UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(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, 2000
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: 8,349,804 shares outstanding at November 10, 2000.
Transitional Small Business Disclosure Format
Yes No X
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DENCOR ENERGY COST CONTROLS, INC.
INDEX
Page
PART I FINANCIAL INFORMATION
Item 1. Financial statements:
Independent accountants' report 1
Balance sheets - September 30, 2000 and December 31, 1999 2
Statements of operations - three and nine months ended
September 30, 2000 and 1999 3
Statements of cash flows - nine months ended
September 30, 2000 and 1999 4
Notes to condensed financial statements 5
Item 2. Management's discussion and analysis 5
PART II. OTHER INFORMATION
Item 1-5 N/A
Item 6. Exhibits and reports on Form 8-K 7
Signatures 7
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Board of Directors and Stockholders
Dencor Energy Cost Controls, Inc.
Denver, Colorado
We have reviewed the accompanying condensed balance sheet of Dencor Energy Cost
Controls, Inc. as of September 30, 2000, the related condensed statement
of operations for the three-month and nine-month period then ended, and
statement of cash flows for the nine-month period then ended. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed financial statements for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1999, and the related
statements of operations, shareholders' deficit, and cash flows for the year
then ended (not presented herein); and in our report dated February 29, 2000,
we expressed an unqualified opinion (which included an explanatory paragraph
relating to the Company's ability to continue as a going concern) on those
financial statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of December 31, 1999, is fairly
stated, in all material respects, in relation to the balance sheet from which
it has been derived.
GELFOND HOCHSTADT PANGBURN, P.C.
Denver, Colorado
November 10, 2000
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DENCOR ENERGY COST CONTROLS, INC.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
(Condensed Balance Sheets)
ASSETS Sept. 30 Dec. 31
2000 1999
(unaudited)
CURRENT ASSETS:
Cash $ 5,300 $ 500
Accounts Receivable,net of allowance for doubtful
accounts of $5,700 43,300 25,100
Inventories 127,900 127,900
Prepaids and Other 9,300 5,100
TOTAL CURRENT ASSETS $185,800 158,600
Furniture & Equipment 213,300 213,300
Less Accumulated Depreciation (213,300) (213,300)
0 0
Long Term Receivables, net of allowance for doubtful
receivables of $11,400 7,900 8,600
$193,700 $167,200
LIABILITIES AND STOCKHOLDERS DEFICIT
CURRENT LIABILITIES:
Notes Payable - Shareholders $144,000 $ 121,400
Notes Payable to Others 0 5,000
Accounts Payable 70,200 65,200
Accrued Compensation and Benefits 367,700 272,100
Accrued Interest - Shareholders & Others 155,200 130,600
Warranty Reserve 3,200 3,200
Other 1,700 1000
TOTAL LIABILITIES (ALL CURRENT) 742,000 598,500
STOCKHOLDERS' DEFICIT
Preferred Stock, no par value, authorized 5,000,000
shares; none issued and outstanding. 0 0
Common Stock, no par value, authorized 25,000,000
shares; issued & outstanding,
6,549,804 shares at September 30, 2000,
5,749,804 shares at December 31, 1999
1,206,600 1,190,600
Accumulated Deficit (1,754,900) (1,621,900)
Stockholders' Deficit (548,300) (431,300)
$ 193,700 $ 167,200
See notes to condensed financial statements
DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Nine Months
Ended Sept.30 Ended Sept.30
2000 1999 2000 1999
REVENUES:
Net Sales $ 57,300 $ 74,200 $ 150,400 $ 200,600
Interest and Other 1,400 1,700 7,900 5,300
TOTAL REVENUES 58,700 75,900 158,300 205,900
COSTS AND EXPENSES:
Cost of Products Sold 28,500 53,500 90,900 126,400
Selling 3,900 3,600 9,800 13,400
General and Administrative 31,000 30,500 100,400 108,400
Research and Development 19,200 22,300 61,000 65,200
Interest 10,100 9,300 29,200 25,500
92,700 119,200 291,300 338,900
NET LOSS $(34,000) $ (43,300) $(133,000) $(133,000)
NET LOSS PER
COMMON SHARE: $ (0.01) $ (0.01) $ (0.02) $ (0.02)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 6,549,804 4,803,304 6,538,082 4,803,804
See notes to condensed financial statements
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DENCOR ENERGY COST CONTROLS, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended Sept. 30
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(133,000) $(133,000)
Adjustments to reconcile net loss
to net cash used in operating activities:
Changes in operating assets and liabilities:
Accounts and other receivables (18,200) (3,700)
Inventories 0 (2,200)
Other assets (4,200) (1,900)
Long term receivables 700 600
Accounts payable 5,000 21,200
Accrued compensation and benefits 95,600 86,200
Accrued interest - shareholders & others 24,600 24,300
Deposits and other liabilities 700 (100)
Total adjustments 104,200 124,400
________ ________
Net cash used in operating activities (28,800) (8,600)
Cash flows from financing activities:
Proceeds from Private Placement of Stock 16,000 0
Proceeds from Notes Payable-Shareholders 22,600 5,000
Repayment of Notes Payable - Others (5,000) 0_
Net cash provided by financing activities 33,600 5,000
Net increase (decrease) in cash 4,800 (3,600)
Cash beginning of year 500 8,300
Cash end of quarter $ 5,300 $ 4,700
See notes to condensed financial statements
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DENCOR ENERGY COST CONTROLS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
A. The condensed Financial Statements of the Company as of September 30,
2000 and for the three-month and nine-month periods ended September 30,
2000 and 1999 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 Management, the 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, 2000, and the results of operations for the three months and nine months
ended September 30, 2000 and 1999 and statement of cash flows for the nine
months ended September 30, 2000.
