U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB AMENDED (Mark One) x 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 February 28, 1998 Commission file number 1-10069 ENVIRONMENTAL TESTING TECHNOLOGIES, INC. 				 Washington 93-0845837 (State of Incorporation) (IRS Employer ID No.) 7500 Perimeter Road South Seattle, Washington 98108 (Address of principal executive offices) (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 ____ NO __X__ 10Q for Quarter Ending 2/28/96, 8/31/96, 11/30/96 and 2/28/97 were not filed. Common stock, no par value, $1,682,065 shares outstanding as of 03/29/98. Table of Contents Page PART I - Financial Information 	 									 Page No. Item 1 Condensed Consolidated Balance Sheet 3 	 Condensed Consolidated Statement of Operations 4 	 	 Notes to Financial Statement 5 		 Item 2 Management Discussion & Analysis of 5 	 Financial Condition & Results of Operations 		 PART II - Other Legal Proceedings 5 	 PART III - Working Capital 6 PART IV - Stockholders' Equity 6 PART V - Reports on Form 8K 6 Signatures 6 Part I - Financial Information Environmental Testing Technologies, Inc. & its subsidiaries Balance Sheet 		 	 					02/28/98 5/31/97 						 Unaudited Audited - ------------------------------------------------------------------- ASSETS Current Assets 	Cash 		 $ -0- $ -0- 	Accounts Receivable - net of allowances 	 485,438 247,684 	Other current assets 127,160 35,037 				 ------------ ------------ 	TOTAL current assets 612,598 282,721 Property, Plant & Equipment Assets 	Property, Plant & Equipment 2,585,058 2,373,015 	Less accumulated depreciation <2,032,151> <1,932,241> ------------ ------------ 	Property, Plant & Equip. (Net) 552,907 440,774 Other Assets 	Deposits 		 22,654 18,548 					 ------------- ------------- TOTAL ASSETS $1,188,159 $742,043 LIABILITIES & STOCKHOLDER'S DEFICIT Current Liabilities 	Line of Credit 	 $ 318,204 $ 175,679 	Accounts Payable 458,595 250,778 	Accrued Liabilities 	 213,297 142,500 	Current portion of long term debt 632,424 604,511 						 ----------- ----------- TOTAL current liabilities 1,622,520 1,173,468 		 Long Term Debt 	 103,278 226,551 Redeemable Preferred Stock 176,959 176,958 Stockholder's (Deficit) Equity 	Preferred Stock 	 100,000 100,000 	Common Stock (no par value) 752,557 677,557 	Accumulated deficit <1,567,173> <1,612,491> 						 ------------ ------------ TOTAL Stockholder's Deficit 	 <714,596> <834,934> 		 TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT $1,188,159 $742,043 Environmental Testing Technologies, Inc. & its subsidiaries Statement of Operations 			 3 Months Ended	 9 Months Ended 			 02/28/98 02/28/97 02/28/98 02/28/97 Sales $896,212 $367,805 $2,231,498 $1,309,002 Cost of Sales 609,624 280,826 1,495,469 944,184 - ----------------------------------------------------------------------- Gross Profit $286,588 $ 86,979 $ 736,029 $ 364,818 Operating Expenses: Selling, General & Administrative $197,975 $160,449 $ 538,573 $ 507,197 Operating Income <Loss> 88,613 <73,470> 197,456 68,908 Other Income <Expense>: 	Interest 57,926 38,526 146,759 109,904 	Other Expenses 738 --- 5,358 15,246 - ------------------------------------------------------------------------ Total Income <Loss> Before Income Taxes 29,953 <111,996> 45,339 <267,529> Federal Income Tax -0- -0- -0- -0- - ------------------------------------------------------------------------ Net Income <Loss> 29,953 <111,996> 45,339 <267,529> Net Income Per Share <Loss> .01 <.07> .02 <.16> Weighted Average Shares Outstanding $1,682,065 $1,598,315 $1,682,065 $1,598,315 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, 1997. 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 the nine months ended February 28, 1998 and February 28, 1997, were $2,231,498 and $1,309,002 respectively. The sales increase of $922,496, or 70%, was attributable to a resurgence in basic nondestructive testing revenues stimulated by the current demand for increase aircraft shipments by the Boeing Company, and by revenues generated from the acquisition of Worldwide Tank Services assets in July 1997. Cost of sales for the six months ended February 28, 1998 and February 28, 1997, were $1,495,469 and $944,184 respectively. The cost of sales resulted in gross profits of $736,029 and $364,818 respectively, or a 101% increase in gross profits in 1998 over the comparable 1997 period. The increase in gross profit is attributable to higher sales levels and improved utilization of manpower as well as improved pricing. Selling, general and administrative expenses increased from $507,197 for the nine months ended February 28, 1997, to $538,573 for the nine months ended February 28, 1998. This increase was related to increased marketing efforts introducing the tank lifting business to the marketplace. The increase of $31,376 is a 6% increase and compares favorably with the 70% increase in sales for the comparable period. Other expense is principally interest expense and late payment penalties. This increased from $125,150 in 1997 to $152,117 in 1998. The increase is due to the financing costs of higher accounts receivable levels created by higher revenue levels in 1998 as compared to 1997. Net income <loss> for the nine months ended February 28, 1998, was $45,339 which compares favorably to the February 28, 1997, loss of <$267,529>. The improved overall profitability is attributable to higher revenue levels while holding selling, general and administrative expenses at a relative constant period to period comparable level. 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. PART III - Working Capital The continuing lack of working capital raises substantial doubt about the Company's ability to continue as a going concern. The Company continues to seek new financing to cure this negative working capital problem. PART IV - Stockholders' Equity The negative stockholders' equity at February 28, 1998, of <$714,596> shows an improvement over the year ended May 31, 1997, balance of <$834,934>. The improvement in Stockholders' equity was caused by the profit generated for the nine month period and by the acquisition of Worldwide Tank Services assets acquired for Common Stock valued at $75,000.00. The Company continues to seek new equity financing to cure this negative working position. PART V - Exhibits and Reports on Form 8K Form 8K regarding a change in accountants was filed on August 15, 1997. Signatures In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized: ENVIRONMENTAL TESTING TECHNOLOGIES, INC. 	 March 31, 1998 			 s/s G.B. Maitland		 - -------------------------------------------------------------------- Date				 George B. Maitland, VP Finance March 31, 1998			 s/s L.G. Connel	 - -------------------------------------------------------------------- Date 				 Lee G. Connel, Director