FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1999 OF
Commission File No. (to be assigned)
THE RIDGEWOOD POWER GROWTH FUND
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3495594
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices (Zip Code)
(201) 447-9000
Registrant's telephone number, including area code:
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. YES [ ] NO [X]
Exhibit Index is located on page .
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The Ridgewood Power Growth Fund
Financial Statements
March 31, 1999
<PAGE>
The Ridgewood Power Growth Fund
Balance Sheet
- --------------------------------------------------------------------------------
March 31, December 31,
1999 1998
------------ -------------
(unaudited)
Assets:
Cash and cash equivalents .................. $ 28,049,593 $ 25,256,560
Due from affiliates ........................ 27,099 9,330
Other current assets ....................... 102,202 86,348
------------ ------------
Total current assets .............. 28,178,894 23,352,238
Investment in ZAP Power Systems ............ 2,052,491 --
Deferred due diligence costs ............... 687,805 381,192
------------ ------------
Total assets ............................. $ 30,919,190 $ 25,733,430
------------ ------------
Liabilities and shareholders' equity:
Accounts payable and accrued expenses ...... $ 263,870 $ 264,620
Due to affiliates .......................... 1,248,636 1,114,129
------------ ------------
Total current liabilities ................ 1,512,506 1,378,749
------------ ------------
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (388.9515 and 296.8815
shares issued and outstanding at March 31,
1999 and December 31, 1998) .............. 29,414,173 24,363,198
Managing shareholder's accumulated deficit . (7,489) (8,517)
------------ ------------
Total shareholders' equity ............... 29,406,684 24,354,681
------------ ------------
Total liabilities and shareholders' equity $ 30,919,190 $ 25,733,430
------------ ------------
See accompanying notes to financial statements.
<PAGE>
The Ridgewood Power Growth Fund
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Commencement of
Share Offering
Three Months (February 9, 1998)
Ended March 31, to March 31,1998
1999
-------- --------
Revenue:
Interest income ......... $298,969 $ 5,220
-------- --------
Expenses:
Investment fee ........... 140,000 19,521
Accounting and legal fees 15,567 4,247
Miscellaneous ............ 40,577 1,472
-------- --------
Total expenses ... 196,144 25,240
-------- --------
Net income (loss) $102,825 $(20,020)
-------- --------
See accompanying notes to financial statements.
<PAGE>
The Ridgewood Power Growth Fund
Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
------------ ------------ -----------
Shareholders' equity, December
31, 1998 (296.8815 shares) . $ 24,363,198 $ (8,517) $ 24,354,681
Capital contributions (92.07
shares) .................... 4,950,178 -- 4,950,178
Cash distributions ........... (1,000) -- (1,000)
Net income for the period .... 101,797 1,028 102,825
------------ ------------ ------------
Shareholders' equity, March
31, 1999 (388.9515 shares) . $ 29,414,173 $ (7,489) $ 29,406,684
------------ ------------ ------------
See accompanying notes to financial statements.
<PAGE>
The Ridgewood Power Growth Fund
Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
Commencement of
Share Offering
Three Months February 9, 1998)
Ended March 31, to March 31,1998
1999
------------ ------------
Cash flows from operating activities:
Net income (loss) .......................... $ 102,825 $ (20,020)
------------ ------------
Adjustments to reconcile net income
(loss) to net cash flows from
operating activities:
Changes in assets and liabilities:
Increase in other current assets ......... (15,854) --
(Decrease) increase in accounts payable
and accrued expenses ................... (750) 5,719
Decrease (increase) in due to/(from)
affiliates, net ........................ 116,738 (58,598)
------------ ------------
Total adjustments ...................... 100,134 (52,879)
------------ ------------
Net cash provided by (used in)
operating activities ..................... 202,959 (72,899)
------------ ------------
Cash flows from investing activities:
Investment in ZAP Power Systems ............ (2,052,491) --
Deferred due diligence costs ............... (306,613) --
------------ ------------
Net cash used in investing activities .... (2,359,104) --
------------ ------------
Cash flows from financing activities:
Proceeds from shareholders' contributions .. 6,549,000 2,365,700
Selling commissions and offering costs paid (1,598,822) (88,893)
Cash distributions to shareholders ......... (1,000) --
------------ ------------
Net cash provided by financing activities 4,949,178 2,276,807
------------ ------------
Net increase in cash and cash equivalents .... 2,793,033 2,203,908
Cash and cash equivalents, beginning of period 25,256,560 --
------------ ------------
Cash and cash equivalents, end of period ..... $ 28,049,593 $ 2,203,908
------------ ------------
See accompanying notes to financial statements.
