U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended June 30, 1995
[ ] Transition Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Transition Period from
__________ to _________
Commission file number 0-10006
METRO CAPITAL CORPORATION
(Exact name of small business issuer as specified its charter)
Wyoming 84-0839926
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
716 College View Drive, Riverton, WY 82501
(Address of principal executive offices) (Zip Code)
(307) 856-3800
(Issuer's telephone number)
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
The number of shares of the Issuer's $.01 par value common stock
outstanding as of August 9, 1995 was 1,599,455.
Transitional Small Business Disclosure Format
(Check one):
Yes No X
<PAGE>
METRO CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1995
(Unaudited)
Current Assets:
Cash and cash equivalents $ 35,506
Marketable securities 1,840,729
Accounts receivable, with no allowance for
doubtful accounts:
Trade 16,857
Interest and other receivables 17,443
34,300
Notes receivable 2,000
Prepaid expenses 12,882
Total current assets 1,925,417
Property and Equipment:
Gas royalty interests 1,067,051
Land and building 498,948
Oil property 219,890
Furniture and fixtures 63,969
Vehicles and equipment 44,815
1,894,673
Less accumulated depreciation and amortization (780,796)
1,113,877
Investments 320,703
Notes Receivable 108,482
Other Assets, net 1,893
Total Assets $3,470,372
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities -
Accounts payable and accrued expenses $ 45,028
Stockholders' Equity:
Preferred stock, $.50 par value; 3,000,000 shares
authorized, no shares issued --
Common stock, $.01 par value; 6,000,000 shares
authorized; 2,700,689 issued 27,007
Capital in excess of par value 3,030,711
Unrealized holding gain 638,429
Retained earnings 1,465,259
Less: Treasury stock, at cost, 1,101,234 shares (1,736,062)
Total stockholders' equity 3,425,344
Total Liabilities and Stockholders' Equity $3,470,372
See accompanying notes to these consolidated financial statements.
<PAGE>
METRO CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended June 30,
1995 1994
REVENUES:
Gas royalty revenue $ 14,987 $ 15,211
Oil sales 11,790 12,702
Other product revenue 359 --
Well overhead fees 988 1,260
28,124 29,173
COSTS AND EXPENSES:
Oil and gas production costs 13,516 34,570
Operating expenses 110,214 107,351
Depreciation and amortization 39,281 41,761
Abandoned leases -- 7,627
163,011 191,309
LOSS FROM OPERATIONS (134,887) (162,136)
OTHER CREDITS (CHARGES):
Interest income 13,592 15,620
Dividend income 5,125 7,823
Rental income 2,535 4,935
Gain on sale of marketable securities 7,411 211
Equity in partnership losses (13,015) --
15,648 28,589
NET LOSS $(119,239) $(133,547)
NET LOSS PER COMMON SHARE $ (.08) $ (.08)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,599,455 1,601,685
See accompanying notes to these consolidated financial statements.
<PAGE>
METRO CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(119,239) $(133,547)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 39,281 41,761
Equity in partnership losses 13,015 --
Abandoned leases -- 7,627
Gain on sale of marketable securities (7,411) (211)
Changes in operating assets and
liabilities:
(Increase) decrease in:
Trade receivables 4,404 (9,728)
Interest and other receivables (4,389) 15,737
Prepaid expenses 3,395 1,786
Increase (decrease) in -
Accounts payable and accrued
expenses (7,744) 23,676
Net cash (used in) operating activities (78,688) (52,899)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (121,218) (141,031)
Proceeds from sale of marketable
securities 111,312 257,486
Proceeds from notes receivable 815 753
Purchase of property and equipment (1,949) (5,250)
Net cash (used in) provided by
investing activities (11,040) 111,958
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock acquired -- (12,661)
Net cash (used in) financing activities -- (12,661)
Increase (decrease) in Cash and Cash
Equivalents $(89,728) $ 46,398
Cash and Cash Equivalents, beginning of
period 125,234 40,387
Cash and Cash Equivalents, end of period $ 35,506 $ 86,785
See accompanying notes to these consolidated financial statements.
