THE 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 March 31, 2000
[ ] 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
THE KINGSLEY COACH, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 23-3003600
(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:
March 31, 2000
Common Voting Stock
7,250,527
March 31, 2000
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, reviewed by the Company's auditors, 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 Company.
The Kingsley Coach, Inc.
Independent Accountants' Report
and
Condensed Financial Statements
March 31, 2000
The Kingsley Coach, Inc.
TABLE OF CONTENTS
Page
Independent Accountants' Report. . . . . . . . . . . 1
Condensed Balance Sheet - March 31, 2000. . . . . . . 2-3
Condensed Statements of Operations for the
Three Months Ended March 31, 2000 and 1999 . . .. . . 4
Condensed Statements of Cash Flows for the
three months ended March 31, 2000 and 1999 . . .. . 5
Notes to Financial Statements . . . . . . . . . . . 6
[Letterhead]
Independent Accountants' Report
The Board of Directors and Shareholders
The Kingsley Coach, Inc.
We have reviewed the accompanying condensed balance sheet of The
Kingsley Coach, Inc., as of March 31, 2000, and the related
statements of operations and cash flows for the three months ended
March 31, 2000 and 1999. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements.
Management has elected to omit substantially all of the disclosures
ordinarily included in financial statements prepared in conformity
with generally accepted accounting principles. If the omitted
disclosures were included in the financial statements, they might
influence the user's conclusions about the Company's Assets,
Liabilities, Stockholders' Equity, Revenues, and Expenses.
Accordingly, these financial statements are not designed for those
who are not informed about such matters.
/s/ Mantyla McReynolds
Mantyla McReynolds
Salt Lake City, Utah
June 5, 2000
<TABLE>
The Kingsley Coach, Inc.
Condensed Balance Sheet
March 31, 2000
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash $33,452
Accounts receivable (net of allowance) 93,242
Inventory 720,192
Settlement Receivable 246,250
---------
Total Current Assets 1,093,136
Property & Equipment, net 192,038
Other Assets:
Prepaid expense 595,767
Deposits 3,650
-------
Total Other Assets 599,417
TOTAL ASSETS $1,884,591
=========
</TABLE>
See accompanying notes to financial statements
<TABLE>
The Kingsley Coach, Inc.
Condensed Balance Sheet [continued]
March 31, 2000
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C>
Current Liabilities:
Accounts payable $71,863
Accrued liabilities 346,629
Payroll taxes payable 55,936
Customer deposits 706,822
Note payable - manufacturer 121,840
Current portion long-term debt 38,986
---------
Total Current Liabilities 1,342,076
Long-Term Liabilities:
Note payable - other 607,954
Note payable -shareholder 337,846
---------
Total Long-Term Liabilities 945,800
---------
Total Liabilities 2,287,876
Stockholders' Deficit
Preferred stock, $.0001 par value;
authorized 5,000,000 shares; issued and
outstanding -0- shares -
Common stock, $.00001 par value;
authorized 30,000,000 shares; issued
and outstanding 7,250,527 73
Additional paid-in capital 983,858
Accumulated Deficit (1,387,216)
---------
Total Stockholders' Deficit (403,285)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $1,884,591
=========
</TABLE>
See accompanying notes to financial statements
<TABLE>
The Kingsley Coach, Inc.
Condensed Statements of Operations
For the Three Months Ended March 31, 2000 and 1999
<CAPTION>
<S> <C> <C>
Revenues: 2000 1999
---------- ----------
Sales $683,121 $133,306
Cost of Sales (456,915) (128,211)
------- -------
Gross Margin 226,206 5,095
General and administrative expenses 347,221 219,707
------- -------
Net Loss from Operations (121,015) (214,612)
Interest expense (15,123) (24,923)
------- -------
Total Other Income/(Expense) (15,123) (24,923)
------- -------
Net Loss Before Taxes (136,138) (239,535)
Income taxes -0- -0-
------- -------
Net Loss $(136,138) $(239,535)
======= =======
Loss Per Share $ (.02) $ (.02)
======= =======
Weighted Average Shares Outstanding 7,250,527 10,100,010
========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
The Kingsley Coach, Inc.
Condensed Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999
<CAPTION>
<S> <C> <C>
2000 1999
-------- -------
Cash Flows Provided by/
(Used for) Operating Activities
Net Loss $(136,138) $(239,535)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 8,207
Decrease (increase) in
prepaid expenses (4,877)
Decrease (increase) in
accounts receivable (65,110)
Decrease in other receivable 303,750
Decrease (increase) in inventory 15,167 (47,464)
Increase in payroll liabilities 2,486 480
Increase (decrease)in
accounts payable (107,341) (42,566)
Increase in accrued liabilities (16,400) 0
Increase in customer deposits (25,812) 198,759
Net Cash Provided by/(used for) ------- -------
Operating Activities (26,068) (130,326)
Cash Flows Provided by/(Used for)
Financing Activities
Principal increase in notes payable 130,557 150,443
Principal payments/reductions (148,766) 0
------- -------
Net Cash Provided by
Financing Activities (18,209) 150,443
------- -------
Net Increase/(Decrease) in Cash (44,277) 20,117
Beginning Cash Balance 77,729 67,724
------- -------
Ending Cash Balance $33,452 $87,841
======= =======
Supplemental Disclosures
Interest paid $15,123 $24,923
Income taxes paid -0- -0-
</TABLE>
See accompanying notes to consolidated financial statements.
