EX-99.01 3 ex9901form8k052003.txt CHAPTER 11 APRIL 2003 OPERATING REPORT - MPSC Exhibit 99.01
UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA In re: Mid-Power Service Corporation Case No. BK-S-03-10874-RCJ CHAPTER 11 MONTHLY OPERATING REPORT (GENERAL BUSINESS CASE) ------------------------------------------------------------------------------------------------------------------------------ SUMMARY OF FINANCIAL STATUS MONTH ENDED: Apr-03 PETITION DATE: 01/24/03 ------------------------------------------------------------------------------------------------------------------------------- 1. Debtor in possession (or trustee) hereby submits this Monthly Operating Report on the Accrual Basis of accounting (or if checked here [ ] the Office of the U.S. Trustee or the Court has approved the Cash Basis of Accounting for the Debtor). Dollars reported in $1 2. Asset and Liability Structure End of Current Month End of Prior Month As of Petition Filing a. Current Assets $44,726 $47,925 b. Total Assets $32,572,690 $35,035,982 $47,925,781 c. Current Liabilities $469,922 $362,884 13,052.92 d. Total Liabilities $6,178,759 $16,408,388 $24,545,123 Cumulative 3. Statement of Cash Receipts & Disbursements for Month Current Month Prior Month (Case to Date) a. Total Receipts $48,376 $96,099 $237,614 b. Total Disbursements $49,660 $95,682 $256,089 c. Excess (Deficiency) of Receipts Over Disbursements (a - b) ($1,284) $417 ($18,475) d. Cash Balance Beginning of Month $4,772 $4,356 $21,963 e. Cash Balance End of Month (c + d) $3,488 $4,773 $3,488 Current Month Prior Month Cumulative (Case to Date) 4. Profit/(Loss) from the Statement of Operations $11,166,409 ($128,536) $10,803,542 5. Account Receivables (Pre and Post Petition) $0 $0 6. Post-Petition Liabilities $469,922 $362,884 7. Past Due Post-Petition Account Payables (over 30 days) $0 $0 At the end of this reporting month: Yes No 8. Have any payments been made on pre-petition debt, other than payments in the normal Footnote 2 course to secured creditors or lessors? (if yes, attach listing including date of payment, amount of payment and name of payee) 9. Have any payments been made to professionals? (if yes, attach listing including date of payment, amount of payment and name of payee) X 10. If the answer is yes to 8 or 9, were all such payments approved by the court X 11. Have any payments been made to officers, insiders, shareholders, relatives? (if yes, X attach listing including date of payment, amount and reason for payment, and name of payee) 12. Is the estate insured for replacement cost of assets and for general liability? X 13. Are a plan and disclosure statement on file? X 14. Was there any post-petition borrowing during this reporting period? X 15. Check if paid: Post-petition taxes; [X] U.S. Trustee Quarterly Fees [ ] Check if filing is current for: Post-petition tax reporting and tax returns: [X]. (Attach explanation, if post-petition taxes or U.S. Trustee Quarterly Fees are not paid current or if post-petition tax reporting and tax return filings are not current.) Total assets include a $30.6 million investment in Mid-Power Resource Corporation. ON A CONSOLIDATED, GAAP BASIS OF ACCOUNTING, THE $11.4 MILLION GAIN ON LEGAL SETTLEMENT RECORDED ON MID-POWER SERVICE CORPORATION'S STAND-ALONE APRIL MONTHLY OPERATING REPORT IS COMPLETELY OFFSET BY THE $11.4 MILLION IMPAIRMENT LOSS RECORDED ON MID-POWER RESOURCE'S MARCH OPERATING REPORT. I declare under penalty of perjury I have reviewed the above summary and attached financial statements, and after making reasonable inquiry believe these documents are correct. Date: May 19, 2003 /s/ James W. Scott ------------------------------------------------------------------ Responsible Individual