<PAGE>
METRO CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
l. Basis of Presentation
The consolidated financial statements included herein are
unaudited. In the opinion of management, all adjustments,
consisting of normal recurring accruals, have been made which
are necessary for a fair presentation of the financial position
of the Company at June 30, 1995 and the results of operations
and cash flows for the three month periods ended June 30, 1995
and 1994. Quarterly results are not necessarily indicative of
expected annual results because of the impact of fluctuations in
prices received for oil and natural gas and other factors.
Certain amounts have been reclassified to conform with the
current period's presentation. For a more complete understanding
of the Company's operations and financial position, reference is
made to the consolidated financial statements of the Company,
and related notes thereto, filed with the Company's annual
report on Form 10-KSB for the year ended March 31, 1995.
2. Marketable Securities
Marketable securities are classified as available-for-sale
based on management's intent. Cash proceeds and net gains from
the sale of available-for-sale securities for the three months
ended June 30, 1995 were $111,312 and $7,411 (gross gains of
$7,629 and gross losses of $218), respectively. Cash proceeds
and net gains from the sale of available-for-sale securities for
the three months ended June 30, 1994 were $257,486 and $211
(gross gains of $2,774 and gross losses of $2,563),
respectively. The net unrealized holding gain on
available-for-sale securities included as a separate component
of stockholders' equity increased by $109,493 for the three
months ended June 30, 1995.
3. Loss Per Share
The computations of loss per share are based on the weighted
average number of common shares outstanding during each period.
Common stock options outstanding were not included in the
computations since their effect is anti-dilutive.
<PAGE>
METRO CAPITAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company's gas royalty revenue decreased by approximately 2%
for the three months ended June 30, 1995 over the comparable
period in 1994 due primarily to a lower average sales price.
Although natural gas production increased due to the gas
processing plant commencing operations on March 30, 1995 to
process "sour gas", the average sales price for natural gas for
the three months ended June 30, 1995 was $1.29 per thousand
cubic feet compared to $1.81 for the comparable period in 1994.
The Company's oil sales decreased by approximately 7% for the
three months ended June 30, 1995 over the comparable period in
1994 due primarily to lower production levels.
The production volumes and average sales prices during the
periods were as follows:
Three Months Ended
June 30
1995 1994
Oil and condensate (barrels) 709 812
Average sales price per barrel $16.86 $15.79
Natural gas (mcf) 11,478 8,366
Average sales price per mcf $ 1.29 $ 1.81
Domestic oil prices generally follow world-wide oil prices which
are subject to price fluctuations resulting from changes in
world supply and demand. Prices received for natural gas are
also subject to price volatility. As a result, no prediction can
be made as to what price the Company will receive for its oil
and gas production in the future.
Average oil production cost per barrel was $12.21 for the three
months ended June 30, 1995 compared to $39.95 for the comparable
period in 1994. The average oil production cost per barrel was
higher in 1994 due to workover costs on three wells. The wells
within the field may require additional workover expenditures in
future periods.
The Company's royalty interests in "sour gas" production are
subject to plant processing costs (depreciation and operating
costs) and severance and ad valorem taxes. The processing
deduction attributable to an individual product (methane,
sulphur or CO2) will not exceed 90 percent of the revenue
received for that product, net of severance tax deductions. The
Company and other royalty owners are presently negotiating with
the plant operator to eliminate certain processing costs which
may not be in accordance with applicable state rules and
regulations. Production from the Company's other natural gas
royalty interests ("sweet gas") do not incur any production
costs other than severance and ad valorem taxes.
Operating expenses for the three months ended June 30, 1995
increased approximately 3% over the comparable period in 1994
due to expenditures in connection with evaluating various
investment opportunities.
