<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, 1998
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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
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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)
(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, 1998, Registrant had 607,853 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, 1998
and June 30, 1998 2
Statement of Operations, Three Months Ended
September 30, 1998 and September 30, 1997 3
Statement of Cash Flows, Three Months Ended
September 30, 1998 and September 30, 1997 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 8
Part II. Other Information 9
1
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
September 30, June 30,
1998 1998
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<S> <C> <C>
Current Assets:
Cash $ 39,667 $ 70,229
Certificates of purchase, real estate
foreclosures 1,679,422 799,801
Mortgage notes receivable, current
portion 305,001 301,574
Mortgage note receivable, related party 139,079 139,079
Deferred income taxes receivable, current 4,626 4,626
Other 27,263 26,685
--------- ---------
Total Current Assets 2,195,058 1,341,994
Real estate, net of accumulated deprec-
iation of $3,875 at September 30, 1998 and
$4,000 at June 30, 1998 243,942 244,317
Transportation equipment, net of accumulated
depreciation of $2,375 at September 30, 1998
and $125 and June 30, 1998 11,125 11,875
Mortgage notes receivable, net of current
portion 756,310 814,010
Other 57,213 57,213
------------ -----------
TOTAL ASSETS $ 3,263,648 $ 2,469,409
============ ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued expenses $ 8,132 $ 6,931
Notes payable, current portion 1,108,619 318,519
Income taxes payable 25,352 39,531
Deferred taxes payable, current portion 1,621 1,621
Other 24,252 22,243
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Total Current Liabilities 1,167,976 388,845
Deferred taxes payable, long term 35,906 35,906
Notes payable, net of current portion 26,123 28,109
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TOTAL LIABILITIES 1,230,005 452,860
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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, 607,853 shares issued
and outstanding 30,393 30,393
Additional paid-in capital 1,610,988 1,610,988
Retained earnings 392,262 375,168
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TOTAL STOCKHOLDERS' EQUITY 2,033,643 2,016,549
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,263,648 $ 2,469,409
============ ===========
</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,
1998 1997
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<S> <C> <C>
Revenue:
Rent income 4,210 7,620
Interest income 27,928 41,892
Management fee income 19,650
Gain on disposition of asset 78 -
Other income 6,400 -
------ ------
38,616 69,162
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Operating Expenses:
Depreciation 1,125 5,043
Interest - 22,074
Rent - 7,279
Contract services 2,095 10,790
Auditing and accounting 4,425 7,622
Property taxes 2,117 726
Other 2,464 6,653
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12,226 60,187
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Net income before provision
for income taxes 26,390 8,975
Provision for income taxes 9,296 920
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Net income $ 17,094 $ 8,055
========== ==========
Per Share $ .03 $ .01
========== ==========
Weighted Average Shares Outstanding 607,853 752,537
========== ==========
</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,
1998 1997
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<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 17,094 $ 8,055
Depreciation 1,125 5,043
(Decrease) in income taxes payable (14,179) (5,660)
(Decrease) in deferred income taxes payable - (4,607)
Increase (decrease) in accounts payable and
accrued expenses 1,201 (713)
Common stock issued for services - 8,886
Other 1,431 (3,496)
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Net Cash Provided by Operating Activities 6,672 7,508
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Cash Flows from Investing Activities:
(Investments) in certificates of purchase (1,174,401) (879,064)
Proceeds from redemptions of certificates
of purchase 294,780 423,516
(Investment) in property - -
Collection of notes receivable 54,273 7,847
Other - 1,703
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Net Cash (Used in) Investing Activities (825,348) (445,998)
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Cash Flows from Financing Activities:
Proceeds from bank notes payable 790,100 -
(Repayment of) bank notes payable - (134,300)
(Repayment of) mortgage notes payable (1,986) (2,142)
(Repayment of) loan from related party - (150,000)
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Net Cash Provided by (Used in) Financing Activities 788,114 (286,442)
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(Decrease) in Cash (30,562) (724,932)
Cash, Beginning of Period 70,229 1,159,431
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Cash, End of Period $ 39,667 434,499
========== ==========
Interest Paid $ 15,584 $ 22,074
========== ==========
Income Taxes Paid $ 24,000 $ 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, 1998
(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 Rocky Mountain Power
Co. 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,
1998 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.
(2) Related Party Transactions
--------------------------
Effective March 31, 1998, the Company sold its investment in its
health club/racquetball facility to the shareholder that
originally contributed the property for stock. The gross
proceeds to the Company were 145,762 shares of the Company's
common stock and a mortgage note receivable of $139,079
collateralized by the property. This note bears interest at 8%
per annum and is totally due on March 31, 1999.
5
<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. Certain statements in the Report are
forward-looking. Actual results of future events could differ
materially.
The following discussion of the financial condition and results of
operations of the Company relates to the three (3) months ended
September 30, 1998 and 1997, and should be read in conjunction with
the financial statements and notes thereto included elsewhere in this
report.
Results of Operations
- - ---------------------
Revenue for the three month period ended September 30, 1998 decreased
from the three month period ended September 30, 1997 as follows:
1997 1998 Decrease
-------- -------- --------
Three Months Ended September 30, $ 69,162 $ 38,616 $ 30,546
Revenue decreased principally due to the shift in business emphasis of
the Company to the acquisitions of certificates of purchase with the
intent of obtaining title to the properties rather than investing in
certificates of purchase for the purpose of earning income on the
certificates. When using borrowed funds for the capital to invest in
certificates of purchase, gross interest income and gross interest
expense are larger, but management believes obtaining title to
properties and reselling them after renovation will increase the net
income of the Company.
Operating expenses were $60,187 during the three month period ended
September 30, 1997 as compared to $12,226 during the three month
period ended September 30, 1998. Operating expenses decreased
principally due to a decrease in interest expense of $22,074, a
decrease in depreciation of $3,918, and a decrease in rent expense of
$7,279 due to the sale of its previously owned health club/racquetball
facility in March 1998. Contract services decreased by $8,695
principally due to the shift in emphasis of the Company's business
described above.
Net income after provision for income taxes amounted to $17,094 during
the three month period ended September 30, 1998 as compared to $8,055
during the three month period ended September 30, 1997, an increase of
$9,039.
6
<PAGE>
Liquidity and Capital Resources
- - -------------------------------
Working capital was $953,149 at June 30, 1998 as compared to
$1,027,082 at September 30, 1998. The Company's stockholders' equity
was $2,016,549 at June 30, 1998 as compared to $2,033,643 at September
30, 1998. The increase in stockholders' equity related principally to
net income of $17,094 during the three month period ended September
30, 1998.
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
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None.
Item 2. Changes in Securities
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None.
Item 3. Defaults upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
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None.
Item 5. Other Information
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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, President
(Date) November 16, 1998
(Name and Title) Michael L. Schumacher, Chief Executive
Officer and Principal Accounting Officer
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 39,667
<SECURITIES> 0
<RECEIVABLES> 444,080
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,195,058
<PP&E> 247,817
<DEPRECIATION> 3,875
<TOTAL-ASSETS> 3,263,648
<CURRENT-LIABILITIES> 1,167,976
<BONDS> 0
0
0
<COMMON> 607,853
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,263,648
<SALES> 0
<TOTAL-REVENUES> 38,616
<CGS> 0
<TOTAL-COSTS> 12,226
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 26,390
<INCOME-TAX> 9,296
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,094
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
