8-K/A 1 spa8ka.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A Amendment No. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 22, 2001 SPACIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 000-26645 11-2602030 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) Brown Place and East 132nd Street Bronx, New York 10454 (Address of principal executive offices) (Zip Code) (718) 292-1920 (Registrant's telephone number, including area code) Item 1. Changes In Control of Registrant. Effective June 22, 2001 (the "Closing Date"), Spacial Corporation (the "Company") entered into and closed a share exchange (the "Exchange") pursuant to a Share Exchange Agreement (the "Exchange Agreement"), among the Company, Waste Recovery Technology Corporation, a Delaware corporation ("WRT"), and the 10 stockholders of WRT (the "WRT Stockholders") wherein the Company issued 13,160,000 shares of common stock, par value $.001 per share (the "Common Stock") to the WRT Stockholders in exchange for all of the issued and outstanding of capital stock of WRT. As a result of the Exchange, the WRT Stockholders hold approximately 91% of the Company's Common Stock and now control the Company. Pursuant to the Exchange Agreement, James J. Solano, Sr. was appointed as a member of the board of directors on the Closing Date. James A. Prestiano, the sole director on the Closing Date remained as the Company's other director. In addition, effective July 9, 2001 (the "Board Change Date"), the end of the waiting period under Securities & Exchange Commission Rule 14f-1 relating to the distribution of an Information Statement concerning the Exchange, James A. Prestiano resigned as a director, and Joseph R. MacDonald and Norman A. Ponder, were appointed as new directors of the Company. New officers were appointed as of the Closing Date, however, the appointment of Mr. MacDonald and Mr. Ponder as directors did not take effect until the Board Change Date. The details of this transaction, including all information required by Item 1 of this Current Report on Form 8-K (the "Report"), are set forth in "Item 2. Acquisition or Disposition of Assets" below, the contents of which are incorporated by reference herein. Item 2. Acquisition or Disposition of Assets. The information below is a summary description of the Exchange and is qualified in its entirety by reference to the Exchange Agreement and related documents that the Company filed as exhibits to this Report, and which are available upon written request to the Company. The terms of the Exchange and date of determination of the value and amount of consideration received by the WRT Stockholders in the exchange were determined in good faith by the Company's management prior to transaction, and in arms' length negotiations. Effective at the Closing Date of the Exchange, James J. Solano, Sr. was appointed to serve as a Director with Mr. Prestiano. In addition, Mr. Prestiano resigned from all officer positions, and new officers took office as of the Closing Date. The appointment of the two additional directors will take effect on the Board Change Date. Under the terms of the Exchange Agreement, the following transactions took place on the Closing Date, with the exception of the change in the Board. o 13,160,000 shares of Common Stock were issued to the 10 WRT Stockholders in exchange for all of the outstanding common stock, no par value, of WRT (the "WRT Stock"). 2 o After the Closing Date and as of the date of the filing of this Report, the Company has issued and outstanding 14,450,000 shares of Common Stock. o James A. Prestiano, the Company's sole board member and executive officer, resigned from all positions as an officer of the Company at the Closing Date, but remained a board member only until the Board Change Date. o Mr. Prestiano returned for cancellation an aggregate of 1,200,000 shares of Common Stock owned by him in exchange for a warrant to purchase 150,000 shares of Common Stock (the "Prestiano Warrant Shares") at an exercise price of $.50 per share, leaving Mr. Prestiano with direct ownership of 800,000 shares of Common Stock, in addition to the warrants to acquire the Prestiano Warrant Shares. o James J. Solano, Sr. was appointed as a board member to serve with Mr. Prestiano at the Closing Date. Joseph R. MacDonald and Norman A. Ponder were appointed as additional board members and Mr. Prestiano resigned effective as of the Board Change Date, leaving Messrs. Solano, MacDonald and Ponder as the Company's entire board. o As of the Closing Date, the sole officers of the Company, were James J. Solano, Sr., President, Chairman and Chief Executive Officer, Norman A. Ponder, Vice President, and Joseph R. MacDonald, Executive Vice President, and Chief Operating Officer. o An aggregate of 1,000,000 shares (the "Escrow Shares") of Common Stock that were issued to the Trust Under Agreement Dated 6/30/89 (the "Trust") (848,536 shares) and to Mr. Solano (151,464 shares) under the Exchange were deposited into escrow (the "Escrow") pending a contemplated completion or termination of financing. Upon completion of such financing, if any, up to all of such Escrow Shares will be returned for cancellation to the Company. If and to the extent that such financing does not occur, the Escrow Shares will be returned proportionately to the Trust and Mr. Solano. o All shares owned by Messrs. Solano, Ponder, Prestiano and the Trust, including the Prestiano Warrant Shares, are subject to a one-year lockup agreement (the "Lock-Up Agreement"), prohibiting the transfer all shares owned by them at the Closing Date for six months after the Closing Date, and prohibiting the transfer of 50% of their shares for a period of six months thereafter. In addition, terms of the Lock-Up Agreement