-----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, Crn4oVyB+nRXZVslDGX2+G/ziUnbQUeg0l8raCsDvzk4mz1YIJiB+UtIZ1nNuLtO J3sOGyKXXXPo4CGk1lPBWQ== 0000216810-98-000001.txt : 19980210 0000216810-98-000001.hdr.sgml : 19980210 ACCESSION NUMBER: 0000216810-98-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980209 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW PARAHO CORP CENTRAL INDEX KEY: 0000216810 STANDARD INDUSTRIAL CLASSIFICATION: ASPHALT PAVING & ROOFING MATERIALS [2950] IRS NUMBER: 841034362 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08536 FILM NUMBER: 98525356 BUSINESS ADDRESS: STREET 1: 5387 MANHATTAN CIRCLE STE 104 CITY: BOULDER STATE: CO ZIP: 80303 BUSINESS PHONE: 3035438900 MAIL ADDRESS: STREET 1: 5387 MANHATTAN CIRCLE #104 CITY: BOULDER STATE: CO ZIP: 80303 FORMER COMPANY: FORMER CONFORMED NAME: PARAHO DEVELOPMENT CORP DATE OF NAME CHANGE: 19861228 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (x) Quarterly Report Under Section 13 or 15(d) of the Securities Exchange act of 1934 For the Quarter ended December 31, 1997 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act oft 1934 For the transition period from _____________ to ______________ Commission File Number: 0-8536 THE NEW PARAHO CORPORATION (Exact name of registrant as specified in its charter) Colorado 84-1034362 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 5387 Manhattan Circle, #104, Boulder, CO 80303-4219 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (303) 543-8900 __________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve 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. (x) Yes ( ) No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 50,772,982 shares of $.01 par value common stock as of December 31, 1997. Transitional Small Business Disclosure Format (check one): Yes ( ) No(x) 1 of 9 pages PART I: FINANCIAL INFORMATION Item 1. Financial Statements. THE NEW PARAHO CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 31, June 30, 1997 1997 (Unaudited) ____________ ___________ Current Assets: Cash $ 34,344 $ 43,259 Accounts Receivable 435 - Prepaid Expenses and other 4,881 12,203 Inventory 35,344 35,344 Total Current Assets 75,004 90,806 Supplies 12,044 12,044 Plant, Furniture and Equipment, at cost (net of accumulated depreciation) 31,841 49,249 Mineral Properties 40,525 40,525 Patent, at cost (net of accumulated amortization) 30,333 20,307 Other Assets 27,000 27,000 Total Assets $ 216,747 $ 239,931
-Continued on the following page- -2- THE NEW PARAHO CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -Continued from previous page- LIABILITIES AND SHAREHOLDERS' EQUITY December 31, June 30, 1997 1997 (Unaudited) __________ Current Liabilities: Accounts Payable $ 14,624 $ 11,869 Accrued Liabilities 4,918 2,454 Reclamation Liability 100,000 100,000 Total Current Liabilities 119,542 114,323 Long Term Liabilities: Note Payable (Note 3) 865,596 865,596 Shareholder's Equity: Common Stock - $.01 par value, authorized - 75,000,000 shares; issued - 50,980,400; outstanding - 50,772,982 507,730 507,730 Par value of common stock issued in excess of the fair market value of assets acquired (352,648) (352,648) Accumulated deficit (923,473) (895,070) Total Shareholders' Equity (768,391) (739,988) $216,747 $239,931
The accompanying notes are an integral part of these consolidated financial statements. -3- THE NEW PARAHO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Six Months Six Months Three Months Three Months Ended Ended Ended Ended December 31, December 31, December 31, December 31, 1997 1996 1997 1996 REVENUES: Asphalt Sales $ 0 $ 4,906 $ 0 $ 0 Interest Income 1,314 76,906 677 30,668 Other 73,225 765,777 64,100 765,152 TOTAL REVENUES 74,539 847,589 64,777 795,820 COSTS AND EXPENSES: Asphalt Research 877 28,967 877 914 General & Admin. 102,065 106,385 43,884 44,256 Interest Expense 0 0 0 0 TOTAL COSTS & EXPENSES 102,942 135,352 44,761 45,170 NET INCOME (LOSS) ($28,403) ($712,237) $ 20,016 $ 750,650 INCOME (LOSS) PER SHARE ($0.00) $0.01 $0.00 $0.01 Weighted average shares outstanding 50,772,982 50,772,982 50,772,982 50,772,982
The accompanying notes are an integral part of these consolidated financial statements. -4- THE NEW PARAHO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Six Months Ended Ended December 30, December 30, 1997 1996 Cash flows from operating activities: Net Income (loss) ($ 28,403) $ 712,237 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 18,424 20,349 Change in operating assets and liabilities: Change in receivables (435) 42,698 Change in inventory 0 8,442 Change in prepaid expenses and other assets 7,322 8,938 Change in accounts payable 2,755 4,677 Change in accrued liabilities 2,464 (3,204) Net cash provided (used) by operating activities 2,127 794,137 Cash flows from investing activities: Patent costs (11,042) 0 Net cash used by investing activities (11,042) 0 Cash flows from financing activities: Borrowings (payments) under line of credit 0 (1,540,000) Principal payment received 0 385,390 Net cash provided (used) by financing activities 0 (1,154,610) Net increase (decrease) in cash (8,915) (360,473) Cash at beginning of year 43,259 491,164 Cash at end of quarter $ 34,344 $ 130,691
