SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1995 or
[ ] Transition report under section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period
from to
Commission file number 0-9255
Dencor Energy Cost Controls, Inc.
(Exact name of registrant as specified in its charter)
Colorado 84-0658020
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1450 West Evans, Denver, Colorado 80223
(Address Of Principal Executive Offices) (Zip Code)
Issuer's telephone number, including area code: (303) 922-1888
Securities registered pursuant to Section 12 (b) of the Act: None
None
(Title of Each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock No Par Value
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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 x No
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or
an amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $579,400
As of February 28, 1996 there were 3,671,304 common shares outstanding and
the aggregate market value of the common shares (based upon the average of
the bid price ($0.03) and the asked price ($0.06) reported by brokers) held
by non-affiliates was approximately $126,900.
Transitional Small Business Disclosure Format (check one): Yes ; No X
PART I
ITEM 1. Business
(a) General Development of Business. Dencor Energy Cost Controls, Inc.
(the "Company") was incorporated on January 16, 1974, under the laws of the
State of Colorado for the purpose of developing, manufacturing, and marketing
electronic devices. Currently the Company's primary activity is the
manufacture and sale of electrical demand controllers which manage electricity
consumed in residences and commercial establishments and energy control
devices used by utilities to modify residential energy use patterns.
The Company has its headquarters, production facilities, and research and
development laboratories in Denver, Colorado.
(b) Business of Issuer. The Company is engaged in only one industry, that
of designing, developing, manufacturing, marketing, and installing products
and systems which assist in controlling the cost of energy utilization.
Management of the Company does not recognize any significant business
difference, at least at this time, between sales of residential demand
controllers, special relay equipment for utilities, temperature activated
duty cyclers, commercial demand controllers, and interlocks.
(1) Principal Products Produced and Services Rendered
(i) Energy Management Systems - Residential
The Company's primary business is the assembly and sale of control systems
which reduce electrical energy costs. Its principal product is the electrical
demand controller that enables a homeowner having an electric heating system
or a central air conditioning system to control the peak use of electricity.
This enables the homeowner to achieve cost savings in geographic locations
served by electric utilities that include a demand factor in their residential
billing rates. Demand rates are used by electric utilities to encourage
consumers to reduce their peak usage of electricity.
A demand controller monitors the total power consumption and turns off
selected loads, typically heating circuits, during peak consumption periods,
restoring them at the end of that period. The controller automatically keeps
the consumption within the level selected. The principal markets for
residential demand control systems are in regions served by utilities with
a demand rate for residential customers. The residential demand controller
is designed for homes heated electrically by baseboard heaters, radiant
heaters, heat pumps, electric boilers and electric furnaces, and may also be
used to control air conditioners.
The sale of residential demand control systems contributed 72% of total
Company sales during 1995.
(ii) Energy Management Systems - Commercial
The Company has developed demand controllers for commercial buildings. One
model of the commercial systems includes a graphics system to interface
commercial demand controllers to IBM compatible computers. This graphics
system can display minute-by-minute demand data as well as 15-minute, daily,
monthly, and annual summaries. All data is also stored on computer disk for
later inspection. The sale of commercial demand control systems contributed
9% of total Company sales during 1995.
(iii) Special Utility Products
The Company has developed a series of products used to control water heaters,
space heaters, and air conditioners for specific utility applications. Sales
of these products accounted for 19% of net sales in 1995. The Company
anticipates a gradual growth in this portion of the business.
(2) Distribution Methods of Products
The Company's demand control systems are currently being marketed through
traditional electrical distribution channels. They are being sold to
electrical distributors who, in turn, market and distribute these systems to
electrical contractors who provide installation services to the builder or to
the consumer. The Company also sells to dealers who specialize in selling
energy products to customers and also utilizes manufacturer's representatives
to promote the distribution of its products. The Company also sells to
organizations that have lease/purchase plans with customers. This enables
the customer to realize cost savings which usually approximate or exceed the
lease payments.
The Company's foreign sales in 1995 were approximately 15% of total sales.
(3) Status of any Publicly Announced New Products or Services
During 1995 the Company developed a new series of low-cost residential energy
controllers. These controllers are designed to shift energy use to off-peak
periods for customers who are billed on a time-of-use rate by their utility.
