<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 March 31, 1997
--------------
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
------------------
ROCKY MOUNTAIN POWER CO.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0503585
------------------------------ ----------------
(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
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 792-2466
--------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------
(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 March 31, 1997, Registrant had 673,808 shares of common stock, $.05 par
value, outstanding.
<PAGE>
INDEX
Page
Number
Part I. Financial Information
Item I. Financial Statements
Balance Sheets as of March 31, 1997
and October 31, 1996 2
Statement of Operations, Three Months
Ended March 31, 1997 and March 31, 1996 3
Statement of Operations, Five Months
Ended March 31, 1997 and March 31, 1996 4
Statement of Cash Flows, Three Months
Ended March 31, 1997 and March 31, 1996 5
Statement of Cash Flows, Five Months
Ended March 31, 1997 and March 31, 1996 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 8
Part II. Other Information 9
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
ROCKY MOUNTAIN POWER CO.
-----------------------------
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
March 31, October 31,
1997 1996
--------- --------
<S> <C> <C>
Current Assets:
Cash $ 757,749 $ 33,920
Certificates of purchase, real estate
foreclosures 852,274 372,074
Mortgage notes receivable, current
portion 100,970 219,318
Other 38,670 27,333
--------- -------
Total Current Assets 1,749,663 652,645
Real estate, net of accumulated deprec-
iation of $28,911 at March 31, 1997 and
$21,758 at October 31, 1996 1,586,129 1,039,057
Mortgage notes receivable, net of
current portion 666,255 733,842
Mortgage note receivable, in process
of foreclosure - 547,634
Other 52,995 -
----------- -----------
TOTAL ASSETS $ 4,055,042 $ 2,973,178
=========== ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued expenses $ 20,447 $ 30,641
Notes payable, current portion 1,018,500 17,347
Note payable, related party 150,000 119,700
Income taxes payable 5,670 23,389
Deferred taxes payable, current portion 7,696 7,696
Other 900 16,197
--------- -------
Total Current Liabilities 1,203,213 214,970
Minority interest in equity of consolidated
subsidiary 136,251 -
Deferred taxes payable, long term 27,439 32,299
Notes payable, net of current portion 622,633 629,131
--------- -------
TOTAL LIABILITIES 1,989,536 876,400
--------- -------
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, 673,808 shares issued
and outstanding at March 31, 1997 and
700,000 shares at October 31, 1996 33,690 35,000
Additional paid-in capital 1,843,083 1,920,298
Retained earnings 188,733 141,480
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 2,065,506 2,096,778
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,055,042 $ 2,973,178
=========== ===========
</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
March 31, March 31,
1997 1996
-------- --------
<S> <C> <C>
Revenue:
Rent income $ 49,500 $ 51,505
Interest income 23,605 8,150
Other income 4,437 550
---------- ----------
77,542 60,205
---------- ----------
Expenses:
Depreciation 7,304 7,888
Interest 16,350 17,200
Real estate taxes and insurance 3,300 4,399
Repairs and maintenance 1,990 2,520
Utilities and other 16,846 13,443
---------- ----------
45,790 45,450
---------- ----------
Net income before provision
for income taxes 31,752 14,755
Provision for income taxes 3,402 2,840
---------- ----------
Net income $ 28,350 $ 11,915
========== ==========
Per Share $ .04 $ .02
========== ==========
Weighted Average Shares Outstanding 673,808 655,582
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
ROCKY MOUNTAIN POWER CO.
------------------------
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Five Months Ended
March 31, March 31,
1997 1996
------- -------
<S> <C> <C>
Revenue:
Rent income $ 80,236 $ 85,841
Interest income 41,009 13,597
Other income 7,991 900
---------- ----------
129,236 100,338
---------- ----------
Expenses:
Depreciation 12,173 13,146
Interest 27,295 28,776
Real estate taxes and insurance 5,547 7,331
Repairs and maintenance 3,319 4,233
Utilities and other 27,979 22,235
---------- ---------
76,313 75,721
---------- ---------
Net income before provision
for income taxes 52,923 24,617
Provision for income taxes 5,670 4,739
---------- ----------
Net income $ 47,253 $ 19,878
========== ==========
Per Share $ .07 $ .03
========== ==========
Weighted Average Shares Outstanding 673,808 655,582
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
ROCKY MOUNTAIN POWER CO.