provide that in the event so required as a condition to an underwritten public financing, said parties will extend their lockup provisions as and if required by an underwriter. o The Company has consented to a limited release of the 8 initial investors in the Company's private offering which closed in early 1999, from their lock-up agreements. These 8 investors, who acquired an aggregate of 170,000 shares of Common Stock in such financing, had originally agreed to restrict the resale of their 3 Common Stock for one year after the close of any merger or similar transaction with the Company. These 8 private placement investors will be restricted from selling one-half of their shares of Common Stock for a period of 6 months after the Closing Date. o As of the Closing Date, and the date of the filing of this Report, Messrs. Solano, Ponder, MacDonald and the Trust now owned 1,785,000 (12.4%), 1,000,000 (6.9%),100,000 (under 1%) and 10,000,000 (69.2%) shares of Common Stock, respectively (including Shares held in Escrow) and have control of the Company. The remaining 6 WRT Stockholders own a total of 275,000 shares constituting 1.9% of the Common Stock outstanding. Business Summary of WRT WRT is a non-hazardous solid waste remediation and recycling company which currently primarily remediates solid waste in the construction and demolition industry ("C & D"). WRT is currently leasing its executive offices and storage facilities at Brown Place and East 132nd Street, Bronx, New York 10454. It was organized as a Delaware corporation in September 1998 and commenced operations in March 1999. WRT is currently leasing its executive offices and storage facilities at Brown Place and East l32nd Street, Bronx, New York 10454. WRT is a provider of the following niche services in the waste transportation and management industry: o Environmental engineering services. o Sale, lease and repair of new and used equipment in the waste and construction industry. o Construction and Demolition Services. o Site remediation services. The sale of new and used equipment along with repairs is generally handled internally. Engineering services provided by WRT are usually handled internally and are sometimes outsourced. The Company intends to continue operation of WRT's business. Subject to Delaware Law, the Company intends to change its name or otherwise transact business under the name "Alliance Environmental Technologies, Inc." 4 Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. The audited balance sheets as of September 30, 2001 and 2000 and the audited statements of income for the years ended September 30, 2001 and 2000 and the unaudited statements of income for the nine and three months ended June 30, 2001 and 2001 are that of Waste Recovery Technology after giving effect to the shares exchanged in the merger, which effectively for the purposes of the financial statements took place as of June 30, 2001. The unaudited consolidated balance sheet as of June 30, 2001 is that of Spacial and Waste Recovery Technology Corporation. Spacial is a public shell with minimal assets and liabilities. The following financial statements of the Company accompany this Form 8-K/A. Description Page(s) ----------- ------- Independent Auditors report 6 Balance Sheets As Of September 30, 2000 and June 30, 2001 7 Statements of Income for the Years Ended September 30, 2000 and 1999 and for the Three and None Months Ended June 30, 2001 9 Statements of Shareholders' Equity For the Years Ended September 30, 2000 and 1999 and for the Nine Months Ended June 30, 2001 11 Statements of Cash Flows For the Years Ended September 30, 2000 and 1999 and for the Nine Months Ended June 30, 2001 and 2000 12 Notes to Financial Statements 14 (c) Exhibits. Listed below are all exhibits to this Current Report on Form 8-K. Exhibit Number Description ------ ----------- 4.1 Warrant certificate, evidencing warrants to purchase 150,000 shares of the Common Stock of Spacial Corporation, registered in the name of James A. Prestiano. * 10.1 Share Exchange Agreement, dated as of June 22, 2001, among Spacial Corporation, Waste Recovery Technology Corporation and the stockholders of Waste Recovery Technology Corporation. * 10.2 Stock Escrow Agreement, dated as of June 22, 2001, among Spacial Corporation, James J. Solano, Sr. and The Trust Under Agreement dated 6/30/89, and Snow Becker Krauss P.C., as Escrow Agent. * 10.3 Lock-Up Agreement, dated as of June 22, 2001, by and among Spacial Corporation, James A. Prestiano, James J. Solano, Sr., The Trust Under Agreement Dated 6/30/89, and Norman A. Ponder.* 10.4 Registration Rights Agreement, dated as of June 22, 2001, between the Spacial Corporation and James A. Prestiano. * ------------- * Previously Filed Item 8. Change in Fiscal Year. As of the Closing Date, the Company has determined to change the end of its fiscal year from December 31 to September 30 for financial accounting purposes. The company will file a report covering the transition period on a Quarterly Report on Form 10-QSB, for the Period Ended June 30, 2001. 5 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders Waste Recovery Technology Corporation We have audited the accompanying balance sheet of Waste Recovery Technology Corporation as of September 30, 2000, and the related statements of operations, shareholders' equity (deficit), and cash flows for each of the two years in the period ended September 30, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Waste Recovery Technology Corporation as of September 30, 2000, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2000 in conformity with accounting principles generally accepted in the United States of America. SINGER LEWAK GREENBAUM & GOLDSTEIN LLP Los Angeles, California March 23, 2001

