<PAGE>
FORM 10-QSB - Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended September 30, 1997
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or
[ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange act of 1934.
For the transition period from to
Commission File Number 0-22027
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ROCKY MOUNTAIN POWER CO.
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(Exact name of registrant as specified in its charter)
Colorado 84-0503585
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
12835 E. Arapahoe Road, T-II, Ste. 110, Englewood, CO 80046
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(Address of principal executive offices) (Zip Code)
(303) 792-2466
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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.
[ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1997, Registrant had 752,537 shares of common stock, $.05
par value, outstanding.
<PAGE>
INDEX
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Page
Number
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Part I. Financial Information
Item I. Financial Statements
Balance Sheets as of September 30, 1997
and June 30, 1997 2
Statement of Operations, Three Months
Ended September 30, 1997 and
September 30, 1996 3
Statement of Cash Flows, Three Months
Ended September 30, 1997 and
September 30, 1996 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 6
Part II. Other Information 7
1
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ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
September 30, June 30,
1997 1997
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<S> <C> <C>
Current Assets:
Cash $ 434,499 $ 1,159,431
Certificates of purchase, real estate
foreclosures 1,022,125 566,577
Mortgage notes receivable, current
portion 59,844 59,655
Deferred income taxes receivable,
current 5,773 5,773
Other 43,636 41,140
--------- ---------
Total Current Assets 1,565,877 1,832,576
Real estate, net of accumulated deprec-
iation of $16,924 at September 30, 1997 and
$14,267 at June 30, 1997 783,132 824,930
Transportation equipment, net of accumulated
depreciation of $875 at September 30, 1997
and $125 at June 30, 1997 14,125 14,875
Mortgage notes receivable, net of
current portion 947,208 1,504,322
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Other 81,827 80,827
------- ---------
TOTAL ASSETS $ 3,392,169 $ 4,257,530
=========== ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued expenses $ 13,587 $ 8,301
Notes payable, current portion 865,700 1,018,758
Note payable, related party - 150,000
Income taxes payable 10,500 16,160
Deferred taxes payable, current portion 22,500 21,927
Accrued expenses and other 6,524 12,523
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Total Current Liabilities 918,811 1,227,669
Deferred taxes payable, long term 36,642 41,822
Notes payable, net of current portion 42,400 610,663
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TOTAL LIABILITIES 997,853 1,880,154
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Stockholders' Equity:
Preferred stock, $25.00 par value, 200,000
shares authorized, none issued & outstanding - -
Common stock, $.05 par value, 100,000,000
shares authorized, 752,537 shares issued
and outstanding at September 30, 1997 and
749,742 shares at June 30, 1997 37,627 37,487
Additional paid-in capital 2,073,980 2,065,234
Retained earnings 282,709 274,655
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TOTAL STOCKHOLDERS' EQUITY 2,394,316 2,377,376
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,392,169 $ 4,257,530
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, September 30,
1997 1996
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<S> <C> <C>
Revenue:
Rent income $ 7,620 $ 31,970
Interest income 41,892 37,972
Management fee income 19,650 -
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69,162 69,942
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Expenses:
Depreciation 5,043 3,694
Interest 22,074 14,872
Rent 7,279 -
Contract services 10,790 -
Audit and accounting 7,622 -
Other 7,379 9,858
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60,187 28,424
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Net income before provision
for income taxes 8,975 41,518
Provision for income taxes 920 9,135
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Net income $ 8,055 $ 32,383
========== ==========
Per Share $ .01 $ .05
========== ==========
Weighted Average Shares Outstanding 752,537 700,000
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, September 30,
1997 1996
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<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 8,055 $ 32,383
Depreciation 5,043 3,694
(Decrease) in income taxes payable (5,660) -
(Decrease) in deferred income taxes payable (4,607) -
(Decrease) in accounts payable and accrued
expenses (713) -
Common stock issued for services 8,886 -
Other (3,496) -
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Net Cash Provided by Operating Activities 7,508 36,077
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Cash Flows from Investing Activities:
(Investments) in certificates of purchase (879,064) (228,812)
Proceeds from redemptions of certificates of
purchase 423,516 88,862
(Investment) in property - (60,140)
Collection of notes receivable 7,847 160,919
Other 1,703 2,000
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Net Cash (Used in) Investing Activities (445,998) (37,171)
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Cash Flows from Financing Activities:
Common stock issued for cash - 4,000
(Repayment) of bank notes payable (134,300) -
(Repayment of) mortgage notes payable (2,142) (3,931)
(Repayment of) loan from related party (150,000) -
Loan from related party - 120,950
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Net Cash Provided by (Used in) Financing Activities (286,442) 121,019
--------- -------
Increase (Decrease) in Cash (724,932) 119,925
Cash, Beginning of Period 1,159,431 19,230
--------- -------
Cash, End of Period $ 434,499 139,155
=========== ==========
Interest Paid $ 22,074 $ 14,872
=========== ==========
Income Taxes Paid $ 11,187 $ -
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
(1)Condensed Financial Statements
The financial statements included herein have been prepared by Rocky
Mountain Power Co. without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted as allowed by such rules and regulations, and
Aspen Capital, Inc. believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the June 30, 1997
audited financial statements and the accompanying notes thereto. While
management believes the procedures followed in preparing these financial
statements are reasonable, the accuracy of the amounts are in some
respect's dependent upon the facts that will exist, and procedures that
will be accomplished by Rocky Mountain Power Co. later in the year.
The management of Rocky Mountain Power Co. believes that the accompanying
unaudited condensed financial statements contain all adjustments
(including normal recurring adjustments) necessary to present fairly the
operations and cash flows for the periods presented.
