FORM 10-Q--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-Q
(x) Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange act of 1934
For the Quarter ended December 31, 1996
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act oft 1934
For the transition period from _____________ to ______________
Commission File Number: 0-8536
THE NEW PARAHO CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-1034362
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5387 Manhattan Circle, #104, Boulder, CO 80303-4219
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 543-8900
__________________________________________________________________
(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 twelve 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 CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
50,772,982 shares of $.01 par value common stock as of December
31, 1996.
1 of 9 pages<PAGE>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements.
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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ASSETS December 31, June 30,
1996 1996
(Unaudited)
____________ ___________
Current Assets:
Cash $ 130,691 $ 491,164
Accounts Receivable - 28,246
Note Receivable (Note 2) - 385,390
Interest Receivable - 14,452
Prepaid Expenses and other 5,475 14,413
Inventory 58,663 67,105
Total Current Assets 194,829 1,000,770
Supplies 12,044 12,044
Plant, Furniture and Equipment,
at cost (net of accumulated
depreciation) 68,585 87,920
Mineral Properties 40,525 40,525
Patent, at cost (net of
accumulated amortization) 21,322 22,336
Note Receivable (Note 2) - 3,083,120
Other Assets 27,000 27,000
Deposits 725 725
Total Assets $365,030 $4,274,440
</TABLE>
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THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-Continued from previous page-
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LIABILITIES AND SHAREHOLDERS' EQUITY December 31, June 30,
1996 1996
(Unaudited) __________
Current Liabilities:
Accounts Payable $ 25,133 $ 20,456
Accrued Liabilities 7,343 10,547
Total Current Liabilities 32,476 31,003
Long Term Liabilities:
Note Payable (Note 3) 873,999 5,497,119
Shareholder's Equity:
Common Stock - $.01 par value,
authorized - 75,000,000 shares;
issued - 50,980,400; outstanding -
50,772,982 507,730 507,730
Par value of common stock issued in
excess of the fair market value of
assets acquired (368,538) (368,538)
Retained earnings (680,637) (1,392,874)
(541,445) (1,253,682)
Total Shareholders' Equity (541,445) (1,253,682)
$365,030 $4,274,440
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
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<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
<TABLE>
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1994
<S> <C> <C> <C> <C>
REVENUES:
Asphalt Sales $ 4,906 $ 0 $ 0 $ 0
Interest Income 76,906 98,277 30,668 48,407
Other 2,585 41,155 1,960 39,385
TOTAL REVENUES 84,397 139,432 32,628 87,792
COSTS AND EXPENSES:
Asphalt Research 28,967 148,271 914 61,589
General & Admin. 106,385 125,436 44,256 63,969
Interest Expense 0 297,673 0 148,498
TOTAL COSTS & EXPENSES 135,352 571,380 45,170 274,056
NET LOSS BEFORE
EXTRAORDINARY ITEM (50,955) (543,087) (12,542) (186,264)
Extraordinary gain 763,192 0 763,192 0
NET INCOME (LOSS) $712,237 ($431,948) $750,650 ($186,264)
INCOME (LOSS) PER SHARE $0.01 ($0.01) $0.01 ($0.01)
Weighted average
shares outstanding 50,772,982 50,772,982 50,772,982 50,772,982
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
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<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Six Months Six Months
Ended Ended
December 31, December 31,
1996 1995
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Cash flows from operating activities:
Net Income (loss) $ 712,237 ($ 431,948)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 20,349 21,270
Change in operating assets and liabilities:
Change in receivables 42,698 (831)
Change in inventory 8,442 -
Change in prepaid expenses and other assets 8,938 9,851
Change in accounts payable 4,677 5,541
Change in accrued liabilities (3,204) (3,333)
Net cash provided (used) by operating
activities 794,137 (399,450)
Cash flows from investing activities:
Asset acquisition - (3,129)
Net cash used by investing activities 0 (3,129)
Cash flows from financing activities:
Borrowings (payments) under line of credit (1,540,000) 297,673
Principal payment received 385,390 385,390
Net cash provided (used) by financing
activities (1,154,610) 683,063
Net increase (decrease) in cash (360,473) 280,484
Cash at beginning of year 491,164 130,908
Cash at end of quarter $ 130,691 $ 411,392
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
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<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES NOTES
NOTE 1 - MANAGEMENT REPRESENTATION
In the opinion of management, the accompanying unaudited
financial statements contain all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the financial
position as of December 31, 1996 and the results of operations and
cash flows for the periods presented. The results of operations
for the six month period ended December 31, 1996 are not
necessarily indicative of the results to be expected for the full
year.
Certain information and footnote disclosures normally required
by generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed financial statements
be read in conjunction with the financial statements and notes
thereto included in the Company's June 30, 1996 audited report in
Form 10-K, filed with the Securities and Exchange Commission.
