SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities and Exchange Act of 1934
For the quarter ended........................... December 31,1995
Commission file number.....................................0-9347
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
(formerly known as Alanco Resources Corporation)
(Exact name of registrant as specified in its charter)
Arizona 86-0220694
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4110 North Scottsdale Road, Suite 200, Scottsdale, Arizona 85251
(Address of principal executive office) (Zipcode)
(602) 874-0448
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
YES XX NO
As of December 31, 1995 there were 32,048,371 shares of common stock
outstanding.<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Consolidated Balance Sheets
December 31, 1995 (unaudited) and
June 30, 1995 (audited)................ 3-4
Consolidated Statements of Operations
For the three months ended December
31, 1995 and 1994 (unaudited).......... 5
Consolidated Statements of Operations
For the six months ended December
31, 1995 and 1994 (unaudited).......... 6
Consolidated Statements of Shareholders'
Equity for the six months ended
December 31, 1995 and 1994 (unaudited). 7
Consolidated Statements of Cash Flows
For the six months ended December
31, 1995 and 1994 (unaudited).......... 8-9
Notes to Consolidated Financial
Statements (unaudited)................. 10-12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................. 13
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders..................................... 14
Item 6. Exhibits and Reports on Form 8-K............ 15
- 2 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1995 AND JUNE 30, 1995
December 31, 1995 June 30, 1995
(Unaudited) (Audited)
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 1,594,634 $ 607,411
Accounts receivable -net 622,159 480,838
Notes receivables 269,406 144,406
Receivable - other (note 3) 514,056 907,368
Inventory of finished and unfinished goods
at lower of cost or market (note 2) 1,475,239 1,011,701
Marketable securities - 148,400
Prepaid expense 93,386 38,435
-------------- --------------
Total current assets 4,568,880 3,338,559
-------------- --------------
PROPERTY, PLANT AND EQUIPMENT
Manufacturing facilities and property 1,689,944 1,676,247
Manufacturing equipment 977,483 1,000,427
Restaurant equipment 846,970 724,470
Furniture and equipment 512,527 386,600
Less accumulated depreciation (546,918) (394,436)
-------------- --------------
Total property, plant and equipment 3,480,006 3,393,308
-------------- --------------
OTHER ASSETS
Investment in restricted securities 100,000 100,000
Costs in excess of book value on acquisition of
wholly owned subsidiaries less accumulated
amortization of $ 315,793 at December 31, 1995
and $102,419 at June 30, 1995 6,082,411 6,295,784
Installment sale contract receivable 1,225,000 1,240,000
Patents, patents pending and patent
application technology, less accumulated
amortization of $93,738 at December 31, 1995
and $83,678 at June 30, 1995 199,173 121,647
Mineral properties and related assets
Mineral properties, at cost 6,170,676 6,170,676
Mill and refinery, less accumulated
depreciation of $407,886 at December 31, 1995
and $391,994 at June 30, 1995 280,810 296,702
Other mining equipment, less accumulated
depreciation of $783,984 at December 31, 1995
and $758,783 at June 30, 1995 82,629 107,831
Other 152,729 151,345
-------------- --------------
Total other assets 14,293,428 14,483,985
-------------- --------------
TOTAL ASSETS $ 22,342,314 $ 21,215,852
============== ==============
See notes to consolidated financial statements
</TABLE>
- 3 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1995 AND JUNE 30, 1995
December 31, 1995 June 30, 1995
(Unaudited) (Audited)
-------------- --------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable, shareholders $ 49,042 $ 53,685
Current maturities of long-term liabilities 94,642 93,987
Accrued payroll taxes 130,056 141,500
Accounts payable 340,026 416,356
Accrued salaries, wages and commissions 89,334 69,173
Accrued liabilities 36,667 112,335
-------------- --------------
Total current liabilities 739,767 887,036
-------------- --------------
LONG-TERM LIABILITIES 405,406 463,834
-------------- --------------
Total liabilities 1,145,173 1,350,870
-------------- --------------
UNREALIZED INCOME ON INSTALLMENT SALES 957,587 969,104
-------------- --------------
REDEEMABLE PREFERRED STOCK, CLASS A
Preferences established by the Board of Directors
5,000,000 shares at all periods presented, 26 shares,
$20,000 par value, non-cumulative, voting issued and
outstanding at December 31, 1995 and June 30, 1995 312,765 295,062
-------------- --------------
SHAREHOLDERS' EQUITY
Preferred stock, Class B, cumulative, voting
authorized 20,000,000 shares and none issued - -
Common stock, no par value
100,000,000 shares authorized at all periods
presented, issued and outstanding 32,048,371
at December 31, 1995 and 29,924,057 at
June 30, 1995 (note 4) 50,406,461 47,885,245
Accumulated deficit (30,479,672) (29,284,429)
-------------- --------------
Total Shareholders' Equity 19,926,789 18,600,816
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 22,342,314 $ 21,215,852
============== ==============
See notes to consolidated financial statements.
