FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(x) Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange act of 1934
For the Quarter ended March 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
APPLICABLE ONLY TO CORPORATE ISSUERS:
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 March 31,
1997.
1 of 9 pages
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements.
THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS March 31, June 30,
1997 1996
(Unaudited)
____________ ___________
Current Assets:
Cash $ 85,511 $ 491,164
Accounts Receivable - 28,246
Note Receivable (Note 2) - 385,390
Interest Receivable - 14,452
Prepaid Expenses and other 1,004 14,413
Inventory 58,663 67,105
Total Current Assets 145,178 1,000,770
Supplies 12,044 12,044
Plant, Furniture and Equipment,
at cost (net of accumulated
depreciation) 58,917 87,920
Mineral Properties 40,525 40,525
Patent, at cost (net of
accumulated amortization) 20,815 22,336
Note Receivable (Note 2) - 3,083,120
Other Assets 27,000 27,000
Deposits - 725
Total Assets $ 304,479 $4,274,440
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THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-Continued from previous page-
LIABILITIES AND SHAREHOLDERS' EQUITY March 31, June 30,
1997 1996
(Unaudited) __________
Current Liabilities:
Accounts Payable $ 9,663 $ 20,456
Accrued Liabilities 6,135 10,547
Total Current Liabilities 15,798 31,003
Long Term Liabilities:
Note Payable (Note 3) 873,999 5,497,119
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 (368,538) (368,538)
Retained earnings (724,510) (1,392,874)
Total Shareholders' Equity (585,318) (1,253,682)
$304,479 $4,274,440
The accompanying notes are an integral part
of these consolidated financial statements.
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THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1997 1996 1997 1996
REVENUES:
Asphalt Sales $ 6,796 $ 0 $ 1,890 $ 0
Interest Income 79,292 144,024 2,386 45,747
Other 3,684 38,355 1,099 (2,800)
TOTAL REVENUES 89,772 182,379 5,375 42,947
COSTS AND EXPENSES:
Asphalt Research 41,264 187,167 12,297 38,896
General & Admin. 143,336 154,397 36,951 28,961
Interest Expense 0 439,322 0 141,649
TOTAL COSTS & EXPENSES 184,600 780,886 49,248 209,506
NET LOSS BEFORE
EXTRAORDINARY ITEM (94,828) (598,507) (43,873) (166,559)
Extraordinary gain 763,192 0 0 0
NET INCOME (LOSS) $668,364 ($598,507) ($ 43,873) ($166,559)
INCOME (LOSS) PER SHARE $0.01 ($0.01) ($0.00) ($0.00)
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.
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THE NEW PARAHO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Nine Months
Ended Ended
March 31, March 31,
1997 1996
Cash flows from operating activities:
Net Income (loss) $ 668,364 ($ 598,507)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 30,526 31,905
Change in operating assets and liabilities:
Change in receivables 42,698 (135)
Change in inventory 8,442 0
Change in prepaid expenses and other assets 14,133 15,491
Change in accounts payable (10,794) (973)
Change in accrued liabilities (4,412) (906)
Net cash provided (used) by operating
activities 748,957 (553,125)
Cash flows from investing activities:
Asset acquisition - 2,241
Net cash used by investing activities 0 2,241
Cash flows from financing activities:
Borrowings (payments) under line of credit (1,540,000) 439,318
Principal payment received 385,390 385,390
Net cash provided (used) by financing
activities (1,154,610) 824,708
Net increase (decrease) in cash (405,653) 273,824
Cash at beginning of year 491,164 130,908
Cash at end of quarter $ 85,511 $ 404,732
The accompanying notes are an integral part
of these consolidated financial statements.
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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 March 31, 1997 and the results of operations and
cash flows for the periods presented. The results of operations
for the nine month period ended March 31, 1997 are not necessarily
indicative of the results to be expected for the full year.
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, 1996 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, 1996,
the note was amended to reflect a maturity date of July 1, 1997.
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 nine months ended March 31, 1997, has reduced the total
amount outstanding on the line of credit to $873,999. This
remaining balance continues to carry the terms described above.
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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 $840,386
during the nine months ended March 31, 1997. Funds were primarily
provided by the principal and interest payments received from The
Oil Shale Company on the note described above. In addition the
Company received a reimbursement of $763,192 from its 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 allocation policy of the parent and Company.
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
March 31, 1997, the Company owed $873,999 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 $184,600 in the nine months
ended March 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 March 31, 1997
Revenues of $5,375 for the quarter ended March 31, 1997,
consisting primarily of interest income and rents were
significantly less than the amount recognized in the same quarter
of the previous year which included interest payments on the
promissory note from The Oil Shale Company.
Expenses of $49,248 for the quarter ended March 31, 1997 were
approximately eighty percent less than the $209,506 for the same
quarter in the previous year, because the Company had discontinued
production, cut staff, and ceased to accrue interest.
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings.
None.
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.
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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)
5/12/97 /s/ Joseph L. Fox
Date Joseph L. Fox, President
5/12/97 /s/ Anne Morgan Smith
Date Anne Morgan Smith, Controller
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