The Kingsley Coach, Inc.
Notes to Condensed Financial Statements
March 31, 2000
Note 1 PRELIMINARY NOTE
The accompanying condensed financial statements have been
prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.
Certain information and disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or
omitted. These financial statements reflect all adjustments
which, in the opinion of management, are necessary to a fair
statement of the results for the periods presented. It is
suggested that these condensed financial statements be read
in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-
KSB for the year ended December 31, 1999.
Organization
The Kingsley Coach, Inc., ("Company") incorporated under the
laws of the State of Utah in 1980 as Micro-Hydro Power, Inc.
[MHP]. MHP changed its domicile from the State of Utah to
the State of Delaware by merging with and into its wholly-
owned subsidiary, Micro-Hydro Power, Inc., a Delaware
corporation in December of 1997. MHP was essentially
dormant for ten years until an Agreement and Plan of
Reorganization was executed on December 18, 1998, between
MHP and The Kingsley Coach, LLC, a Louisiana limited
liability company [Kingsley]. The result was the
acquisition of the assets and liabilities of Kingsley, also
known as a reverse acquisition, accounted for herein on the
purchase basis. Kingsley is a manufacturer of customized
luxury recreational and commercial vehicles known as The
Kingsley Coach. With the acquisition of Kingsley, MHP
changed its name to The Kingsley Coach, Inc.
Item 2. Management Discussion and Analysis or Plan of Operation
The Company accumulated losses through March 31, 2000 amounting
to <$136,138>.
In 1999, the Company's sales increased by approximately 39%, from
$2,046,121 to $2,810,632. In 1999, the Company's Net Loss Before
Taxes was $551,518 as compared to a Net Loss Before Taxes in 1998 of
$585,691. In 1999, the Company incurred approximately $800,000 on
research and development costs as compared to approximately $650,000
in 1998.
For the period ended March 31, 2000 compared to one year earlier,
the Company's sales increased from $133,306 to $683,121, and its gross
margin after deducting cost of sales increased from $5,095 to
$226,206. In addition, the Company's net loss from operations
decreased from <$214,612> to <$121,015>.
The Company was still developing its product through March 31,
2000, and the Company does not expect to be ready for high-volume,
assembly-line production of its planned standard RV models until July
2000. As such, the Company did not, and does not presently,
anticipate profits until July 2000. When taking into consideration
the Company's development expenses incurred in 1999 and 1998, the
Company actually would have experienced a profit in both years had
these development costs not been incurred. Since the Company had
sales of only $2,810,632 in 1999 and $2,046,121 in 1998, the Company's
profitable breakeven point is low, both in terms of dollars and unit
sales. This fact should serve the Company well in the future,
especially in the event of any economic downturns which might
adversely affect the RV industry.
The Company expects sales to increase substantially in 2000,
reflecting the benefits of standardizing production at its Middleburg,
Pennsylvania facility and expanding its market scope.
The Company recognizes that its products may be considered luxury
items, that any downturn in the economy may detrimentally impact
demand for it product. However, the Company does not expect any
decrease in sales as its expanded market efforts should more than
offset any reasonable economic downturn.
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 may seek additional capital in
order to increase inventory, production, and to decrease delivery time
of its product to its customers.
PART II - OTHER INFORMATION
Item 1.Legal Proceedings.
On March 1, 1999, a lawsuit was filed against the Company in the
Supreme Court of Maricopa County, Arizona, alleging that an
individual, on behalf of Kingsley, contracted with a consultant to
provide certain "management services" in exchange for 15,000 shares of
free trading Kingsley common stock. The plaintiff further alleged
that Kingsley failed to pay the 15,000 shares of stock and is seeking
approximately $52,000 in damages, plus attorney fees. The Company
maintained that the individual had no authority to execute on its
behalf and further that "management services" were not provided. In
May 2000, the trial Court ruled in favor of the Company on all causes
of action, made no award to plaintiff, and awarded attorney's fees to
the Company.
Item 2.Changes in Securities.
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.
(a)Exhibits.*
Where Incorporated in this Report
---------------------------------
Exhibit Number Description
--------------- -----------
(27) Financial Date Schedule.
(b)Reports on Form 8-K.
**This exhibit has previously been filed with the Securities and
Exchange Commission.
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.
THE KINGSLEY COACH, INC.
Date: 6-9-00 By /S/Terry Watkins
CEO
