-----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, Chg2NR0+afYpg7DT3VFYg+UwnO0wPrEkkOHJ69Sv3GX+4v1mt1M8rf0cT2aqmfs7 1ytqolo50HLwfbnR2cTDQQ== 0000312066-98-000006.txt : 19981123 0000312066-98-000006.hdr.sgml : 19981123 ACCESSION NUMBER: 0000312066-98-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981120 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: SEC FILE NUMBER: 000-09255 FILM NUMBER: 98756437 BUSINESS ADDRESS: STREET 1: 1450 WEST EVANS CITY: DENVER STATE: CO ZIP: 80223 BUSINESS PHONE: 3039221888 MAIL ADDRESS: STREET 1: 1450 W EVANS STREET 2: 1450 W EVANS CITY: DENVER STATE: CO ZIP: 80223 10QSB 1 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, 1998 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 as 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 (Issuer'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: 4,801,304 shares outstanding at September 30,1998. 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 1998 1997 (unaudited) CURRENT ASSETS: Cash $ 2,300 $ 8,300 Accounts Receivable, net of allowance for doubtful accounts of $6,700 37,200 20,500 Inventories 158,700 149,700 Prepaids and Other 18,200 6,100 TOTAL CURRENT ASSETS 216,400 184,600 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 $9,400 16,400 17,100 $ 232,800 $ 201,700 LIABILITIES & STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Notes Payable - Shareholders $ 96,500 $ 118,500 Accounts Payable 60,300 51,500 Accrued Compensation and Benefits 87,400 36,600 Accrued Interest - Shareholders 90,900 72,200 Warranty Reserve 3,200 6,300 Other 2,500 2,100 TOTAL CURRENT LIABILITIES 340,800 287,200 STOCKHOLDERS' DEFICIT Common Stock, no par value, authorized 5,000,000 shares; issued & outstanding, 4,801,304 shares (1998) and 3,671,304 (1997) 1,175,900 1,147,600 Accumulated deficit (1,283,900) (1,233,100) ( 108,000) ( 85,500) $ 232,800 $ 201,700 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 1998 1997 1998 1997 REVENUES: Net Sales $ 78,600 $ 92,300 $ 267,800 $ 360,000 Interest and Other 1,900 1,700 6,600 5,200 TOTAL REVENUES 80,500 94,000 274,400 365,200 COSTS AND EXPENSES; Cost of Products Sold 41,100 43,600 129,000 173,500 Selling 4,300 7,900 14,600 18,700 General and Administrative 35,000 37,200 106,000 106,800 Research and Development 19,300 30,100 56,300 69,400 Interest 6,200 5,500 19,300 15,200 105,900 124,300 325,200 383,600 NET LOSS (25,400) ($ 30,300) ($50,800) ($ 8,400) NET LOSS PER COMMON SHARE ($ *) ($ *) $ (.01) ($ *) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,801,304 3,671,304 4,126,615 3,671,304 *Less than $.01 per share DENCOR ENERGY COST CONTROLS, INC. STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) NINE MONTHS ENDED SEPTEMBER 30, 1998 Common Stock Accumulated Shareholders' Shares Amount deficit deficit Balances January 1, 1998 3,671,304 $1,147,600 ($1,233,100) ($ 85,000) Issuances of 1,130,000 shares of Common Stock (Note C) 1,130,000 23,300 28,300 Net loss ________ _________( 50,800) ( 50,800) Balances, September 30, 1998 4,801,304 $1,175,900 ($1,283,900) ($108,000) See notes to condensed financial statements DENCOR ENERGY COST CONTROLS, INC. STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (50,800) ($18,400) Adjustments to reconcile loss to net cash used in operating activities: Depreciation 2,000 Changes in operating assets and liabilities: Accounts and other receivables (16,000) 3,300 Inventories (9,000) 11,500 Other assets (12,100) (16,200) Accounts payable 8,800 10,500 Accrued compensation and benefits 50,800 2,400 Accrued interest - shareholders 18,700 12,800 Deposits (9,900) Other liabilities (2,700) Total adjustments 38,500 16,400 Net cash used in operating activities (12,300) (2,000) Cash flows from financing activities: Proceeds from Private Placement of Stock 3,300 Proceeds from Notes Payable-Shareholders 9,000 6,000 Principal payment on Notes Payable Shareholders ( 6,000) cash provided by financing activities 6,300 6,000 Net decrease in cash (6,100) 4,000 Cash beginning of year 8,300 1,600 Cash end of quarter $ 2,300 $5,600 Supplemental disclosure of non-cash financing activities: $25,000 Issuance of 1,000,000 shares of common stock in settlement of $25,000 of Notes payable-Shareholders (Note C) 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, 1998, and the results of operations and cash flows for the three and nine months ended September 30, 1998 and 1997. The results of operations for the three and nine-month periods ended September 30, 1998 and 1997, 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 of 1998, the Company had no long-term debt. C. Common Stock: During the third quarter of 1998, the Company sold no restricted common stock. During the second quarter of 1998, the Company sold 1,130,00 shares of restricted common stock in a private placement at a price of $0.025/share. Maynard L. Moe, President and Director, purchased 500,000 shares to retire $12,500 in notes from the Company to Dr. Moe. Theodore A. Hedman, Secretary and Director, purchased 500,000 shares to retire $12,500 in notes from the Company to Mr. Hedman. Edmund Barbour, Director, purchased 70,000 shares for $1,750 cash and an unrelated party purchased 60,000 shares for $1,500 cash. D. Compliance Income: On January 1, 1998 the company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This standard establishes requirements for disclosure of comprehensive income which includes certain items previously not included in the statement of operations including adjustments, among others. For the three and nine months ended September 30, 1998 and 1997, the company had no items of comprehensive income. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES Third quarter sales of $78,600 were approximately 15% less than the $92,300 for the comparable period in 1997. The decrease is primarily a result of a decrease in sales to dealers. COST AND EXPENSE Cost of Products Sold as a percentage of net sales increased 5% for the third quarter of 1998 compared with the same period in the prior year. This decrease in gross margin percentage is primarily due to an increase in the percentage of sales of products with less software content and thus lower margins. Selling expenses as a percentage of net sales decreased by 3% compared to the same period in the prior year. The decrease was due to a decrease in the purchase of marketing material. General and Administrative expenses as a percentage of net sales for the third quarter of 1998 increased to 45% compared to 40% in the same period in the prior year. The total administrative expense decreased slightly from the prior year. Research and Development expenses as a percentage of net sales for the second quarter decreased to 25% from 33% in the same quarter in the prior year. The decrease was due to decreased software development expenses. NET LOSSES The net loss for the third quarter was $25,400 compared to a net loss of $30,300 for the same period in the prior year. The decrease in losses was due to the decreased software development expenses. LIQUIDITY The Independent Auditors' Report on Dencor Energy Cost Controls, Inc. Financial Statements for the year ended December 31, 1997 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, 1997 Financial Statements. The Company's current ratio is .63 at the Quarter ended September 30, 1998. Management believes the acid ratio (cash and accounts receivable divided by current liabilities) of .12 is below the limits of reasonable liquidity. YEAR 2000 The Company has not completed its evaluation of year 2000 issues. The Company has determined its products are year 2000 compliant and that there are no year 2000 issues in its production processes. DENCOR ENERGY COST CONTROLS, INC. 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-QSB: 27. Financial Data Schedule. (b) During the quarter ended September 30, 1998, 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 11,1998 -----END PRIVACY-ENHANCED MESSAGE-----