These controllers have the capacity to use existing building wiring to send
signals to control remote loads. These new products are in production.
(4) Competitive Conditions
Competition is intense in the energy management control system market.
The Company competes directly with several relatively small electronic
companies in its residential controller market, and with the major
manufacturers of electrical controls for its commercial demand controllers.
Several companies manufacture systems which are similar in concept to the
Company's demand controllers. Many of the companies with which the Company
competes and will be competing in both the residential and commercial market
have substantially greater financial and technical capabilities. Products of
these companies often compete directly with those being offered by the
Company and with those currently in development.
The Company strives to produce high quality products which may be priced
slightly higher than the competition.
(5) Sources and Availability of Raw Materials
The Company has approximately 16 suppliers for its components.
Its semi-conductor components are made by a variety of primary semi-conductor
manufacturers. The Company also has components made to order from several
local and national vendors. It is believed that adequate sources are
available and the Company has had no significant difficulty in obtaining
components. The Company believes other alternate sources are available
if required. The principal suppliers are: Circle AW, Deltrol, Star Circuits,
and X-10 USA.
Its suppliers' productive capacities are believed to be sufficient to meet any
rapid delivery requirements of customers or to any continuous allotment of
goods.
(6) Major Customers
During 1995, four major customers accounted for 61% of the Company's net sales.
These customers are not affiliated with the Company. The loss of any of
these customers may adversely affect the Company's business.
As of February 28, 1996, the Company had a backlog of orders totaling $5,900
consisting of equipment orders from distributors. The Company anticipates
filling these orders during the current year. The backlog of orders as of
February 28, 1995 was $670.
(7) Patents
Most of the Company's demand control systems are not protected by any patents.
While management believes that patent protection may be desirable in some
instances, it does not consider such protection essential to the ultimate
success of the Company. A patent was issued April 4, 1989 for a Variable-
Limit Demand Controller for metering electrical energy. In 1991 the Company
entered into a non-exclusive licensing agreement with an unrelated third party
for use of the Company's patent. A patent application was filed in April 1994
for an Adaptive Load Cycler for Controlled Reduction of Energy Use; however,
the Company has no assurance a patent will be issued.
(8) Government Approval
There is no requirement for government approval of principal products or
services. The Company has no government contracts.
(9) Government Regulations
There is no known material effect from known or probable government
regulations.
(10) Research and Development
In the fiscal years ended December 31, 1995 and 1994 the Company expended
$73,900 and $70,500, respectively, on Company sponsored research and
development activities. The Company plans to continue research and
development activities during 1996.
(11) Environmental Protection
The Company's compliance with federal, state, and local laws and regulations
relating to the discharge of material into the environment or otherwise
relating to the protection of the environment does not have a material
impact on the Company's capital expenditures.
(12) Employees
On March 15, 1996, the Company had 6 full-time employees. Two were engaged
in administration, three in production, and one in engineering research
and development.
ITEM 2. Properties
The Company leases 5100 sq. ft. of office, research and development, sales,
and manufacturing space at 1450 West Evans, Denver, Colorado for $2,488/month.
Management considers these facilities to be adequate for its requirements
for the immediate future.
See Note 7 of the Notes to Financial Statements for additional information
about the Company's commitments under terms of non-cancelable leases.
ITEM 3. Legal Proceedings
The Company is not a party to any legal proceedings other than ordinary
routine litigation incidental to its business, nor, to the best of its
knowledge, are any such proceedings threatened or contemplated.
ITEM 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter.
PART II
ITEM 5. Market for the Registrant's Common Stock
and Related Security Holder Matters
(a) The principal market on which the Company's common stock is traded is the
Over-the-Counter market. The table below presents the high and low bid price
for the Company's common stock each quarter during the past two years and
reflects inter-dealer prices, without retail markup, markdown, or commission,
and may not represent actual transactions. The Company obtained the following
information from brokers who make a market in the Company's securities.
Bid Bid
Quarter Ended Low High Quarter Ended Low High
03/31/95 $.01 $.06 03/31/94 $.01 $.06
06/30/95 .01 .06 06/30/94 .01 .06
09/30/95 .01 .06 09/30/94 .01 .06
12/31/95 .01 .06 12/31/94 .01 .06
(b) Holders. The approximate number of holders of record of the Registrant's
Common Stock as of February 28, 1996 was 340.