</TABLE>
- 4 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER, 31, 1995 AND 1994
Three Months Ended December 31
(Unaudited) 1995 1994
-------------- -------------
<S> <C> <C>
REVENUES
Environmental services $ - $ 107,000
Restaurant service 141,390 -
Insurance adjusting 310,889 -
Mining and mining services - -
Manufacturing 741,487 644,492
All other 5,293 12,893
-------------- -------------
Total revenues 1,199,059 764,385
-------------- -------------
OPERATING EXPENSES
Direct Service
Environmental industry 115,255 381,912
Restaurant equipment and supply industry 86,235 -
Insurance adjusting industry 133,411 -
Mining industry 18,702 44,127
Manufacturing industry 450,602 651,963
General and administrative 840,639 149,909
Depreciation and amortization 265,063 98,515
-------------- -------------
Total operating expense 1,871,731 1,326,426
-------------- -------------
LOSS FROM OPERATIONS (672,672) (562,041)
OTHER INCOME AND (EXPENSE)
Interest Income 12,342 20,610
Interest Expense (28,497) (1,389)
Other income (expense) (20,708) 50,460
Loss on disposal of security (28,010) -
-------------- -------------
(78,089) 69,681
-------------- -------------
NET LOSS BEFORE EXTRAORDINARY ITEM (581,366) (492,360)
EXTRAORDINARY ITEM
Write-down of assets to reflect market value - (1,022,428)
-------------- -------------
LOSS INCLUDING EXTRAORDINARY ITEM $ (736,564) $ (1,514,788)
============== =============
NET LOSS PER SHARE OF COMMON STOCK:
Before extraordinary item $ (0.02) $ (0.02)
Extraordinary item - (0.05)
-------------- -------------
NET LOSS PER SHARE OF COMMON STOCK
INCLUDING EXTRAORDINARY ITEM $ (0.02) $ (0.07)
============== =============
Weighted average number of shares
outstanding during period 31,308,113 22,785,187
-------------- -------------
See notes to consolidated financial statements
</TABLE>
- 5 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER, 31, 1995 AND 1994
(UNAUDITED)
December 31
1995 1994
------------- -------------
<S> <C> <C>
REVENUES
Environmental services $ - $ 107,000
Restaurant service 314,109 -
Insurance adjusting 606,297 -
Mining and mining services - -
Manufacturing 1,950,040 1,513,699
All other 10,725 28,953
------------- -------------
Total revenues 2,881,171 1,649,652
------------- -------------
OPERATING EXPENSES
Direct Service
Environmental industry 170,434 707,116
Restaurant equipment and supply industry 218,055 -
Insurance adjusting industry 244,258 -
Mining industry 32,893 150,138
Manufacturing industry 1,153,217 1,318,430
General and administrative 1,719,429 343,517
Depreciation and amortization 460,039 186,660
------------- -------------
Total operating expense 3,998,325 2,705,861
------------- -------------
LOSS FROM OPERATIONS (1,117,154) (1,056,209)
------------- -------------
OTHER INCOME AND (EXPENSE)
Interest Income 17,007 54,734
Interest Expense (55,909) (2,804)
Other income (expense) (11,177) 62,302
Loss on disposal of security (28,010) -
------------- -------------
(78,089) 114,232
------------- -------------
LOSS BEFORE EXTRAORDINARY ITEM (1,195,243) (941,977)
EXTRAORDINARY ITEM
Write-down of assets to reflect market value - (1,022,428)
------------- -------------
LOSS INCLUDING EXTRAORDINARY ITEM $ (1,195,243) $ (1,964,405)
============= =============
LOSS PER SHARE OF COMMON STOCK
Before extraordinary item $ (0.04) $ (0.04)
Extraordinary item - (0.05)
------------- -------------
NET LOSS PER SHARE OF COMMON STOCK
INCLUDING EXTRAORDINARY ITEM $ (0.04) $ (0.09)
============= =============
Weighted average number of shares
outstanding during period (note 4) 30,806,371 22,739,006
See notes to consolidated financial statements
</TABLE>
- 6 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED DECEMBER 31, 1994 AND 1995
(Unaudited)
Common Stock Subscriptions Accumulated
Shares Amount Receivable Deficit TOTAL
---------- ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Balances, Junes 30, 1994 22,687,487 $ 40,958,846 $ (100,000) $ (24,531,050) $ 16,327,796
Issued for the following:
Cash 50,200 35,938 35,938
Asset acquisition 5,000 5,000 5,000
Services 5,000 5,000 5,000
Settlement of dispute 50,000 37,500
Write off subscription receivable (100,000) 100,000
Net loss (1,964,405) (1,964,405)