NOTE 2 - SALE OF PROPERTY AND MINERAL RIGHTS
On December 17, 1987 Tosco Corporation's wholly owned
subsidiary, The Oil Shale Company, exercised its option, granted in
1963 by the Company's parent, to acquire from the Company its 50%
ownership interest in certain property and mineral rights for
$6,355,850. The Company received $575,000 cash and a note
receivable in the amount of $5,780,850 on closing. The note is
receivable in fifteen equal annual installments of $385,390,
commencing December 17, 1990. The principal balance bears interest
receivable quarterly at 5%. On December 18, 1996, the Company
executed an assignment of its interest in this note, to the Tell
Ertl Family Trust, in partial repayment of the line of credit
described below in Note 3.
NOTE 3 - DEBT
On May 1, 1994, the Company's line of credit from the Tell
Ertl Family Trust was increased to $5,500,000 and on June 1, 1996,
the note was amended to reflect a maturity date of July 1, 1997.
Effective July 1, 1995, the Company was relieved and discharged of
all obligations to pay accrued interest on the line. In addition,
the line shall no longer accrue interest as of July 1, 1995. The
terms of the note provide that the Trust reserves the right to
approve activities and budgets of the Company during the term of
the promissory note.
On December 18, 1996, the Company executed an assignment of
its interest in the note receivable from The Oil Shale Company
(described in Note 2) in partial repayment of this line of credit.
This assignment, together with cash payments of $1,540,000 made
during the six months ended December 31, 1996, has reduced the
total amount outstanding on the line of credit to $873,999. This
remaining balance continues to carry the terms described above.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
LIQUIDITY AND CAPITAL RESOURCES
The Company realized a decrease in working capital of $807,414
during the six months ended December 31, 1996. Funds were
primarily provided by the principal and interest payments received
from The Oil Shale Company on the note described above. In
addition the Company received a reimbursement of $758,192 from its
parent for tax savings that the parent was able to realize by
utilizing the Company's net operating loss carryforwards, in
accordance with the tax allocation policy of the parent and
Company.
On August 29, 1989, the Company signed an unsecured promissory
note with the Tell Ertl Family Trust. The principal amount of this
note was increased to a total of $5,500,000 on May 1, 1994. As of
December 31, 1996, the Company owed $873,999 to the Trust. The
funds were used to cover the cost of operating expenses and asphalt
research and development. On December 18, 1996, the Company
executed an assignment of its interest in the note receivable from
The Oil Shale Company to the Trust in partial repayment of this
note.The Company does not expect to be able to pay the balance
remaining on this note when it becomes due.
The Company will attempt to progress toward the realization of
three principal objectives: commercialization of an oil shale
derived asphalt binder, licensing the Paraho technology, and
research and development. In pursuit of these objectives, the
Company incurred costs and expenses of $135,352 in the six months
ended December 31, 1996. The decrease in these costs over the
amount incurred in the same period of the previous year, is the
result of ceasing all operations.
Possible future sources of cash include revenues from the
sales of SOMAT. Additional future sources of cash may include
revenues from the performance of engineering services, or from the
use of the Company's pilot plant retort facility. Management
presently does not expect that significant revenues from these
sources will be obtained.
RESULTS OF OPERATIONS
Quarter ended December 31, 1996
Revenues of $37,628 for the quarter ended December 31, 1996,
consisting primarily of interest on the promissory note from The
Oil Shale Company were less than half of the amount recognized in
the same quarter of the previous year which included some contract
revenues. The Company realized an extraordinary gain of $758,192
pursuant to its tax allocation with its parent.
Expenses of $45,170 for the quarter ended December 31, 1996
were approximately eighty percent less than the $274,056 for the
same quarter in the previous year, because the Company had
discontinued production, cut staff, and ceased to accrue interest.
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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-
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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 NEW PARAHO CORPORATION
(Registrant)
2/14/97 /s/ Joseph L. Fox
Date Joseph L. Fox, President
2/14/97 /s/ Anne Morgan Smith
Date Anne Morgan Smith, Controller
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 130,691
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 58,663
<CURRENT-ASSETS> 194,829
<PP&E> 315,169
<DEPRECIATION> (246,584)
<TOTAL-ASSETS> 365,030
<CURRENT-LIABILITIES> 32,476
<BONDS> 0
0
0
<COMMON> 139,192
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 365,030
<SALES> 4,906
<TOTAL-REVENUES> 84,397
<CGS> 0
<TOTAL-COSTS> 135,352
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (50,955)
<INCOME-TAX> 0
<INCOME-CONTINUING> (50,955)
<DISCONTINUED> 0
<EXTRAORDINARY> 763,192
<CHANGES> 0
<NET-INCOME> 712,237
<EPS-PRIMARY> .01
<EPS-DILUTED> 0
</TABLE>
