<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 December 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
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(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 December 31, 1997, Registrant had 752,537 shares of common stock, $.05
par value, outstanding.
<PAGE>
INDEX
Page
Number
------
Part I. Financial Information
Item I. Financial Statements
Balance Sheets as of December 31, 1997
and June 30, 1997 2
Statement of Operations, Three Months
Ended December 31, 1997 and
December 31, 1996 3
Statement of Operations, Six Months
Ended December 31, 1997 and
December 31, 1996 4
Statement of Cash Flows, Three Months
Ended December 31, 1997 and
December 31, 1996 5
Statement of Cash Flows, Six Months
Ended December 31, 1997 and
December 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
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
December 31, June 30,
1997 1997
------------ -----------
<S> <C> <C>
Current Assets:
Cash $ 68,904 $ 1,159,431
Certificates of purchase, real estate
foreclosures 945,568 566,577
Mortgage notes receivable, current
portion 58,840 59,655
Deferred income taxes receivable,
current 5,903 5,773
Other 34,779 41,140
--------- ---------
Total Current Assets 1,113,994 1,832,576
Real estate, net of accumulated deprec-
iation of $21,131 at December 31, 1997 and
$14,267 at June 30, 1997 778,925 824,930
Transportation equipment, net of accumulated
depreciation of $1,625 at December 31, 1997
and $125 at June 30, 1997 13,375 14,875
Mortgage notes receivable, net of
current portion 938,083 1,504,322
Other 81,827 80,827
----------- -----------
TOTAL ASSETS $ 2,926,204 $ 4,257,530
=========== ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued expenses $ 8,320 $ 8,301
Notes payable, current portion 403,870 1,018,758
Note payable, related party - 150,000
Income taxes payable 10,600 16,160
Deferred taxes payable, current portion 22,500 21,927
Accrued expenses and other - 12,523
------- ---------
Total Current Liabilities 445,290 1,227,669
Deferred taxes payable, long term 36,642 41,822
Notes payable, net of current portion 40,580 610,663
------- -------
TOTAL LIABILITIES 522,512 1,880,154
------- ---------
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 December 31, 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 292,085 274,655
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 2,403,692 2,377,376
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,926,204 $ 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
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Revenue:
Rent income $ 13,268 $ 23,631
Interest income 37,694 22,392
Inspection fee income 3,550 -
------ ------
54,512 46,023
------ ------
Expenses:
Depreciation 4,956 3,694
Interest 15,429 16,867
Rent 6,382 2,426
Contract services 4,816 -
Audit and accounting 3,163 5,217
Other 6,954 10,565
------ ------
41,700 38,769
------ ------
Net income before provision
for income taxes 12,812 7,254
Provision for income taxes 3,437 1,451
------ -----
Net income $ 9,375 $ 5,803
========== ==========
Per Share $ .01 $ .01
========== ==========
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 INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Revenue:
Rent income $ 20,888 $ 55,601
Interest income 79,586 60,364
Inspection fee income 23,200 -
------- -------
123,674 115,965
------- -------
Expenses:
Depreciation 9,999 7,388
Interest 37,503 31,739
Rent 13,661 2,426
Contract services 15,606 -
Audit and accounting 10,785 5,217
Other 14,333 20,423
------- ------
101,887 67,193
------- ------
Net income before provision
for income taxes 21,787 48,772
Provision for income taxes 4,357 10,586
------ ------
Net income $ 17,430 $ 38,186
=========== ==========
Per Share $ .02 $ .06
=========== ==========
Weighted Average Shares Outstanding 752,537 700,000
=========== ==========
</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
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 9,375 $ 5,803
Depreciation 4,956 3,694
Increase in income taxes payable 100 59,135
Increase (decrease) in accounts payable
and accrued expenses (11,791) 13,444
Other 8,727 -
------ ------
Net Cash Provided by Operating Activities 11,367 82,076
------ ------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase (713,592) (238,473)
Proceeds from redemptions of certificates of
purchase 790,149 139,950
Collection of notes receivable 2,282 138,275
Other 10,820 -
------- -------
Net Cash Provided by (Used in) Investing Activities 89,659 39,752
------- -------
Cash Flows from Financing Activities:
(Repayment) of bank notes payable (461,830) -
(Repayment of) mortgage notes payable (4,791) (4,201)
(Repayment of) loan from related party - (120,950)
Loan from related party - 50,000
------- --------
Net Cash Provided by (Used in) Financing Activities (466,621) (75,151)
--------- --------
Increase (Decrease) in Cash (365,595) 46,677
Cash, Beginning of Period 434,499 139,155
------- -------
Cash, End of Period $ 68,904 185,832
=========== ==========
Interest Paid $ 15,429 $ 16,867
=========== ==========
Income Taxes Paid $ 3,337 $ -
=========== ==========
</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>
Six Months Ended
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 17,430 $ 38,186
