UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 2007
or
o | 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: 0-21304
RIDGEWOOD ELECTRIC POWER TRUST II
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | | 22-3206429 |
(State of Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) |
| 1314 King Street, Wilmington, Delaware | | 19801 |
| (Address of Principal Executive Offices) | | (Zip Code) |
| | (302) 888-7444 | |
| | (Issuer’s Telephone Number, Including Area Code) | |
| |
| (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 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 o No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
As of December 31, 2007, there were 235.3775 Investor Shares outstanding.
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| PART I. | FINANCIAL INFORMATION | Page |
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| PART II. | OTHER INFORMATION | |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| RIDGEWOOD ELECTRIC POWER TRUST II | | | | | | |
| CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | | |
| (in thousands, except share data) | | | | | | |
| | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2007 | | | 2006 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 581 | | | $ | 395 | |
| Accounts receivable | | | - | | | | 118 | |
| Due from affiliates | | | - | | | | 21 | |
| Other current assets | | | 6 | | | | 29 | |
| Total assets | | $ | 587 | | | $ | 563 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 69 | | | $ | 8 | |
| Due to affiliates | | | 45 | | | | - | |
| Total current liabilities | | | 114 | | | | 8 | |
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| Commitments and contingencies | | | | | | | | |
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| Shareholders’ equity (deficit): | | | | | | | | |
| Shareholders’ equity (235.3775 Investor Shares issued and | | | | | | | | |
| outstanding) | | | 670 | | | | 751 | |
| Managing shareholder’s accumulated deficit | | | | | | | | |
| (1 management share issued and outstanding) | | | (197 | ) | | | (196 | ) |
| Total shareholders’ equity | | | 473 | | | | 555 | |
| Total liabilities and shareholders’ equity | | $ | 587 | | | $ | 563 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| RIDGEWOOD ELECTRIC POWER TRUST II | |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |
| (unaudited, in thousands, except per share data) | |
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| | | Six Months Ended June 30, | | | Three Months Ended June 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | | | | | | | | | | | | |
| Revenues | | $ | - | | | $ | 91 | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | |
| Cost of revenues | | | 161 | | | | 867 | | | | 69 | | | | 226 | |
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| Gross loss | | | (161 | ) | | | (776 | ) | | | (69 | ) | | | (226 | ) |
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| Operating expenses: | | | | | | | | | | | | | | | | |
| General and administrative expenses | | | 255 | | | | 67 | | | | 151 | | | | 37 | |
| Impairment of plant, equipment and intangibles | | | - | | | | 2,830 | | | | - | | | | - | |
| Management fee to the Managing Shareholder | | | 4 | | | | 29 | | | | 2 | | | | 14 | |
| Total operating expenses | | | 259 | | | | 2,926 | | | | 153 | | | | 51 | |
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| Loss from operations | | | (420 | ) | | | (3,702 | ) | | | (222 | ) | | | (277 | ) |
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| Other income: | | | | | | | | | | | | | | | | |
| Gain on sale of investment | | | 334 | | | | 334 | | | | 167 | | | | 167 | |
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| Net loss | | $ | (86 | ) | | $ | (3,368 | ) | | $ | (55 | ) | | $ | (110 | ) |
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| Managing Shareholder - Net loss | | $ | (1 | ) | | $ | (34 | ) | | $ | - | | | $ | (1 | ) |
| Shareholders - Net loss | | | (85 | ) | | | (3,334 | ) | | | (55 | ) | | | (109 | ) |
| Net loss per Investor Share | | | (361 | ) | | | (14,166 | ) | | | (234 | ) | | | (463 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| RIDGEWOOD ELECTRIC POWER TRUST II | |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |
| (unaudited, in thousands) | |
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| | | Six Months Ended June 30, | |
| | | 2007 | | | 2006 | |
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| Cash flows from operating activities: | | | | | | |
| Net cash provided by operating activities | | $ | 186 | | | $ | 132 | |
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| Cash and cash equivalents, beginning of period | | | 395 | | | | 196 | |
| Cash and cash equivalents, end of period | | $ | 581 | | | $ | 328 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollar amounts in thousands)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to SEC rules. These condensed consolidated financial statements should be read in conjunction with the Ridgewood Electric Power Trust II (the “Trust”) Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on January 25, 2008 (the “2006 Form 10-K”). No significant changes have been made to the Trust’s accounting policies and estimates disclosed in its 2006 Form 10-K.
