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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 7, 2001
RELIABLE POWER SYSTEMS, INC.
F/K/A
DENCOR ENERGY COST CONTROLS, INC.
(Exact name of registrant as specified in charter)
COLORADO 0-9255 84-0658020
(State or other jurisdiction (Commission File (IRS Employer
of incorporation or organization) Number) Identification No.)
1450 WEST EVANS
DENVER, COLORADO 80223
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 922-1888
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Item 7. Financial Statements.
The pro forma financial statements contained in the 10KSB/A filed on
March 20, 2001 are incorporated herein by this reference.
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in Stockholder's Equity (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
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AJ. ROBBINS, PC
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
3033 EAST 1ST AVENUE
SUITE 201
DENVER, COLORADO 80206
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
RELIABLE POWER SYSTEMS, INC.
SEDALIA, COLORADO
We have audited the accompanying balance sheets of Reliable Power Systems, Inc.
(a development stage company) as of February 7, 2001 and December 31, 2000, and
the related statements of operations, changes in stockholder's equity (deficit),
and cash flows for the periods from January 1, 2001 to February 7, 2001, from
July 6, 2000 (inception) to December 31, 2000 and from July 6, 2000 (inception)
to February 7, 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Reliable Power Systems, Inc. as
of February 7, 2001 and December 31, 2000, and the results of its operations and
its cash flows for the periods from January 1, 2001 to February 7, 2001, from
July 6, 2000 (inception) to December 31, 2000 and from July 6, 2000 (inception)
to February 7, 2001, in conformity with generally accepted accounting
principles.
AJ. ROBBINS, PC
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS
DENVER, COLORADO
APRIL 5, 2001
F-2
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
FEBRUARY 7, 2001 AND DECEMBER 31, 2000
ASSETS
FEBRUARY 7, DECEMBER 31,
2001 2000
----------- ------------
CURRENT ASSETS:
Cash $ 301,757 $ --
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 7,630 $ 1,170
Accrued expenses 231 --
--------- ---------
7,861 1,170
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY (DEFICIT):
Preferred stock, no par value, 10,000,000 shares
authorized, none issued -- --
Common stock, no par value, 50,000,000 shares
authorized, 1,990 shares issued and
outstanding 259 259
Stock subscription receivable -- (259)
Additional paid in capital 319,741 --
(Deficit) accumulated during the development stage (26,104) (1,170)
--------- ---------
Total Stockholder's Equity (Deficit) 293,896 (1,170)
--------- ---------
$ 301,757 $ --
========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FOR THE PERIOD CUMULATIVE
FROM FROM FROM
JANUARY 1, JULY 6, 2000 JULY 6, 2000
2001 TO (INCEPTION) TO (INCEPTION) TO
FEBRUARY 7, DECEMBER 31, FEBRUARY 7,
2001 2000 2001
-------------- -------------- ------------
REVENUE $ -- $ -- $ --
-------- -------- --------
EXPENSES, general and administrative 24,934 1,170 26,104
-------- -------- --------
Total Expenses 24,934 1,170 26,104
-------- -------- --------
NET (LOSS) $(24,934) $ (1,170) $(26,104)
======== ======== ========
NET (LOSS) PER COMMON SHARE - BASIC $ (12.53) $ (.59)
======== ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,990 1,990
======== ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)
FOR THE PERIOD FROM JULY 6, 2000 (INCEPTION)
TO FEBRUARY 7, 2001
(DEFICIT)
ACCUMULATED
COMMON STOCK ADDITIONAL STOCK DURING THE
----------------------- PAID-IN SUBSCRIPTION DEVELOPMENT
SHARES AMOUNT CAPITAL RECEIVABLE STAGE TOTAL
--------- --------- ---------- ------------ ------------ --------
BALANCES, JULY 6, 2000 -- $ -- $ -- $ -- $ -- $ --
Issuance of stock for subscription
receivable July 6, 2000 1,990 259 -- (259) -- --
Net (loss) -- -- -- -- (1,170) (1,170)
--------- --------- --------- --------- --------- ---------