The accompanying notes are an integral part of these financial statements. 1

The accompanying notes are an integral part of these financial statements. 2

The accompanying notes are an integral part of these financial statements. 3

The accompanying notes are an integral part of these financial statements. 4

The accompanying notes are an integral part of these financial statements. 5

The accompanying notes are an integral part of these financial statements. 6

The accompanying notes are an integral part of these financial statements. 7 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION AND LINE OF BUSINESS Waste Recovery Technology Corp. ("WRT") was incorporated on September 22, 1998 in the state of Delaware and is engaged in construction and engineering services and the sale of equipment. WRT principally sells to companies throughout New York. Effective June 22, 2001, WRT entered into a Share Exchange Agreement, whereby the shareholders of WRT were issued an aggregate of 13,160,000 shares of common stock of Spacial Corporation ("Spacial") in exchange for 1,316 shares of WRT, constituting all of the capital stock of WRT and resulting in WRT becoming a wholly owned operating subsidiary of Spacial. After the closing of the Share Exchange, a total of 14,450,000 shares of Spacial's common stock were issued and outstanding, resulting in a transfer of control of Spacial to the former WRT shareholders. For accounting purposes, the transaction has been treated as a recapitalization of WRT, with WRT as the accounting acquirer (reverse acquisition), and has been accounted for in a manner similar to a pooling of interests. The operations of Spacial have been included with those of WRT from the acquisition date. For periods prior to the acquisition, the equity of the combined enterprise is the historical equity of WRT, the accounting acquirer prior to the merger, retroactively restated to reflect the number of shares received in the business combination. Spacial was incorporated on October 6, 1998 in the state of Delaware. Spacial had minimal assets and liabilities at the date of the acquisition and did not have significant operations prior to the acquisition. Therefore, no pro forma information is presented. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Development Stage Enterprise ---------------------------- After the Share Exchange, Spacial Corporation, the surviving entity, (the "Company") ceased to be a development stage company as defined in Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises." The Company's planned principal operations have commenced, and there have been significant revenues from those operations. Cash Equivalents ---------------- For the purpose of the statements of cash flows, the Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. 8 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Accounts Receivable ------------------- The Company periodically reviews its accounts receivable for uncollectible amounts. At September 30, 2000 and June 30, 2001, no allowance was deemed necessary. The Company generally does not require collateral from its customers. Property and Equipment ---------------------- Property and equipment are stated at cost. Depreciation is provided on a straight-line basis over an estimated useful life of seven to 10 years. Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. Revenue Recognition ------------------- Amounts received for construction and engineering services are recognized in accordance with the contract or upon completion of the project. For sales of equipment, revenues are recognized upon delivery of the equipment. Comprehensive Income -------------------- The Company utilizes SFAS No. 130, "Reporting Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Comprehensive income is not presented in the Company's financial statements since the Company did not have any of the items of comprehensive income in the period presented. Advertising Costs ----------------- The Company expenses advertising costs as incurred. Advertising costs for the nine months ended June 30, 2001 and 2000 were $200 and $120, respectively. Income Taxes ------------ The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. 