U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the Quarter Ended August 31, 1995 Commission file number 1-10069 ENVIRONMENTAL TESTING TECHNOLOGIES, INC. (formerly Peripheral Systems, Inc.) Washington (State of Incorporation) 7500 Perimeter Road South Seattle, WA (Address of principal executive offices)93-0845837 (IRS Employer ID No.) 98108 (Zip Code) 206-763-1919 (Telephone Number) Check whether the registrant filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by the bankruptcy court. YES X NO Common stock, no par value, $1,481,315 shares outstanding as of 10/31/95 Table of Contents Page PART I - Financial Information Item 1 Condensed Consolidated Balance Sheet Condensed Consolidated Statement of Operations Notes to Financial Statement Item 2 Management Discussion & Analysis of Financial Condition & Results of OperationsPage No. 1 2 3 4PART II - Other Item 1 Legal Proceedings Item 2 Reports on Form 8K Signatures 5 5 6 ODDHEADER: Environmental Testing Technologies, Inc. & its subsidiaries Part I - Financial Information Environmental Testing Technologies, Inc. & its subsidiaries Balance Sheet 8/31/95 Unaudited5/31/95 Audited ASSETS Current Assets Cash Accounts Receivable - net of allowances Other current assets TOTAL current assets Property, Plant & Equipment Building & leasehold improvements Machinery & equipment Vehicles & office trailers Furniture & fixtures Less accumulated depreciation Property, Plant & Equip. (Net) Other Assets Deposits $11,600 211,324 51,421 274,348 115,912 1,952,582 242,052 60,405 (1,670,70 2) 700,249 20,009 $12,659 535,299 225,570 773,528 126,178 2,205,328 325,943 86,112 (1,735,668 ) 1,007,893 30,058 TOTAL ASSETS$994,606$1,811,479LIABILITIES & STOCKHOLDER'S DEFICIT Current Liabilities Line of Credit Accounts Payable Accrued Liabilities Current portion of long term debt TOTAL current liabilities Long Term Debt Income Tax Payable Redeemable Preferred Stock Stockholder's (Deficit) Equity Preferred Stock Common Stock (no par value) Accumulated deficit TOTAL Stockholder's Deficit $109,579 339,825 185,241 575,507 1,210,152 229,874 175,000 176,958 100,000 617,557 (1,514,93 5) (797,398) 522,452 370,284 164,473 529,041 1,786,250 222,389 175,000 176,958 200,000 608,557 (1,357,675 ) (549,118)TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT$994,606$1,811,479 Environmental Testing Technologies, Inc. & its subsidiaries Statement of Operations 3 Months ended3 Months Ended8/31/958/31/94 Sales - - Cost of Sales Gross Profit$537,706 434,678 103,028$988,965 625,454 363,511 Operating Expenses: Selling, General & Administrative $226,056 231,552Operating Income <Loss>(123,028)131,959Other Income <Expense>: Interest Net Loss on Discontinued Operations Gain on Sale of Discontinued Business (54,817) (22,554) 43,139 (26,921) (4,451) - - - Total Income <Loss> Before Income Taxes(157,260)100,587Federal Income Tax00Net Income <Loss>($157,260)(100,587) Net Income <Loss> Per ShareNIL01Weighted Average Shares Outstanding1,472,3151,386,315 Notes to Condensed Consolidated Financial Statements Item 1 - The unaudited consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The accompanying consolidated financial statements and related notes should be read in conjunction with the audited financial statements of the Company, and notes thereto, for the fiscal year ended May 31, 1995. The information furnished reflects, in the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of the interim periods presented. Item 2 - Management's Discussion and Analysis of Financial Condition & Results of Operations Sales for quaters ended August 31, 1995 and August 31, 1994, were $537,706 and $988,965 respectively. The sales reductions of $451,259 were the result of an abnormal decline in business volume at X-Ray,Inc., coupled with the near disappearance of TankTek business caused by former mangements leaving the Company and taking the business with it. In 1994 TankTek enjoyed a large Alaskan contract that did not reoccur in 1995. Cost of Sales for the Quarters ended August 31, 1995,and August 31, 1994, were $434,678 and $625,454 respectively. These cost of sales resulted in gross profits of $103,028 in 1995 and $363,511 in 1994. The loss of gross profit is directly attributable to the lower sales volumes between this time period. Selling, general and administrative expenses remained relativel constant between this time period. Interest expense increased in 1995 over 1994 due to increased borrowings to cover the operating losses, as well as financing new equipment for TankTek's expected sales increases. Losses for discontinued operations of $22,554, and gains on sales of disposed assets of $43,139, are directly attributable to the sale of Accu-Inspect, Inc. in June 1995. Future gains on the sale will be recorded as realized with the collection of the outstanding notes totaling $202,000. Net income loss for the quarters ended Augsut 31, 1995 were $157,260 and $100,587 in 1994. The loss incurred was caused by the Company's failure to achieve the sales levels anticipated. PART II - Other Information 1. Legal Proceedings. The Company is not a party to any material pending legal proceedings other than ordinary routine litigation incidental to the business, except for a suit filed by Mr. Anton Kurtz, the owner of the Class A Preferred Stock. ETT is one of the defendents in this suit and intends to vigorously defend against this suit on a number of grounds and does not expect Mr. Kurtz to prevail in his assertions. Item 6 Exhibits and Reports on Form 8K No reports on Form 8K were filed for the 3 month period ending August 31, 1995. Signatures In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf, by the undesigned, thereunto duly authorized: ENVIRONMENTAL TESTING TECHNOLOGIES, INC. __________________________________________________________________ Date George B. Maitland, VP Finance __________________________________________________________________ Date Lee G. Connel, Director