CHEM-MET SERVICES COMBINED ENTITIES
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO COMBINED FINANCIAL STATEMENTS
_______________________________________
PAGE
____
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BOVITZ & CO., CPA, P.C.. . . . . . . . . . . . . . . . . 2
COMBINED FINANCIAL STATEMENTS:
______________________________
Combined Balance Sheets as of September 30, 1998
and 1997. . . . . . . . . . . . . . . . . . . . . . . 3
Combined Statements of Income and Retained Earnings
for the Years Ended September 30, 1998, 1997 and
1996. . . . . . . . . . . . . . . . . . . . . . . . . 4
Combined Statements of Cash Flows for the Years
Ended September 30, 1998, 1997 and 1996 . . . . . . . 5
Notes To Financial Statements . . . . . . . . . . .6 - 12
FINANCIAL STATEMENT SCHEDULES:
_____________________________
I Combining Balance Sheets as of September 30,
1998 . . . . . . . . . . . . . . . . . . . . . . .13 - 14
II Combining Balance Sheets as of September 30,
1997 . . . . . . . . . . . . . . . . . . . . . . .15 - 16
III Combining Statements of Income for Year End
September 30, 1998 . . . . . . . . . . . . . . . . . 17
IV Combining Statements of Income for Year End
September 30, 1997 . . . . . . . . . . . . . . . . . 18
V Combining Statements of Income for Year End
September 30, 1996 . . . . . . . . . . . . . . . . . 19
B O V I T Z
_____________________
& C O. C P A, P. C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
____________________________
To the Board of Directors and Stockholders of
Chem-Met Services Combined Entities
We have audited the accompanying combined balance sheets of Chem-
Met Services Combined Entities as of September 30, 1998 and 1997,
and the related combined statements of income and retained
earnings and cash flows for each of the three years in the period
ended September 30, 1998. We have also audited the schedules
listed in the accompanying index. These combined financial
statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
combined financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and schedules are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements and schedules. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the
financial statements and schedules. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the financial
position of Chem Met Services Combined Entities at September 30,
1998 and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended
September 30, 1998, in conformity with generally accepted
accounting principles.
Also, in our opinion, the schedules present fairly, in all
material respects, the information set forth therein.
/s/ Bovitz & Co., CPA, PC
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
January 26, 1999
1651 Kingsway Court * P.O. Box 445/Trenton, Michigan 48183-0445
Phone: (734) 671-5300/Fax: (734) 671-6504/
Website: bovitzcpa.com/E-Mail: bovitz@bovitzcpa.com
-2-
CHEM-MET SERVICES COMBINED ENTITIES
COMBINED BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997
ASSETS 9/30/98 9/30/97
_______ _______ _______
CURRENT ASSETS
______________
Cash $ 334,242 $ 599,980
Restricted Cash 494,449 539,367
Accounts Receivable 5,043,064 4,551,552
Prepaid Federal Income Tax 27,610 -0-
Notes Receivable - Other 26,042 9,606
___________ ___________
TOTAL CURRENT ASSETS 5,925,407 5,700,505
___________ ___________
PROPERTY AND EQUIPMENT
______________________
Property and Equipment,
Net of Accumulated Depreciation 6,636,079 7,205,665
___________ ___________
OTHER ASSETS
_____________
Note Receivable - Officer 1,064,939 869,032
Other Assets 36,153 46,036
___________ ___________
TOTAL OTHER ASSETS 1,101,092 915,068
___________ ___________
TOTAL ASSETS $13,662,578 $13,821,238
=========== ===========
LIABILITIES AND STOCKHOLDER EQUITY
__________________________________
CURRENT LIABILITIES
___________________
Accounts Payable $ 1,603,020 $ 1,821,378
Payroll Taxes Payable 34,121 22,753
Federal Income Tax Payable -0- 140,797
Accrued Expenses 1,078,390 801,843
Current Portion of Long-Term Debt 2,481,828 2,667,452
Current Portion of Settlements Payable 1,044,000 1,084,000
___________ ___________
TOTAL CURRENT LIABILITIES 6,241,359 6,538,223
___________ ___________
LONG-TERM LIABILITIES
Accrued Environmental Cost 4,430,421 4,430,421
Accrued Closing Cost 449,783 440,277
Long-Term Debt, Less Current Maturities 1,553,606 1,772,472
Settlements Payable, Less Current Portion 264,000 396,000
___________ ___________
NET LONG-TERM LIABILITIES 6,697,810 7,039,170
___________ ___________
STOCKHOLDER EQUITY
