U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the Quarterly Period Ended June 30, 1997
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Transition Period from __________ to _________
Commission file number 0-10006
BISHOP CAPITAL CORPORATION
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Wyoming 84-0901126
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
716 College View Drive, Riverton, Wyoming 82501
------------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
(307) 856-3800
-------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. Yes X No
----- -----
The number of shares outstanding of the issuer's $.01 par value Common Stock as
of August 8, 1997 was 885,481.
Transitional Small Business Disclosure Format
(Check one):
Yes No X
----- -----
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Unaudited)
ASSETS
------
Current Assets :
Cash and equivalents $ 15,346
Restricted cash 321,025
Marketable securities 480,205
Receivables:
Gas royalties 10,411
Interest and other 10,202
Notes receivable - officers 25,000
Prepaid expenses and other 8,481
-----------
Total current assets 870,670
Property and Equipment:
Building 212,157
Furniture and fixtures 63,162
Vehicles and equipment 79,999
-----------
355,318
Less accumulated depreciation (127,696)
-----------
Net property and equipment 227,622
Other Assets:
Land under development 616,536
Investment in limited partnership 211,373
Gas royalty interest, net of
accumulated amortization of $836,961 260,100
Notes receivable 37,380
Other assets, net 4,147
-----------
Total other assets 1,129,536
-----------
Total Assets $ 2,227,828
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Note payable, bank $ 50,000
Accounts payable and accrued expenses 141,805
Payable to brokers 152,965
Customer deposit - related party 20,000
Deferred revenue 267,868
-----------
Total current liabilities 632,638
Stockholders' Equity:
Preferred stock, no par value; 5,000,000 shares
authorized; no shares issued --
Common stock, $.01 par value; 15,000,000 shares
authorized; 885,481 issued and outstanding 8,855
Additional paid-in capital 2,245,995
Accumulated deficit (659,660)
-----------
Total stockholders' equity 1,595,190
-----------
$ 2,227,828
===========
See accompanying notes to these consolidated financial statements.
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<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended June 30,
----------------------
1997 1996
--------- ---------
REVENUES:
Gross profit on real estate sold $ 17,010 $ --
Gas royalties 17,983 16,174
--------- ---------
34,993 16,174
COSTS AND EXPENSES:
Gas processing and production taxes 6,030 6,385
General and administrative 138,585 115,747
Depreciation and amortization 9,738 37,983
--------- ---------
154,353 160,115
--------- ---------
LOSS FROM OPERATIONS (119,360) (143,941)
OTHER INCOME (EXPENSE):
Interest income 5,005 11,531
Dividend income 2,710 3,088
Rental income 3,435 2,535
Net gain on sale of marketable securities -- 25,161
Net unrealized gain on marketable securities 21,494 --
Equity in limited partnership loss (3,216) (5,672)
Interest expense (5,331) (1,871)
--------- ---------
NET LOSS $ (95,263) $(109,169)
========= =========
NET LOSS PER SHARE $ (.11) $ (.12)
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 885,481 885,481
========= =========
See accompanying notes to these consolidated financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
--------------------------------
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (95,263) $(109,169)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 9,738 37,983
Equity in limited partnership loss 3,216 5,672
Net gain on sale of marketable securities -- (25,161)
Net unrealized gain on marketable securities (21,494) --
Land development costs (51,200) --
Changes in operating assets and liabilities:
(Increase) decrease in:
Restricted cash (321,025) --
Marketable securities (8,795) --
Gas royalties receivable 5,078 2,837
Interest and other receivables 838 11,848
Prepaid expenses and other 844 3,674
Increase (decrease) in:
Accounts payable and accrued expenses 98,761 (23,293)
Payable to brokers 7,859 1,871
Deferred revenue 267,868 --
--------- ---------
Net cash used in operating activities (103,575) (93,738)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities -- (158,070)
Proceeds from sale of marketable securities -- 344,458
Funds advanced under notes receivable -- (100,000)
Proceeds from collection of notes receivable 339 17,826
Land development costs -- (26,790)
Purchase of property and equipment (38,153) (2,043)
--------- ---------
Net cash provided by (used in) investing activities (37,814) 75,381
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 110,000 --
--------- ---------
Net cash provided by financing activities 110,000 --
--------- ---------
Net decrease in cash and equivalents (31,389) (18,357)
Cash and equivalents, beginning of period 46,735 66,770
--------- ---------
Cash and equivalents, end of period $ 15,346 $ 48,413
========= =========
Supplemental Cash Flow Information:
Cash paid for interest $ 2,756 $ --
========= =========
See accompanying notes to these consolidated financial statements.
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</TABLE>
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
In the opinion of management, all adjustments, consisting of normal
recurring accruals, have been made which are necessary for a fair
presentation of the financial position of the Company at June 30, 1997 and
the results of operations and cash flows for the three month periods ended
June 30, 1997 and 1996. For a more complete understanding of the Company's
operations and financial position, reference is made to the consolidated
financial statements of the Company, and related notes thereto, filed with
the Company's annual report on Form 10-KSB for the year ended March 31,
1997, previously filed with the U. S. Securities and Exchange Commission.
