SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
March 7, 2001
(Date of Report)
ENERCORP, INC.
(Exact Name of Registrant as specified in its charter)
Colorado 0-9083 84-0768802
------------------ ------------ ------------
(State or other (Commission (I.R.S. Employer
jurisdiction of file number) Identification Number)
incorporation or
organization)
32751 Middlebelt Road, Suite B
Farmington Hills, Michigan 48334
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (248) 851-5651
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Former name or former address, if changed from last report: N/A
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Item 2. Disposition of Assets
On March 7, 2001, the Registrant sold 1,077,800 shares of the common stock it
held in Williams Controls, Inc., and on March 12, 2001 the Registrant sold an
additional 574,529 shares of Williams Controls, Inc., for a total of 1,652,329
shares, representing all the shares of Williams Controls, Inc. common stock
owned by the Registrant at the time of this filing. These shares were acquired
by the Registrant in transactions between April 1991 and August 1998. The shares
were sold in open market transactions through an unaffiliated broker. The broker
received a sales commission considered by the Registrant to be reasonable and
customary. Upon settlement of the trades, the Registrant expects to receive
proceeds of $1.50 per share less the sales commissions, for total net proceeds
of approximately $2,424,800. These proceeds will be used to pay off the
Company's demand loan from a bank with a balance of $2,141,649 plus accrued
interest, and make payments of or toward other debt obligations and payables
that the Company has outstanding.
The demand loan was obtained from a bank in July 1997 and is secured by shares
of common stock of Williams Controls, Inc. and Ajay Sports, Inc. that the
Registrant has held in its investee portfolio for a number of years. The
Registrant has been out of compliance with the terms of the loan agreement for
over one year. Under the terms of the demand loan, the bank has the right to
demand immediate payment on the loan by the Registrant at any time. The bank
disallowed any further advances against the credit line until the loan was
brought back into formula, either through loan paydown or through the providing
of additional collateral acceptable to the bank. The Registrant has been unable
to pay down the loan or provide additional security acceptable to the bank,
although through February 28, 2001 the Registrant has been able to meet its
monthly interest payment obligations. The loan remains out of compliance and,
based on recent discussions with the bank, the Registrant believed that the bank
would make demand for payment of the entire loan amount and all accrued unpaid
interest on March 31, 2001 or shortly thereafter if the March 31, 2001 interest
payment was not made. The Registrant lacks the liquidity to continue paying
monthly interest payments and, absent sales of portfolio securities, would be
unable to meet its March interest payment obligations to the bank. Due to
uncertain and volatile market conditions, the Registrant determined that it
would be more prudent for it to voluntarily sell portfolio securities as
reported herein, using the proceeds to repay the loan, rather than risk the
bank's demand for payment and foreclosure of the collateral portfolio
securities.
The Registrant continues to hold its other principal common stock investments in
CompuSonics Video Corporation (10,001,751 shares), Ajay Sports, Inc. (310,785
common and 2,000 preferred shares) and ProGolf International, Inc. (7,450
shares), and continues to hold 200,000 warrants in Williams Controls, Inc.,
which are fully vested at the time of this filing.
Item 7. Financial Statements
Unaudited proforma financial statements for the Registrant have been prepared
and are included on the following pages. They present the December 31, 2000
balance sheet and both the June 30, 2000 and December 31, 2000 Statements of
Operations, as if the stock of Williams Controls, Inc., and liabilities related
to that asset had not been a part of the company beginning as of June 30, 1999.
The financial statements and notes to the financial statements for the
Registrant's Form 10-K filed for the period ended June 30, 2000 and Form 10-Q
filed for the period ended December 31, 2000 are incorporated by reference
herein. The unaudited proforma financial statements presented herein include the
actual financial results for the periods mentioned, adjustments resulting from
removal of the Williams Controls, Inc. shares and related liabilities, and the
proforma results after adjustments.
Enercorp, Inc.
Statements of Operations (unuadited)
Actual Proforma
Year ended Year ended
-----------------------------------
06/30/00 Adjustments 06/30/00
-------- ----------- ---------
REVENUES
Interest income $ 187 $ 0 $ 187
Interest income from related entities 30,250 0 30,250
Consulting fees from related companies 22,000 0 22,000
Net realized gain on sale of investments 461,358 0 461,358
Dividend income from affiliated company 0 0 0
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513,795 0 513,795
--------- ---------- ------------
EXPENSES
Salaries - officer 78,500 0 78,500
Bonus expense - officer 0 0 0
Directors' fees 1,000 0 1,000
Staff salaries 0 0 0
Legal, accounting and other
professional fees 24,073 0 24,073
Interest expense - other 217,885 (217,885) 0
Bad debt expense 7,554 0 7,554
Other general and administrative expenses 29,374 0 29,374
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358,387 (217,885) 140,502
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Net gain (loss) from operations before
taxes 155,408 217,885 373,293
Income taxes (Note 5) (155,000) 0 (155,000)
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Net gain (loss) from operations after taxes 408 217,885 218,293
-------- --------- -----------
Net unrealized gain (loss) on investments
before taxes (2,730,231) 2,039,470 (690,761)
Income taxes (Note 5) 928,000 (693,212) 234,788
--------- ---------- ----------
Net unrealized gain (loss) on investment
after taxes (1,802,231) 1,346,258 (455,973)
--------- ----------- ----------
Increase (decrease) in net assets
resulting from operations (1,801,823) $1,564,143 $ (237,680)
========== ========== ==========
Increase (decrease) in net assets
per share $ (2.59) $ $ (0.34)
========== ========== ==========
Enercorp, Inc.