Common Stock 77,160 77,160
Retained Earning 646,249 166,685
___________ ___________
TOTAL STOCKHOLDER EQUITY 723,409 243,845
___________ ___________
TOTAL LIABILITIES AND STOCKHOLDER
EQUITY $13,662,578 $13,821,238
=========== ===========
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
(The Accompanying Notes Are An Integral Part
Of These Combined Financial Statements)
-3-
CHEM-MET SERVICES COMBINED ENTITIES
COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997, AND 1996
9/30/98 9/30/97 9/30/96
___________ ___________ _________
NET REVENUES $21,801,179 $21,917,416 $28,030,820
COST OF GOODS SOLD 14,133,618 14,348,058 19,582,877
___________ ___________ __________
GROSS PROFIT 7,667,561 7,569,358 8,447,943
SELLING GENERAL AND ADMINISTRATIVE
EXPENSES 6,055,329 6,742,485 7,562,912
DEPRECIATION AND AMORTIZATION 798,788 755,071 920,137
___________ __________ ___________
INCOME(LOSS) FROM OPERATIONS 813,444 71,802 (35,106)
___________ __________ ___________
OTHER INCOME(EXPENSES)
Interest and Other Income 26,511 286,782 63,823
Interest Expense (360,391) (391,353) (405,401)
Other Expense (200,000)
TOTAL OTHER INCOME(EXPENSES) (333,880) (104,571) (541,578)
____________ ___________ __________
NET INCOME(LOSS) Before Federal
Income Tax 479,564 (32,769) (576,684)
FEDERAL INCOME TAX -0- (27,490) (61,312)
___________ ___________ __________
NET INCOME(LOSS) 479,564 (60,259) (637,996)
RETAINED EARNINGS - Beginning 166,685 226,944 864,940
____________ ___________ __________
RETAINED EARNINGS - Ending $ 646,249 $ 166,685 $ 226,944
=========== =========== ===========
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
(The Accompanying Notes Are An Integral Part
Of These Combined Financial Statements)
-4-
CHEM-MET SERVICES COMBINED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
9/30/98 9/30/97 9/30/96
___________ ___________ __________
Cash flows from operating activities:
Net Income(Loss) from continuing
operations $ 479,564 $ (60,259) $ (637,996)
Adjustments to reconcile net
income(loss) to cash provided by
operations:
Depreciation and amortization 798,788 755,071 920,137
Provision for bad debt reserves 606,006 (290,352) (238,319)
Changes in assets and liabilities:
Accounts receivable (1,097,518) 700,684 (33,530)
Prepaid federal income tax (168,407) 27,490 2,302
Accounts payable and accrued expenses 79,063 (1,180,716) 284,771
___________ __________ __________
Net cash provided by continuing
operations 697,496 (48,082) 297,365
___________ ___________ __________
Cash flows from investing activities:
Purchases of property and equipment,
net (304,829) (379,835) (325,604)
Proceeds from sale of property and
equipment 85,510 91,712 5,657
Change in restricted cash 44,918 451,138 -0-
___________ ___________ __________
Net cash used in investing
activities (174,401) 163,015 (319,947)
___________ ___________ __________
Cash flows from financing activities:
Long-term financing new equipment 257,557 314,872 1,014,607
Principal repayments on long-term debt (850,483) (661,800) (1,302,215)
Change in officer note receivable (195,907) 205,785 (436,446)
___________ ___________ __________
Net cash used by financing
activities (788,833) (141,143) (724,054)
___________ ___________ __________
Increase(Decrease) in cash (265,738) (26,210) (746,636)
Cash - Beginning 599,980 626,190 1,372,826
___________ ___________ __________
Cash - Ending $ 334,242 $ 599,980 $ 626,190
=========== =========== ==========
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48138
(The Accompanying Notes Are An Integral Part Of
These Financial Statements)
-5-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS
NOTE A - COMPANY OVERVIEW
Company Overview
________________
Chem-Met Services, Inc. ("Chem-Met") operates a facility near
Detroit, Michigan that processes acids, alkalis, adhesives, oils,
paints, phosphates, plastisols, resins, sludges and other
hazardous waste into inert solids that are economically
compatible with the environment for placement in approved third-
party non-hazardous landfills.
Chemical Conservation Corporation ("Chem-Con") runs a fully Part
B-permitted T.S.D.F. and transfer station in Orlando, Florida,
that processes acids, inorganic and organic waste, as well as
depacking of lab packs. The company is fully licensed and
equipped to transport hazardous waste.
Chemical Conservation of Georgia, Inc. ("Chem-Con Georgia") has a
facility just north of the Florida border in Valdosta, Georgia,
that recycles solvents and blends organic wastes to make virgin-
fuel substitutes for cement kilns.