(c) The Registrant has paid no dividends from inception to date and does not
currently intend to do so.
ITEM 6. Management's Discussion and Analysis
(a) Selected Financial Data
Year Ended December 31
1995 1994 1993 1992 1991
Net Sales $567,900 $547,300 $549,700 $1,035,800 $1,201,500
Net Earnings (Loss) 11,300 (42,800) (126,300) (1,800) (74,900)
Net Earnings (Loss)
Per Common Share * (.0116) (.0345) * (.020)
Weighted Average
Common Shares
Outstanding 3,671,304 3,671,304 3,671,304 3,671,304 3,671,304
* Less than $.01
per share
AT YEAR END
Total Assets $275,800 $248,700 $261,900 $432,700 $466,900
Working Capital 50,600 32,900 78,100 196,900 193,700
Shareholders' Equity 63,100 51,800 94,600 220,900 222,700
No dividends have been declared or paid for any of the periods presented.
(b) Liquidity and Capital Resources
The Company considers, and currently uses for internal management purposes,
a number of measures of liquidity. These measures include the Current Ratio
which is the ratio of current assets to current liabilities and the Sales
to Working Capital Ratio. Working capital is Current Assets less
Current Liabilities.
1995 1994 1993
Current Ratio 1.24 1.17 1.47
Sales to Working Capital 11.22 16.64 7.04
Sales to Total Assets 2.06 2.20 2.10
The major factors affecting these ratios were the gains in 1995 and the losses
for 1994 and 1993. The Company has made extensive use of short-term debt as
summarized in the following table:
Maximum Average Weighted
Weighted amount amount average
Balance at average outstanding outstanding interest
end of interest during the during the rate during
Notes Payable period rate period period period
Shareholders 93,400 17.3% 93,400 93,200 17.3%
The weighted average interest rate during the period was based on the
outstanding balance and interest rate at each month-end for each note.
The Company anticipates continuing short term borrowing in 1996. The
Company currently has no line of credit. If working capital beyond that
provided by profits and the line of credit is needed, additional debt
financing will be sought. If traditional debt financing is not available,
the Company will attempt to raise working capital by private borrowing
including stock holder loans, or sales of stock through private placements
although no assurances can be given that financing will be available.
The Company at present has no long-term debt.
(c) Results of Operations
The Company experienced sales in 1995 slightly higher than in 1994.
The primary source of the sales increase was international sales.
Distributor sales experienced some decrease. The earnings for 1995 were
$11,300 compared to a loss of $42,800 in the prior year.
Gross Margins. The gross margin percentages were 46%, 44%, and 41%, of sales
for 1995, 1994, and 1993 respectively. The increase in gross margin in 1995
resulted from an increase in production efficiency.
Selling Expenses. Selling expenses as a percentage of sales decreased to
3.5% in 1995 compared to 7.2% in 1994. The primary reasons for the decrease
were decreases in trade show attendance, travel and printing.
General and Administrative Expense. General and administrative expenses as
a percentage of sales have decreased slightly to 25.6% in 1995 compared to
27.2% in 1994.
Research and Development. Research and development expenses increased slightly
in 1995 due to an increase in activity.
Inflation. Inflation has no significant impact on the operations of the
Company.
Management's Plans. The Company's 1996 operating plan includes achieving
increased sales goals and continuing its cost reduction program. Management
believes that actions presently being taken to revise the Company's operating
and financial requirements will enable the Company to continue profitable
operations during 1996.
ITEM 7. Financial Statements
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Dencor Energy Cost Controls, Inc.
Denver, Colorado
We have audited the accompanying balance sheet of Dencor Energy Cost Controls,
Inc. (the Company) as of December 31, 1995, and the related statements of
operations, shareholders' equity and cash flows for each of the years in the
two-year period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dencor Energy Cost Controls,
Inc. as of December 31, 1995, and the results of its operations and its cash
flows for each of the years in the two-year period ended December 31, 1995,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has experienced substantial losses in
recent years, and has experienced difficulty and uncertainty in meeting its
liquidity needs, that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
GELFOND HOCHSTADT PANGBURN & CO.