STATEMENT OF OPERATIONS (General Business Case) For the Period April 1 - April 30, 2003 Current Month ------------------------------------------------------------- Actual Forecast Variance Cumulative Next Month (Case to Date) Forecast - Revenues: $0 - $0 1 Gross Sales - - - - - 2 less: Sales Returns & Allowances - - - - - 3 Net Sales - - - - 4 less: Cost of Goods Sold (Schedule 'B') - - - - 5 Gross Profit - - - - - 6 Interest 2,698 - - - - 7 Other Income: - - 11,426,648 - 11,426,648 8 Gain on Legal Settlement 11,426,648 - - - - 9 - - 11,426,648 - 11,426,648 10 Total Revenues 11,429,346 - Expenses: - - - 11 Compensation to Owner(s)/Officer(s) - - 17,383 17,383 - 0% 12 Salaries 54,818 17,383 - - - 0% 13 Commissions - - 8,027 11,320 3,293 29% 14 Contract Labor 43,760 14,150 - 310 310 100% 15 Rent/Lease: 621 - Personal Property 2,802 2,802 - 0% 16 Real Property 9,168 3,338 2,043 2,043 - 0% 17 Insurance 7,039 2,000 - - - 0% 18 Management Fees - - - - - 0% 19 Depreciation 318 - 2,269 1,616 (653) -40% 20 Taxes: 5,998 1,415 Employer Payroll Taxes - - - 0% 21 Real Property Taxes - - - 75 75 100% 22 Other Taxes 25 - 9,950 - (9,950) 0% 23 Other Selling 9,950 - 3,939 5,272 1,333 25% 24 Other Administrative 14,608 4,962 150,000 - (150,000) 0% 25 Interest 151,260 - - 0% 26 Other Expenses: 1,800 1,800 - 0% 27 Patent License Fees 4,200 1,200 36,772 30,000 (6,772) -23% 28 Product Development 171,689 60,000 2,890 10,000 7,110 71% 29 Auditors 13,675 5,000 - 3,294 3,294 100% 30 Travel 6,128 3,294 403 800 397 50% 31 U.S. Stock Transfer Group 1,738 800 6,966 - (6,966) 0% 32 SEC attorney 21,467 10,000 - - - 0% 33 - - 0% 34 245,244 86,715 (158,529) 35 Total Expenses 516,462 123,542 11,181,404 (86,715) 11,268,119 36 Subtotal 10,912,884 (123,542) (14,995) (80,000) (65,005) 37 Reorganization Items: (108,092) (20,000) Professional Fees - 38 Provisions for Rejected Executory Contracts - 39 Interest Earned on Accumulated Cash from Resulting Chp 11 Case - 40 Gain or (Loss) from Sale of Equipment - - - 41 U.S. Trustee Quarterly Fees (1,250) - - 42 (14,995) (80,000) 65,005 43 Total Reorganization Items (109,342) (20,000) 11,166,409 (166,715) 11,333,124 44 Net Profit (Loss) Before Federal & State Taxes 10,803,542 (143,542) - 45 Federal & State Income Taxes $11,166,409 ($166,715) $11,333,124 46 Net Profit (Loss) $10,803,542 ($143,542) Attach an Explanation of Variance to Statement of Operations (For variances greater than +/- 10% only):
MID-POWER SERVICE CORPORATION BK-S-10874-RCJ STATEMENT OF OPERATIONS - VARIANCE EXPLANATIONS Line 8 - Gain on Legal Settlement See Footnotes 1 and 2. Line 14 - Contract Labor Less hours billed by contract accountant during month. Line 15 - Rent/Lease of Personal Property Lease ended. Line 20 - Payroll Taxes Represents under-accrual of Nevada employer payroll taxes. Line 23 - Other Selling Two gas turbine generators were shipped in readiness for sale of the manifolds in May 2003. Line 24 - Other Administrative Amounts fluctuate on a monthly basis. Line 25 - Interest Expense See Footnote 1. Line 28 - Product Development Development expenses forecasted to occur in May were incurred in April in attempts to wrap-up one project. Line 29 - Auditors Expense of accounting review of settlement agreement and other quarterly costs less than forecasted. Line 30 - Travel No travel expenses were incurred in April 2003. Line 32 - SEC Attorney Costs related to filing 8K filings during month of April, including disclosing settlement agreement. Line 37 - Professional Fees Forecast for legal fees relating to bankruptcy had been overstated.
