any business, trade, or
occupation similar to or in competition with the business of the Employer within
a radius of one hundred (100) miles of the main office or any branch office of
the Corporation then existing at that time. The Corporation
6
<PAGE>
shall have the right to assign this restrictive covenant in the event that the
Corporation desires at a date subsequent hereto to sell or otherwise transfer
all of the stock or other assets of the Corporation, and Employee agrees to
remain bound by the terms and conditions of this restrictive covenant to any and
all subsequent purchasers of the stock and/or assets of the Corporation.
17. Headings
Headings in this Agreement are for the convenience of the parties hereto
only and shall not be used to interpret or construe its provisions.
18. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original of which together shall constitute one and the same
agreement.
19. Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns.
IN WITNESS WHEREOF, Corporation has, by its appropriate officers, day
signed and sealed, and Employee has signed this Agreement.
THERMO-MIZER ENVIRONMENTAL CORP
BY: ____________________________
ATTEST:
SECRETARY
7
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