Denver, Colorado
January 18, 1996
DENCOR ENERGY COST CONTROLS, INC.
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
Current assets:
Cash $ 3,800
Accounts receivable, net of allowance
for doubtful accounts of $9,200 (Note 9) 77,000
Inventories (Note 4) 174,200
Prepaids and other 8,300
Total current assets 263,300
Furniture and equipment 213,300
Less accumulated depreciation 207,400
5,900
Other receivables, net of allowance
for doubtful receivables of $1,700 (Note 3) 6,600
$ 275,800
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable - shareholders (Note 5) $ 93,400
Accounts payable 52,800
Accrued compensation and benefits 22,700
Accrued interest - shareholders (Note 5) 33,600
Warranty reserve 6,300
Other 3,900
Total liabilities (all current) 212,700
Commitments (Note 7)
Shareholders' equity (Note 8):
Common stock, no par value; authorized,
5,000,000 shares; issued and outstanding,
3,671,304 shares 1,147,600
Deficit (1,084,500)
63,100
$ 275,800
See notes to financial statements.
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995 1994
Revenues:
Net sales $ 567,900 $ 547,300
Interest and other 11,500 8,500
579,400 555,800
Costs and expenses:
Cost of products sold 306,300 305,900
Selling 19,800 39,300
General and administrative 145,400 148,900
Research and development 73,900 70,500
Provision for doubtful
accounts receivable 5,000 17,700
Interest, substantially to
related parties (Note 5) 17,700 16,300
568,100 598,600
Net income (loss) $ 11,300 $ (42,800)
Earnings (loss) per common share $ * $ (.01)
Weighted average common shares
outstanding 3,671,304 3,671,304
* Less than $.01 per share
See notes to financial statements.
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995 AND 1994
Common Stock
Shareholders'
Shares Amount Deficit equity
Balances, January 1, 1994 3,671,304 $ 1,147,600 $(1,053,000) $ 94,600
Net loss (42,800) (42,800)
Balances, December 31, 1994 3,671,304 1,147,600 (1,095,800) 51,800
Net income 11,300 11,300
Balances, December 31, 1995 3,671,304 $ 1,147,600 $(1,084,500) $ 63,100
See notes to financial statements.
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995 1994
Cash flows from operating activities:
Net income (loss) $ 11,300 $ (42,800)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 5,400 6,700
Provision for doubtful accounts
receivable 5,000 17,700
Changes in operating assets and
liabilities:
Accounts and other receivables (26,400) (30,600)
Inventories (20,600) 27,700
Prepaids and other 100 500
Accounts payable (900) 14,300
Accrued compensation and benefits (2,800) 1,100
Accrued interest - shareholders 16,000 11,200
Warranty reserve 600 (1,400)
Other liabilities 2,600 1,200
Total adjustments (21,000) 48,400
Net cash provided by (used in)
operating activities (9,700) 5,600
Cash flows from investing activities:
Capital expenditures (1,500)
Net cash used in investing activities (1,500)
(Continued)
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995 1994
Cash flows from financing activities:
Proceeds from notes
payable - shareholders $ 300 $ 43,000
Principal payments on
note payable - bank (30,000)
Principal payments on notes
payable - shareholders (9,800)
Net cash provided by financing activities 300 3,200
Net increase (decrease) in cash (9,400) 7,300
Cash, beginning 13,200 5,900
Cash, ending $ 3,800 $ 13,200
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest $ 1,700 $ 5,100
See notes to financial statements.
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1. Organization and significant accounting policies:
Organization:
Dencor Energy Cost Controls, Inc. (the Company) manufactures and markets
electrical energy cost control devices and equipment which are sold
primarily to distributors and dealers in the United States and Canada.
There is only one business segment.
Inventories:
Inventories are stated at the lower of cost (first-in, first-out; FIFO)
or market.
Furniture, equipment, and depreciation:
Furniture and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
related assets of three to five years.
Research and development:
Research and development costs are charged to operations as incurred.
Product warranties:
Estimated costs related to product warranties are provided for at
the time of sale.
Earnings (loss) per share:
Earnings (loss) per common share is computed based upon the weighted
average number of common shares outstanding during the period.
