UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(x) Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange act of 1934
For the Quarter ended September 30, 1997
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
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 September
30, 1997.
Transitional Small Business Disclosure Format (check one):
Yes ( ) No(x)
1 of 9 pages<PAGE>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements.
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
ASSETS September 30, June 30,
1997 1997
(Unaudited)
____________ ___________
<S> <C> <C>
Current Assets:
Cash $ 5,529 $ 43,259
Accounts Receivable 435 -
Prepaid Expenses and other 8,542 12,203
Inventory 35,344 35,344
Total Current Assets 49,850 90,806
Supplies 12,044 12,044
Plant, Furniture and Equipment,
at cost (net of accumulated
depreciation) 40,546 49,249
Mineral Properties 40,525 40,525
Patent, at cost (net of
accumulated amortization) 29,514 20,307
Other Assets 27,000 27,000
Total Assets $ 199,479 $ 239,931
</TABLE>
-Continued on the following page-
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<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-Continued from previous page-
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY September 30, June 30,
1997 1997
(Unaudited) __________
<S> <C> <C>
Current Liabilities:
Accounts Payable $ 18,604 $ 11,869
Accrued Liabilities 3,686 2,454
Reclamation Liability 100,000 100,000
Total Current Liabilities 122,290 114,323
Long Term Liabilities:
Note Payable (Note 3) 865,596 865,596
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 (352,648) (352,648)
Accumulated deficit (943,489) (895,070)
Total Shareholders' Equity (788,407) (739,988)
$199,479 $239,931
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-3-
<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three Months Three Months
Ended Ended
September 30, September 30,
1997 1996
<S> <C> <C>
REVENUES:
Asphalt Sales $ 0 $ 4,906
Interest Income 637 46,238
Other 9,125 625
TOTAL REVENUES 9,762 51,769
COSTS AND EXPENSES:
Asphalt Research 0 28,053
General & Admin. 58,181 62,129
Interest Expense 0 0
TOTAL COSTS & EXPENSES 58,181 90,182
NET INCOME (LOSS) ($48,419) ($38,413)
INCOME (LOSS) PER SHARE ($0.00) ($0.00)
Weighted average
shares outstanding 50,772,982 50,772,982
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-4-
<PAGE>
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Three Months Three Months
Ended Ended
September 30, September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Income (loss) ($ 48,419) ($ 38,413)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 9,211 10,175
Change in operating assets and liabilities:
Change in receivables (435) 28,246
Change in inventory 0 8,442
Change in prepaid expenses and other assets 3,661 4,469
Change in accounts payable 6,735 6,325
Change in accrued liabilities 1,232 (4,552)
Net cash provided (used) by operating
activities (28,015) 14,692
Cash flows from investing activities:
Asset acquisition (9,715) 0
Net cash used by investing activities (9,715) 0
Cash flows from financing activities:
Borrowings (payments) under line of credit 0 (240,000)
Net cash provided (used) by financing
activities 0 (240,000)
Net increase (decrease) in cash (37,730) (225,308)
Cash at beginning of year 43,259 491,164
Cash at end of quarter $ 5,529 $ 265,856
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-5-
<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 September 30, 1997 and the results of operations and
cash flows for the periods presented. The results of operations
for the three month period ended September 30, 1997 are not
necessarily indicative of the results to be expected for the full
year. The June 30, 1997 balance sheet presented in this report is
derived from the June 30, 1997 audited financial statements but
does not include all disclosures required by generally accepted
accounting principles.
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, 1997 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, 1997,
the note was amended to reflect a maturity date of July 1, 1998.
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 year ended June 30, 1997, has reduced the total amount
outstanding on the line of credit to $865,596. This remaining
balance continues to carry the terms described above.
-6-<PAGE>
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 $48,923
during the three months ended September 30, 1997. Funds were
primarily provided by miscellaneous income including rental of its
Rifle facility.
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
September 30, 1997, the Company owed $865,596 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 $58,181 in the three months
ended September 30, 1997. 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 September 30, 1997
Revenues of $9,762 for the quarter ended September 30, 1997,
consisting primarily of interest income and rents were
significantly less than the amount recognized in the same quarter
of the previous year which included interest payments on the
promissory note from The Oil Shale Company.
Expenses of $58,181 for the quarter ended September 30, 1997
were approximately thirty-five percent less than the $90,182 for
the same quarter in the previous year, because the Company had
discontinued all operations.
-7-<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings.
Walker Field Airport Authority has filed a complaint against
New Paraho (Corn Construction Co. v. Walker Field, Colorado, Public
Airport Authority, Case No. 96 CV 545; Division B Mesa County
District Court). This proceeding involves an allegedly defective
runway constructed in 1996 at Walker Field Airport in Grand
Junction, Colorado. New Paraho manufactured a shale oil-derived
asphalt modifier product ("SOM") which was a component of the
asphalt runway. Walker Field Airport alleges that its general
contractor, Corn Construction Co., and the engineer on the project,
Armstrong Consultants, Inc., negligently designed and built the
runway. In the complaint, Walker Field sets forth claims of
negligence, breach of contract, "implied contractual indemnity",
"breach of implied warranty of fitness of particular purpose", and
negligent misrepresentations against New Paraho based on alleged
representations made by New Paraho regarding the characteristics of
SOM. New Paraho filed an answer to the Complaint on October 23,
1997 denying any liability.
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-
<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 NEW PARAHO CORPORATION
(Registrant)
11/7/97 /s/ Joseph L. Fox
Date Joseph L. Fox, President
11/7/97 /s/ Anne Morgan Smith
Date Anne Morgan Smith, Controller
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 5,529
<SECURITIES> 0
<RECEIVABLES> 435
<ALLOWANCES> 0
<INVENTORY> 35,344
<CURRENT-ASSETS> 49,850
<PP&E> 315,169
<DEPRECIATION> (274,623)
<TOTAL-ASSETS> 199,479
<CURRENT-LIABILITIES> 122,290
<BONDS> 865,596
0
0
<COMMON> 155,082
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 199,479
<SALES> 0
<TOTAL-REVENUES> 9,762
<CGS> 0
<TOTAL-COSTS> 58,181
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (48,419)
<INCOME-TAX> 0
<INCOME-CONTINUING> (48,419)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (48,419)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
