KINGSLEY COACH, INC. THIRD QUARTER 10QSB
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 0-21733
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
(Name of Small Business Issuer in its Charter)
DELAWARE 87-0369035
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
64 Old Route 522
Middleburg, PA 17842
(Address of Principal Executive Offices)
Issuer's Telephone Number: (570)837-7114
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
---- ---- ---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
None; not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of
shares outstanding of each of the Registrant's classes of common stock,
as of the latest practicable date:
September 30, 1999
Common Voting Stock
10,100,010
September 30, 1999
Preferred Stock
-0-
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management and
commence on the following page, together with related Notes. In the opinion
of management, the Financial Statements fairly present the financial
condition of the Registrant.
<TABLE>
KINGSLEY COACH, INC.
(FORMERLY Micro-Hydro Power, Inc.)
BALANCE SHEET
September 30, 1999 and December 31, 1998
(Unaudited)
<CAPTION>
ASSETS
9/30/99 12/31/98
<S> <C> <C>
Current Assets:
Cash $ 183,846 $ 67,724
Accounts Receivable 99,567 22,959
Inventory 888,213 800,172
--------- -------
Total Current Assets 1,171,626 890,855
Property & Equipment, net 98,682 98,682
Other Assets:
Deposits 3,650 3,650
Prepaid Expenses 5,000 0
----- -----
Total Other Assets 8,650 3,650
TOTAL ASSETS $1,278,958 $ 993,187
========= =======
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable $ 243,292 $ 145,334
Accrued Liabilities 22,187 22,187
Payable - Related Party 44,520 80,414
Payroll Taxes Payable 44,065 44,596
Customer Deposits 841,956 540,868
Note Payable - Manufacturers 335,000 200,000
Note Payable - Other 452,546 479,523
Note Payable - Shareholder 537,846 537,846
Deferred Credits 52,367 0
--------- ---------
Total Current Liabilities 2,573,779 2,050,768
Stockholders' Deficit
Preferred stock, $.00001 par value;
authorized 5,000,000 shares; issued
and outstanding -0- shares 0 0
Common stock, $.00001 par value;
authorized 30,000,000 shares;
issued and outstanding 10,100,010 101 101
Additional Paid-in Capital 191,878 191,878
Accumulated Deficit (1,249,560) (1,249,560)
Current Year Deficit ( 237,240) -
--------- ---------
Total Stockholders' Deficit (1,294,821) (1,057,581)
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT $1,278,958 $993,187
========= =======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
STATEMENTS OF OPERATIONS
For the Nine Month Periods Ended September 30, 1999 and 1998
(Unaudited)
<CAPTION>
Nine Months Nine Months
Ended Ended
9/30/99 9/30/98
<S> <C> <C>
REVENUE
Sales $1,858,270 $ 0
Cost of Sales (1,317,047) 0
--------- --------
Gross Margin 539,223 0
General and Administrative Expenses 698,261 1,007
------- -----
Net Loss from Operations (159,038) (1,007)
Other Income/Expense
Interest Expense (78,202) 0
------ ----
Total Other Income/Expense (78,202) 0
Net Loss Before Taxes (237,240) (1,007)
Income Taxes 0 0
------- -----
Net Loss $(237,240) $(1,007)
======= =====
Loss Per Share $ (.02) $ (.01)
Weighted Average
Shares Outstanding 10,100,010 300,010
</TABLE>
See accompanying notes to the financial statements.
<TABLE>
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<CAPTION>
Add'l Accum- Total
Shares Common Paid-in ulated Stockholders'
Issued Stock Capital Deficit Deficit
<S> <C> <C> <C> <C> <C>
Balance, December
31, 1998 10,100,010 $ 101 $191,878 $(1,249,560) $(1,057,581)
Net Loss for the
Period Ended
March 31, 1999 (239,535) (239,535)
Net Loss for the
Period Ended
June 30, 1999 (208,752) (208,752)
Net Income for the
Period Ended
September 30, 1999 211,047 211,047
Balance,
September 30, __________ _____ _______ __________ __________
1999 10,100,010 $ 101 $191,878 $(1,486,800) $(1,294,821)
========== ===== ======= ========== ==========
</TABLE>
See accompanying notes to the financial statements.
<TABLE>
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
STATEMENTS OF CASH FLOWS
For the Nine Month Periods Ended September 30, 1999 and 1998
(Unaudited)
<CAPTION>
Nine Months Nine Months
Ended Ended
9/30/99 9/30/98
<S> <C> <C>
Cash Flows Provided By/Used For
Operating Activities
Net Loss $ (237,240) $ (1,007)
Adjustments to reconcile
net loss to net cash provided by/
used in operating activities:
Increase in inventory (88,041) 0
Increase in accounts receivable (76,608) 0
Increase in prepaid expenses (5,000) 0
Decrease in payroll liabilities (531) 0
Increase in accounts payable 97,958 0
Increase in customer deposits 301,088 0
Increase in deferred credits 52,367 0
Net Cash Provided By/Used
for Operating Activities 43,993 0
Cash Flows Provided By/Used for
Financing Activities
Principal increase in notes payable 72,129 0
Investment by shareholder 0 1,007
Net Cash Provided By Financing
Activities 72,129 1,007
Net Increase in Cash 116,122 0
Beginning Cash Balance 67,724 0
Ending Cash Balance 183,846 0
Supplemental Disclosure
Interest paid 78,202 0
Income taxes paid 0 0
</TABLE>
NOTES TO FINANCIAL STATEMENTS: Interim financial statements reflect
all adjustments which are, in the opinion of management, necessary to
a fair statement of the results for the periods. The December 31, 1998
balance sheet has been derived from the audited financial statements. These
interim financial statements conform with the requirements for interim
financial statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles.
