American Toxxic Again Fails to Satisfy Conditions of $4-Million Acquisition Debt

American Toxxic Control Inc. said Friday it had once again failed to meet the requirements of a $4-million debt owed Merrill Lynch Business Capital Inc., financing which American Toxxic used to buy another company.

Now Merrill Lynch and another lender, San Francisco investment fund BBU Mezzanine Fund, may force American Toxxic to sell its new company to repay the debt, American said Friday.

American Toxxic said it was also hard up for cash and was considering selling stock in its other subsidiaries, according to a statement issued Friday. American executives were not available to comment. Merrill Lynch and BBU could not be reached.

Under its agreement with Merrill Lynch and BBU, American Toxxic had been under a January deadline to raise $2 million by selling its stock to investors. The deadline was later extended to April 17, and then to April 24.

Despite protestations that it was near meeting the requirement, the company said Friday it was still not there. Talks with an unnamed investor had “concluded . . . without agreement,” the statement said.

The company was harshly criticized last month in a Forbes magazine article assailing the honesty of chief executive Lou Purmort. Purmort resigned as chairman and chief executive as a result, the company said.

The company has also moved from Newport Beach to Huntington Beach.

American Toxxic is a maker of equipment for hazardous-waste cleanup. It borrowed $4 million last year and later used it to buy part of U.S. Filter from Texcel International as part of American Toxxic’s ambitious acquisition strategy.

Texcel would not take American Toxxic stock for the transaction, Forbes reported.

American Toxxic, meanwhile, said Friday it was still negotiating with Merrill Lynch and BBU over their $4 million in senior notes.

If found to be in default on the notes, American Toxxic said in its statement, the two investors could force it to put its shares in U.S. Filter up for sale or sell 15 million shares of American Toxxic stock to repay the debt.

The company’s stock, which had surged to $2.50 a share in the bull market before the 1987 crash, traded Friday over the counter for 12.5 cents a share.

American Toxxic recently reported lackluster results for the third quarter of its fiscal year, which ends in December. The company lost $102,000 compared to $551,000 a year ago. Sales were $7.2 million compared to $3 million a year ago.