BALANCES, DECEMBER 31, 2000 1,990 259 -- (259) (1,170) (1,170)
--------- --------- --------- --------- --------- ---------
Contributed capital -- -- 319,741 -- -- 319,741
Payment for stock subscription -- -- -- 259 -- 259
Net (loss) -- -- -- -- (24,934) (24,934)
--------- --------- --------- --------- --------- ---------
BALANCES, FEBRUARY 7, 2001 1,990 $ 259 $ 319,741 $ -- $ (26,104) $ 293,896
========= ========= ========= ========= ========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FOR THE PERIOD CUMULATIVE
FROM FROM FROM
JANUARY 1, JULY 6, 2000 JULY 6, 2000
2001 TO (INCEPTION) TO (INCEPTION) TO
FEBRUARY 7, DECEMBER 31, FEBRUARY 7,
2001 2000 2001
-------------- -------------- --------------
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net (loss) from operations $ (24,934) $ (1,170) $ (26,104)
Adjustments to reconcile net (loss) to net cash (used) by
operating activities:
Changes in:
Accounts payable 6,460 1,170 7,630
Accrued expenses 231 -- 231
--------- --------- ---------
Net Cash (Used) by Operating Activities (18,243) -- (18,243)
--------- --------- ---------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Collection of stock subscription receivable 259 -- 259
Contributed capital 319,741 -- 319,741
--------- --------- ---------
Net Cash Provided by Financing Activities 320,000 -- 320,000
--------- --------- ---------
NET INCREASE IN CASH 301,757 -- 301,757
CASH, beginning of period -- -- --
--------- --------- ---------
CASH, end of period $ 301,757 $ -- $ 301,757
========= ========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-6
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
HISTORY
Reliable Power Systems, Inc. (the Company) a development stage company, was
organized under the laws of the State of Colorado on July 6, 2000 under the name
of DHW Industries, Inc. On October 11, 2000 DHW Industries changed its name to
Reliable Power Systems, Inc. The Company is in the development stage as defined
in Financial Accounting Standards Board Statement No. 7. The Company's year end
is December 31.
On February 7, 2001 the Company was acquired by Dencor Energy Cost Controls,
Inc. (Dencor). Following the acquisition, Dencor began operating under the name
Reliable Power Systems, Inc. For financial reporting purposes, the acquisition
will be treated as a reverse acquisition, whereby the Company is treated as the
accounting acquirer reporting under the name of Dencor Energy Cost Controls,
Inc. (d.b.a. Reliable Power Systems). (See Note 4)
ACTIVITY
The Company is a provider of quality power generation systems and energy
management technology. The Company's strategy is to increase revenues through
strategic acquisitions.
MANAGEMENT'S PLANS
The Company was devoting its efforts to locating merger candidates. The Company
commenced operations as a result of the Dencor acquisition with a base of
revenues and is further supported under a revolving line of credit bearing
interest at 10% from its majority stockholder.
INCOME TAXES
The Company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards No. 109. Under this method, deferred
income taxes are recorded to reflect the tax consequences in future years of
temporary differences between the tax basis of the assets and liabilities and
their financial amounts at year end.
The Company had a net operating loss carryforward of approximately $1,170,
expiring in 2020 as of December 31, 2000. Since it is more likely than not that
the Company will not utilize the net operating loss in the near term, a
valuation allowance equal to the deferred tax asset, which consisted primarily
of the net operating loss carryforwards, has been provided.
CASH EQUIVALENTS
For purposes of reporting cash flows, the Company considers all short term,
interest bearing deposits with original maturities of three months or less to be
cash equivalents.
F-7
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK-BASED COMPENSATION
The Company intends to account for stock based compensation in accordance with
the Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation" (SFAS No. 123).