<PAGE>
The Ridgewood Power Growth Fund
Notes to Financial Statements (unaudited)
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which consist of normal recurring adjustments,
necessary for the pair presentation of the results for the interim periods.
Additional footnote disclosure concerning accounting policies and other matters
are disclosed in The Ridgewood Power Growth Fund's financial statements included
in the Registration Statement on Form 10, which should be read in conjunction
with these financial statements.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
2. Purchase of Investment in ZAP Power Systems
On March 30, 1999, the Fund, through a wholly owned subsidiary, purchased
678,808 shares of common stock of ZAP Power Systems, Inc ("ZAP") for $2,052,491.
ZAP, headquartered in Sebastopol, California, designs, assembles, manufactures
and distributes electric power bicycle kits, electric bicycles and tricycles and
electric scooters. ZAP's common stock is quoted on the OTC Bulletin Board under
the symbol "ZAPP". The Fund also received a warrant to purchase additional
shares of ZAP's common stock at a price between $3.50 and $4.50 per share. The
total exercise price of the warrant is $2,000,000 and the Fund can be required
to exercise the warrant by December 31, 1999 if ZAP meets certain performance
goals. If the Fund were to exercise its warrant, it would own approximately 30%
of the outstanding common stock of ZAP.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are generally rounded to the nearest $1,000.
Introduction
The financial statements include only the accounts of the Fund. The Fund uses
the equity method of accounting for its investments in ZAP Power Systems, which
was acquired on March 30, 1999.
Results of Operations
Quarter ended March 31, 1999 compared to quarter ended March 31, 1998.
Interest income was $299,000 for the first quarter of 1999 compared to $5,000 in
the same period in 1998 reflecting the significant increase in the cash balance
of the Fund, which began offering shares in February 1998.
The investment fee expense charged on capital contributions increased to
$140,000 in the first quarter of 1999 compared to $20,000 in the first quarter
of 1998 reflecting a higher level of capital contributions. The increase in
other expenses to $56,000 in the first quarter of 1999 from $6,000 in March 1998
is a result of 1999 representing a full quarter of operations while 1998
represented only part of a month. The Fund did not begin incurring expenses
until after it raised the minimum amount of the offering and broke escrow in
March 1998.
Liquidity and Capital Resources
At March 31, 1999, the Fund had $28,050,000 of cash available for investments in
power generation Projects and payment of operating expenses. Upon the closing of
the Fund's offering of Investor Shares, the Fund will also pay a management fee
to Ridgewood Power VI LLC, one of the Managing Shareholders.
On March 30, 1999, the Fund, through a wholly owned subsidiary, purchased
678,808 shares of common stock of ZAP Power Systems, Inc ("ZAP") for $2,052,491.
ZAP, headquartered in Sebastopol, California, designs, assembles, manufactures
and distributes electric power bicycle kits, electric bicycles and tricycles and
electric scooters. ZAP's common stock is quoted on the OTC Bulletin Board under
the symbol "ZAPP". ZAP also issued in connection with the financing a warrant to
purchase additional shares of ZAP's common stock at a price between $3.50 and
$4.50 per share. The total exercise price of the warrant is $2,000,000 and the
warrant must be exercised by December 31, 1999 if ZAP meets certain performance
goals. The Managing Shareholders currently intend that the warrant will be
assigned to two private venture capital investment funds, Ridgewood Capital
Venture Partners, LLC and Ridgewood Institutional Venture Partners, LLC (the
"Venture Capital Funds") managed by an affiliate of the Managing Shareholders
and that the Venture Capital Funds would provide the capital necessary to
exercise the warrant. If the Fund and the Venture Capital Funds were to exercise
the warrant,they would collectively own approximately 30% of the outstanding
common stock of ZAP.