------------------------
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 28,350 $ 11,915
Depreciation 7,304 7,888
Increase (decrease) in income taxes payable (17,719) 637
(Decrease) in deferred income taxes payable (4,860) -
(Decrease) in accounts payable and accrued
expenses (15,290) (8,887)
Other (6,802) (310)
----------- -----------
Net Cash Provided by (Used in) Operating Activities (9,017) 11,243
----------- -----------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase (774,153) -
Proceeds from redemptions of certificates
of purchase 160,390 -
Collection of notes receivable 98,721 2,343
Other 69,091 -
---------- ----------
Net Cash Provided by (Used in) Investing Activities (445,951) 2,343
----------- ----------
Cash Flows from Financing Activities:
Proceeds from bank notes payable 1,000,000 -
Additional paid-in capital 11,849 -
(Repayment of) mortgage notes payable 3,207 (7,353)
(Repayment of) loan from related party (119,700) -
Loan from related party 150,000 -
---------- ----------
Net Cash Provided by
Financing Activities 1,045,356 (7,353)
---------- -----------
Increase in Cash 590,388 6,233
Cash, Beginning of Period 167,361 269,208
---------- ----------
Cash, End of Period $ 757,749 275,441
========== ==========
Interest Paid $ 16,350 $ 17,200
========== ==========
Income Taxes Paid $ 23,389 $ 3,461
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
ROCKY MOUNTAIN POWER CO.
------------------------
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Five Months Ended
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 47,253 $ 19,878
Depreciation 12,173 13,146
Increase (decrease) in income taxes payable (17,719) 637
(Decrease) in deferred income taxes payable (4,860) -
(Decrease) in accounts payable and accrued
expenses (25,491) (14,812)
Other (11,337) (339)
-------- --------
Net Cash Provided by (Used in) Operating Activities 19 18,510
-------- --------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase (852,274) -
Proceeds from redemptions of certificates
of purchase 372,074 -
Collection of notes receivable 185,935 3,905
(Acquisition) of real estate - (38,093)
Other (29,419) -
-------- --------
Net Cash Provided by (Used in) Investing Activities (323,684) (34,188)
--------- --------
Cash Flows from Financing Activities:
Proceeds from bank notes payable 1,000,000 -
Additional paid-in capital 11,849 -
(Repayment of) mortgage notes payable 5,345 (12,255)
(Repayment of) loan from related party (119,700) -
Loan from related party 150,000 -
--------- --------
Net Cash Provided by
Financing Activities 1,047,494 (12,255)
--------- --------
Increase (decrease) in Cash 723,829 (27,933)
Cash, Beginning of Period 33,920 303,374
--------- -------
Cash, End of Period $ 757,749 275,441
========== ==========
Interest Paid $ 27,295 $ 28,776
========== ==========
Income Taxes Paid $ 23,389 $ 3,461
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
ROCKY MOUNTAIN POWER CO.
------------------------
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 October 31, 1996
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.
The Company was a relatively inactive public shell corporation for the
two years preceding the business combination with Prime Rate Investment
Enterprises, Inc. (PRIME) effective March 31, 1997. Since the
controlling shareholders of PRIME control RMPC after the business
combination, the transaction was accounted for as a reverse
acquisition. The financial statements of PRIME are presented in this
filing since for accounting purposes, PRIME is the acquiring entity.
Effective April 30, 1997, PRIME was merged into RMPC with Prime Rate
Income & Dividend Enterprises, Inc. (PRIDE), a wholly-owned subsidiary
of PRIME becoming a wholly-owned subsidiary of RMPC. After the merger
of PRIME into RMPC effective April 30, 1997, the $136,251 minority
interest in PRIME was exchanged for common stock of RMPC, increasing
the Company's stockholders' equity to approximately $2,200,000.
(2) Per Share Information
---------------------
Net income per share was computed using the weighted average number of
common shares outstanding during the period.
(3) Short-term Borrowing
--------------------
During the quarter ended March 31, 1997, the Company engaged in short-
term borrowing with a commercial bank for $1,000,000, collateralized
initially by all of the assets of the Company. Proceeds of the
borrowings are designated for certificates of purchase. Interest is
payable at 1% over the prime rate.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Rocky Mountain Power Co. (the "Company") was organized as a Colorado
corporation on September 30, 1958. The Company is principally in the real
estate ownership and rental business. The Company also invests in mortgage
notes receivable and certificates of purchase related to real estate
foreclosures. Statements in this section relating to the Company's plans and
expectations are forward-looking. Actual results of future events could
differ materially based on general economic conditions, interest rates, the
real estate market generally and the areas in which the Company operates.