5
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Rocky Mountain Power Co. (RMPC) was organized as a Colorado corporation on
September 30, 1958. Prime Rate Income & Dividend Enterprises, Inc. (PRIDE),
is a wholly-owned subsidiary of RMPC. PRIDE is the operating company and RMPC
is principally a holding company. PRIDE is principally in the real estate
ownership and rental business. PRIDE also invests in mortgage notes
receivable and certificates of purchase related to real estate foreclosures.
Certain statements in the Report are forward-looking. Actual results of
future events could differ materially.
Results of Operations
- ---------------------
Revenue for the three month period ended September 30, 1997 decreased from
$69,942 during the three month period ended September 30, 1996 as compared to
$69,162 during the three month period ended September 30, 1997, a decrease of
$780.
While the total revenue remained relatively constant, the source of the income
changed. Rent income decreased $24,350 due to the sale of a significant
portion of the Company's real estate. Interest income increased by $3,920.
During the three month period ended September 30, 1996 the Company earned
$12,281 of interest on a note receivable related to a racquetball health club
facility located in Orange County, California. This property was in the
process of foreclosure and the interest income was added to the basis of the
property when title to the property was subsequently obtained. There was no
interest from this note during the three months ended September 30, 1997. The
tenant in the facility did not pay any rent during the three month period
ended September 30, 1997. As of September 30, 1997 approximately $35,000 of
past due rent was receivable but due to the inability to determine the
collectibility of this balance, this revenue has not been included in the
financial statements. The Company's other interest income increased $16,201
principally due to increased interest from certificates of purchase and
mortgage notes receivable, resulting in a net increase in interest income of
$3,920. Property inspection service fee income relates to fees for inspecting
properties during the period that the Company owns the certificates of
purchase during the foreclosure redemption period. The property inspection
service revenue amounted to $19,650 during the period ended September 30,
1997. The Company did not provide any property inspection services during the
three month period ended September 30, 1996.
Operating expenses were $28,424 during the three month period ended September
30, 1996 as compared to $60,187 during the three month period ended September
30, 1997, an increase of $31,763.
Contract services were $10,790 during the three month period ended September
30, 1997 which principally related to the Company's inspection services on
foreclosure properties during the redemption period. No such contract
services were incurred during the three month period ended September 30, 1996.
Interest expense increased by $7,202 principally due to interest incurred on
the Company's bank line of credit used to finance acquisitions of certificates
6
<PAGE>
of purchase. Rent expense amounted to $7,279 during the three month period
ended September 30, 1997 and related to the ground lease on the racquetball
health club facility. The Company owns the building through a long-term
ground lease with approximately 35 years remaining on the lease. Since the
Company did not own this facility during the three month period ended
September 30, 1996, no rent expense was incurred during that period. The
Company incurred $7,622 of audit and accounting fees during the three month
period ended September 30, 1997 and none during the three month period ended
September 30, 1996. The Company changed its year end from October 31 to June
30 and prior year audit fees were incurred during the three month period ended
December 31, 1996.
Net income after provision for income taxes amounted to $8,055 during the
three month period ended September 30, 1997 as compared to $32,383 during the
three month period ended September 30, 1996, a decrease of $24,328.
The inability to collect the rent from the tenant of the racquetball/health
club facility and the related depreciation and ground rent for the property
during the three month period ended September 30, 1997 resulted in reduction
in net income before taxes of approximately $29,000. Subsequent to September
30, 1997 the company collected $4,000 and received a promissory note for
approximately $41,000 from the tenant for past due rent. The note is
collateralized by the health club equipment and bears interest at 6% per
annum, with scheduled payments commencing in January 1998. Due to the
uncertainty of the ability to collect this note, an allowance for doubtful
accounts has been provided for the entire balance. The amount, if any, of
future collections on this note will be recorded as income as collected.
Liquidity and Capital Resources
- -------------------------------
Current assets decreased from $1,832,576 at June 30, 1997 to $1,565,877 at
September 30, 1997, a decrease of $266,699. Current liabilities decreased
from $1,227,669 at June 30, 1997 to $918,811 at September 30, 1997, a decrease
of $308,858. The decrease in current assets and current liabilities was
principally the result of repayment of short term notes payable.
Working capital was $647,066 at September 30, 1997 as compared to $604,907 at
June 30, 1997, an increase of $42,159. The Company's stockholders' equity was
$2,394,316 at September 30, 1997 as compared to $2,377,376 at June 30, 1997,
an increase of $16,940. The increase in working capital and stockholders'
equity was principally the result of the Company's net income of $8,055 and
stock issued for services at $8,886 during the three month period ended
September 30, 1997.
The Company has made no commitments that would require any material increase
in capital resources. The Company's financial condition has not been affected
by the modest inflation of the recent past. The Company believes that future
inflation, if any, would not materially affect the results of operations,
other than interest rates on the line of credit which are based on a floating
rate over prime would be higher. Also the values and rental rates on the
Company's real estate could be affected by future inflation, in any.
7
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults 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
None.
8
<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.
(Registrant) ROCKY MOUNTAIN POWER CO.
BY(Signature) /s/Michael L. Schumacher
(Date) November 19, 1997
(Name and Title) Michael L. Schumacher,
President
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 434,499
<SECURITIES> 0
<RECEIVABLES> 59,844
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,565,877
<PP&E> 800,056
<DEPRECIATION> 16,924
<TOTAL-ASSETS> 3,392,169
<CURRENT-LIABILITIES> 918,811
<BONDS> 0
0
0
<COMMON> 752,537
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,392,169
<SALES> 0
<TOTAL-REVENUES> 69,162
<CGS> 0
<TOTAL-COSTS> 60,187
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,074
<INCOME-PRETAX> 8,975
<INCOME-TAX> 920
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,055
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