Chem-Met, Chem-Con, Chem-Con Georgia (collectively "Environmental
Companies") have provided safe industrial waste management
services for more than 25 years. The Enviromental Companies
provide long-term, proven remedies for many types of waste
streams--remedies that insure the longevity of the companies
served and allow those companies to coexist with a healthy
environment. Hazardous waste is a natural byproduct of our vast
technological and industrial output. The assumption of
responsibility for the safe, cost-effective, long-term management
of industrial wastes is crucial not only to the health of the
environment, but to the health of the businesses and industries
that create the waste. The present objectives of the
Enviromental Companies are to maximize the profitability of their
existing business and to continue to search for new waste
opportunities.
T.A.S. Leasing, Inc. ("TAS") operates an equipment leasing
company serving only Chem-Met Services, Inc.
Quanta Corporation ("Quanta") operates an industrial maintenance
company adjacent to the Chem-Met facility located in Brownstown,
Michigan.
Principal Products and Services
_______________________________
The Environmental Companies provide off-site services for the
transportation, treatment, storage, recycling and disposal of
hazardous and non-hazardous waste. The Environmental Companies
service commercial companies and governmental agencies
nationwide.
Chem-Met is a permitted facility that provides transportation,
stabilization of liquid and solid drum residues and disposal of
non-hazardous liquid and solid waste, including characteristic
hazardous liquid and solid waste in which prior to disposal the
hazardous waste is processed in a manner designed to remove or
eliminate the hazardous characteristics.
Chem-Con is a permitted transfer station that provides
transportation of hazardous and non-hazardous waste.
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
-6-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE A - COMPANY OVERVIEW (Continued)
Chem-Con Georgia is a permitted facility that provides
transportation, storage, treatment and disposal services to
hazardous and non-hazardous waste generators throughout the
United States. Chem-Con Georgia operates a hazardous waste
storage facility that primarily blends and processes hazardous
and non-hazardous waste liquids, solids and sludges into
substitute fuel or as a raw material substitute in cement kilns
that have been specially permitted for the processing of
hazardous and non-hazardous wastes.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Combination
- -------------------------
The combined financial statements include the accounts of Chem-
Met, Chem-Con, Chem-Con Georgia, TAS, and Quanta (collectively
the "Company") after elimination of all significant intercompany
accounts and transactions.
Use of Estimates
- ----------------
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net Revenues
- ------------
Revenues for services and reimbursable costs are recognized at
the time services are rendered or, in the case of fixed price
contracts, under the percentage-of-completion method of
accounting. The Department of Defense with multiple locations
serviced by Chem-Met generates revenues which amount to
approximately 19.7% of combined net revenues.
Income Taxes
____________
The Company accounts for income taxes under Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes," which requires use of the liability method. SFAS
No. 109 provides that deferred tax assets and liabilities are
recorded based on the differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences.
Deferred tax assets or liabilities at the end of each period are
determined using the currently enacted tax rates to apply to
taxable income in the periods in which the deferred tax assets or
liabilities are expected to be settled or realized.
Accrued Closure Costs
_____________________
Accrued closure costs represent the Company's estimated
environmental liability to clean up their facilities in the event
of closure.
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
-7-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Self-Insurance
______________
The Company has adopted a self-insurance program effective
August 1, 1998, for certain health benefits. The claims for
September, 1998, for $80,496 have been accrued and are being
recognized as an expense in the period ended 9/30/98.
Operating Leases
________________
The Company leases certain equipment under operating leases.
Future minimum rental payments as of Septmber 30, 1998, required
under these leases are $40,004 in 1999 and $16,843 in 2000.
Restricted Cash
_______________
Restricted cash represented various certificates of deposit held
by the State, which equaled the estimated amount of long-term
site cleanup costs and monies held in trust to satisfy the
current debt retirement payment for the Small Business
Administration note.
9/30/98 9/30/97
________ ________
Restricted Cash - SBA Note $494,449 $467,478
Restricted Cash - Land Reclamation -0- 71,889
________ _________
$494,449 $539,367
======== ========
The company has satisfied State land reserve requirements by
purchasing insurance policies. A reserve is no longer necessary.
Accounts Receivable - Trade
___________________________
For the September 30, 1998 and 1997 balance sheets, the company
utilized an allowance for doubtful accounts. The current year
financial statements are net of the allowance for doubtful
accounts.