Accounting for income taxes:
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected
to reverse. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in the statement of operations
in the period that includes the enactment date.
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
1. Organization and significant accounting policies (continued):
Use of estimates in the preparation of financial statements:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
Recently issued accounting standards:
Management does not believe that any recently issued accounting standards
will have a material impact to the Company's financial position or
results of operations.
2. Going concern, results of operations, and management's plans:
The Company's financial statements for the year ended December 31, 1995
have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments
in the normal course of business. The Company has experienced
substantial losses in recent years, and has experienced difficulty
and uncertainty in meeting its liquidity needs. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.
The Company's 1996 operating plan includes achieving increased sales
goals and maintaining its cost reduction program, which primarily
includes a reduction in labor costs. Management believes that actions
presently being taken under its 1996 operating plan will enable the
Company to continue profitable operations during 1996. The financial
statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
3. Other receivables:
Other receivables consist of a note receivable and interest due from a
customer. The note receivable is due on demand, bears interest at 18%
and is unsecured.
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
4. Inventories:
Inventories as of December 31, 1995 consist of:
Finished products $ 7,400
Sub-assemblies and work-in-process 40,100
Component parts 126,700
$ 174,200
The elements of cost in inventories include materials,
labor and overhead.
5. Notes payable - shareholders:
The notes payable to shareholders are unsecured, due on demand, and
bear interest at 12% to 18.25% per year. The weighted average
interest rates during the years ended December 31, 1995 and 1994
were approximately 17.3% and 16.9%, respectively. Interest expense
of approximately $17,100 and $14,800 associated with these notes
payable was charged to operations for the years ended December 31,
1995, and 1994, respectively.
6. Income taxes:
The components of the deferred tax assets as of December 31, 1995, were
as follows:
Current deferred tax assets:
Accounts receivable, due to
allowance for doubtful accounts $ 2,200
Inventories, due to obsolescence reserve
and additional costs inventoried for tax purposes 16,400
Compensated absences 2,800
Warranty reserve 1,300
Total current gross deferred tax assets 22,700
Less valuation allowance (22,700)
Net current deferred tax assets $ -
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
6. Income taxes (continued):
Noncurrent deferred tax assets:
Net operating loss carryforwards $ 178,000
Other tax credits carryforwards 20,700
Total noncurrent gross deferred tax assets 198,700
Less valuation allowance (198,700)
Net noncurrent deferred tax assets $ -
The net increase during the year in the total valuation
allowance was $3,200.
The difference between taxes computed at the statutory federal tax
rate and the effective tax rate is reconciled below:
Years ended December 31,
1995 1994
Income tax (expense) benefit computed at
statutory federal tax rate $ (1,700) $ 6,400
Deferred tax benefit recognized
(not recognized) 1,700 (6,400)
Income tax (expense) benefit computed
at the effective tax rate $ - $ -
At December 31, 1995, the Company had net operating loss and general
business credit carryforwards which may be used to reduce future
taxable income and taxes payable, respectively, and which expire
through 2009 as follows:
Net General
operating business
loss credit
carryforwards carryforwards
1996 $105,100 $ 4,600
1997 53,500 300
1998 192,500 300
1999 91,200
2000
Thereafter 451,800 15,500
$894,100 $ 20,700
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
7. Commitments:
The Company leases its facility and certain equipment under non-
cancelable operating leases. Future rentals on these non-cancelable
operating leases as of December 31, 1995 are $7,000. Lease rental
expense of approximately $39,500 and $39,600 was charged to operations
for the years ended December 31, 1995 and 1994, respectively.
8. Common stock:
At December 31, 1995, the Company has reserved 196,000 shares of common
stock for issuance under a restricted stock bonus plan. All employees
and directors of the Company, with the exception of the President,
are eligible to receive stock bonuses under this plan. There have
been no shares issued under this plan.
9. Concentration of credit risk:
The Company extends credit based on an evaluation of the customer's
financial condition, generally without requiring collateral.
Exposure to losses on receivables is principally dependent on each
customer's financial condition. The Company monitors its exposure
for credit losses and maintains allowances for anticipated losses.
During 1995, four customers accounted for approximately 12%, 13%, 14%
and 22% of net sales. During 1994, three customers accounted for
approximately 17%, 15% and 14% of net sales. As of December 31, 1995,
61% of the Company's accounts receivable were due from five customers.