Depreciation 9,999 7,388
Increase (decrease) in income taxes payable (5,560) 59,135
(Decrease) in deferred income taxes payable (4,607) -
Increase (decrease) in accounts payable
and accrued expenses (12,504) 13,444
Common stock issued for services 8,886 -
Other 5,231 -
-------- -------
Net Cash Provided by Operating Activities 18,875 118,153
-------- -------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase (1,592,656) (467,285)
Proceeds from redemptions of certificates of
purchase 1,213,665 228,812
(Investment) in property - (60,140)
Collection of notes receivable 10,129 301,996
Other 12,523 2,000
--------- -------
Net Cash Provided by (Used in) Investing Activities (356,339) 5,383
---------- -------
Cash Flows from Financing Activities:
Common stock issued for cash - 4,000
(Repayment) of bank notes payable (596,130) (4,201)
(Repayment of) mortgage notes payable (6,933) (6,733)
(Repayment of) loan from related party (150,000) (120,950)
Loan from related party - 170,950
-------- ---------
Net Cash Provided by (Used in) Financing Activities (753,063) 43,066
--------- ---------
Increase (Decrease) in Cash (1,090,527) 166,602
Cash, Beginning of Period 1,159,431 19,230
--------- -------
Cash, End of Period $ 68,904 185,832
=========== ==========
Interest Paid $ 37,503 $ 31,739
=========== ==========
Income Taxes Paid $ 14,524 $ -
=========== ==========
</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
December 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 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.
7
<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 December 31, 1997 increased from
$46,023 during the three month period ended December 31, 1996 as compared to
$54,512 during the three month period ended December 31, 1997, an increase of
$8,489.
While the total revenue remained relatively constant, the source of the income
changed. Rent income decreased $10,363 due to the sale of a significant
portion of the Company's real estate. Interest income increased by $15,302
principally due to increase interest from certificates of purchase and
mortgage notes receivable. As of December 31, 1997 approximately $45,100 of
past due rent was receivable related to a racquetball health club facility
located in Orange County, California, but due to the inability to determine
the collectibility of this balance, this revenue has not been included in the
financial statements. 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 $3,550 during the period ended
December 31, 1997. The Company did not provide any property inspection
services during the three month period ended December 31, 1996.
Operating expenses were $38,769 during the three month period ended December
31, 1996 as compared to $41,700 during the three month period ended December
31, 1997, an increase of $2,931.
Contract services were $4,816 during the three month period ended December 31,
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 December 31, 1996.
Rent expense amounted to $6,382 during the three month period ended December
31, 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 owned this
facility for only one month during the three month period ended December 31,
1996, only $2,426 rent expense was incurred during that period.
Net income after provision for income taxes amounted to $9,375 during the
three month period ended December 31, 1997 as compared to $5,803 during the
three month period ended December 31, 1996, an increase of $3,572.
8
<PAGE>
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 December 31, 1997 resulted in reduction in
net income before taxes of approximately $29,000. Subsequent to December 31,
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 $1,565,877 at September 30, 1997 to $1,113,994
at December 31, 1997, a decrease of $451,883. Current liabilities decreased
from $918,811 at September 30, 1997 to $445,290 at December 31, 1997, a
decrease of $473,521. The decrease in current assets and current liabilities
was principally the result of repayment of short term notes payable.
Working capital was $668,704 at December 31, 1997 as compared to $647,066 at
September 30, 1997, an increase of $21,638. The Company's stockholders'
equity was $2,403,692 at December 31, 1997 as compared to $2,394,316 at
September 30, 1997, an increase of $9,376. The increase in stockholders'
equity was the result of the Company's net income during the three month
period ended December 31, 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.
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 Schumaker
(Date) February 10, 1998
(Name and Title) Michael Schumaker
Chief Executive Officer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 68,904
<SECURITIES> 0
<RECEIVABLES> 1,004,408
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,113,994
<PP&E> 800,056
<DEPRECIATION> 21,131
<TOTAL-ASSETS> 2,926,204
<CURRENT-LIABILITIES> 445,290
<BONDS> 0
0
0
<COMMON> 752,537
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,926,204
<SALES> 0
<TOTAL-REVENUES> 54,512
<CGS> 0
<TOTAL-COSTS> 41,700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,429
<INCOME-PRETAX> 12,812
<INCOME-TAX> 3,437
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,375
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