The Fund anticipates that, during 1999, its cash flow from operations and
unexpended offering proceeds will be adequate to fund its obligations.
Year 2000 remediation
Please refer to the Fund's disclosures at Item 2(b) - Management's Discussion
and Analysis of its Registration on Form 10 for a discussion of year 2000 issues
affecting the Fund. Since that report was filed, the only material change in the
Fund's year 2000 compliance is that the changes to the Managing Shareholder's
investor distribution system have been completed. Testing of those changes has
been rescheduled to late May 1999 in conjunction with a regularly scheduled set
of distributions. No other material changes in the Fund's remediation efforts or
its plans for year 2000 compliance have occurred.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) Sales of unregistered securities
During the period from January 1, 1999 through March 31, 1999, the Fund sold a
total of 92.07 shares of its Investor Shares in its continuing private placement
offering under Rule 506. The total consideration paid was $6,549,000.
Information as to the underwriters, class of persons to whom the securities were
sold, the exemption from registration claimed, and terms of the securities is
incorporated by reference to Item 11 - Description of the Fund's Securities to
be Registered, in the Fund's Registration Statement on Form 10, filed April 30,
1999.
Item 5. Other Information
Ridgewood Power Corporation has been the managing shareholder of the Fund. It
organized the Fund and acted as managing shareholder until April 1999. On or
about April 20, 1999 it was merged into Ridgewood Power LLC, a New Jersey
limited liability company, which thus became the Managing Shareholder of the
Fund. Ridgewood Power LLC was organized in early April 1999 and has no business
other than acting as the successor to Ridgewood Power Corporation. No material
change in the Fund's operations or business will result from the merger.
Robert E. Swanson has been the President, sole director and sole stockholder of
Ridgewood Power Corporation since its inception in February 1991 and is now the
controlling member, sole manager and President of the Managing Shareholder. Mr.
Swanson currently is the sole equity owner of the Managing Shareholder but is
considering a transfer of 53% of the equity ownership to two family trusts. If
that transfer is made, he will have the power on behalf of those trusts to vote
or dispose of the membership equity interests owned by them and accordingly will
continue to have sole control of the Managing Shareholder. Further, Mr. Swanson
is designated as the sole manager of the Managing Shareholder in its operating
agreement.
Ridgewood Power LLC is also the managing shareholder of the other five business
trusts organized by Ridgewood Power Corporation to participate in the
independent electric power industry.
Similarly, Ridgewood Power Management Corporation, which operates certain
Projects on behalf of the Fund, was merged on or about April 20, 1999 into a new
New Jersey limited liability company, Ridgewood Power Management LLC. The
ownership and control of Ridgewood Power Management LLC are the same as those of
Ridgewood Power LLC and its only business is to be the successor to Ridgewood
Power Management Corporation. No material change in the operation of the
Projects is expected as a result of that merger.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
<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.
THE RIDGEWOOD POWER GROWTH FUND
Registrant
May 17, 1999 By /s/ Martin V. Quinn
Date Martin V. Quinn
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>This schedule contains summary financial information extracted from the
Registrant's audited financial statements for the quarter ended March 31, 1999
and is qualified in its entirety by reference to those financial statements.
</LEGEND>
<CIK>0001057076
<NAME> THE RIDGEWOOD POWER GROWTH FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 28,049,593
<SECURITIES> 2,052,491<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,231,385<F2>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,919,190
<CURRENT-LIABILITIES> 1,512,506<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 29,406,684<F4>
<TOTAL-LIABILITY-AND-EQUITY> 30,919,190
<SALES> 0
<TOTAL-REVENUES> 298,969
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 196,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 102,825
<INCOME-TAX> 0
<INCOME-CONTINUING> 102,825
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,825
<EPS-PRIMARY> 264
<EPS-DILUTED> 264
<FN>
<F1>Investments in power project partnerships.
<F2>Includes $27,099 due from affiliates.
<F3>Includes $1,248,636 due to affiliates.
<F3>Represents Investor Shares of beneficial interest
in Trust with capital accounts of $29,414,173 less
managing shareholder's accumulated deficit of $7,489.
</FN>
</TABLE>