Under the provisions of SFAS No. 123, companies can either measure the
compensation cost of equity instruments issued under employee compensation plans
using a fair value based method, or can continue to recognize compensation cost
using the intrinsic value method under the provisions of APB No. 25. However, if
the provisions of APB No. 25 are continued, proforma disclosures of net income
or loss and earnings or loss per share must be presented in the financial
statements as if the fair value method had been applied. The Company will
recognize compensation costs under the provisions of APB No. 25 and provides the
expanded disclosure required by SFAS No. 123.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In 1999 the FASB issued Statement No. 133, Accounting for Derivative Instruments
and Hedging Activities. The adoption by the Company of Statement 133 did not
impact the Company's financial statements.
The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin
(SAB) 101, Revenue Recognition in Financial Statements, in December 1999. The
SAB summarizes certain of the SEC staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements. In June
2000, the SEC issued SAB 101B, which delays the implementation date of SAB 101
until no later than the fourth fiscal quarter of fiscal years beginning after
December 15, 1999. The Company does not believe that adoption of this SAB will
have a material impact on its financial statements.
EARNINGS (LOSS) PER COMMON SHARE
During 1997 the Financial Accounting Standard Board (FASB) issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). SFAS
128 replaced the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Basic earnings (loss) per common
share is computed based upon the weighted average number of common shares
outstanding during the period. Diluted earnings per share consists of the
weighted average number of common shares outstanding plus the dilutive effects
of options and warrants calculated using the treasury stock method. In loss
periods, dilutive common equivalent shares are excluded, as the effect would be
anti-dilutive.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates and assumptions.
F-8
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - STOCKHOLDER'S EQUITY
During 2000, the Company issued for a $259 stock subscription receivable, 1,990
shares of its no par value common stock to its Chief Executive Officer. The $259
was paid in January 2001 and an additional $319,741 was contributed.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
EMPLOYMENT AGREEMENTS
Subsequent to February 7, 2001, the Company entered into employment agreements
with four executives, which include salaries ranging from $70,000 to $170,000
per year. The Company has agreed to, subject to approval of a proposed incentive
plan by the Company's stockholders grant options to purchase shares of Dencor's
common stock.
CAPITAL LEASE
In March 2001, the Company entered into a lease agreement for a phone system.
The Company will pay 13 monthly payments of $515 and will own the equipment at
the end of the lease.
OPERATING LEASE
In March 2001, the Company entered into a three month lease for office space at
a rate of $2,712 per month. The lease will be monthly at the expiration of the
term. Management of the Company is in negotiations for new facilities.
NOTE 4 - SUBSEQUENT EVENTS
NOTE RECEIVABLE
Subsequent to February 7, 2001, in connection with the employment agreement with
the Company's Chief Technology Officer, the Company loaned the officer $50,000
in the form of a non-interest bearing note. The note is due in February 2002,
but will be forgiven if the employee remains employed by the Company in February
2002.
ACQUISITION
On February 7, 2001, the Company was acquired by Denmer Corporation, a wholly
owned subsidiary of Dencor. The Company exchanged all of its issued and
outstanding common stock for 12,600,000 shares of Dencor's common stock and
3,348,000 shares of Dencor's Company's Series A voting convertible preferred
stock. Each share of the Series A preferred stock is convertible into 50 shares
of common stock and is entitled to 50 votes. Due to the fact that following the
acquisition, the stockholder of Reliable Power Systems will be in control of the
combined entity, the acquisition is accounted for as though the Company is the
accounting acquirer and the acquisition is treated as a reverse acquisition for
accounting purposes.
F-9
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RELIABLE POWER SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - SUBSEQUENT EVENTS (CONTINUED)
It is the intention of the Company to seek the approval of Dencor's stockholders
to ratify the merger agreement, effectuate a 1 for 18 reverse stock split of
Dencor common stock, decrease the authorized common stock of Dencor to
65,000,000 shares and increase the authorized preferred stock of Dencor to
15,000,000 shares, change the name of Dencor to Reliable Power Systems, Inc. and
approve the equity incentive plan.
Reference is made to the Company's financial statements, including the
proforma statements contained therein, for the year ended December 31,
2000 included in Form 10K-SB/A as filed on March 20, 2001.
F-10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
April 13, 2001 /s/ Thomas J. Wiens
----------------------------------
(Signature)
Thomas J. Wiens
Chairman and CEO