Accounts Receivable
-Chem-Met Services, Inc. $3,485,646 $2,651,704
-Chemical Conservation Corp. 2,547,416 2,310,875
-Quanta Corporation 158,947 131,912
__________ __________
6,192,009 5,094,491
__________ __________
Allowance for Doubtful Accounts
-Chem-Met Services, Inc. 438,396 112,501
-Chemical Conservation Corp. 685,367 430,438
-Quanta Corporation 25,182 -0-
_________ _________
1,148,945 542,939
_________ _________
NET ACCOUNTS RECEIVABLE $5,043,064 $4,551,552
========== ==========
Bovtiz & Co., CPA, P.C.
Trenton, Michigan 48183
-8-
CHEM-MET COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE C - PROPERTY AND EQUIPMENT
Property and equipment expenditures are capitalized and
depreciated using the straight-line method over the estimated
useful lives of the assets for financial statement purposes,
while accelerated depreciation methods are principally used for
tax purposes. Generally, annual depreciation rates range from
ten to forty years for buildings (including improvements) and
three to seven years for office furniture and equipment,
vehicles, and decontamination and processing equipment.
Maintenance and repairs are charged directly to expense as
incurred. The cost and accumulated depreciation of assets sold
or retired are removed from the respective accounts, and any gain
or loss from sale or retirement is recognized in the accompanying
combined statements of operations. Renewals and improvements
which extend the useful lives of the assets are capitalized.
9/30/98 9/30/97
_______ _______
Tank Project $ 759,751 $ 759,751
Shredding System 434,280 434,280
Office Renovation 535,719 535,719
Office Equipment 403,085 353,749
Buildings 7,391,902 7,391,902
Machinery and Equipment 5,654,839 5,626,630
Transporation Equipment 2,881,074 2,850,236
__________ _________
18,060,650 17,952,267
Accumulated Depreciation (11,885,971) (11,208,002)
__________ __________
6,174,679 6,744,265
Land 461,400 461,400
__________ __________
NET PROPERTY AND EQUIPMENT $6,636,079 $7,205,665
========== ==========
NOTE D - ACCRUED EXPENSES
9/30/98 9/30/97
_______ _______
Accrued - Disposal Expense $ 465,808 $ 400,035
- Interest 53,550 64,350
- Payroll Deductions 13,964 17,704
- Property Taxes 52,792 49,786
- State Surcharges 80,532 26,999
- Wages 331,249 242,969
- Medical Insurance Claims 80,495 -0-
_________ _________
1,078,390 801,843
========= =========
Bovitz & Co., CPA. P.C.
Trenton, Michigan 48183
-9-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE E - NOTES PAYABLE
Notes payable consists of the following:
9/30/98 9/30/97
_______ _______
Note payable to Charter Bank with interest
@ 1% above bank prime, secured by trade
accounts receivable. $1,990,000 $2,000,000
Note payable to Comerica Bank, payable in
monthly installments of $7,500, including
interest at 9.25%, secured by corporate
assets and personally guaranteed by
shareholder Thomas P. Sullivan. 52,500 142,500
Note payable to Michigan Strategic Fund,
payable in monthly installments of
$30,607, plus interest at 9%, secured by
corporate assets and personally guaranteed
by shareholder Thomas P. Sullivan. 1,190,000 1,430,000
Note payable to Associates Commercial Credit,
payable in monthly installments of $7,496,
including interest at 10%, secured by three
tractors. 43,755 133,707
Notes payable to Ford Motor Credit (total of
nine), payable in monthly installments of
$4,467, including interest from 2% to 9%,
secured by nine Ford automobiles. 59,645 108,708
Note payable to Cargill Leasing Corp., dated
4/4/97, payable in monthly installments of
$2,631, including interest at 2.047%, secured
by two Kenworth tractors with a cost of
$149,918. 99,182 128,396
Note payable to Associates Commercial Corp.,
dated 7/9/98, payable in monthly installments
of $1,836, including interest at 11%, secured
by a Kenworth tractor with a cost of $99,120. 89,323 -0-
Note payable to Associates Commercial Corp.,
dated 6/4/98, payable in monthly installments
of $2,015, including interest at 11%, secured
by a Kenworth tractor with a cost of $84,591. 72,492 -0-
Note payable to Allen Sibley, LLC, without
