UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO 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 small business issuer specified in its charter)
Colorado 84-0658020
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1450 West Evans, Denver, Colorado 80223
(Address of principal executive office) (Zip Code)
(303) 922-1888
(Registrant's telephone number, including area code)
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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. No par value per share:
3,671,304 shares outstanding at Sept. 30, 1997.
Transitional Small Business Disclosure Format
Yes No X
DENCOR ENERGY COST CONTROLS, INC.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
(Condensed Balance Sheets)
ASSETS September 30 December 31
1997 1996
(unaudited)
CURRENT ASSETS:
Cash $ 5,600 $ 1,600
Accounts Receivable,net of allowance for
doubtful accounts of $9,200 55,300 58,500
Inventories 132,100 143,600
Other 24,500 8,300
TOTAL CURRENT ASSETS 217,500 212,000
Furniture & Equipment 213,300 213,300
Less Accumulated Depreciation (213,300) (211,300)
-0- 2,000
Other Receivables, net of allowance for
doubtful receivables of $2,300 3,300 3,400
$220,800 $217,400
LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes Payable - Shareholders $ 99,400 $ 93,400
Accounts Payable 43,800 33,300
Accrued Compensation and Benefits 33,000 30,600
Accrued Interest - Shareholders 66,400 53,600
Deposits 9,900
Warranty Reserve 6,300 6,300
Other 1,600 1,600
TOTAL CURRENT LIABILITIES 250,500 228,700
STOCKHOLDERS' DEFICIT
Common Stock, no par value, authorized
5,000,000 shares; issued & outstanding,
3,671,304 shares 1,147,600 1,147,600
Accumulated Deficit (1,177,300) (1,158,900)
Stockholders' Deficit (29,700) (11,300)
$ 220,800 $ 217,400
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Nine Months
Ended September 30 Ended September 30
1997 1996 1997 1996
REVENUES:
Net Sales $ 92,300 $ 100,000 $ 360,000 $ 299,900
Interest and Other 1,700 2,300 5,200 6,200
TOTAL REVENUES 94,000 102,300 365,200 306,100
COSTS AND EXPENSES;
Cost of Products Sold 43,600 50,000 173,500 161,100
Selling 7,900 7,000 18,700 16,200
General and Administrative 37,200 30,700 106,800 86,700
Research and Development 30,100 15,800 69,400 50,600
Interest 5,500 4,700 15,200 13,900
124,300 108,200 383,600 328,500
NET LOSS $(30,300) $ (5,900) $(18,400) $( 22,400)
NET LOSS PER
COMMON SHARE:
Net loss $ (.0083) $ (.0017) $ (.0051) $ (.0062)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,671,304 3,671,304 3,671,304 3,671,304
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENT OF CASH FLOWS
(unaudited)
Nine Months Ended September 30
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ (18,400) $(22,400)
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation 2,000 3,000
Changes in operating assets and liabilities:
Accounts and other receivables 3,300 11,200
Inventories 11,500 19,100
Other assets (16,200) (6,700)
Notes Payable 6,000
Accounts payable 10,500 (11,400)
Accrued compensation and benefits 2,400 (1,700)
Accrued interest - shareholders 12,800 13,600
Deposits (9,900)
Other liabilities (2,700)
Total adjustments 22,400 24,400
Net cash provided by operating 4,000 2,000
activities
CASH, beginning of year 1,600 3,800
CASH, end of quarter 5,600 5,800
Supplemental disclosure of cash
flow information:
Cash paid during the nine month
period for interest $ -0- $ 400
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
A. The condensed Financial Statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not
misleading.
In the opinion of the Company, all accompanying unaudited condensed
Financial Statements contain all adjustments, which consist only of
recurring adjustments, necessary to present fairly the financial position
as of September 30, 1997, and the results of operations
and cash flows for the nine months ended September 30, 1997 and 1996.
The results of operations for the three-month and nine-month periods
ended September 30, 1997 and 1996, are not necessarily indicative of the
results to be expected for the full year. It is suggested that these
Condensed Financial Statements be read in conjunction with the Financial
Statements and the notes therein included in the Company's latest annual
reporton Form 10-KSB.
B. Long-Term Debt:
As of the end of Third Quarter, 1997, the Company had no long-term
debt.
