EX-99.01 3 ex9901form8k082503.txt MPSC MONTHLY OPERATING REPORT FOR JUNE 2003 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: Jun-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 $41,875 $47,854 b. Total Assets $32,572,619 $32,576,102 $47,925,781 c. Current Liabilities $619,424 $552,406 13,052.92 d. Total Liabilities $6,328,260 $6,261,243 $24,545,123 3. Statement of Cash Receipts & Disbursements for Month Current Month Prior Month Cumulative (Case to Date) a. Total Receipts $34,133 $56,923 $328,670 b. Total Disbursements $38,106 $54,740 $348,935 c. Excess (Deficiency) of Receipts Over Disbursements (a - b) ($3,973) $2,183 ($20,265) d. Cash Balance Beginning of Month $5,671 $3,488 $21,963 e. Cash Balance End of Month (c + d) $1,698 $5,671 $1,698 Current Month Prior Month Cumulative (Case to Date) 4. Profit/(Loss) from the Statement of Operations ($70,502) ($77,455) $10,655,584 5. Account Receivables (Pre and Post Petition) $0 $91 6. Post-Petition Liabilities $619,424 $552,406 7. Past Due Post-Petition Account Payables (over 30 days) $23,762 $30,205 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 X 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 X including date of payment, amount of payment and name of payee) 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 X; Check if filingis 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. ------------------------------------------------------------------------------------------------------------------------------------ The cumulative profit from the Statement of Operations includes an $11.4 million gain on legal settlement. On a consolidated, GAAP basis of accounting, this gain would be completely offset by an $11.4 million impairment loss recorded on Mid-Power Resource Corp.'s Statement of Operations. ------------------------------------------------------------------------------------------------------------------------------------ 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: 8/22/2003 0:00 /s/ Mark Davis ------------------ ------------------------------------------------------------------ Responsible Individual
STATEMENT OF OPERATIONS (General Business Case) For the Period January 24 (bankruptcy filing) - June 30, 2003 Current Month Actual 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 - - 2,723 - 2,723 6 Interest 5,421 - - - - 7 Other Income: - - - - - 8 Gain on Legal Settlement 11,426,648 - - - - 9 - - 2,723 - 2,723 10 Total Revenues 11,432,069 - Expenses: - - - 11 Compensation to Owner(s)/Officer(s) - - 18,018 17,383 (635) -4% 12 Salaries 90,219 17,383 - - - 0% 13 Commissions - - 14,193 11,320 (2,873) -25% 14 Contract Labor 62,546 11,320 - - - 0% 15 Rent/Lease: 621 - Personal Property 2,825 3,338 513 15% 16 Real Property 14,968 3,338 1,915 1,698 (217) -13% 17 Insurance 12,678 1,220 - - - 0% 18 Management Fees - - 318 - (318) 0% 19 Depreciation 636 - 1,731 1,415 (316) -22% 20 Taxes: 8,521 1,415 Employer Payroll Taxes - - - 0% 21 Real Property Taxes - - - - - 0% 22 Other Taxes 25 75 - - - 0% 23 Other Selling 9,950 - 2,413 4,962 2,549 51% 24 Other Administrative 17,616 4,962 5,199 - (5,199) 0% 25 Interest 156,459 - - 0% 26 Other Expenses: 1,250 1,200 (50) -4% 27 Patent License Fees 6,700 1,200 21,503 30,000 8,497 28% 28 Product Development 225,357 - (2,890) 5,000 7,890 158% 29 Auditors 11,219 15,000 2,377 3,294 917 28% 30 Travel 9,825 3,294 379 800 421 53% 31 U.S. Stock Transfer Group 2,063 800 485 1,000 515 52% 32 SEC attorney 25,808 7,500 - - - 0% 33 - - 0% 34 69,716 81,410 11,694 35 Total Expenses 655,211 67,507 (66,993) (81,410) 14,417 36 Subtotal 10,776,858 (67,507) (2,259) (15,000) (12,741) 37 Reorganization Items: (118,774) (15,000) 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 (1,250) - 1,250 41 U.S. Trustee Quarterly Fees (2,500) 1,500 - 42 (3,509) (15,000) 11,491 43 Total Reorganization Items (121,274) (13,500) (70,502) (96,410) 25,907 44 Net Profit (Loss) Before Federal & State Taxes 10,655,584 (81,007) - 45 Federal & State Income Taxes ($70,502) ($96,410) $25,907 46 Net Profit (Loss) $10,655,584 ($81,007) 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 14 - Contract Labor More hours billed during the transition of contract accountants in the month of June. Line 17 - Insurance Unbudgeted but valid car insurance. Line 20 - Payroll Taxes Under accrual of Nevada Business taxes in prior months as well as increase in payroll taxes for the over budget payroll. Line 24 - Other Administrative Amounts fluctuate on a monthly basis. Line 28 - Product Development Expenditures lower in attempt to wrap-up projects. Line 29 - Auditors Accrual of accounting review for prior month was not reversed in the month the actual invoice was recorded. Thus resulting in a credit balance for the current month. Line 30 - Travel Amounts fluctuate on a monthly basis. Line 31 - U.S. Stock Transfer Group Amounts fluctuate on a monthly basis. Line 32 - SEC Attorney Forecast had anticipated filing of 10Q with SEC. Monthly 8-K filings, which require less legal time, are filed instead. Line 37 - Professional Fees Forecast for legal fees relating to bankruptcy had been overestimated.