2. Change in Capital Structure and Spin-off
Prior to June 20, 1997, the Company was a wholly-owned subsidiary of
American Rivers Oil Company ("AROC"). In November 1996, the Board of
Directors of AROC (the Company's sole stockholder of 4,500,000 common
shares outstanding) agreed to make a pro rata distribution of 885,481
shares of the Company's common stock to AROC's common stockholders
(excluding holders of Class B common stock) of record on November 18, 1996.
The pro rata distribution of shares occurred on June 20, 1997, and the
remaining 3,614,519 shares of the Company's common stock owned by AROC were
canceled. Accordingly, all share and per share amounts in the accompanying
financial statements have been retroactively restated to give effect to the
change in capital structure.
3. Sales of Real Estate
Sales of real estate generally are accounted for under the full accrual
method. Under that method, gain is not recognized until the collectibility
of the sales price is reasonably assured and the earnings process is
virtually complete. When a sale does not meet the requirements for income
recognition, gain is deferred until those requirements are met. Sales of
real estate are accounted for under the percentage-of-completion method
when the Company has material obligations under sales contracts to provide
improvements after the property is sold. Under the percentage-of-completion
method, the gain on sale is recognized as the related obligations are
fulfilled.
The Company is presently developing five commercial pad sites on
approximately 4.62 acres ("Phase I") of a 20 acre parcel for which the
Company entered into sale agreements on three lots. The Company is
obligated and entered into a contract for approximately $400,000 of Phase I
site development work consisting of grading, utilities, channel lining,
storm sewer, paving, curb and gutter with a scheduled completion date in
September 1997. The Company was also required to furnish a bank letter of
credit for $36,000 to the City of Colorado Springs to provide assurance
that the paving, curb and gutter improvements would be completed. As of
-5-
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997, approximately 10% of the contract work had been completed.
The Company closed on one lot sale in June 1997 and a bank letter of credit
was furnished to the purchaser to provide assurance that the site
development work would be completed. The net proceeds of $321,025 received
at the closing were used as collateral for this bank letter of credit. This
amount is reflected as restricted cash on the Company's balance sheet at
June 30, 1997. Subsequent to June 30, 1997, the Company closed on another
lot sale and the total commitment on outstanding letters of credit was
decreased to approximately $160,000.
In connection with the closing of the lot sale in June 1997, the Company
utilized the percentage-of-completion method to determine the amount of
gross profit to be recognized at June 30, 1997 as follows:
Sale of real estate $ 350,000
Revenue deferred (267,868)
---------
82,132
Cost of real estate sold 65,122
---------
Gross profit on sale of real estate $ 17,010
=========
The revenue deferred of $267,868 is reflected as a liability in the
Company's balance sheet at June 30, 1997. The revenue will be recognized
subsequent to June 30, 1997 as the related site development work
obligations are completed.
4. Note Payable
The note payable to bank provides for interest at 9.5% and is due April
1998. The note is collateralized by a U. S. Treasury Bond with a face value
of $100,000. The note was paid off subsequent to June 30, 1997.
5. Payable to Brokers
During the current quarter, the Company borrowed a total of $60,000 on
margin from two brokerage firms. Subsequent to June 30, 1997, the Company
repaid borrowings of $50,000 on one of the margin accounts.
-6-
<PAGE>
BISHOP CAPITAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's unaudited consolidated financial statements and notes thereto.
Forward-Looking Statements
- --------------------------
The Company believes that this report contains certain forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995,
including, without limitation, statements containing the words "believes,"
"anticipates," "estimates," "expects," "may" and words of similar import, or
statements of management's opinion. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements.
Results of Operations
- ---------------------
The Company's net loss for the three months ended June 30, 1997 was $95,300
compared to a net loss of $109,200 for the comparable period in 1996. The
decrease in the net loss is primarily due to an increase in revenues of $18,800
with a corresponding decrease in depreciation and amortization of $28,200 offset
by an increase in general and adminstrative expenses of $22,800 and a decrease
in other income of $11,700.
The Company closed on one lot sale related to the development of five commercial
pad sites consisting of approximately 5 acres in a 20 acre parcel in Colorado
Springs, Colorado. Since the Company had obligations to complete certain site
improvements at June 30, 1997, the gross profit of $17,010 recognized by the
Company on the sale was accounted for under the percentage-of-completion method
(see Note 3).
The Company's gas royalty revenue increased $1,800 or 11% for the three months
ended June 30, 1997 compared to the same period in 1996. Natural gas production
for the three months ended June 30, 1997 was 12,017 mcf compared to 11,991 mcf
for the comparable period in 1996. The average sales price of natural gas
increased 12% ($1.44 per mcf compared to $1.29 per mcf ) for the three months
ended June 30, 1997 over the comparable period in 1996.