interest, unsecured. 365,000 304,179
Other Notes Payable 73,537 192,434
__________ __________
Total Debt 4,035,434 4,439,924
Less Current Maturities (2,481,828) (2,667,452)
__________ __________
Net Long-Term Debt $1,553,606 $1,772,472
========== ==========
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
-10-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE F - SETTLEMENTS PAYABLE
9/30/98 9/30/97
_______ _______
Note payable to Chemfix Technologies, Inc.,
dated 2/9/93, payable in monthly installments
of $12,000, non-interest bearing, total
principal of $1,352,000 with $200,000 paid
prior to commencement of monthly payments
8/1/93. $ 408,000 $ 540,000
Settlement payable to Indiana Department
of Environmental Management (Four County
Landfill Site). 900,000 900,000
Consent judgement payable to Michigan Department
of Environmental Quality, dated June, 1996,
satisfied January, 1998. -0- 40,000
__________ __________
1,308,000 1,480,000
Less Current Portion (1,044,000) (1,084,000)
__________ __________
Long-Term Settlements Payable $ 264,000 $ 396,000
========== ==========
The approximate aggregate maturities of long-term debt and
settlements payable for the five years ending September 30 are as
follows:
LONG-TERM DEBT SETTLEMENT PAYABLE
______________ ___________________
1999 $2,481,828 $1,044,000
2000 418,872 144,000
2001 387,784 120,000
2002 381,950 -0-
2003 365,000 -0-
__________ __________
$4,035,434 $1,308,000
========== ==========
NOTE G - LEGAL
Legal counsel has advised that there are potential lawsuits
pending at balance sheet date. Formal legal action on the State
of Indiana litigation was commenced in November, 1996. During
the period since the filing of the suit, settlement negotiations
have been ongoing. As of this date a settlement appears imminent
in the amount of $900,000 and has been accrued as a settlement
payable under Note F. Said settlement, however, is dependent
upon successful completion of pending merger negotiations. If
the merger negotiations are unsuccessful and if litigation
ensues, the estimated cost could be in the range of $1,000,000 to
$5,000,000.
In addition to the above matters and in the normal course of
conducting its business, the Company is involved in various other
litigation. The Company is not a party to any litigation or
governmental proceeding which its management believes could
result in any judgments or fines against it that would have a
material adverse affect on the Company's financial position,
liquidity or results of operations.
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
-11-
CHEM-MET SERVICES COMBINED ENTITIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE H - EMPLOYEE BENEFIT PLANS
The company provides a defined contribution profit sharing plan
and trust for its employees. The plan is a section 401(k)
deferred compensation plan. The company is required to
contribute annually an amount equal to 25% of each plan
participant's elective deferral, up to $250 per participant.
For the years ended September 30, 1998, 1997, and 1996 company
contributions to the trust totaled $4,683, $3,927 and $7,356
respectively.
NOTE I - NOTE RECEIVABLE OFFICER
The officer note is a demand note receivable with interest based
on the prime rate.
NOTE J - FEDERAL AND STATE INCOME TAXATION
Each entity files a corporate tax return indicating it is a
member of a controlled group. There is no federal income tax
liabilities due to current year net losses and available net
operating loss deductions. Current year estimated payments of
$27,610 along with net operating losses are available to offset
future years' liabilities. State income taxes are dealt with on
an individual reporting basis with a liability being charged to
the following year's expense.
Projected
Federal N.O.L. State Liabilities
______________ _________________
Chem-Met Services $ 31,449 $ 251
Chemical Conservation Corporation 58,206 2,090
Chemical Conservation of Georgia, Inc. 190,089 10
T.A.S. Leasing, Inc. 304 -0-
Quanta Corporation -0- -0-
__________ _______
$280,048 $2,351
========== =======
Bovitz & Co., CPA, P.C.