The Company's export and domestic sales consist of the following:
Years ended December 31,
1995 1994
Net sales, Canada $ 88,000 $ 4,700
Net sales, United States 479,900 542,600
Total net sales $ 567,900 $ 547,300
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995 AND 1994
10. Fair value of financial instruments:
Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments," requires the Company
to disclose estimated fair values for its financial instruments,
for which it is practicable to estimate fair value. Management
believes that the carrying amounts of the Company's financial
instruments approximates fair value because of the short-term
maturity of these items.
ITEM 8. Changes In And Disagreements With Accountants On Accounting And
Financial Disclosure
None
PART III
ITEM 9. Directors and Executive Officers of the Registrant
(a) Identification of Directors
The following information, as of February 28, 1996, is furnished with respect
to each Director:
Year First
Elected as
Name of Director Age Director Position with Company
Theodore A. Hedman 57 1988 Director, Vice President,
Secretary, Manager of
Engineering
Maynard L. Moe 61 1974 Chairman of Board and
President
Joseph L. Mellusi 30 1994 Director, Treasurer
All Directors serve for one-year terms which expire at the annual shareholders
meeting in 1996. For the period ending December 31, 1995, all corporate
officers were also directors.
(b) Identification of Executive Officers
Position
Name of Officer Age (Date Elected To Position)
Maynard L. Moe 61 Chairman of the Board & President
(January 16, 1974); Director
Theodore A. Hedman 57 Director, Vice President, Secretary,
Manager of Engineering (March 24, 1988)
Joseph L. Mellusi 30 Treasurer (June 16, 1994); Director
All officers serve at the pleasure of the Board.
There are no family relationships among the officers or directors listed, and
there are no arrangements or understandings pursuant to which any of them
were elected as officers.
Dr. Moe has served as President for the Registrant since 1974.
Mr. Hedman has been Manager of Engineering for Dencor since 1979.
Since 1991 Joseph L. Mellusi has been a Marketing Representative, Project
Manager and currently a Branch Manager with Kemper Management Services, Inc.
a company specializing in providing Demand-Side Management services for
utilities.
There have been no events under any bankruptcy act, no criminal proceedings
and no judgments or injunctions material to the evaluation of the ability and
integrity of any director or executive officer during the past 5 years.
Based on information furnished to Registrant, no officer, director, or ten
percent shareholder failed to file on a timely basis reports on Forms 3, 4,
or 5 during the most recent two fiscal years.
ITEM 10. Executive Compensation
Summary Compensation Table
The following table sets forth in summary form the compensation received during
each of the Company's last three completed fiscal years by the Chief Executive
Officer and President of the Company. No executive officer of the company,
including the Chief Executive Officer and President, received total salary and
bonus exceeding $100,000 during any of the last three fiscal years.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
Other All
Annual Other
Compen- Restricted LTIP compen-
Name and Fiscal Salary Bonus sation Stock Options Payouts sation
Position Year ($) (1) ($)(2) ($)(3) Award(s) (#)(5) ($)(6) ($)(7)
Maynard L. Moe 1995 67,000 -0- -0- -0- -0- -0- -0-
CEO, President,
and 1994 60,300 -0- -0- -0- -0- -0- -0-
a director (8)
1993 61,400 -0- -0- -0- -0- -0- -0-
(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) During the periods covered by the Summary Compensation Table, the Company
did not pay any other annual compensation not properly categorized as
salary or bonus, including perquisites and other personal benefits,
securities or property.
(4) During the periods covered by the Summary Compensation Table, the Company
did not make any award of restricted stock.
(5) The Company has had no stock option plans.
(6) The Company has a Restricted Stock Bonus Plan, the purpose of which is to
attract and retain qualified personnel for responsible positions. The
Company has remaining 196,000 shares of the Company's authorized but
unissued common stock as of December 31, 1995, to be awarded as stock
bonuses to employees, not including Dr. Moe. Stock bonuses may be awarded,
as an incentive to contribute to the success of the Company, at the
discretion of a stock bonus committee, consisting of not less than two
directors, from a list of recommendations submitted periodically by the
President. The plan may be amended, modified, suspended or withdrawn at
any time by the Board of Directors. There were no shares awarded during
the periods covered by the Summary Compensation Table.