In the opinion of management, the condensed consolidated financial statements as of June 30, 2007, and for the six and three month periods ended June 30, 2007 and 2006, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The results of operations for the six and three month periods ended June 30, 2007 and 2006 are not necessarily indicative of the results to be expected for the full year or any other period.
2. DESCRIPTION OF BUSINESS
The Trust is a Delaware trust formed on November 20, 1992. The Trust began offering shares on January 4, 1993 and concluded its offering on January 31, 1994. The objective of the Trust is to provide benefits to its shareholders through a combination of distributions of operating cash flow and capital appreciation. Ridgewood Renewable Power LLC (“RRP” or the “Managing Shareholder”), a New Jersey limited liability company, is the Managing Shareholder. The Trust has been organized to invest primarily in power generation facilities located in the US. The projects of the Trust have characteristics that qualify the projects for government incentives.
As of June 30, 2007, the Trust had one non-operating investment, located in California and 100% owned by the Trust (“Monterey”). The investment is a 5.5 megawatt (“MW”) cogeneration project which suspended operations in January 2006 due to a contract dispute with its only customer. Since the closing of the Monterey facility in January 2006, the Trust has not had any operating revenues, though it continued to have contractual obligations through August 2006 related to its gas purchase agreement with Coral Services Energy, Inc. and on-going ground lease expenses. During the first quarter of 2006, the Trust recorded an asset impairment of Monterey’s net book value of its plant, equipment and intangibles. The Monterey project remains closed as of the date of this filing.
At June 30, 2007, the Trust had long-term notes receivable, which were paid in full, in advance of their due dates, on October 31, 2007. Upon the repayment of the Trust’s long-term receivables in October 2007, the Trust no longer had any cash producing assets in operation and may not in the future, subject to the resolution of litigation relating to the Monterey facility.
3. RECENT ACCOUNTING PRONOUNCEMENTS
FIN 48
In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes (“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Trust adopted FIN 48 effective January 1, 2007, with no material impact on its condensed consolidated financial statements.
SFAS 157
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS 157"), to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting principles and expand disclosures about fair value measurements. SFAS 157 requires quantitative disclosures using a tabular format in all periods (interim and annual) and qualitative disclosures about the valuation techniques used to measure fair value in all annual periods. SFAS 157 will become effective for the Trust beginning January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 157 on its condensed consolidated financial statements.
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollar amounts in thousands)
SFAS 159
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”), which expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 will become effective for the Trust beginning January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 159 on its condensed consolidated financial statements.
SFAS 160
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 requires that ownership interests in subsidiaries held by parties other than the parent, and the amount of consolidated net income, be clearly identified, labeled, and presented in the consolidated financial statements within equity, but separate from the parent’s equity. It also requires once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 will become effective for the Trust beginning January 1, 2009. The Trust is currently evaluating the impact of adopting SFAS 160 on its condensed consolidated financial statements.
4. IMPAIRMENT
On January 9, 2006, Monterey suspended its operations indefinitely. As a result, the Trust recorded full impairments relating to its plant and equipment and intangibles of $1,132 and $1,698, respectively.
5. GAS CONTRACT
In August 2001, Monterey entered into an agreement to purchase natural gas, at fixed prices, over a five-year term in connection with entering into an amendment fixing the sales price of electric power sales contracts for a similar term. The contract was entered into in order to minimize the impact of fluctuating energy prices. The Trust has determined that the contract is a derivative as defined under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. The Trust designated the derivative as a non-hedge instrument. Accordingly, the value of the contract based on the differences between contract prices and market value prices was recognized as an asset or a liability in the condensed consolidated balance sheet. Changes in the carrying value of the contract were reflected as a component of cost of revenues in the condensed consolidated statements of operations. During the third quarter of 2006, the Trust completed its contractual agreement to resell the purchased gas back to the gas supplier.