Trenton, Michigan 48183
-12-
COMBINING BALANCE SHEETS SCHEDULE I
9/30/98 __________
Chem-Met ChemCon FL ChemCon GA
09/30/98 09/30/98 09/30/98
__________ ___________ __________
ASSETS:
Current Assets:
Cash 123,442 201,317 14
Restricted Cash 494,449
Accounts Receivable, 3,047,250 1,862,049
net of allowance
for doubtful accounts
of $438,396, $685,367
$25,182, respectively
Prepaid Expenses 27,610
Other Receivables 10,788 15,254
Note Receivable - Chem-Met
Note Receivable - Chem-Con FL 1,575,910 1,939,503
Note Receivable - Chem-Con GA 1,540,068
Note Receivable - Quanta Corp. 920,336 260,000
__________ ____________ ___________
Total Current Assets 7,739,852 2,338,620 1,939,517
__________ ____________ ___________
Property and equipment:
Land 413,400 48,000
Fixed Assets 10,099,510 2,759,094 3,301,754
__________ ____________ ___________
10,512,910 2,759,094 3,301,754
Less accumulated depreciation (6,570,151) (2,079,645) (1,876,908)
__________ ____________ ___________
Net Property and equipment 3,942,759 679,449 1,424,846
__________ ____________ ___________
Other Assets:
Deposits 1,050
Note Receivable - Officer 399,814
Goodwill 34,603
__________ ____________ ___________
Total other assets 399,814 0 35,653
__________ ____________ ___________
Total Assets 12,082,426 3,018,069 3,400,016
========== ============ ===========
TAS Quanta
09/30/98 12/31/98 Elimination Total
__________ ___________ ____________ _________
3,378 6,901 334,242
494,449
133,765 5,043,064
81,561 (81,561) 0
(3,515,413) 0
(1,540,068) 0
(1,180,336) 0
__________ ____________ ___________ __________
84,939 139,856 (6,317,378) 5,925,407
__________ ____________ ___________ __________
461,400
812,853 1,135,439 18,060,650
__________ ____________ ___________ __________
812,853 1,135,439 18,522,050
(728,035) (631,232) (11,885,971)
__________ ____________ ___________ __________
84,818 504,207 6,636,079
__________ ____________ ___________ __________
1,050
726,105 (60,980) 1,064,939
500 35,103
__________ ____________ ___________ __________
0 726,605 (60,980) 1,101,092
__________ ____________ ___________ __________
169,757 1,370,668 (6,378,358) 13,662,578
========== ============ =========== ==========
-13-
COMBINING BALANCE SHEETS SCHEDULE I
9/30/98 __________
Chem-Met ChemCon FL ChemCon GA
09/30/98 09/30/98 09/30/98
__________ __________ __________
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current liabilities:
Accounts Payable 663,899 418,162 373,017
Accounts Payable - Intercompany 1,067,099 325,164 549,823
Net Payable - Officer 60,980
Net Payable - Chem-Met 1,575,910 1,540,068
Accrued Expenses 363,550 281,000 439,811
Current portion 1,044,000
of settlements payable
Current portion of 2,307,167 86,405
long-term debt
___________ ___________ __________
Total current liabilities 5,445,715 2,747,621 2,902,719
___________ ___________ __________
Long-term debt, less current 931,100 25,645
portion
Long-term portion 264,000
of settlements payable
Accrued environmental costs 2,292,000 2,138,421
Accrued closure costs 233,981 28,947 186,855
___________ ___________ __________
Total long-term debt 3,721,081 54,592 2,325,276
___________ ___________ __________
Stockholder's Equity
Common Stock 860 1,000 75,000
Retained Earnings 2,914,770 214,856 (1,902,979)
___________ __________ __________
Total Stockholder's equity 2,915,630 215,856 (1,827,979)
___________ ___________ __________
Total liabilities 12,082,426 3,018,069 3,400,016
and Stockholder's Equity =========== =========== ==========
TAS Quanta
09/30/98 12/31/98 Elimination Total
__________ ___________ ____________ _________
117,678 1,572,755
109,242 (2,021,064) 30,264
(60,980) 0
1,180,336 (4,296,314) 0
28,150 1,112,511
1,044,000
15,315 72,941 2,481,828
___________ ____________ ____________ __________
15,315 1,508,347 (6,378,358) 6,241,359
___________ ____________ ____________ __________
9,262 587,599 1,553,606
264,000
4,430,421
449,783
___________ ____________ ____________ __________
9,262 587,599 6,697,810
___________ ____________ ____________ __________
200 100 77,160
144,980 (725,378) 646,249
___________ ____________ ____________ __________
145,180 (725,278) 723,409
___________ ____________ ____________ __________
169,757 1,370,668 (6,378,358) 13,662,578
