-----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, LcdiQC7/cfFylU0TGtspykn6jzNyK2hI7BnFPbavCBGvap+FGAAOWQ44XvC3JsSf fo7rgaZjjKrED0omWPB1VA== 0000894952-98-000008.txt : 19980817 0000894952-98-000008.hdr.sgml : 19980817 ACCESSION NUMBER: 0000894952-98-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: SEC FILE NUMBER: 000-09255 FILM NUMBER: 98691726 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 June 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 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: 4,801,304 shares outstanding at June 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 June 30 Dec. 31 1998 1997 (unaudited) CURRENT ASSETS: Cash $ 3,100 $ 8,300 Accounts Receivable,net of allowance for doubtful accounts of $6,700 15,300 20,500 Inventories 158,800 149,700 Prepaids and Other 21,000 6,100 TOTAL CURRENT ASSETS 198,200 184,600 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 16,500 17,100 $214,700 $201,700 LIABILITIES & STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Notes Payable - Shareholders $ 96,500 $ 118,500 Accounts Payable 50,800 51,500 Accrued Compensation and Benefits 60,000 36,600 Accrued Interest - Shareholders 84,700 72,200 Warranty Reserve 3,200 6,300 Other 2,100 2,100 TOTAL CURRENT LIABILITIES 297,300 287,200 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 (1,258,500) (1,233,100) (82,600) (85,500) $ 214,700 $ 201,700 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 1998 1997 1998 1997 REVENUES: Net Sales $ 72,100 $ 154,600 $ 189,000 $ 267,700 Interest and Other 2,000 1,700 4,800 3,500 TOTAL REVENUES 74,100 156,300 193,800 271,200 COSTS AND EXPENSES; Cost of Products Sold 34,100 75,300 87,900 129,900 Selling 4,700 4,700 10,200 10,800 General and Administrative 37,000 36,600 71,000 69,700 Research and Development 18,400 21,400 37,100 39,300 Interest 6,500 5,000 13,000 9,700 100,700 143,000 219,200 259,400 NET EARNINGS (LOSS) $ (26,600) $ 13,300 (25,400) $11,800 NET EARNINGS (LOSS) PER COMMON SHARE: $ (.001) $ * $ (.001) $ * WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,894,820 3,671,304 3,783,680 3,671,304 *Less than $.01 per share See notes to condensed financial statements DENCOR ENERGY COST CONTROLS, INC. STATEMENT OF CASH FLOWS (unaudited) Six Months Ended June 30 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss) $ (25,400) $11,800 Adjustments to reconcile net earnings (loss) to net cash used in operating activities: Depreciation 2,000 Changes in operating assets and liabilities: Accounts and other receivables 5,800 (50,000) Inventories (9,100) 15,300 Other assets (14,900) (4,700) Accounts payable (700) 12,000 Accrued compensation and benefits 23,400 (6,200) Accrued interest - shareholders 12,500 7,900 Deposits (9,900) Other liabilities (3,100) (400) Total adjustments 13,900 (34,000) Net cash used in operating activities (11,500) (22,200) Cash flows from financing activities: Proceeds from Private Placement of Stock 3,300 Proceeds from Notes Payable-Shareholders. 9,000 23,000 Principal payment on Notes Payable Shareholder (6,000) Net cash provided by financing activities 6,300 23,000 Net increase (decrease) in cash (5,200) 800 Cash beginning of year 8,300 1,600 Cash end of quarter $ 3,100 $ 2,400 Supplemental disclosure of non-cash financing activities: Issuance of 1,000,000 of common stock in settlement of Notes Payable - Shareholders (Note C) $ 25,000 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, 1998, and the results of operations and cash flows for the six months ended June 30, 1998 and 1997. The results of operations for the three and six-months periods ended June 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 Second Quarter, 1998, the Company had no long-term debt. C. Common Stock: During the second quarter of 1998, the Company sold 1,130,000 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. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES Second quarter sales of $72,100 were approximately 47% less than the $154,600 for the comparable period in 1997. The decrease is primarily a result of a decrease in sales to utilities. COST AND EXPENSE Cost of Products Sold as a percentage of net sales decreased 2% for the second quarter of 1998 compared with the same period in the prior year. This increase in gross margin percentage is primarily due to an increase in the percentage of sales to dealers of products with higher margins. Selling expenses for the second quarter of 1998 increased by 4% for the same period in the prior year. General and Administrative expenses as a percentage of net sales for the second quarter of 1998 increased to 51% compared to 23% in the same period in the prior year. The total administrative expense remained about the same as the prior year. Research and Development expenses as a percentage of net sales for the second quarter increased to 26% from 14% in the same quarter in the prior year. EARNINGS The net loss for the second quarter were $26,600 compared to net earning of $11,800 for the same period in the prior year. The losses were due to the decrease in sales. LIQUIDITY The Independent Auditor's 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 .67 at the Quarter ended June 30, 1998. Management believes the acid ratio (cash and accounts receivable divided by current liabilities) of .06 is below the limits of reasonable liquidity. The company placed 1,130,000 shares of common restricted stock to retire $25,000 in Shareholder notes and raise $3,200 cash. 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 4 would appear to require no answers according to the instructions. Item 5. Other Information Pursuant to Rule 14a-4( c ) under the Securities Exchange Act of 1934, as amended, the Company hereby notifies its stockholders that the proxies solicited by the Company in connection with the Company's annual meeting to be held in 1999 will confer discretionary authority to vote on matters raised by stockholders for which the Company did not have notice on or before March 23, 1999. In addition, if the Company receives notice on or before March 23, 1999 of a matter that a stockholder intends to raise at the annual meeting of stockholders to be held in 1999, the proxies solicited by the Company may exercise discretion to vote on each such matter if the Company included in its proxy statement advice on the nature of the matter raised and how the Company intends to exercise its discretion to vote on each such matter. However, the Company may not exercise discretionary voting authority on a particular proposal if the proponent of that proposal provides the Company with a written statement on or before March 23,1999, that the proponent intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the company's voting shares required under applicable law to carry the proposal, (the Required Percentage) which would be a majority of the Company's outstanding common stock or a majority of the shares of common stock represented at the meeting, depending on the nature of the proposal, if the proponent includes the same statement in its proxy materials filed under Rule 14a-6, and if the proponent, immediately after soliciting the holders of Required Percentage, provides the Company with a statement from any solicitor or any other person with knowledge that the necessary steps have been taken to deliver a proxy statement and form of proxy to the holders of the Required Percentage. 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, 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: August 13, 1998 -----END PRIVACY-ENHANCED MESSAGE-----