6. COMMITMENTS AND CONTINGENCIES
Monterey has a non-cancelable operating lease which expires in May 2021. Future minimum lease payments as of December 31, 2006 are approximately $12 per annum along with the delivery of by-product steam. In connection with this lease, Monterey has not delivered by-product steam since it was shut down in January 2006. As a result, Monterey may be subject to claims by the lessor; however, as of the date of this filing none have been asserted.
Monterey received notice on December 1, 2005 from Pacific Gas & Electric (“PG&E”), its sole customer, directing Monterey to increase its operations from 13 hours, 5 days a week to 24 hours, 7 days a week. However, PG&E had been operating or "dispatching" Monterey on a 13 by 5 basis for over 15 years. Monterey determined that it could not operate profitably on such a 24 by 7 schedule and was concerned that if it only operated on a 13 by 5 basis, PG&E might refuse to pay for delivered electricity. Monterey requested from PG&E to limit its operations to the 13 by 5 basis, but this request was denied. As a result, effective January 9, 2006, Monterey ceased its operations. Monterey and PG&E have filed lawsuits against the other for breach of contract. The Monterey project remains closed as of the date of this filing. Since the closing of the Monterey facility, the Trust has not had any operating revenues, though it continued to have contractual obligations through August 2006 related to its gas purchase agreement with Coral Services Energy, Inc. Monterey filed a Complaint against PG&E in the San Francisco Superior Court on May 16, 2006 (the “Monterey Complaint”). The Monterey Complaint seeks damages for breach of contract, damages for PG&E’s breach of the implied covenant of good faith and fair dealing, and a claim for declaratory relief against PG&E, seeking a judicial determination that PG&E’s conduct materially breached the parties’ agreement and justified Monterey’s suspension of performance. Monterey is seeking damages against PG&E estimated at approximately $5,000. The date for a Jury Trial with regard to this matter has not been set.
On May 14, 2007, PG&E filed a Complaint in San Francisco Superior Court against Monterey (the “PG&E Complaint”). The PG&E Complaint arises out of the same transactions and occurrences that gave rise to the Monterey Complaint against PG&E. PG&E asserted claims for compensatory damages for breach of contract and breach of the implied covenant of good faith and fair dealing as well as “restitution” of capacity payments made to Monterey on a theory of unjust enrichment, and declaratory relief for repayment of capacity payments made to the Monterey. PG&E is seeking restitution damages against Monterey estimated at approximately $4,800.
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollar amounts in thousands)
The claims made by PG&E have been made solely against Monterey and do not involve any claims against the Trust. Both of the above litigation matters are currently in discovery.
On August 16, 2006, the Managing Shareholder and affiliates of the Trust, filed lawsuits against the former independent registered public accounting firm for the Trust, Perelson Weiner, LLP (“Perelson Weiner”), in New Jersey Superior Court. The suits alleged professional malpractice and breach of contract in connection with audit and accounting services performed by Perelson Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the Trust and its affiliates alleging breach of contract due to unpaid invoices. Discovery is ongoing and no trial date has been set. The costs and expenses of the litigation are being paid for by the Managing Shareholder and affiliated management companies and not the underlying investment funds, including the Trust.
The Trust is subject to legal proceedings involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are disclosed if considered reasonably possible and accrued if considered probable after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Trust may be required to record additional litigation expense. While it is not possible to predict the outcome of the litigation discussed above with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the Trust, based on its evaluation of matters which are pending or asserted, the Trust's management believes the disposition of such matters will not have a material adverse effect on the Trust's business or financial statements.
7. SUBSEQUENT EVENT
On October 31, 2007, the Trust’s notes receivable were fully repaid in advance of their due dates. The amount received, including prepayment penalties, totaled $5,042. As these notes had no recorded accounting value, the amount received was recorded as other income during the fourth quarter of 2007.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The purpose of this discussion and analysis of the operating results and financial condition as of June 30, 2007 is intended to help readers analyze the accompanying condensed consolidated financial statements, notes and other supplemental information contained in this document. Results of operations for the six and three month periods ended June 30, 2007 are not necessarily indicative of results to be attained for any other period. This discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements, notes and other supplemental information included elsewhere in this report and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Trust's 2006 Form 10-K.