---------- ------------ ------------ -------------- --------------
Balances, December 31, 1994 22,797,687 $ 40,942,284 $ - $ (26,495,455) $ 14,446,829
========== ============ ============ ============== ==============
<CAPTION>
Common Stock Subscriptions Accumulated
Shares Amount Receivable Deficit TOTAL
---------- ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Balances, June 30, 1995 29,924,057 $ 47,885,246 $ - $ (29,284,429) $ 18,600,817
Issued for the following (note 4):
Cash 2,068,333 2,470,000 2,470,000
Services 2,231 2,500 2,500
Employee stock options 35,000 7,700 7,700
Acquisition of intellectual property 18,750 41,015 41,015
Net loss (1,195,243) (1,195,243)
---------- ------------ ------------ -------------- --------------
Balances, December 31, 1995 32,048,371 $ 50,406,461 $ - $ (30,479,672) $ 19,926,789
========== ============ ============ ============== ==============
See notes to consolidated financial statements
</TABLE>
- 7 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1995 1994
-------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,195,243) $ (1,964,405)
-------------- ---------------
Adjustments to reconcile net loss
tonet cash (used in) operating activities:
Depreciation 236,469 178,877
Amortization 223,570 7,783
Loss on sale of assets 51,124 -
Gain on sale of assets (730) (4,149)
Stock issued for services 6,700 5,000
Imputed expense preferred stock 17,704 -
Foregiveness of debt - (87,974)
Extraordinary item - 1,022,428
Gain realized on installment sale contract (11,517) (7,678)
Stock issued on settlement of dispute - 37,500
(Increase) Decrease in asset:
Accounts receivable (141,321) (69,609)
Notes and other receivables 18,312 492,062
Inventory (463,538) 187,929
Prepaid expenses (54,951) 21,279
Increase (Decrease) in liabilities:
Accounts payable (76,330) (179,494)
Notes payable-shareholders (4,643) -
Advances from officers and directors - (13,484)
Accrued liabilities and other (66,951) (72,265)
-------------- ---------------
Total adjustments (266,102) 1,518,205
-------------- ---------------
Net cash (used in) operating activities (1,461,345) (446,200)
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment
Restaurant equipment (122,500) -
Manufacturing facility and equipment (46,044) (82,095)
Furniture and equipment (146,231) (13,588)
Additions to patent value (46,571) (16,812)
Advances on note receivable (125,000) -
Proceeds from sale of property, plant and
equipment 13,917 7,483
Investment in PMM - (850,220)
Proceeds form sale of securities 120,390 -
Deposits and accrued interest (1,620) (4,495)
Collection on installment sale 15,000 10,000
Collection on receivable-other (note 3) 375,000 -
Net cash provided by (used in)
investing activities $ 36,341 $ (949,727)
-------------- ---------------
See notes to consolidated financial statements
</TABLE>
- 8 -<PAGE>
<TABLE>
<CAPTION>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1995 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings $ - $ 39,220
Proceeds from exercise of stock options 3,500 -
Payments on long term obligations (57,773) (13,000)
Proceeds from sale of stock 2,470,000 35,938
-------------- --------------
Net cash provided by financing activities 2,412,227 62,158
-------------- --------------
(DECREASE) INCREASE IN CASH 987,223 (1,333,769)
CASH AT BEGINNING OF PERIOD 607,411 1,935,915
-------------- --------------
CASH (OVERDRAFT) AT END OF PERIOD $ 1,594,634 $ 602,146
============== ==============
Supplemental disclosure of non-cash operating,
investing and financing activities:
Issuance of capital stock :
Addition to manufacturing facility $ - $ 5,000
For services 6,700 -
Acquisition of intellectual property 41,015
See notes to consolidated financial statements
</TABLE>
- 9 -<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with Generally Accepted Accounting Principles for interim financial
information and in accordance with the instructions to Form 10Q. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with Generally Accepted Accounting Principles
have been condensed or omitted. These interim financial statements should be
read in conjunction with the Company's June 30, 1995 Annual Report on Form 10K.