BALANCE SHEET (General Business Case) For the Month Ended 04/30/03 Assets From Schedules Market Value Current Assets 1 Cash and cash equivalents - unrestricted $3,488 2 Cash and cash equivalents - restricted $0 3 Accounts receivable (net) A $0 4 Inventory B $0 5 Prepaid expenses $6,238 6 Professional retainers $35,000 7 Other: $0 8 9 Total Current Assets $44,726 Property and Equipment (Market Value) 10 Real property C $0 11 Machinery and equipment D, Footnote 2 $900,000 12 Furniture and fixtures D $0 13 Office equipment D $5,650 14 Leasehold improvements D $0 15 Vehicles D $0 16 Other: D $0 17 D 18 D 19 D 20 D 21 Total Property and Equipment $905,650 Other Assets 22 Loans to shareholders $0 23 Loans to affiliates Footnote 2 $930,300 24 Loans to unrelated parties, net of $328,575 allowance $77,725 25 Investment in Mid-Power Resource Corp. Footnote 3 $30,614,289 26 27 28 Total Other Assets $31,622,314 29 Total Assets $32,572,690 NOTE: See footnotes following this balance sheet. Liabilities and Equity (General Business Case) Liabilities From Schedules Post-Petition Current Liabilities 30 Salaries and wages $0 31 Payroll taxes $0 32 Real and personal property taxes $0 33 Income taxes $0 34 Sales taxes $0 35 Notes payable (short term) $0 36 Accounts payable (trade) A $42,278 37 Real property lease arrearage $0 38 Personal property lease arrearage $0 39 Accrued professional fees (accrued but not yet approved by Trustee) $168,409 40 Current portion of long-term post-petition debt (due within 12 months) $235,508 41 Other: Accrued ordinary course expenses $22,467 42 Interest expense - DIP loan $1,260 43 Accrued trustee fees 44 Total Current Liabilities $469,922 45 Long-Term Post-Petition Debt 46 Total Post-Petition Liabilities $469,922 Pre-Petition Liabilities (allowed amount) 47 Secured claims F $0 48 Priority unsecured claims F $0 49 General unsecured claims F, Footnote 2 $5,708,837 50 Total Pre-Petition Liabilities $5,708,837 51 Total Liabilities $6,178,759 Equity (Deficit) Footnote 2 52 Retained Earnings/(Deficit) at time of filing ($5,519,415) 53 Capital Stock, $.001 Par Value, 100,000,000 shares authorized, 27,972,276 issued and outstanding $10,847 54 Additional paid-in capital $25,489,153 55 Cumulative profit/(loss) since filing of case $10,803,542 56 Post-petition contributions/(distributions) or (draws) 57 58 Market value adjustment Footnote 3 ($4,390,196) 59 Total Equity (Deficit) $26,393,931 60 Total Liabilities and Equity (Deficit) $32,572,690
Mid-Power Service Corporation BK-S 03-10874-RCJ Footnotes to the Balance Sheet As Of April 30, 2003 Footnote 1 Mid-Power Service Corporation is presented on a stand-alone basis for bankruptcy reporting purposes. Mid-Power Service Corporation's financial statements do not represent financial statements prepared in accordance with generally accepted accounting principles for the consolidated, SEC-registered Mid-Power Service Corporation. The monthly operating report of Mid-Power Resource Corporation, a wholly-owned subsidiary of Mid-Power Service Corporation, should be read in conjunction with reading these financial statements. The operations of other wholly-owned subsidiaries have not been reflected in these financial statements. On a consolidated, generally-accepted accounting principle basis, the $11.4 million of gain on legal settlement recorded on Mid-Power Service Corporation's stand-alone April Operating Report is completely offset by the $11.4 million impairment loss recorded on Mid-Power Resource Corporation's March Operating Report. Footnote 2 As noted in the March 2003 monthly operating report, the Bankruptcy Court approved a settlement between Mid-Power Service Corporation ("Mid-Power", the consolidated, public-held entity) and Edward Mike Davis on April 9, 2003. For a full discussion of the full effect of the settlement agreement, see Mid-Power's current event report on Form 8-K filed April 21, 2003. This settlement resulted in the following adjustments to Mid-Power Service Corporation (stand-alone) April monthly operating report:
Increase (Decrease) ------------------- Assets Transfer of two gas generators to Edward Mike Davis $ (132,628) Reduction in receivable from Mid-Power Resource * (2,327,465) ------------------- $ (2,460,093) ------------------- Pre-Petition Liabilities ------------------- General unsecured claims $ (10,336,667) ------------------- Equity (Deficit) Cancellation of Edward Mike Davis capital stock $ (17,125) Additional paid-in capital: Reduction in additional paid in capital associated with cancellation (3,407,948) Issuance of options 25,000 Cumulative profit (loss) since filing of case: Interest payable on Edward Mike Davis note for 1st quarter 2003 ** (150,000) Gain on legal settlement 11,426,647 ------------------- $ 7,876,574 -------------------
* Mid-Power Resource assets were transferred to Edward Mike Davis as part of the settlement. ** Interest expense had not been recorded in the February and March operating reports in accordance with AICPA Statement of Position 90-7. To reflect the full amount of the legal settlement, which included cancellation of Mid-Power's $10.0 million promissory note and all accrued interest, fees and charges, interest for first quarter 2003 was recorded in this operating report. Footnote 3 The value of Mid-Power Service's wholly-owned investment, Mid-Power Resource Corporation, was adjusted in the March operating report to reflect Mid-Power Resource's equity balance on March 31, 2003. This valuation reflected the $11.4 million impairment Mid-Power Resource recorded on its Clear Creek property in March 2003. The application of generally accepted accounting principles might provide different results. This adjustment was reflected in the market value component of the equity section. In addition, the market value adjustment reflects the removal of a GAAP-calculated $8.5 million deferred tax liability included in the February monthly operating report but which did not reflect an existing claim by the IRS.
SCHEDULES TO THE BALANCE SHEET (General Business Case) Schedule A Accounts Receivable and (Net) Payable Receivables and Payables Agings Accounts Receivable Accounts Payable Past Due [Pre and Post Petition] [Post Petition] Post Petition Debt 0 -30 Days 0 $0 42,278.00 31-60 Days 0 61-90 Days 0 $0 91+ Days 0 Total accounts receivable/payable $0 $42,278 Allowance for doubtful accounts Accounts receivable (net) $0 Schedule B Inventory/Cost of Goods Sold Types and Amount of Inventory(ies) Cost of Goods Sold Inventory(ies) Inventory Beginning of Month Balance at End of Month Add - Retail/Restaurants - Net purchase Product for resale Direct labor Manufacturing overhead Distribution - Freight in Products for resale Other: Manufacturer - Raw Materials Work-in-progress Less - Finished goods Inventory End of Month Shrinkage Other - Explain Personal Use Cost of Goods Sold $0 TOTAL $0 Method of Inventory Control Inventory Valuation Methods Do you have a functioning perpetual inventory system? Indicate by a checkmark method of inventory used. Yes [ ] No [ ] How often do you take a complete physical inventory? Valuation methods - FIFO cost Weekly LIFO cost Monthly Lower of cost or market Quarterly Retail method Semi-annually Other Annually Explain Date of last physical inventory was __________________________________ Date of next physical inventory is ___________________________________