BALANCE SHEET (General Business Case) For the Month Ended 06/30/03 Assets From Schedules Market Value Current Assets 1 Cash and cash equivalents - unrestricted $1,698 2 Cash and cash equivalents - restricted $0 3 Accounts receivable (net) A $0 4 Inventory B $0 5 Prepaid expenses $5,177 6 Professional retainers $35,000 7 Other: $0 8 9 Total Current Assets $41,875 Property and Equipment (Market Value) 10 Real property C $0 11 Machinery and equipment D $900,000 12 Furniture and fixtures D $0 13 Office equipment D $5,331 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 $905,331 Other Assets 22 Loans to shareholders $0 23 Loans to affiliates $931,818 24 Loans to unrelated parties, net of $328,575 allowance $79,305 25 Investment in Mid-Power Resource Corp. Footnote 2 $30,614,289 26 27 28 Total Other Assets $31,625,412 29 Total Assets $32,572,619 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 $677 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 $69,147 37 Real property lease arrearage $0 38 Personal property lease arrearage $0 39 Accrued professional fees (accrued but not yet approved by Trustee) $200,415 40 Current portion of long-term post-petition debt (due within 12 months) $326,564 41 Other: Accrued ordinary course expenses $16,164 42 Interest expense - DIP loan $6,458 43 Accrued trustee fees 44 Total Current Liabilities $619,424 45 Long-Term Post-Petition Debt 46 Total Post-Petition Liabilities $619,424 Pre-Petition Liabilities (allowed amount) 47 Secured claims F $0 48 Priority unsecured claims F $0 49 General unsecured claims F $5,708,836 50 Total Pre-Petition Liabilities $5,708,836 51 Total Liabilities $6,328,260 Equity (Deficit) Footnotes 1, 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 $10,655,584 56 Post-petition contributions/(distributions) or (draws) 57 58 Market value adjustment ($4,391,810) 59 Total Equity (Deficit) $26,244,359 60 Total Liabilities and Equity (Deficit) $32,572,619
Mid-Power Service Corporation BK-S 03-10874-RCJ Footnotes to the Balance Sheet As Of June 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. Mid-Power Service Corporation's cumulative profit since filing of the case includes an $11.4 million gain on legal settlement. On a consolidated, generally accepted accounting principle basis, this gain is completely offset by the $11.4 million impairment loss recorded on Mid-Power Resource Corporation. Footnote 2 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 45,385 31-60 Days 0 $20,593 61-90 Days 0 $1,270 $23,762 91+ Days 0 $1,899 Total accounts receivable/payable $0 $69,147 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. $5,331 $5,331 Total $5,331 $5,331 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) $677 $677 Income $0 $0 Other (Attach List) $0 $0 Total Federal Taxes $677 $0 $0 $0 $677 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 $677 $0 $0 $0 $677 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 $5,708,836 (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. 100-9350453 Account Purpose Operating Balance, End of Month $1,698 Total Funds on Hand for all Accounts $1,698 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 06/30/03 Actual Cumulative Current Month (Case to Date) Cash Receipts 1 Rent/Leases Collected $0 $0 2 Cash Received from Sales - - 3 Interest Received - 6 4 Borrowings 34,133 326,564 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 34,133 328,670 Cash Disbursements 13 Payments for Inventory - 14 Selling 9,950 15 Administrative 5,613 40,860 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) 13,330 69,800 27 Management Fees - Taxes: - 28 Employee Withholding 4,688 25,761 29 Employer Payroll Taxes 1,457 9,511 30 Real Property Taxes - 31 Other Taxes 25 32 Other Cash Outflows: 33 Ordinary Course Professionals - 15,419 34 Contract Labor 5,416 52,834 35 Product Development 6,352 102,781 36 Patent License Fees 1,250 5,450 37 U.S. Trustee - 1,250 38 Advance to Mid-Power Resources 5,520 39 Total Cash Disbursements: 38,106 348,935 40 Net Increase (Decrease) in Cash (3,973) (20,265) 41 Cash Balance, Beginning of Period 5,671 21,963 41 Cash Balance, End of Period $1,698 $1,698