C. Common Stock:
During the Third Quarter, 1997, the Company sold no stock.
D. Letter of Intent:
In May 1997, the Company entered into a letter of intent to merge with
Proven Alternatives, Inc. (PAI). PAI is an integrated energy and process
management firm. It provides process knowledge, energy management
capabilities, energy efficiency technologies and capital capabilities to
solve business problems relating to energy usage. Under the letter of
intent, PAI will become a wholly-owned subsidiary of the Company. Subject
to certain provisions, following the merger the current stockholders of PAI
will hold approximately 92% of the total number of shares of the Company's
common stock issued and outstanding after the merger (approximately 93% on a
fully diluted basis assuming the exercise of all outstanding
DENCOR ENERGY COST CONTROLS, INC.
PAI stock options). The merger is subject to shareholder approval of both
companies of matters related to the merger and certain other conditions.
The Company has filed a joint proxy statement/prospectus with the Securities
and Exchange Commission concerning certain matters related to the merger and
has received comments from the SEC concerning this filling. The Company is
awaiting reimbursement of expenses from PAI as set forth in the letter of
intent and other information from PAI in order to respond to the SEC
comments.
Pursuant to the letter of intent, the proposed merger will be terminated if
not completed on or before December 31, 1997, unless extended by both the
Company and PAI. There is no assurance the merger will occur.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
Third Quarter sales of $92,300 were approximately 7% less than sales for the
comparable period in 1996. The decrease in third quarter sales compared to
the prior year was a decrease in dealer sales. Year to date sales of
$360,000 were approximately 20% greater than sales for the comparable period
in 1996. The increase sales for the year to date period was the result of
an increase in sales of utility products.
COST AND EXPENSE
Cost of Products Sold as a percentage of net sales decreased to 47.2% for
the third quarter of 1997 compared with 50.0% for the same period in the
prior year. Cost of Products Sold as a percentage of net sales decreased
to 48.2% for year to date 1997 compared to 53.7% for the comparable period
in 1996. The decrease for both periods was due to the sales of utility
products with a higher software content resulting in a lower cost per unit
of sales than other products.
Selling expenses as a percentage of sales increased to 8.6% for the third
quarter compared to 7.0% for the same period in the prior year. Selling
expenses as a percentage of sales decreased to 5.1% for year to date
compared to 5.4% for the comparable period in 1996. The increase for the
third quarter was caused by a decrease in sales while the decrease for the
year to date expense was due to increased sales.
DENCOR ENERGY COST CONTROLS, INC.
General and Administrative expenses increased from the same quarter in the
prior year and year to date due to an increase in personnel.
Research and Development expenses increased compared to the same quarter in
the prior year and year to date due to increased software development
activity related to new products. The Company anticipates that these new
products will be available for sale during the fourth quarter 1997.
EARNINGS
The loss for the third quarter was $30,300 compared to loss of $5,900 for
the same period in the prior year. The loss for the year to date was
$18,400 compared to a loss of $22,400 for the comparable period in 1996. The
increase in sales reduced the year to date loss compared to the prior year.
The increased loss for the third quarter was due to increased software
development and administrative activity as well as lower sales.
LIQUIDITY
The Independent Auditor's Report on Dencor Energy Cost Controls, Inc.
Financial Statements for the year ended December 31, 1996 included a
"going concern" explanatory paragraph which means that the Auditors have
expressed substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regards to the factors which prompted
the explanatory paragraph are discussed in Note 2 to the Company's December
31, 1996 Financial Statements.
The Company's current ratio is .87 at the Quarter ended September 30, 1997.
Management believes the acid ratio (cash and accounts receivable divided by
current liabilities) of .24 is within the limits of reasonable liquidity.
PART II
OTHER INFORMATION
Items 1 through 5 would appear to require no answers according to the
instructions.
Item 6. Exhibits And Reports On Form 8-K
(a) The following Exhibit is filed as part of this Quarterly
Report on Form 10-Q:
27. Financial Data Schedule.
(b) During the quarter ended September 30, 1997, the Registrant did
not file any reports on Form 8-K.
DENCOR ENERGY CONTROLS, INC.
SIGNATURE
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.
DENCOR ENERGY COST CONTROLS, INC.
Registrant
By: Maynard L. Moe
President
Date: November 20, 1997