In the opinion of management, the accompanying financial statements include all
adjustments consisting of normal recurring accruals necessary to present fairly
the financial position, results of operations, changes in shareholders equity
and statements of cashflows as of December 31, 1995, and for all periods
presented. The results of operations for the period ending December 31, 1995,
are not necessarily indicative of the operating results to be expected for an
entire year.
All significant intercompany balances, transactions and stock holdings have
been eliminated from the accompanying interim financial statements.
Note 2 - Inventories
Inventories have been recorded at the lower of cost or market. The
composition of inventories as of December 31, 1995 and June 30, 1995 is listed
below:
December 31, 1995 June 30, 1995
----------------- -------------
Raw materials $ 599,643 $ 583,164
Work in process 171,250 186,571
Finished goods 704,346 241,966
------------- -------------
Total Inventories $ 1,475,239 $ 1,011,701
============= =============
- 10 -<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
Note 3 - Contingencies
During the year ended June 30, 1995, the Company sold 86% of its interest
in Phoenix Medical Management to Amarante Financial S.A., an unrelated third
party. The terms of the sale provide for total payments of $870,000 beginning
July 15, 1995, at the rate of $75,000 per month with a balloon payment of
$495,000 due on December 15, 1995. As part of the negotiated acquisition of 70%
of the outstanding stock of Phoenix Medical Management, the Company agreed to
indemnify certain unrelated third parties against loss on their continuing
guarantees on leased facilities and equipment valued at $1,159,826 and on a Note
Payable to a prior Phoenix Medical Management shareholder which is due and
payable no later than December 31, 1995, in the principal amount of $100,000.
As part of the Company's sale of the majority of its interest in Phoenix Medical
Management, the purchaser agreed to indemnify the Company against loss from
these commitments and assumed the commitments under the contract sale agreement.
As of December 31, 1995, the Company had collected $375,000 of the total
outstanding amount of $870,000. Currently the debtor is in default on the
$495,000 due December 15, 1995, and the above $100,000 Note Payable. Although
negotiations are currently under way to remedy the default, there are no
assurances that the Company will be successful in these negotiations. The
Company has reached an agreement with the holder of the Note Payable and is
making payments thereon.
Note 4 - Shareholders' Equity and Loss Per Share
During the six months ended December 31, 1995, the Company issued common
stock for cash in the amount of $2,470,000. The restricted common shares were
issued pursuant to exemption available under Section 4 of the Securities Act for
a negotiated price on private placement agreements to several unrelated
qualified investors. As of December 31, 1995, 500,000 shares valued at $600,000
remain outstanding on one private placement agreement. Under terms of that
agreement, for each two shares purchased the buyer will receive one warrant for
the purchase of an additional share of restricted common stock for $3,
exercisable for
- 11 -<PAGE>
ALANCO ENVIRONMENTAL RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
Note 4 - Shareholders' Equity and Loss Per Share (cont.)
a period of three years from the date of the subscription. As part of this
agreement, the Company will issue a special warrant exercisable within 90
days of issuance at an exercise price of $1 per share. The number of warrants
will be determined at the date of issuance based upon stock performance
parameters which currently would have the Company issuing approximately 34,000
of these warrants as of February 6, 1996.
The Company currently has two stock option plans in effect. Under the
Officers and Directors Stock Option Plan, 1,000,000 shares have been authorized.
The price of these options is to be determined by the Board of Directors at the
time the option is granted. To date, options on 225,000 shares have been
granted at an option price of $0.10 per share.
At the Annual Shareholders Meeting December 16, 1995, the Shareholders
approved the 1995 Incentive Stock Option Plan for key employees. Under the
Plan, the Board of Directors may issue options to acquire up to 1,000,000 shares
to key employees. For this plan, the number of shares subject to options
granted to any one key employee shall not exceed 100,000 shares. The exercise
price for options shall be set by the Administrative Committee but shall not be
less than the fair market value of the shares on the date the option is granted.
The Company is in the process of registering these securities according to the
requirements of the Plan through a Form S-8 Registration Statement.
The net loss per share has been calculated based on net losses for the
periods divided by the weighted average number of shares of common stock
outstanding during the periods presented. The potential issuance of additional
shares through the exercise of stock warrants or options was not included in the
calculations of average shares outstanding since the effect would be anti-
dilutive.
