SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
---------------
Date of Report (Date of earliest event reported) April 25, 1996
AQUAGENIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24490 65-0419263
(State or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification
No.)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (954) 973-9999
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2. DISPOSAL OF ASSETS
On April 25, 1996, Aquagenix, Inc. (the "Company") sold substantially
all of the assets and liabilities of Haas Environmental Services, Inc.
("HES") to Heart Environmental Services, Inc. (the "Buyer"), a New
Jersey corporation for a total consideration of $1,907,021. The
aggregate consideration comprises (i) $681,000 in cash, (ii) a
three-year promissory note of $600,000 issued by the Buyer, bearing
interest at 9% per annum and collaterized by the pledge of 499 shares
of the Buyer's Common Stock pursuant to a Stock Pledge Agreement, (iii)
the cancellation of the promissory note obligation of the Company of
$436,921 by H&H Investment Corporation, Mr. Eugene M. Haas and Mr.
Robert E. Haas (collectively known as the "Haas Shareholders"), also
the shareholders of the Buyer, (iv) the cancellation of the obligations
amounting to $100,000 by the Haas Shareholders pursuant to their
employment termination agreement, (v) the cancellation of the lease
obligations to the Haas Shareholders amounting to $62,700 in connection
to a office lease agreement, (vi) the cancellation of an equipment note
payable of $26,400 by the Haas Shareholders. The Company originally
incurred these obligations ((iii) to (vi)) in connection with the
acquisition of HES in February 1995.
In connection with the HES sale, the Company and the Haas Shareholders
entered into a lock-up agreement relating to the 219,000 shares of the
Company's common stock (the "Shares") owned by the Haas Shareholders.
The lock-up agreement provides that any sale or transfer of the Shares
by the Haas Shareholders will be restricted to an amount of not greater
than 20,000 Shares for every three-month period. As a result of the HES
sale, the Company has agreed not to pursue any claims against the Haas
Shareholders in connection with the Haas Acquisition in February 1995.
Reference is made to the Asset Purchase Agreement, dated as of April
25, 1996, among the Company, HES, the Buyer, the Haas Shareholders and
Haas Sand and Gravel, Inc., filed as an exhibit hereto, for further
information concerning the terms and conditions of the HES sale. The
Asset Purchase Agreement and such information are incorporated herein
by reference.
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ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Condensed Consolidated Financial Statements
(Unaudited) of Aquagenix, Inc.
The following pro-forma condensed consolidated balance sheet
as of March 31, 1996 and the proforma condensed consolidated
income statement for the three months ended March 31, 1996
give effect the sale of HES, assuming the sale transaction
took place at the end of the period presented. The adjustments
were based on financial information available on April 25,
1996 which resulted in a net gain of approximately $1.5
million. The adjustments relating to the pro forma condensed
consolidated income statement for the year ended December 31,
1995 assume the transaction was consummated on February 28,
1995 which was the date that HES was acquired. The actual sale
took place on April 25, 1996.
The pro forma information is based on the historical financial
statements of the Company which had previously been
reclassified to separately present the discontinued
operations. Accordingly, the only proforma adjustments are to
eliminate the net assets of and net losses relating to HES and
to record the sale proceeds and the net gain arising from the
HES sale.
(c) Exhibit
10.76 Asset Purchase Agreement, dated as of April 25, 1996,
by and between Heart Environmental Services, Inc.,
H&H Investment Corporation, Eugene M. Haas, Robert E.
Haas, Haas Sand and Gravel, Inc., HES and the Company.
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AQUAGENIX, INC. & SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT MARCH 31, 1996
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------
Assets
Current assets 2,571,662 681,000 (a) 3,252,662
Property and equipment, net 1,844,814 1,844,814
Intangible assets, net 3,177,583 3,177,583
Net assets of discontinued operations 1,192,720 (650,507)(b) 542,213
Other assets 261,899 600,000 (c) 861,899
---------- ---------- ----------
Total assets $9,048,678 630,493 9,679,171
========== ========== ==========
Liabilities and Stockholders' Equity
Current liabilities 1,704,203 1,704,203
Long-term debts 5,023,898 5,023,898
Stockholders' equity 2,320,577 630,493 (d) 2,951,070
---------- ---------- ----------
Total liabilities and stockholders' equity $9,048,678 630,493 9,679,171
========== ========== ==========
(a) Record cash proceeds from the HES Sale.
(b) Record the sale of certain assets and liabilities of HES.
(c) Record the promissory note receivable from Heart Environmental
Services, Inc., the Buyer.
(d) Record remaining gain from the HES Sale. Total positive impact on
earnings amounted to approximately $1.5 million, of approximately
$870,000, relating to the change in allowance for estimated phase-out
and other losses from environmental remediation segment.
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AQUAGENIX, INC. & SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------
Operating income 369,969 369,969
---------- ----------
Income from continuing operations before income taxes 250,490 250,490
Income tax provision 0 0
---------- ---------- ----------
Income from continuing operations 250,490 0 250,490
Discontinued operations:
Loss from environmental remediation business segment, 0 0
net of income taxes
Change in allowance for estimated phase-out and other
losses from environmental remediation segment 869,507 630,493 (a) 1,500,000
---------- ---------- ----------
Net income $1,119,997 630,493 1,750,490
========== ========== ==========
Earnings (loss) per common and common equivalent shares:
Continuing operations - primary $ 0.08 0.08
Continuing operations - assuming full dilution 0.08 0.08
Discontinued operations 0.26 0.46
Weighted average common and common equivalent shares outstanding:
Primary 3,292,862 3,292,862
========== ==========
Assuming full dilution 3,292,862 3,292,862
========== ==========
(a) Record remaining gain from the HES Sale.
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AQUAGENIX, INC. & SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
----------- ----------- -----------
Operating loss (1,112,323) (1,112,323)
----------- -----------
Loss from continuing operations before income taxes (1,056,344) (1,056,344)
Income tax benefit (374,350) (374,350)
----------- ----------- -----------
Loss from continuing operations (681,994) 0 (681,994)
Discontinued operations:
Loss from environmental remediation business segment, (2,437,614) 2,000,544(a) (437,070)
net of income taxes
Loss on disposal of environmental remediation remediation
business segment (4,882,138) 3,930,020(b) (952,118)
----------- ----------- -----------
Net income $(8,001,746) 5,930,564 (2,071,182)
=========== =========== ===========
Loss per common and common equivalent shares:
Continuing operations $ (0.22) (0.22)
Discontinued operations (2.31) (0.44)
Weighted average common and common equivalent
shares outstanding: 3,166,768 3,166,768
=========== ===========
(a) Loss relating to the operations of HES since its acquisition in March
1995.
(b) Loss on disposal of HES.
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SIGNATURES
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, hereunto duly authorized.
AQUAGENIX, INC.
Date: May 8, 1996 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
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