The accompanying notes are an integral part of these consolidated financial statements. -5- THE NEW PARAHO CORPORATION AND SUBSIDIARIES NOTES NOTE 1 - MANAGEMENT REPRESENTATION In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position as of December 31, 1997 and the results of operations and cash flows for the periods presented. The results of operations for the six month period ended December 31, 1997 are not necessarily indicative of the results to be expected for the full year. The June 30, 1997 balance sheet presented in this report is derived from the June 30, 1997 audited financial statements but does not include all disclosures required by generally accepted accounting principles. Certain information and footnote disclosures normally required by generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 1997 audited report in Form 10-K, filed with the Securities and Exchange Commission. NOTE 2 - SALE OF PROPERTY AND MINERAL RIGHTS On December 17, 1987 Tosco Corporation's wholly owned subsidiary, The Oil Shale Company, exercised its option, granted in 1963 by the Company's parent, to acquire from the Company its 50% ownership interest in certain property and mineral rights for $6,355,850. The Company received $575,000 cash and a note receivable in the amount of $5,780,850 on closing. The note is receivable in fifteen equal annual installments of $385,390, commencing December 17, 1990. The principal balance bears interest receivable quarterly at 5%. On December 18, 1996, the Company executed an assignment of its interest in this note, to the Tell Ertl Family Trust, in partial repayment of the line of credit described below in Note 3. NOTE 3 - DEBT On May 1, 1994, the Company's line of credit from the Tell Ertl Family Trust was increased to $5,500,000 and on June 1, 1997, the note was amended to reflect a maturity date of July 1, 1998. Effective July 1, 1995, the Company was relieved and discharged of all obligations to pay accrued interest on the line. In addition, the line shall no longer accrue interest as of July 1, 1995. The terms of the note provide that the Trust reserves the right to approve activities and budgets of the Company during the term of the promissory note. On December 18, 1996, the Company executed an assignment of its interest in the note receivable from The Oil Shale Company (described in Note 2) in partial repayment of this line of credit. This assignment, together with cash payments of $1,540,000 made during the year ended June 30, 1997, has reduced the total amount outstanding on the line of credit to $865,596. This remaining balance continues to carry the terms described above. -6- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation. LIQUIDITY AND CAPITAL RESOURCES The Company realized a decrease in working capital of $21,021 during the six months ended December 31, 1997. Funds were primarily provided by a reimbursement received from the Company's parent for tax savings that the parent was able to realize by utilizing the Company's net operating loss carryforwards, in accordance with the tax allocations policy of the Company and its parent. On August 29, 1989 the Company signed an unsecured promissory note with the Tell Ertl Family Trust. The principal amount of this note was increased to a total of $5,500,000 on May 1, 1994. As of December 31, 1997, the Company owed $865,596 to the Trust. The funds were used to cover the cost of operating expenses and asphalt research and development. On December 18, 1996, the Company executed an assignment of its interest in the note receivable from The Oil Shale Company to the Trust in partial repayment of this note.The Company does not expect to be able to pay the balance remaining on this note when it becomes due. The Company will attempt to progress toward the realization of three principal objectives: commercialization of an oil shale derived asphalt binder, licensing the Paraho technology, and research and development. In pursuit of these objectives, the Company incurred costs and expenses of $102,942 in the six months ended December 31, 1997. The decrease in these costs over the amount incurred in the same period of the previous year, is the result of ceasing all operations. Possible future sources of cash include revenues from the sales of SOMAT. Additional future sources of cash may include revenues from the performance of engineering services, or from the use of the Company's pilot plant retort facility. Management presently does not expect that significant revenues from these sources will be obtained. RESULTS OF OPERATIONS Quarter ended December 31, 1997 Revenues of $64,777 for the quarter ended December 31, 1997, consisting primarily of the tax reimbursement from its parent, were significantly less than the amount recognized in the same quarter of the previous year when the Company's parent utilized a much larger amount of the net operating loss carryforward. Expenses of $44,761 for the quarter ended December 31, 1997 were essentially unchanged from the same quarter in the previous year, as the Company continues to operate at a minimum level of subsistence. -7- PART II: OTHER INFORMATION Item 1. Legal Proceedings. Walker Field Airport Authority has filed a complaint against New Paraho (Corn Construction Co. v. Walker Field, Colorado, Public Airport Authority, Case No. 96 CV 545; Division B Mesa County District Court). This proceeding involves an allegedly defective runway constructed in 1996 at Walker Field Airport in Grand Junction, Colorado. New Paraho manufactured a shale oil-derived asphalt modifier product ("SOM") which was a component of the asphalt runway. Walker Field Airport alleges that its general contractor, Corn Construction Co., and the engineer on the project, Armstrong Consultants, Inc., negligently designed and built the runway. In the complaint, Walker Field sets forth claims of negligence, breach of contract, "implied contractual indemnity", "breach of implied warranty of fitness of particular purpose", and negligent misrepresentations against New Paraho based on alleged representations made by New Paraho regarding the characteristics of SOM. New Paraho filed an answer to the Complaint on October 23, 1997 denying any liability. New Paraho has product liability insurance in excess of the total damage claimed by Walker Field, and the insurer is currently undertaking a defense of New Paraho is this proceeding. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. None. -8- SIGNATURES 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. THE NEW PARAHO CORPORATION (Registrant) 2/9/98 /s/ Joseph L. Fox Date Joseph L. Fox, President 2/9/98 /s/ Anne Morgan Smith Date Anne Morgan Smith, Controller -9- EX-27 2
5 6-MOS JUN-30-1998 DEC-31-1997 34344 0 435 0 34344 75004 315169 (283328) 216747 119542 865596 0 0 155082 0 216747 0 74539 0 102942 0 0 0 (28403) 0 (28403) 0 0 0 (28403) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----