=========== ============ ============ ==========
-14-
COMBINING BALANCE SHEETS SCHEDULE II
9/30/97 ___________
Chem-Met ChemCon FL ChemCon GA
09/30/97 09/30/97 09/30/97
__________ ___________ __________
ASSETS:
Current Assets:
Cash 465,677 127,219 734
Restricted Cash 467,478 71,889
Accounts Receivable, 2,539,203 1,880,437
net of allowance
for doubtful accounts
of $112,501, $430,438,
$0, respectively
Other Receivables 5,599 4,007
Accounts Receivable - 33,737 1,309,561
Intercompany
Note Receivable - Chem-Con FL 1,575,910
Note Receivable - Chem-Con GA 1,540,068
Note Receivable - Quanta Corp. 727,398 225,000
__________ ___________ ___________
Total Current Assets 7,355,070 2,236,663 1,382,184
__________ ___________ ___________
Property and equipment:
Land 413,400 48,000
Fixed Assets 10,019,125 2,838,504 3,253,754
__________ ___________ ___________
10,432,525 2,838,504 3,301,754
Less accumulated depreciation (6,209,603) (1,909,400) (1,818,406)
__________ ___________ ___________
Net Property and equipment 4,222,922 929,104 1,483,348
__________ ___________ ___________
Other Assets:
Deposits 1,050
Note Receivable - Officer 399,814
Goodwill 44,486
__________ ___________ ___________
Total other assets 399,814 0 45,536
__________ ____________ ___________
Total Assets 11,977,806 3,165,767 2,911,068
========== ============ ===========
TAS Quanta
09/30/97 12/31/97 Elimination Total
__________ ___________ ____________ __________
593 5,757 599,980
539,367
131,912 4,551,552
9,606
57,924 (1,401,222) 0
(1,575,901) 0
(1,540,068) 0
(952,398) 0
__________ ___________ ____________ __________
58,517 137,669 (5,469,598) 5,700,505
__________ ___________ ____________ __________
461,400
889,155 951,729 17,952,267
__________ ___________ ____________ __________
889,155 951,729 0 18,413,667
(757,389) (513,204) (11,208,002)
__________ ___________ ____________ __________
131,766 438,525 0 7,205,665
__________ ___________ ____________ __________
1,050
565,665 (96,447) 869,012
500 44,986
__________ ___________ ____________ __________
0 565,165 (96,447) 915,068
__________ ___________ ____________ __________
190,283 1,142,359 (5,566,045) 13,821,238
========== =========== ============= ==========
-15-
COMBINING BALANCE SHEETS SCHEDULE II
9/30/97 ___________
Chem-Met ChemCon FL ChemCon GA
09/30/97 09/30/97 09/30/97
__________ __________ __________
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current liabilities:
Accounts Payable 781,212 359,442 601,346
Accounts Payable - Intercompany 432,952 350,378 554,250
Note Payable - Officer 60,980
Note Payable - Chem-Met 1,575,910 1,540,068
Note Payable - Quanta Corp.
Accrued Expenses 375,565 147,081 421,093
Current portion 1,084,000
of settlements payable
Current portion of 2,337,408 251,073
long-term debt
___________ __________ __________
Total current liabilities 5,011,137 2,744,864 3,116,757
___________ __________ __________
Long-term debt, less current 1,248,502 96,384
portion
Long-term portion 396,000
of settlements payable
Accrued environmental costs 2,292,000 2,138,421
Accrued closure costs 228,707 28,379 183,191
___________ __________ __________
Total long-term debt 4,165,209 124,763 2,321,612
___________ __________ __________
Stockholder's Equity
Common Stock 860 1,000 75,000
Retained Earnings 2,800,600 295,140 (2,602,301)
___________ __________ __________
Total Stockholder's equity 2,801,460 296,140 (2,527,301)
___________ __________ __________
Total liabilities 11,977,806 3,165,767 2,911,068
and Stockholder's Equity =========== ========== ==========
TAS Quanta
09/30/97 12/31/97 Elimination Total
__________ ___________ ____________ ___________
79,378 1,821,378
99,109 (1,436,689) 0
(60,980) 0
(3,115,978) 0
952,398 (952,398) 0
21,654 965,393
1,084,000
26,487 52,484 2,667,452
__________ ___________ ____________ ___________
26,487 1,205,022 (5,566,045) 6,538,223
__________ ___________ ____________ ___________
1,542 426,044 1,772,472
396,000
4,430,421
440,277
__________ ___________ ____________ ___________
1,542 426,044 0 7,039,170
__________ ___________ ____________ ___________
200 100 77,160
162,054 (488,808) 166,685
__________ ___________ ____________ ___________
162,254 (488,708) 243,845