The results of operations for the three and nine-month periods ended
September 30, 2000 and 1999, 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 report on Form 10-KSB.
B. Long-Term Debt:
As of the end of Third Quarter, 2000, the Company had no long-term debt.
C. Common Stock:
In January 2000, the Company issued 800,000 shares of common stock in a
private placement at $0.02 per share, which was the quoted market price of the
Company's common stock on the date of issuance.
D. Subsequent Event
On November 10, 2000 a third party exercised its option to purchase
750,000 shares of restricted common stock at a price of $0.02 for $15,000
cash. On November 10, 2000 the company sold 1,050,000 shares of restricted
common stock in a private placement at a price of $0.04 per share in exchange
for $42,000 in notes and interest payable due to officers or directors of the
Company. On November 10, 2000 the high bid was $0.05 and the low asked was
$0.06. The most recent trade was on October 25, 2000.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
NET SALES
Third quarter sales of $57,300 were approximately 23% less than the $74,200
for the comparable period in 1999. The decrease is primarily a result of a
decrease in international sales. The nine-month sales of $150,400 were down
25% from $200,600 in the previous year. The decrease was due to a decrease
in both utility sales and international sales.
COST AND EXPENSE
Cost of Products Sold as a percentage of net sales decreased approximately
22% to 50% for the third quarter of 2000 compared with 72% the same period
in the prior year. For the nine-month period, the Cost of Products Sold
decreased to 60% compared to 63% in the same period the prior year.
This increase in gross margin percentage is primarily due to an increase
in sales of newer products with higher gross margins.
Selling expenses for the third quarter of 2000, as percentage of net sales,
increased by 2% to 7% compared to 5% in the same period in the prior year.
General and Administrative expenses as a percentage of net sales for the
third quarter of 2000 increased 13% to 54% compared to 41% in the same period in
the prior year. Total administrative expenses were approximately the
same as in the prior year.
Research and Development expenses decreased 14% to $19,200 for the third quarter
of 2000 compared to $22,300 in the same quarter the prior year. The decrease
resulted from lower new product development expenses.
EARNINGS
The net loss for the third quarter was $34,000 compared to a net loss of
$43,300 for the same period in the prior year. The decrease in net loss
was due to the increase in gross margin.
LIQUIDITY
The Independent Auditor's Report on Dencor Energy Cost Controls, Inc. Financial
Statements for the year ended December 31, 1999 included a "going concern"
explanatory paragraph that describes 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, 1999 Financial Statements.
The Company's current ratio is .25 at Quarter ended September 30, 2000. Man-
agement believes the acid ratio (cash and accounts receivable divided by
current liabilities) of .065 is below the limits of reasonable liquidity.
YEAR 2000
The Company did not experience any Year 2000 problems with its accounting
system, its products, or production processes. The Company has no information
that indicates key vendors, service providers, or any third parties, may be
unable to sell or purchase from the Company because of any Year 2000 compliance
problems they may have. The Company's contingency plans in the event year 2000
problems arise are set forth in the Company's Annual Report on Form 10KSB for
the year ended December 31, 1999.
DENCOR ENERGY COST CONTROLS, INC.
PART II - OTHER INFORMATION
Items 1 through 5 would appear to require no answers according to the
instructions.
Item 5. 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, 2000, the Registrant filed no
reports on Form 8-K.
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 13, 2000
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