KINGSLEY COACH, INC. FIRST 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 June 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:
June 30, 1999
Common Voting Stock
10,100,010
June 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
June 30, 1999 and December 31, 1998
(Unaudited)
<CAPTION>
ASSETS
6/30/99 12/31/98
<S> <C> <C>
Current Assets:
Cash $ 74,429 $ 67,724
Accounts Receivable 23,908 22,959
Inventory 921,192 800,172
Total Current Assets 1,019,529 890,855
Property & Equipment, net 98,682 98,682
Other Assets:
Deposits 3,650 3,650
TOTAL ASSETS $1,121,861 $ 993,187
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable $ 150,168 $ 145,334
Accrued Liabilities 22,187 22,187
Payable - Related Party 91,905 80,414
Payroll Taxes Payable 33,389 44,596
Customer Deposits 943,398 540,868
Note Payable - Manufacturers 335,000 200,000
Note Payable - Other 461,469 479,523
Note Payable - Shareholder 537,846 537,846
Deferred Credits 52,367 0
Total Current Liabilities 2,627,729 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 ( 448,287) -
Total Stockholders' Deficit (1,505,868) (1,057,581)
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT 1,121,861 993,187
</TABLE>
See accompanying notes to financial statements.
<TABLE>
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
STATEMENTS OF OPERATIONS
For the Three Month Periods Ended June 30, 1999 and 1998
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
6/30/99 6/30/98
<S> <C> <C>
REVENUE
Sales $ 579,790 $ 0
Cost of Sales (496,227) 0
Gross Margin 83,563 0
General and Administrative Expenses 478,631 1,007
Net Loss from Operations (395,068) (1,007)
Other Income/Expense
Interest Expense (53,219) 0
Total Other Income/Expense (53,219) 0
Net Loss Before Taxes (448,287) (1,007)
Income Taxes 0 0
Net Loss $(448,287) $(1,007)
Loss Per Share $ (.04) $ (.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 JUNE 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 (448,287) (448,287)
Balance, June 30,
1999 10,100,010 $ 101 $191,878 $(1,937,382) $(1,745,403)
</TABLE>
See accompanying notes to the financial statements.
<TABLE>
KINGSLEY COACH, INC.
(Formerly Micro-Hydro Power, Inc.)
STATEMENTS OF CASH FLOWS
For the Three Month Periods Ended June 30, 1999 and 1998
(Unaudited)
<CAPTION>
Six Months Six Months
Ended
Ended 6/30/99
6/30/98
<S> <C> <C>
Cash Flows Provided By/Used For
Operating Activities
Net Loss $ (448,287) $ (1,007)
Adjustments to reconcile
net loss to net cash provided by/
used in operating activities:
Increase in inventory (121,020) 0
Increase in accounts receivable (949) 0
Decrease in payroll liabilities (11,207) 0
Increase in accounts payable 4,834 0
Increase in customer deposits 402,530 0
Increase in deferred credits 52,367 0
Net Cash Provided By/Used
for Operating Activities (121,732) 0
Cash Flows Provided By/Used for
Financing Activities
Principal increase in notes payable 128,437 0
Investment by shareholder 0 1,007
Net Cash Provided By Financing
Activities 128,437 1,007
Net Increase in Cash 6,705 0
Beginning Cash Balance 67,724 0
Ending Cash Balance 74,429 0
Supplemental Disclosure
Interest paid 53,219 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.
<PAGE>
Item 2. Management Discussion and Analysis or Plan of Operation for the
Period Ended March 31, 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 June 30, 1999 amounting to $448,287
and had a net working capital deficiency of $1,505,868 at June 30, 1999.
The Company named Kermit Kingsley as Chief Executive Officer, effective
July 1999. While bearing the same surname as the Company, Mr. Kingsley is not
related to the Company or any of its officers and directors. Mr. Kingsley has
proposed a number of changes in the Company, which as of this release have not
become effective and may not become effective:
New officers and directors. The current proposal calls for the
following officers and directors: President, Daniel Ayres; Vice President and
CFO, Paul Gregg; Jack Patterson, Secretary/Treasurer; Kermit Kingsley,
Chairman of the Board; Fred Smith, Vice Chairman of the Board; David Ayres,
Director; Tom Pistacchio, Director; Gary Jestice, Director; Catherine Rimes,
Director; Charles Yeomans, Director.
New manufacturing facility location. A location for another
manufacturing facility is being sought in the West in order to increase plant
capacity to meet the delivery schedules for the increased number of orders
anticipated, in particular for specialty and medical units.
Orders for specialty and mobile medical units. Orders are being
negotiated for twenty-five specialty and mobile medical units to be delivered
within the next eighteen months. These units would be priced at an average of
$700,000, for a total order of $17,500,000.
Financing. The Company is securing $1,000,000 of financing for the
purchase of truck chassis and power units, with interest at Prime Rate, and
ten percent payments due upon the placement of each order and every month
thereafter until each purchase is paid in full. In addition, the Company is
looking to complete a $5,000,000 line of credit for operations of the Company,
secured by an insurance company financial guaranty bond.
Consulting agreement. The Company has signed a consulting agreement
with DRK, Inc., which consists of Ralph Dickenson, George Carlson, and Richard
Whitney. Upon its effective date, which shall commence with the first payment
from the Company, the Company will pay DRK, Inc. $500,000 per year for five
years in exchange for DRK, Inc.'s consulting services over a five year period,
and the surrender to the Company of DRK, Inc.'s contacts, programs, customer
lists, research, records, engineering and software.
Management believes that with the cash flow of the Company and the
financing as set forth above, that it can satisfy cash requirements through
the end of the year. The Company is considering raising additional capital in
order to increase inventory and thereby speed up delivery time of its product
to its customers, and also to improve the Company's marketing efforts. No
specific plans for such capital raising have been made at this time.
Management recognizes that its 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 and the decrease of discretionary income. Therefore, the Company is
pursuing contracts for specialty and mobile medical units. Sales of these
units would result in a lower margin compared to the Company's luxury coaches.
However, it would result in volume orders from the same customer as well as
repeat business, which the Company lacks with individual luxury orders.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
The Board has approved a 1-for-2 stock split in order to reposition the stock
in the market at a higher valuation. This split will be effective within 30-
45 days.
All of the outstanding stock options as of December 31, 1998 have been
recaptured and canceled by the Company.
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.
<PAGE>
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: 8-23-99 By /S/Ralph Dickenson
President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 74,429
<SECURITIES> 0
<RECEIVABLES> 23,908
<ALLOWANCES> 0
<INVENTORY> 921,192
<CURRENT-ASSETS> 1,019,529
<PP&E> 98,682
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,121,861
<CURRENT-LIABILITIES> 2,627,729
<BONDS> 0
0
0
<COMMON> 101
<OTHER-SE> (1,505,767)
<TOTAL-LIABILITY-AND-EQUITY> 1,121,861
<SALES> 579,790
<TOTAL-REVENUES> 579,790
<CGS> 496,227
<TOTAL-COSTS> 478,631
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,219
<INCOME-PRETAX> (448,287)
<INCOME-TAX> 0
<INCOME-CONTINUING> (448,287)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (448,287)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