__________ ___________ ____________ ___________
190,283 1,142,359 (5,566,045) 13,821,238
========== =========== ============ ===========
-16-
COMBINING INCOME STATEMENTS SCHEDULE III
FOR YEAR END 9/30/98 ____________
Chem-Met ChemCon FL ChemCon GA
09/30/98 09/30/98 09/30/98
__________ ___________ __________
NET REVENUES 11,542,619 12,929,369 4,302,718
COST OF GOODS SOLD 7,562,546 10,827,456 3,009,681
GROSS PROFIT 3,980,073 2,101,913 1,293,037
SELLING, GENERAL AND ADMINISTRATIVE 3,226,831 1,948,408 525,330
DEPRECIATION AND AMORTIZATION 360,548 212,515 68,385
__________ ____________ __________
INCOME(LOSS) FROM OPERATIONS 392,694 (59,010) 669,322
OTHER INCOME (EXPENSE):
INTEREST INCOME 26,160
INTEREST EXPENSE (304,684) (21,274)
__________ ____________ __________
NET INCOME(LOSS) 114,170 (80,284) 669,322
FROM CONTINUING OPERATIONS
NET INCOME(LOSS) 114,170 (80,284) 699,322
========== ============ ==========
TAS Quanta
09/30/98 12/31/98 Elimination Total
__________ ___________ ____________ ___________
44,075 1,324,513 (8,342,115) 21,801,179
17,959 1,058,091 (8,342,115) 14,133,618
26,116 266,422 0 7,667,561
150 354,610 6,055,329
39,312 118,028 798,788
__________ ___________ ___________ ___________
(13,346) (206,216) 0 813,444
351 26,511
(3,728) (30,705) (360,391)
__________ ___________ ___________ ___________
(17,074) (236,570) 0 479,564
(17,074) (236,570) 0 479,564
========== =========== =========== ===========
-17-
COMBINING INCOME STATEMENTS SCHEDULE IV
FOR YEAR END 9/30/97 ___________
Chem-Met ChemCon FL ChemCon GA
09/30/97 09/30/97 09/30/97
__________ ___________ __________
NET REVENUES 12,257,286 12,469,875 4,195,098
COST OF GOODS SOLD 8,315,481 9,746,335 3,597,820
GROSS PROFIT 3,941,805 2,723,540 597,278
SELLING, GENERAL AND ADMINISTRATIVE 3,322,431 2,358,660 531,703
DEPRECIATION AND AMORTIZATION 258,975 180,724 129,932
__________ ____________ __________
INCOME(LOSS) FROM OPERATIONS 333,399 184,156 (64,357)
OTHER INCOME (EXPENSE):
INTEREST INCOME 37,758
INTEREST EXPENSE (320,930) (43,253)
OTHER 230,475
__________ ____________ __________
NET INCOME(LOSS) 280,702 140,903 (64,357)
FROM CONTINUING OPERATIONS
FEDERAL INCOME TAX (27,490)
NET INCOME(LOSS) 253,212 140,903 (64,357)
========== ============ ==========
TAS Quanta
09/30/97 12/31/97 Elimination Total
__________ ___________ ____________ ___________
58,894 1,301,343 (8,365,080) 21,917,416
21,352 1,026,648 (8,359,578) 14,348,058
37,542 274,695 (5,502) 7,569,358
159 535,034 (5,502) 6,742,485
66,553 91,887 755,071
__________ ___________ ____________ ___________
(29,170) (352,226) 0 71,802
18,549 56,307
(6,246) (20,924) (391,353)
230,475
__________ ___________ ____________ ___________
(35,416) (354,601) 0 (32,769)
(27,490)
(35,416) (354,601) 0 (60,259)
========== ========== ============ ============
-18-
COMBINING INCOME STATEMENTS SCHEDULE V
FOR YEAR END 9/30/96 __________
Chem-Met ChemCon FL ChemCon GA
09/30/96 09/30/96 09/30/96
__________ ___________ __________
NET REVENUES 12,337,655 15,479,803 5,926,326
COST OF GOODS SOLD 8,316,029 12,787,956 5,410,541
GROSS PROFIT 4,021,626 2,691,874 515,785
SELLING, GENERAL AND ADMINISTRATIVE 3,253,292 2,475,797 565,638
DEPRECIATION AND AMORTIZATION 368,236 247,844 139,845
__________ ____________ __________
INCOME(LOSS) FROM OPERATIONS 400,098 (31,767) (189,698)
OTHER INCOME (EXPENSE):
INTEREST INCOME 52,046
INTEREST EXPENSE (314,325) (60,788)
OTHER (200,000)
__________ ____________ __________
NET INCOME(LOSS) 137,819 (92,555) (389,698)
FROM CONTINUING OPERATIONS
FEDERAL INCOME TAX (61,312)
NET INCOME(LOSS) 76,507 (92,555) (389,698)
========== ============ ==========
TAS Quanta
09/30/96 12/31/96 Elimination Total
__________ ___________ ____________ ___________
76,089 3,232,667 (9,021,747) 28,030,820
16,549 2,050,867 (8,999,065) 19,582,877
59,540 1,181,800 (22,682) 8,447,943
21 1,290,846 (22,682) 7,562,912
88,910 75,302 920,137
__________ ___________ ____________ ___________
(29,391) (184,348) 0 (35,106)
11,777 63,823
(6,689) (23,599) (405,401)
200,000
__________ ___________ ____________ ___________
(36,080) (196,170) 0 (576,684)
(61,312)
(36,080) (196,170) 0 (637,996)
========== ========== ============ ============
-19-