The following discussion of the financial condition and results of operations
of the Company relates to the three (3) months ended March 31, 1997 and 1996
and the five (5) months ended March 31, 1997 and 1996, and should be read in
conjunction with the financial statements and notes thereto included elsewhere
in this Report. The Company was a relatively inactive public shell
corporation for the two years preceding the business combination with Prime
Rate Investment Management Enterprises, Inc. (PRIME) effective March 31, 1997.
Since the controlling shareholders of PRIME control RMPC after the business
combination, the transaction was accounted for as a reverse acquisition. The
financial statements of PRIME are presented in this filing since for
accounting purposes, PRIME is the acquiring entity. Effective April 30, 1997,
PRIME was merged into RMPC with Prime Rate Income & Dividend Enterprises, Inc.
(PRIDE), a wholly-owned subsidiary of PRIME becoming a wholly-owned subsidiary
of RMPC. PRIDE is the operating company and RMPC is principally a holding
company. PRIME formerly had an October 31 year end. The Company has adopted
June 30 as its year end.
Results of Operations
- ---------------------
Revenue for the three and five month periods ended March 31, 1997 increased
from the three and five month periods ended March 31, 1996 as follows:
1996 1997 Increase
-------- -------- --------
Three Months Ended March 31, $ 60,205 $ 77,542 $ 17,337
Five Months Ended March 31, $100,338 $129,236 $ 28,898
Revenue increased principally due to the investment in the Racquetball/Health
Club Facility in Orange County, California during November 1996. This
property was acquired through foreclosure of a delinquent note receivable
which was contributed to the Company for common stock of the Company.
Operating expenses were $45,450 during the three month period ended March 31,
1996 as compared to $45,790 during the three month period ended March 31,
1997. Operating expenses were $75,721 during the five month period ended
March 31, 1996 as compared to $76,313 during the five month period ended March
31, 1997. Total operating expenses have remained relatively constant during
the respective periods.
8
<PAGE>
Net income after provision for income taxes amounted to $28,350 during the
three month period ended March 31, 1997 as compared to $11,915 during the
three month period ended March 31, 1996, an increase of $16,435.
Interest income increased threefold as a result of an increase by $1,000,000
in borrowed funds which in large part were invested in short-term interest
bearing accounts and certificates of purchase.
Net income after provision for income taxes for the five month period ended
March 31, 1997 was $47,253 as compared to $19,878 during the five month period
ended March 31, 1996, an increase of $27,375.
The Company has limited general and administrative expenses because it pays no
salaries and maintains offices on a shared basis, at no cost, at the offices
of its president. The Company retains independent entities to manage its
rental properties.
Liquidity and Capital Resources
- -------------------------------
Current assets increased from $652,645 at October 31, 1996 to $1,749,663 at
March 31, 1997, an increase of $1,097,018. Current liabilities increased from
$214,970 at October 31, 1996 to $1,203,213 at March 31, 1997, an increase of
$988,243. The increase in current assets and current liabilities was
principally caused by the bank line of credit in the amount of $1,000,000.
This line of credit has been established and used to acquire] real estate
foreclosure certificates of purchase. The remainder of the increase in
current assets is principally the result of the Company's net income of
$47,253 and the collection of principal payments on long-term mortgage notes
receivable in the amount of $67,587 during the five month period ended March
31, 1997.
Working capital was $546,450 at March 31, 1997 as compared to $437,675 at
October 31, 1996. The Company's stockholders' equity was $2,065,506 at March
31, 1997. After the merger of PRIME into RMPC effective April 30, 1997, the
$136,251 minority interest in PRIME was exchanged for common stock of RMPC,
increasing the Company's stockholders' equity to approximately $2,200,000.
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.
9
<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.
10
<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) August 20, 1997
(Name and Title) President, Chief Executive Officer and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 757,749
<SECURITIES> 0
<RECEIVABLES> 100,970
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,749,663
<PP&E> 1,615,040
<DEPRECIATION> 28,911
<TOTAL-ASSETS> 4,055,042
<CURRENT-LIABILITIES> 1,203,213
<BONDS> 0
0
0
<COMMON> 673,808
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,055,042
<SALES> 0
<TOTAL-REVENUES> 77,542
<CGS> 0
<TOTAL-COSTS> 45,790
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,350
<INCOME-PRETAX> 31,752
<INCOME-TAX> 3,402
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,350
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