General and administrative expenses increased by $22,800 or 20% for the three
months ended June 30, 1997 compared to the same period in 1996. The increase is
primarily due to legal, accounting and other expenses incurred in connection
with the spin-off from American Rivers Oil Company.
Depreciation and amortization expense decreased $28,200 or 74% in the current
quarter compared to the corresponding quarter in 1996 primarily due to a change
in the estimated remaining life of the gas royalty interest effective January 1,
1997.
-7-
<PAGE>
Interest and dividend income decreased $6,900 or 47% for the three months ended
June 30, 1997 compared to the same period in 1996 due to the sale of marketable
equity and fixed income securities in the prior fiscal year.
Rental income increased $900 or 36% in the current quarter compared to the
corresponding quarter in 1996 due to the short-term rental of office space to a
non-affiliated third party.
The net unrealized gain on marketable securities of $21,500 for the three months
ended June 30, 1997 represents the net change in the market value of the trading
securities portfolio.
Equity in partnership loss decreased $2,500 or 43% for the three months ended
June 30, 1997 compared to the same period in 1996. The limited partnership's
operations in the current period reflected a 21% decrease in revenue offset by a
25% decrease in costs and expenses when compared to the comparable period in
1996.
Interest expense increased by $3,500 for the current quarter of 1997 over the
corresponding quarter of 1996 due to a higher average amount of debt
outstanding.
Financial Condition
- -------------------
At June 30, 1997, the Company had working capital of $238,000.
The following summary table reflects the Company's cash flows for the three
months ended June 30, 1997 and 1996:
Three Months Ended
June 30,
------------------------
1997 1996
---------- ---------
Net cash used in
operating activities $ (103,600) $ (93,700)
Net cash provided by
(used in) investing activities (37,800) 75,400
Net cash provided by
financing activities 110,000 --
Net cash used in operating activities increased to $103,600 for the three months
ended June 30, 1997 compared to $93,700 for the comparable period in 1996. The
small increase is attributable to the changes in operating assets and
liabilities for the period.
Net cash used in investing activities of $37,800 for the three months ended June
30, 1997 resulted primarily from the purchase of property and equipment. Net
cash provided by investing activities of $75,400 for the three months ended June
30, 1996 resulted from net cash proceeds of $186,400 from the purchase and sale
of marketable securities being utilized for $100,000 advanced under a note
receivable, land development costs of $26,800 and funding of operating
activities.
Net cash provided by financing activities of $110,000 for the three months ended
June 30, 1997 resulted from bank borrowings of $50,000 and borrowings of $60,000
from two brokerage margin accounts.
-8-
<PAGE>
The Company's material commitments for capital expenditures in the next twelve
months will be in conjunction with the three phase development of a 20 acre
parcel in Colorado Springs, Colorado. Phase I consisting of five commercial pad
sites (approximately 4.62 acres) is currently being developed. The Company
entered into a contract for $400,000 related to on-site and off-site
improvements in Phase I. These improvements were approximately 10% completed at
June 30, 1997 and the Company anticipates completion by September 1997. The
Company entered into sales contracts for three of the five lots and has closed
on two of the lots. The third closing will occur in August 1997. The Company is
utilizing the net proceeds from the sale closings to fund the Phase I
improvements. Management, which is devoting all of its efforts to Phase I of the
development, is unable to project an estimated time frame for the commencement
and completion of Phases II and III related to the 20 acre parcel.
-9-
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Default Upon Senior Securities
------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
a. Exhibits
Exhibit 27. Financial Data Schedule (submitted only in
electronic format)
b. Reports on Form 8-K
None
-10-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BISHOP CAPITAL CORPORATION
(Registrant)
Date: August 8, 1997 By: /s/ Robert E. Thrailkill
---------------------------
Robert E. Thrailkill
President
(Principal Executive Officer)
Date: August 8, 1997 By: /s/ John A. Alsko
----------------------------
John A. Alsko
Treasurer and Chief
Financial Officer
(Principal Financial Officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 FDS for 1st quarter 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 336,371
<SECURITIES> 480,205
<RECEIVABLES> 45,613
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 870,670
<PP&E> 355,318
<DEPRECIATION> 127,696
<TOTAL-ASSETS> 2,227,828
<CURRENT-LIABILITIES> 632,638
<BONDS> 0
0
0
<COMMON> 8,855
<OTHER-SE> 1,586,335
<TOTAL-LIABILITY-AND-EQUITY> 2,227,828
<SALES> 34,993
<TOTAL-REVENUES> 34,993
<CGS> 6,030
<TOTAL-COSTS> 154,353
<OTHER-EXPENSES> (29,428)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,331
<INCOME-PRETAX> (95,263)
<INCOME-TAX> 0
<INCOME-CONTINUING> (95,263)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (95,263)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