Schedule C Real Property Description Cost Market Value 0 0 0 Total 0 $0 $0 Schedule D Other Depreciable Assets Description Cost Market Value Machinery & Equipment - Two GG4A-7 Non-Flight Pratt and Whitney turbine engines $900,000 $900,000 Total $900,000 $900,000 Furniture & Fixtures - Total $0 $0 Office Equipment - Computers, furniture, etc. $5,650 $5,650 Total $5,650 $5,650 Leasehold Improvements - Total $0 $0 Vehicles - Total $0 $0
Schedule E Aging of Post-Petition Taxes (As of End of the Current Reporting Period) Taxes Payable 0-30 Days 31-60 Days 61-90 Days 91+ Days Total Federal Income Tax Withholding $0 $0 FICA - Employee $0 $0 FICA - Employer $0 $0 Unemployment (FUTA) $0 $0 Income $0 $0 Other (Attach List) $0 $0 Total Federal Taxes $0 $0 $0 $0 $0 State and Local Income Tax Withholding $0 $0 Unemployment (UT) $0 $0 Disability Insurance (DI) $0 $0 Empl. Training Tax (ETT) $0 $0 Sales $0 $0 Excise $0 $0 Real property $0 $0 Personal property $0 $0 Income $0 $0 Other (Attach List) $0 $0 Total State & Local Taxes $0 $0 $0 $0 $0 Total Taxes $0 $0 $0 $0 $0 Schedule F Pre-Petition Liabilities List Total Claims For Each Classification - Claimed Allowed Amount Amount (b) Secured claims (a) Priority claims other than taxes Priority tax claims General unsecured claims $5,708,837 (a) List total amount of claims even it under secured. (b) Estimated amount of claim to be allowed after compromise or litigation. As an example, you are a defendant in a lawsuit alleging damage of $10,000,000 and a proof of claim is filed in that amount. You believe that you can settle the case for a claim of $3,000,000. For Schedule F reporting purposes you should list $10,000,000 as the Claimed Amount and $3,000,000 as the Allowed Amount. Schedule G Rental Income Information Not applicable to General Business Cases Schedule H Recapitulation of Funds Held at End of Month Account 1 Account 2 Account 3 Account 4 Bank Wells Fargo Account Type Checking Account No. Account Purpose Operating Balance, End of Month $3,488 Total Funds on Hand for all Accounts $3,488
Attach copies of the month end bank statement(s), reconciliation(s), and the check register(s) to the Monthly Operating Report.
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS Increase/(Decrease) in Cash and Cash Equivalents For the Month Ended 04/30/03 Actual Cumulative Current Month (Case to Date) Cash Receipts 1 0 $0 $0 2 0 - - 3 0 - 6 4 0 48,376 235,508 5 Funds from Shareholders, Partners, or Other Insiders - - 6 Capital Contributions - - 7 Collection of accounts receivable - 2,100 8 - 9 - 10 - 11 - 12 Total Cash Receipts 48,376 237,614 Cash Disbursements 13 Payments for Inventory - 14 Selling 9,950 9,950 15 Administrative 2,168 26,453 16 Capital Expenditures - 17 Principal Payments on Debt - 18 Interest Paid - Rent/Lease: - 19 Personal Property 620 20 Real Property 9,154 Amount Paid to Owner(s)/Officer(s) - 21 Salaries - 22 Draws - 23 Commissions/Royalties - 24 Expense Reimbursements - 25 Other - 26 Salaries/Commissions (less employee withholding) 12,840 43,631 27 Management Fees - Taxes: - 28 Employee Withholding 9,088 16,529 29 Employer Payroll Taxes 4,219 6,724 30 Real Property Taxes - 31 Other Taxes 25 32 Other Cash Outflows: 33 Ordinary Course Professionals 403 9,269 34 Contract Labor 5,992 37,600 35 Product Development 1,950 85,164 36 Patent License Fees 1,800 4,200 37 U.S. Trustee 1,250 1,250 38 Advance to Mid-Power Resources 5,520 39 Total Cash Disbursements: 49,660 256,089 40 Net Increase (Decrease) in Cash (1,284) (18,475) 41 Cash Balance, Beginning of Period 4,772 21,963 41 Cash Balance, End of Period $3,488 $3,488