9 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Estimates --------- The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments ----------------------------------- The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of the Company's financial instruments, including cash, accounts receivable, notes receivable, and accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. The amounts shown for notes payable and note payable - related party also approximate fair value because the current interest rate offered to the Company for debt of similar maturity is substantially the same. Recently Issued Accounting Pronouncements ----------------------------------------- In July 2001, the FASB issued SFAS No. 141, "Business Combinations." This statement addresses financial accounting and reporting for business combinations and supersedes Accounting Principles Bulletin ("APB") Opinion No. 16, "Business Combinations," and SFAS No. 38, "Accounting for Pre-Acquisition Contingencies of Purchased Enterprises." All business combinations in the scope of this statement are to be accounted for using one method, the purchase method. The provisions of this statement apply to all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method for those business combinations is prohibited. This statement also applies to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or later. In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets." This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, "Intangible Assets." It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. It is effective for fiscal years beginning after December 15, 2001. Early application is permitted for entities with fiscal years beginning after March 15, 2001, provided that the first interim financial statements have not been issued previously. 10 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment at September 30, 2000 and June 30, 2001 consisted of the following:

Depreciation expense was $27,374, $54,225 (unaudited), and $20,530 (unaudited) for the year ended September 30, 2000 and the nine months ended June 30, 2001 and 2000, respectively. NOTE 4 - NOTES PAYABLE Notes payable at September 30, 2000 and June 30, 2001 consisted of the following:

11 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 4 - NOTES PAYABLE (Continued)

Future maturities of notes payable at June 30, 2001 were as follows: 12 Months Ending June 30, 2002 $ 62,676 2003 62,115 2004 41,512 2005 41,435 2006 5,993 ----------- Total $ 213,731 =========== 12 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 5 - COMMITMENTS The Company is obligated to a third party under a non-cancelable operating lease for its showroom and office facilities, which expires on December 31, 2001. The lease provides for monthly payments of $4,950, plus certain operating expenses. Rent expense, including operating expense escalations, amounted to $59,400, $26,700 (unaudited), and $42,900 (unaudited) for the year ended September 30, 2000 and the nine months ended June 30, 2001 and 2000, respectively. In January 2001, the lease agreement was terminated by mutual consent, which did not result in a loss to the Company. NOTE 6 - SHAREHOLDERS' EQUITY Common Stock ------------ On June 22, 2001, an aggregate of 13,160,000 shares of common stock were issued to the shareholders of WRT in exchange for all of the issued and outstanding capital stock of WRT. At such time, the former founder and principal of Spacial returned for cancellation an aggregate of 1,200,000 shares of common stock of Spacial. Warrants -------- On April 19, 1999, warrants to purchase 51,000 shares of the Company's common stock, par value $0.001, were issued to the placement agent at an exercise price of $0.255 per share. The shares vest immediately and can be exercised within seven years from the date of issuance of the warrants. The fair value of the warrants at the date of issuance was $2,813 based on the fair value of the placement agent's services, less cash paid. As of June 30, 2001, the warrants were outstanding. On June 26, 2000, pursuant to a consulting agreement, warrants to purchase a total of 150,000 shares of the Company's common stock, par value $0.001, were issued to various consultants at an exercise price of $0.01 per share. In September 2000, holders of these warrants exchanged the warrants for 150,000 shares of common stock. Consideration for the shares was $800 of services rendered and a cash payment of $1,500. On June 22, 2001, in connection with the Share Exchange Agreement, warrants to purchase 150,000 shares (unaudited) of the Company's common stock, par value $0.001, were issued to a former director of Spacial at an exercise price of $0.50 (unaudited) per share in exchange for the return and cancellation of certain shares of the Company. The shares vest immediately and can be exercised within four years from the date of issuance of the warrants. 13 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 7 - INCOME TAXES Current income taxes for the year ended September 30, 2000 and the nine months ended June 30, 2001 and 2000 consisted of the following:

A reconciliation of the income tax computed at the federal statutory rate to the tax provision in the financial statements for the year ended September 30, 2000 and the nine months ended June 30, 2001 and 2000 is as follows:

NOTE 8 - RELATED PARTY TRANSACTIONS Subcontract Services -------------------- During the year ended September 30, 2000 and the nine months ended June 30, 2001 and 2000, the Company paid a company owned by one of the shareholders $21,000, $45,953 (unaudited), and $17,632 (unaudited), respectively, for subcontract services rendered. 14 SPACIAL CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2000 and June 30, 2001 (unaudited) -------------------------------------------------------------------------------- NOTE 8 - RELATED PARTY TRANSACTIONS (Continued) Trust Under Agreement Dated June 30, 1989, Bruce Caputo as Trustee ------------------------------------------------------------------ The Company bought equipment for $167,000 from the Trust, which is a related party because of its ownership interest. Under the terms of the agreement, the Company will pay $167,000 with simple interest at a rate of 9% per annum. Interest is payable in equal installments of $10,800 on June 1, 2001, December 1, 2001, and June 1, 2002. On December 1, 2002, the entire principal amount and total accrued but unpaid interest are payable in full. Due to Shareholders ------------------- As of September 30, 2000 and June 30, 2001, due to shareholders represented non-interest-bearing amounts due to shareholders. The amounts have no stated repayment terms. Common Stock ------------ During the nine months ended June 30, 2001, the Company issued 175,000 shares of common stock to employees as compensation expense totaling $175,000. During the nine months ended June 30, 2001, the Company issued 150,000 shares of common stock for cash totaling $150,000. 15 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. Dated: September 7, 2001 SPACIAL CORPORATION. By: /s/ Norman A. Ponder -------------------------------- Norman A. Ponder, Vice President EXHIBIT INDEX Exhibit Number Description ------ ----------- 4.1 Warrant certificate, evidencing warrants to purchase 150,000 shares of the Common Stock of Spacial Corporation, registered in the name of James A. Prestiano. 10.1 Share Exchange Agreement, dated as of June 22, 2001, among Spacial Corporation, Waste Recovery Technology Corporation and the stockholders of Waste Recovery Technology Corporation. 10.2 Stock Escrow Agreement, dated as of June 22, 2001, among Spacial Corporation, James J. Solano, Sr. and The Trust Under Agreement dated 6/30/89, and Snow Becker Krauss P.C., as Escrow Agent. 10.3 Lock-Up Agreement, dated as of June 22, 2001, by and among Spacial Corporation, James A. Prestiano, James J. Solano, Sr., The Trust Under Agreement Dated 6/30/89, and Norman A. Ponder. 10.4 Registration Rights Agreement, dated as of June 22, 2001, between the Spacial Corporation and James A. Prestiano. 7

SPACIAL CORP 8-K/A