Forward-Looking Statements
Certain statements discussed in this item and elsewhere in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Trust’s plans, objectives and expectations for future events and include statements about the Trust’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. These statements are based upon management’s opinions and estimates as of the date they are made. Although management believes that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties that may be beyond the Trust’s control, which could cause actual results, performance and achievements to differ materially from the results, performance and achievements projected, expected, expressed or implied by the forward-looking statements. Examples of events that could cause actual results to differ materially from historical results or those anticipated include the outcome of litigation described in Item 3. "Legal Proceedings” of the Trust’s 2006 Form 10-K, changes in political and economic conditions, federal or state regulatory structures, government mandates, the ability of customers to pay for energy received, supplies and prices of fuels, operational status of generating plants, mechanical breakdowns, volatility in the price for electric energy, natural gas, or renewable energy. Additional information concerning the factors that could cause actual results to differ materially from those in the forward-looking statements is contained in, Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of the Trust's 2006 Form 10-K. The Trust undertakes no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.
Critical Accounting Policies and Estimates
The following discussion and analysis of the Trust’s financial condition and operating results is based on its condensed consolidated financial statements. The preparation of this Quarterly Report on Form 10-Q requires the Trust to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Trust’s condensed consolidated financial statements, and the reported amount of revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions. No material changes have been made to the Trust’s critical accounting policies and estimates disclosed in its 2006 Form 10-K.
Results of Operations and Changes in Financial Condition
Six months ended June 30, 2007 compared to the six months ended June 30, 2006
There were no revenues in the six months ended June 30, 2007 compared to $0.1 million for the same period in 2006. During the six months ended June 30, 2007, there were no revenues due to the shutdown of Monterey’s operations, pending ongoing litigation, which occurred in January 2006.
Cost of revenues decreased $0.7 million, or 81.4%, to $0.2 million in the six months ended June 30, 2007, as compared to $0.9 million for the same period in 2006 as cost of revenues in 2006 was primarily due to the gas contract, which expired in August 2006. Cost of revenues for the six months ended June 30, 2007 primarily includes certain fixed expenses for the maintenance of the Monterey operations.
Gross loss decreased $0.6 million in the six months ended June 30, 2007 to a gross loss of $0.2 million from a gross loss of $0.8 million for the six months ended June 30, 2006 primarily due to the 2007 period not having the gas contract that existed during 2006.
During the first quarter of 2006, the Trust recorded a $2.8 million impairment of its plant, equipment and intangible assets, due to the shutdown of Monterey’s operations.
General and administrative expenses increased $0.2 million, to $0.3 million in the six months ended June 30, 2007, as compared to $0.1 million for the same period in 2006. This was primarily due to increased legal fees related to the Monterey litigation.
Total assets were $0.6 million at June 30, 2007, which is comparable to the total assets balance at December 31, 2006. Total liabilities at June 30, 2007 increased by $0.1 million from December 31, 2006 to $114,000, due to an increase in accounts payable and accrued expenses and amounts due to affiliates.
Three months ended June 30, 2007 compared to the three months ended June 30, 2006
There were no revenues during the three months ended June 30, 2007 or 2006 due to the shutdown of Monterey’s operations.
Cost of revenues decreased approximately $0.2 million, or 69.5%, to $0.1 million in the three months ended June 30, 2007 as compared to $0.2 million for the same period in 2006 primarily due to the 2006 impact of the gas contract.
General and administrative expenses increased $114,000, to $151,000 in the three months ended June 30, 2007, as compared to $37,000 for the same period in 2006. This was primarily due to increased legal fees related to the Monterey litigation.
Liquidity and Capital Resources
Six months ended June 30, 2007 compared to the six months ended June 30, 2006
At June 30, 2007, the Trust had cash and cash equivalents of $0.6 million, a decrease of $0.2 million from $0.4 million at December 31, 2006.
Cash provided by operating activities for the six months ended June 30, 2007 was $0.2 million as compared to $0.1 million for the same period in 2006, primarily due to an increase in current liabilities.
