-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ATY3S7/s1BKzbx0Y3QY/mYAEOqjt5iZzPRo/FSb1snpC6xmuCFrV027C+Ny5vlRQ IdpAHuYiq8S4zgpbA3cMwQ== 0000312066-97-000008.txt : 19970815 0000312066-97-000008.hdr.sgml : 19970815 ACCESSION NUMBER: 0000312066-97-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENCOR ENERGY COST CONTROLS INC CENTRAL INDEX KEY: 0000312066 STANDARD INDUSTRIAL CLASSIFICATION: AUTO CONTROLS FOR REGULATING RESIDENTIAL & COMML ENVIRONMENT [3822] IRS NUMBER: 840658020 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09255 FILM NUMBER: 97663249 BUSINESS ADDRESS: STREET 1: 1450 WEST EVANS CITY: DENVER STATE: CO ZIP: 80223 BUSINESS PHONE: 3039221888 MAIL ADDRESS: STREET 2: 1450 W EVANS CITY: DENVER STATE: CO ZIP: 80223 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 June 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 July 31, 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 June 30 Dec. 31 1997 1996 (unaudited) CURRENT ASSETS: Cash $ 2,400 $ 1,600 Accounts Receivable,net of allowance for doubtful accounts of $8,500 108,600 58,500 Inventories 128,300 143,600 Prepaids and Other 13,000 8,300 TOTAL CURRENT ASSETS 252,300 212,000 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 $255,600 $217,400 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes Payable - Shareholders $ 116,400 $ 93,400 Accounts Payable 45,300 33,300 Accrued Compensation and Benefits 24,400 30,600 Accrued Interest - Shareholders 61,500 53,600 Deposits 0 9,900 Warranty Reserve 6,300 6,300 Other 1,200 1,600 TOTAL CURRENT LIABILITIES 255,100 228,700 STOCKHOLDERS' EQUITY Common Stock, no par value, authorized 5,000,000 shares; issued & outstanding, 3,671,304 shares 1,147,600 1,147,600 Deficit (1,146,600) (1,158,900) Stockholders' Equity 500 (11,300) $ 256,100 $ 217,400 See notes to condensed financial statements DENCOR ENERGY COST CONTROLS, INC. STATEMENTS OF OPERATIONS (unaudited) Three Months Six Months Ended June 30 Ended June 30 1997 1996 1997 1996 REVENUES: Net Sales $ 154,600 $ 96,200 $ 267,700 $ 199,900 Interest and Other 1,700 2,000 3,500 3,900 TOTAL REVENUES 156,300 98,200 271,200 203,800 COSTS AND EXPENSES; Cost of Products Sold 75,300 52,300 129,900 111,100 Selling 4,700 4,800 10,800 9,200 General and Administrative 36,600 25,200 69,700 56,000 Research and Development 21,400 15,900 39,300 34,800 Provision for doubtful accounts receivable Interest 5,000 4,800 9,700 9,200 143,000 103,000 259,400 220,300 NET EARNINGS (LOSS) $ 13,300 $ (4,800) $ 11,800 $(16,500) NET EARNINGS (LOSS) PER COMMON SHARE: Net Earnings (loss) $ .0036 $ (.0014) $ .0032 $ (.0045) 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) Six Months Ended June 30 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss) $ 11,800 $(16,500) Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 2,000 2,000 Changes in operating assets and liabilities: Accounts and other receivables (50,000) 9,100 Inventories 15,300 5,200 Other assets (4,700) (8,600) Notes payable 23,000 0 Accounts payable 12,000 5,200 Accrued compensation and benefits (6,200) (2,200) Accrued interest - shareholders 7,900 9,000 Deposits (9,900) 0 Other liabilities (400) (3,000) Total adjustments 11,000 16,700 Net cash provided by operating activities 800 200 CASH beginning of year 1,600 3,800 CASH end of quarter $ 2,400 $ 4,000 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 June 30, 1997, and the results of operations and cash flows for the six months ended June 30, 1997 and 1996. The results of operations for the six-month period ended June 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 report on Form 10-KSB. B. Long-Term Debt: As of the end of Second Quarter, 1997, the Company had no long-term debt. C. Common Stock: During the Second Quarter, 1997, the Company sold no restricted 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, each issued and outstanding share of PAI common stock will be converted into 1.5 shares of the Company's common stock. The shares of the Company's common stock issued to stockholders of PAI will comprise 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 PAI stock options). The merger is subject to shareholder approval of both companies and certain other conditions. Although there is no assurance that the merger will occur, the Company believes that the transaction will be completed during the third or fourth quarter of 1997. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES Second Quarter sales of $154,600 were approximately 61% greater than the $96,200 for the comparable period in 1996. The increase is primarily a result of a increase in sales of a new product to utilities. COST AND EXPENSE Cost of Products Sold as a percentage of net sales decreased 5.6% for the second quarter of 1997 compared with the same period in the prior year. This increase in gross margin is primarily due to a increase in the sales of new products with higher margins. Selling expenses for the second quarter of 1997 were essentially the same as for the same period in the prior year. General and Administrative expenses as a percentage of net sales for the second quarter of 1997 decreased 2.5% compared to the same period in the prior year. Research and Development expenses as a percentage of net sales decreased 2.8% from the same quarter in the prior year. EARNINGS The net earnings for the second quarter were $11,800 compared to a net loss of $16,500 for the same period in the prior year. The earnings were due to the decrease in cost of goods sold as a percentage of sales as well as increased 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 .99 at the Quarter ended June 30, 1997. Management believes the acid ratio (cash and accounts receivable divided by current liabilities) of .44 is within the limits of reasonable liquidity. DENCOR ENERGY COST CONTROLS, INC. PART II - OTHER INFORMATION Items 1 through 4 would appear to require no answers according to the instructions. Item 5. Other Information (a) On June 3, 1997, The Registrant announced that it had entered into a letter of intent to merge with Proven Alternatives, Inc. The Registrant and Proven Alternatives, Inc. believe that the merger will be completed in the third or fourth quarter of 1997, although there is no assurance this will occur. See registrant's Form 8-K dated June 3, 1997. 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 June 30, 1997, the Registrant filed one report on Form 8-K: Exhibit 99.1 Press release dated June 3, 1997. 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: August 13, 1997 EX-27 2 ART. 5 FDS FOR 10-KSB FOR YEAR 1996
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR DEC-31-1996 DEC-31-1996 1,600 0 61,900 10,800 143,600 212,000 213,300 211,300 217,400 228,700 0 1,147,600 0 0 0 217,400 388,700 397,000 208,600 230,700 216,200 5,100 19,400 (74,400) 0 0 0 0 0 (74,400) 0 0 -----END PRIVACY-ENHANCED MESSAGE-----