Proforma Statements of Operations (unaudited)
6 Mos. Ended 6 Mos. Ende
12/31/2000 12/31/2000
Actual Adjustments Proforma
--------------- ------------ --------------
REVENUES
Interest income from related entities $ 1,640 $ $ 1,640
Net realized gain on sale of investments 8,464 8,464
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10,104 0 10,104
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EXPENSES
Salaries - officer 0 0 0
Legal, accounting and other professional fees 7,412 0 7,412
Interest expense - other 116,251 (116,251) 0
Bad debt expense 1,471 0 1,471
Other general and administrative expenses 8,378 0 8,378
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133,512 (116,251) 17,261
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Net gain (loss) from operations before taxes (123,408) 116,251 (7,157)
Income taxes (Note 5) 0 0 0
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Net gain (loss) from operations after taxes (123,408) 116,251 (7,157)
----------- ----------- ---------
Net unrealized gain (loss) on investmts
before taxes (1,807,656) 1,575,000 (232,656)
Income taxes (Note 5) 0 0 0
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Net unrealized gain (loss) on investment
after taxes (1,807,656) 1,575,000 (232,656)
----------- ------------ ----------
Increase (decrease) in net assets from
operations $(1,931,064) $ 1,691,251 $ (239,813)
============ ============= ===========
Increase (decrease) in net assets per
share $ (2.77) $ 2.43 $ (0.34)
============ ============= ===========
Enercorp, Inc.
Proforma Statements of Assets and Liabilities (unaudited)
Actual Proforma
ASSETS 12/31/00 Adjustments 12/31/00
-------- -------- --------
Investments at fair value $ 2,065,109 $ (1,422,476) $ 642,633
Cash 1,684 0 1,684
Accounts receivable - related party 17,848 0 17,848
Accrued interest receivable - net of allowance for
uncollectible interest receivable of $21,735 and
$20,264 at Dec. 31, 2000 and June 30, 2000, respectively 6,268 0 6,268
Notes receivable - related parties, net of allowance for
uncollectible notes receivable of $27,776 at Dec. 31, 2000
and $27,776 at June 30, 2000 3,086 0 3,086
Furniture and fixtures, net of accumulated depreciation of $10,568
at Dec. 30, 2000 and $9,633 at June 30, 2000, respectively 1,869 0 1,869
Other assets 678 0 678
-------- -------- --------
$ 2,096,542 $ (1,422,476)$ 674,066
======== ======== ========
LIABILITIES AND NET ASSETS
Liabilities
Note payable - bank $ 2,141,649 $ (2,141,649) $ 0
Note payable - Other 145,500 (145,500) 0
Accounts payable and accrued liabilities 14,413 0 14,413
Deferred tax liability 0 0 0
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2,301,562 (2,287,149) 14,413
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Net assets
Common stock, no par value: 10,000,000 shares authorized
695,897 shares issued and outstanding at Dec. 31, 2000
and June 30, 2000, respectively 1,888,251 0 1,888,251
Preferred stock, no par value: 1,000,000 shares
authorized, -0- issued and outstanding 0 0 0
Accumulated deficit (1,961,492) 116,251 (1,845,241)
Unrealized net gain on investments, net of def
deferred income taxes (131,779) 748,422 616,643
-------- -------- --------
(205,020) 864,673 659,653
-------- -------- --------
$ 2,096,542 $ (1,422,476) $ 674,066
======== ======== ========
Explanatory Notes to the Unaudited Proforma Financial Statements
Statements of Operations - June 30, 2000:
No adjustments were made to Revenues. Interest on loans was reduced to zero to
reflect that the company would not have had bank debt and other loans
outstanding and therefore would not have had to pay interest on the debt.
Therefore, the reported gain from operations after taxes of $408 for the period
ended June 30, 2000 was adjusted by $217,885, resulting in a proforma gain from
operations after taxes of $218,293. An unrealized loss on the stock of Williams
Controls would not have been recognized, so an unrealized loss of $2,039,470 was
removed, as was the income tax benefit related to the unrealized loss. Instead
of the reported actual ($1,801,823) decrease in net assets resulting from
operations, the Registrant would have reported a decrease in net assets
resulting from operations of ($237,680) on an unaudited proforma basis.
Statements of Operations - December 31, 2000:
No adjustments to Revenues were made for the six months ended December 31, 2000.
Interest on loans of $116,251 was reduced to zero to reflect that the company
would not have had bank debt and other loans outstanding and therefore would not
have had to pay interest on the debt. This would have resulted in a proforma net
loss from operations of ($7,157) as compared to the actual loss from operations
of ($123,408). An unrealized loss on the stock of Williams Controls would not
have been recognized, so the unrealized loss of $1,575,000 on the Williams
Controls stock was removed. Instead of the reported ($1,931,064) decrease in net
assets resulting from operations, the Registrant would have reported a decrease
in net assets resulting from operations of ($239,813) on an unaudited proforma
basis.
Balance Sheet - December 31, 2000
The balance sheet for the period December 31, 2000 was adjusted to remove the
$1,422,476 value of the Williams Controls shares owned by the Registrant, along
with the removal of the corresponding Notes Payable of $2,287,149. The
accumulated deficit was adjusted to reflect the improvement in net loss from
operations after taxes during the six month period ended 12/31/00, as was the
unrealized net gain on investments, net of deferred income taxes. The unaudited
proforma net asset value of the Registrant would have improved from ($205,020)
to $659,653, to $.95 per share net asset value.
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.
Date: March 22, 2001
ENERCORP, INC.
By: \s\Robert R. Hebard
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Robert R. Hebard, President