There were no cash flows from either investing or financing activities during the six months ended June 30, 2007 and 2006.
Future Liquidity and Capital Resource Requirements
The Trust expects cash flows from operating activities to be significantly less in the future periods than in the previous periods since the operations of Monterey have ceased. The Trust believes sufficient cash and cash equivalents will be available to provide working capital and fund capital expenditures for the next 12 months.
Off-Balance Sheet Arrangements and Contractual Obligations and Commitments
There have been no material changes in the off-balance sheet arrangements and contractual obligations and commitments disclosed in the Trust's 2006 Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The disclosure required by this Item is omitted pursuant to Item 305(e) of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Trust’s Chief Executive Officer and Chief Financial Officer evaluate the effectiveness of the Trust’s disclosure controls and procedures. A system of disclosure controls and procedures is designed to ensure that information required to be disclosed by a registrant in reports filed with the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms. This includes disclosure controls and procedures designed to ensure that information required to be disclosed by a registrant is accumulated and communicated to senior management so as to allow timely decisions regarding required disclosure. A review of these controls and procedures was done by the Trust as of June 30, 2007 which revealed that the following material weaknesses previously identified continue to exist:
| | (i) | a lack of sufficient personnel with relevant experience to develop, administer and monitor disclosure controls and procedures to enable the Trust to comply efficiently, or on a timely basis, with its financial reporting obligations, |
| | (ii) | inadequate disclosure controls and procedures, including inadequate record retention and review policies that would enable the Trust to meet its financial reporting and disclosure obligations in an efficient and timely manner. |
As a result of these weaknesses, the Trust has not timely met its reporting obligations under the Exchange Act.
During the quarter ended June 30, 2007, the Trust appointed a new Chief Financial Officer who is a Certified Public Accountant with approximately 29 years of professional accounting experience, including prior experiences as a financial officer of publicly traded companies.
Since the review, the Trust has implemented the following to address the above weaknesses:
| | · | Increased the number of degreed accountants. Additional staff expansion is underway. |
| | · | During the fourth quarter of 2007, the Trust expanded its disclosure controls and procedures. The Trust documented many of its existing informal procedures, established a compliance-focused disclosure committee, formalized monthly closing procedures, and implemented a corporate whistleblower policy. |
The Trust believes that the completion of the expansion of the accounting and financial reporting staff and the implementation of the above procedures will mitigate the above weaknesses. However, due to the Trust’s delinquencies in meeting its filing deadlines under the Exchange Act, the Trust expects these deficiencies to continue to be material weaknesses at least until such time as the Trust is no longer delinquent in its Exchange Act filings.
The Trust’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Trust’s disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Exchange Act and concluded that, as of the end of the period covered by this report, because of the material weaknesses noted above, the Trust’s disclosure controls and procedures were not effective.
The Trust’s Chief Executive Officer and Chief Financial Officer have concluded that there was no change in the Trust’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material changes to the legal proceedings disclosed in the Trust's 2006 Form 10-K.
There have been no material changes to the risk factors previously disclosed in the Trust's 2006 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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.
| Exhibit No. | | Description |
| 31.1 | * | Certification of Randall D. Holmes, Chief Executive Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a). |
| | | |
| 31.2 | * | Certification of Jeffrey H. Strasberg, Chief Financial Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a). |
| | | |
| 32 | * | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief Executive Officer of the Registrant, and Jeffrey H. Strasberg, Chief Financial Officer of the Registrant. |
_____________________
* Filed herewith.
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.
| | RIDGEWOOD ELECTRIC POWER TRUST II |
| | | |
| | | |
| Date: February 14, 2008 | By: | /s/ Randall D. Holmes |
| | | Randall D. Holmes |
| | | Chief Executive Officer |
| | | (Principal Executive Officer) |
| | | |
| Date: February 14, 2008 | By: | /s/ Jeffrey H. Strasberg |
| | | Jeffrey H. Strasberg |
| | | Executive Vice President and Chief Financial Officer |
| | | (Principal Financial and Accounting Officer) |
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