Item 2. Management Discussion and Analysis or Plan of Operation for the
Period Ended September 30, 1999, including material events as applicable
The Company accumulated losses through December 31, 1998 amounting to
$(1,249,560) and had a net working capital deficiency of $(1,057,581) at
December 31, 1998. It accumulated losses through September 30, 1999 amounting
to $(237,240) and had a net working capital deficiency of $(1,294,821) at
September 30, 1999.
Management can satisfy cash requirements through the end of
the year from cash flow from operations without needing to raise additional
funds. However, the Company is actively seeking additional capital in order
to increase inventory, production, and to decrease delivery time of its
product to its customers. Funding would also be used to expand its own
manufacturing facilities in order to decrease its reliance on Thor Industries,
Inc., an RV manufacturer, which is currently responsible for approximately 50%
of the construction of each of the coaches manufactured by the Company.
Ultimately, this would markedly decrease its production costs per unit, and it
is expected that the costs of expansion would be fully recouped within two
years. The Company is working with the financial consulting firm of Jenson
Services, Inc. to assist it in identifying capital sources, with the ultimate
goal to seek between $2,000,000 and $5,000,000 in convertible
notes/debentures. Management has approved a two-to-one stock split that will
take effect in November 1999 in order to make an investment in the Company
more attractive.
Management is pursuing product research and development on more high-end
and exotic materials for installation on the interior of its coaches, which
Management expects would create higher per-unit sales and produce greater
profit margins.
Management is considering upgrading its paint and graphic design
facility, which would provide more space and would allow for more
computer-based design and application of its graphics and paints, which
management expects would create higher per-unit sales and produce greater
profit margins.
Management recognizes that is product is considered a luxury item,
and that as the economy has enjoyed remarkable growth for some time, that the
growth cycle may end, detrimentally affecting consumer interest in luxury
items. However, management has experienced a steady increase in interest and
sales, and expects, as more babyboomers begin consider retirement, that sales
will continue to increase for the foreseeable future, even if the economy
experiences a downturn.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On August 16, 1999, the Company was served with a lawsuit entitled Russell
A. Ratliff and Southeast Financial Consulting, Inc., Plaintiffs, vs. The
Kingsley Coach, Inc., The Kingsley Coach, L.L.C., D.R.K., Inc., Verdo J.
Lancaster, Richard Dutson and Ralph Dickenson, Defendants. The Complaint was
filed on August 2, 1999 in the Chancery Court for Roane County, State of
Tennessee.
In the Complaint, the Plaintiffs allege that they located investors and
investment opportunities for the Company, but that the Defendants did not
cooperate in finalizing these investments, and as a result Plaintiffs were
injured in that they would have received 2,170,000 shares of common stock of
the Company in exchange for the investments, pursuant to an agreement between
the Plaintiffs and the Company. Plaintiffs are seeking, in the alternative,
an equitable award of $500,000.
The Company and all of the Defendants have denied and continue to deny
each and every allegation of the Complaint, are vigorously defending the
lawsuit, and believe it is wholly without merit and is being brought for the
sole purpose of improperly of forcing the Company, through a nuisance suit, to
settle the suit through an issuance of shares to Plaintiffs.
Item 2.Changes in Securities.
Management has approved a 2-to-1 reverse split of all of its outstanding
shares of common stock, which will take effect in mid-November, 1999.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of matters to a Vote of Security Holders.
None; not applicable
Item 5. Other Information.
None; not applicable
Item 6. Exhibits and Reports on Form 8-K.
Exhibit Number Description
- - -------------- -----------
(27) Financial Date Schedule.
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 thereunto duly authorized.
KINGSLEY COACH, INC.
Date: 11/12/99 By /S/Ralph Dickenson
President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 183,846
<SECURITIES> 0
<RECEIVABLES> 99,567
<ALLOWANCES> 0
<INVENTORY> 888,213
<CURRENT-ASSETS> 1,171,626
<PP&E> 98,682
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,278,958
<CURRENT-LIABILITIES> 2,572,779
<BONDS> 0
0
0
<COMMON> 101
<OTHER-SE> (1,294,720)
<TOTAL-LIABILITY-AND-EQUITY> 1,278,958
<SALES> 1,856,270
<TOTAL-REVENUES> 1,856,270
<CGS> 1,317,047
<TOTAL-COSTS> 698,261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78,202
<INCOME-PRETAX> (237,240)
<INCOME-TAX> 0
<INCOME-CONTINUING> (237,240)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (237,240)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