(7) No other compensation
(8) Compensation Pursuant to Plans
Dr. Moe, for the year 1996, will receive an annual salary of $69,700
payable in substantially equal monthly installments. Dr. Moe will also
receive additional compensation equal to two percent of the Company's
first $100,000 pre-tax net profits, plus four percent of pre-tax profits
from $100,000 to $200,000 plus six percent of the pre-tax profits in
excess of $200,000.
Compensation of Directors
The Company pays its non-employee director $100 per Directors' Meeting attended.
It is anticipated that no more than twelve meetings will occur each year.
Employment Contracts and Termination of Employment and
Change-In Control Arrangements
The Company does not have any written employment contracts with respect to any
of its executive officers. The Company has no compensatory plan or arrangement
that results or will result from the resignation, retirement, or any other
termination of an executive officer's employment with the Company or from a
change-in-control of the Company or a change in an executive officer's
responsibilities following a change-in-control.
ITEM 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
All persons known by the Registrant to own beneficially more than 5% of any
class of the Company's outstanding stock on February 28, 1996, are listed below:
Percent
Name & Address of Amount and Nature of of
Title of Class Beneficial Owners Beneficial Ownership Class (w)
Common Stock Maynard L. Moe 703,650 (x) 19.2
No Par Value 2309 South Jackson
Denver, CO 80210
(w) On February 28, 1996, there were 3,671,304 shares of
common stock issued and outstanding.
(x) Includes 159,650 shares owned of record by Carol M. Moe,
wife of Maynard L. Moe.
(b) Security Ownership of Management
The following table sets forth the number of shares owned beneficially on
February 28, 1996, by each Director and by all Officers and Directors as a
group. Information as to the beneficial ownership is based upon statements
furnished to the Company by such persons.
Percent
Name & Address of Amount and Nature of of
Title of Class Beneficial Owners Beneficial Ownership Class (w)
Common Stock Maynard L. Moe 703,650 (x) 19.2
2309 South Jackson
Denver, CO 80210
Theodore A. Hedman 148,300 (y) 4.0
5445 South Camargo Road
Littleton, CO 80123
Joseph L. Mellusi 0 0.0
9977 East Louisiana Drive
Denver, CO 80231
Executive Officers 851,950 23.2
and Directors as a
group
(w) On February 28, 1996, there were 3,671,304 shares of
common stock issued and outstanding.
(x) Includes 159,650 shares owned of record by Carol M. Moe,
wife of Maynard L. Moe.
(y) Includes 35,800 shares owned of record by Charlotte
Hedman, wife of Theodore A. Hedman.
(c) Changes in Control
The Company knows of no contractual arrangements which may at a subsequent date
result in a change of control of the Company.
ITEM 12. Certain Relationships and Related Transactions
(a) Transactions with Management and Others
None involving more than $60,000.
(b) Parents of Small Business Issuer
None.
(c) Transactions with Promoters
None.
ITEM 13. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a) Financial Statements
1. The following financial statements of Dencor Energy Cost
Controls are included in Part II, Item 7:
Page
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . 8
Balance Sheet - December 31, 1995 . . . . . . . . . . . . . . . . . . . 9
Statements of Operations - years ended
December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . 10
Statements of Shareholders' Equity - years ended
December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . 11
Statements of Cash Flows - years ended
December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . 12
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 14
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or
not required, or because the required information is included
in the financial statements or notes thereto.
3. Exhibits
3. Articles of Incorporation and By-Laws are incorporated
by reference to Exhibit No. 1 of Form 10 filed May 5, 1980.
(b) Reports On Form 8-K
There were no reports on Form 8-K for the three months ended
December 31, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, Dencor Energy Cost Controls, Inc., has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
DENCOR ENERGY COST CONTROLS, INC.
by: MAYNARD L. MOE
President
Date: March 28, 1996
In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the date indicated:
March 28, 1996 THEODORE A. HEDMAN
Date Secretary/Director/Vice President
March 28, 1996 MAYNARD L. MOE
Date Director/Principal Executive Officer
<TABLE> <S> <C>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
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<RECEIVABLES> 62,200
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