Depreciation and amortization decreased approximately 6% for the
three months ended June 30, 1995 over the comparable period in
1994 due to a reduction in property and equipment.
Interest and dividend income for the three months ended June 30,
1995 decreased approximately 20% over the comparable period in
1994 due to changes in portfolio mix and sales of marketable
securities.
Rental income decreased approximately 49% for the three months
ended June 30, 1995 over the comparable period in 1994 due to a
lessee vacating office space upon expiration of the lease.
The equity in partnership losses of $13,015 represents the
Company's share of operating losses for the three months ended
June 30, 1995 in a golf driving range, miniature golf and
batting facility. Since the facility commenced operations in
July 1994, there were no operating results for the three months
ended June 30, 1994.
Financial Condition
Net cash used in operations of $78,688 for the three months
ended June 30, 1995 was the result of a net loss of $119,239
plus non-cash net expenses of $44,885 (comprised of
depreciation and amortization, equity in partnership losses and
gain on sale of marketable securities) and a net decrease in
operating assets and liabilities of $4,334. Net cash used in
operations of $52,899 for the three months ended June 30, 1994
was the result of a net loss of $133,547 plus non-cash net
expenses of $49,177 (comprised of depreciation and amortization,
gain on sale of marketable securities and abandoned leases) and
a net increase in operating assets and liabilities of $31,471.
Net cash (used in) provided by investing activities by the
Company was $(11,040) and $111,958 for the three months ended
June 30, 1995 and 1994, respectively. During the three months
ended June 30, 1995, the Company utilized the net cash proceeds
of $9,906 from the purchase and sale of marketable securities
for capital expenditures of $1,949 and operating activities.
During the three months ended June 30, 1994, the Company
utilized the net cash proceeds of $116,455 from the purchase and
sale of marketable securities for capital expenditures of
$5,250, the purchase of treasury stock for $12,661 and operating
activities.
The Company's material commitments for capital expenditures in
the next twelve months will be in conjunction with the
development of the real estate located in Colorado. The amount
of such commitment is not known at this time but it is expected
that any expenditures will be funded by internal sources.
The Company may make additional purchases of its common stock
from time to time. The shares repurchased are being held as
treasury shares which affords the Company greater financial
flexibility to respond to business opportunities that might
arise.
In addition to its real estate and oil and gas operations, the
Company is reviewing other business opportunities.
Management believes that the funds provided from its short-term
cash investments and marketable securities, the Company's
ability to obtain long-term financing and the availability of
the Company's common or preferred stock for issuance will
provide adequate sources of funding for any proposed future
acquisitions.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default 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
a. Exhibits
Exhibit 27. Financial Data Schedule (submitted only
in electronic format)
b. Reports on Form 8-K
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
METRO CAPITAL CORPORATION
(Registrant)
Date: August 9, 1995 By:/s/ Robert E. Thrailkill
Robert E. Thrailkill
President
(Principal Executive Officer)
Date: August 9, 1995 By:/s/ John A. Alsko
John A. Alsko
Vice President-Finance
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S BALANCE SHEET AS OF JUNE 30, 1995 AND ITS STATEMENT OF OPERATIONS FOR
THE THREE MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 35,506
<SECURITIES> 1,840,729
<RECEIVABLES> 34,300
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,925,417
<PP&E> 1,894,673
<DEPRECIATION> 780,796
<TOTAL-ASSETS> 3,470,372
<CURRENT-LIABILITIES> 45,028
<BONDS> 0
<COMMON> 27,007
0
0
<OTHER-SE> 3,398,337
<TOTAL-LIABILITY-AND-EQUITY> 3,470,372
<SALES> 27,136
<TOTAL-REVENUES> 28,124
<CGS> 13,516
<TOTAL-COSTS> 13,516
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (119,239)
<INCOME-TAX> 0
<INCOME-CONTINUING> (119,239)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (119,239)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