- 12 -<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
1. Liquidity and Capital Resources.
As of December 31, 1995, the Company's current assets exceeded current
liabilities by $3,829,113, a ratio of six to one. The available cash of
$1,594,634 represents 35% of total current assets. The Company also anticipates
the receipt of $600,000 by February 29, 1996, from the issuance of common stock
through an existing private placement subscription agreement. The Company
believes that it has adequate liquidity to complete the sales promotion of the
CDSI air pollution control equipment and the restaurant equipment lines. The
insurance adjustment business segment is expanding through the use of cash
generated from that business segment. The manufacturing business segment
increased its cash position by $379,000 for the six months ended December 31,
1995. Management expects the manufacturing segment to generate all cash
requirements internally.
2. Results of Operations.
Revenues for the six months ended December 31, 1995, increased by
$1,231,519. Of that increase, 35% was generated from the manufacturing segment
though increased marketing efforts and the introduction of new product lines.
The balance of the increase was generated in the restaurant service and
insurance adjusting business segments which were not a part of the Company for
the period ending December 31, 1994. Operating expenses increased with the
addition of the new business segments and the development of the infrastructure
necessary to maximize future operations. Additional efforts to promote the
Company's products, Company recognition and market value increased general and
administrative expense over the prior periods. Excluding the write-off for
depreciation and amortization, loss from operations decreased from $869,549 to
$657,115, a reduction of 24% for the six months ended December 31, 1995, when
compared to the same period in 1994.
3. Other.
The Company is currently seeking to dispose of its mining properties or to
enter into joint venture agreements for the operation of the mining assets.
Information packets have been prepared and distributed to various mining
concerns soliciting their interest. Although, no negotiations are in process at
this time, the company has received positive responses.
- 13 -<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Shareholders' Meeting December 16, 1995, three (3) matters were
brought to a vote of security holders.
(a) The slate of eleven (11) directors, as nominated and contained in the
proxy, was elected. The total number of shares represented in person or by
proxy was 24,466,488. The following is a tabulation of votes cast for each
director based upon cumulative voting:
Harold S. Carpenter 30,174,064
Steven H. Davis 30,177,464
Kevin L. Jones 30,059,608
Larry G. Nelson 12,598,937
Robert J. Scannell 12,584,737
Peter D. Van Oosterhout 29,419,833
John Connelly 12,585,027
Bradley Gordon 30,168,764
Norman E. Meyer 30,376,464
James G. Ricketts 12,703,737
Dennis Schlegel 30,177,764
Shares voted against - not applicable
Shares abstained - 1,685,329
Broker non-voted - 1,435,329
(b) A second matter brought to a vote was a nomination from the floor
requesting that the Board of Directors consist of only five members.
Management holding Proxies representing approximately fifty-percent (50%)
of the shares entitled to vote abstained from the vote on the motion upon
the instructions of the Board of Directors. The motion failed to pass as
shown below:
Votes for this motion 9,123,024
Votes against 3,207,979
Votes abstaining 12,135,511
Broker non-voted 1,435,329
Needed to pass 12,233,245
- 14 -<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (cont.)
(c) The Key Employee Incentive Stock Option Plan was approved by the security
holders. See Note 4. The result of the vote was as follows:
Votes for Resolution 15,943,981
Votes against Resolution 8,347,233
Shares abstained 109,170
Broker non-votes 1,435,329
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit (27) FINANCIAL DATA SCHEDULE
(b) Reports on Form 8-K
Report dated January 16, 1996, request for a Special Meeting of the
Shareholders for the proposal of election of a Board of only five
Directors.
- 15 -<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
ALANCO ENVIRONMENTAL
RESOURCES CORPORATION
(Registrant)
John E. Haggar
----------------------------------
JOHN E. HAGGAR
Treasurer
Date: 2/13/96
--------------
- 16 -<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 1594634
<SECURITIES> 0
<RECEIVABLES> 1405621
<ALLOWANCES> 0
<INVENTORY> 1475239
<CURRENT-ASSETS> 4568880
<PP&E> 11752909
<DEPRECIATION> (1738788)
<TOTAL-ASSETS> 22342314
<CURRENT-LIABILITIES> 739767
<BONDS> 405406
<COMMON> 50406461
312765
0
<OTHER-SE> (30479672)
<TOTAL-LIABILITY-AND-EQUITY> 22342314
<SALES> 2264149
<TOTAL-REVENUES> 2881171
<CGS> 1371272
<TOTAL-COSTS> 3998325
<OTHER-EXPENSES> 39187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (55909)
<INCOME-PRETAX> (1195243)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1195243)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1195243)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
