SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the Quarterly Period Ended March 31, 2001
Commission File Number 2-85602-D
Mid-Power Service Corporation
(Exact name of registrant as specified in its charter)
Delaware 87-0398403
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3800 Howard Hughes Parkway, Suite 860A
Las Vegas, Nevada 89109
(Address of principal executive offices) (Zip Code)
702-319-7153
(Registrant's telephone number, including area code)
Caplan Corporation
111 South Saint Charles
Brenham, Texas 77833
(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 [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of May 10, 2001, registrant
had 4,800,396 shares of issued and outstanding common stock, par value $0.001.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MID-POWER SERVICE CORPORATION
(Formerly Caplan Corporation)
Balance Sheet
(Unaudited)
March 31, 2001 June 30, 2000
----------------- -----------------
ASSETS
Current Assets:
Cash.................................................................. $ -- $ 20,590
Current Portion of Note Receivable.................................... -- --
----------------- -----------------
Total Current Assets........................................................ -- 20,590
----------------- -----------------
Total Assets................................................................ $ -- $ 20,590
================= =================
Stockholders' Equity:
Common Stock, $0.001 par value. 100,000,000
shares authorized, 3,600,793 and 1,300,793
shares issued and outstanding, respectively......................... $ 3,600 $ 3,600
Additional paid-in Capital............................................. 1,479,849 1,479,849
Accumulated Deficit.................................................... (1,483,449) (1,462,859)
----------------- -----------------
Total Stockholders' Equity.................................................. -- 20,590
----------------- -----------------
Total Liabilities and Stockholders' Equity.................................. $ -- $ 20,590
================= =================
See accompanying notes to financial statements
2
MID-POWER SERVICE CORPORATION
(Formerly Caplan Corporation)
Statements of Operations
(Unaudited)
For the three months For the nine months
ended March 31, ended March 31,
---------------------------------- ----------------------------------
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
Interest Income.............................. $ -- $ 62 $ -- $ 456
Cost & Expenses:
Professional Fees....................... 1,554 1,081 11,251 8,685
General and Administrative.............. 5,799 3,046 9,339 7,982
General and Administrative - affiliate.. -- 2,500 -- 7,500
---------------- ---------------- ---------------- ----------------
Total Costs and Expenses...... 7,353 6,627 20,590 24,167
---------------- ---------------- ---------------- ----------------
Loss from Continuing Operations
before Federal Income Tax............. (7,353) (6,565) (20,590) (23,711)
Federal Income Tax Provision................. -- -- -- --
Loss from Continuing Operations.............. (7,353) (6,565) (20,590) (23,711)
Net Income (Loss)............................ $ (7,353) $ (6,565) $ (20,590) $ (23,711)
================ ================ ================ ================
Weighted Average Number of Common
Shares Outstanding.................... 3,600,793 1,300,793 3,600,793 1,300,793
================ ================ ================ ================
Basic Diluted Net Income (Loss)
Per Common Share:
Continuing Operations............ $ (0.01) $ (0.01) $ (0.01) $ (0.01)
================ ================ ================ ================
Net Income (Loss)............................ $ (0.01) $ (0.01) $ (0.01) $ (0.01)
================ ================ ================ ================
See accompanying notes to financial statements.
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MID-POWER SERVICE CORPORATION
(Formerly Caplan Corporation)
Statement of Cash Flows
(Unaudited)
Nine Months Nine Months
Ended Ended
March 31, 2001 March 31, 2000
----------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)........................................................... $ (20,590) $ (23,711)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by (used in) Operating Activities:
Depletion, depreciation and amortization and valuation provisions...... -- 80
Changes in Operating Assets and Liabilities:
Accounts Receivable - Trade and Affiliate, decrease (increase)...... -- --
Accounts Payable - Trade and Affiliate & Accrued Liabilities,
increase (decrease)............................................... -- (29,444)
----------------- ------------------
NET CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES..................... (20,590) (53,075)
----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on Note Receivable......................................... -- 1,243
Cash Paid for Mineral Leasehold Interests.............................. -- --
----------------- ------------------
NET CASH USED IN INVESTING ACTIVITIES.................................. -- 1,243
----------------- ------------------
OTHER ADJUSTMENTS FINANCING ACTIVITIES
Proceeds of Private Placement.......................................... -- 95,000
Acquisition Cost of Position........................................... -- (19,527)
Treasury Stock Acquisition............................................. -- (15,000)
Note Receivable Write-off.............................................. -- 9,046
Net Asset Value Retired................................................ -- (81)
----------------- ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES.............................. -- 69,438
----------------- ------------------
NET DECREASE OF CASH........................................................ (20,590) 7,606
CASH, beginning of period................................................... 20,590 7,423
----------------- ------------------
CASH, end of period......................................................... $ -- $ 25,029
================= ==================
See accompanying notes to financial statements
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MID-POWER SERVICE CORPORATION
(Formerly Caplan Corporation)
Notes to the Consolidated Financial Statements
(Unaudited)
Note 1: Basis of Presentation
The interim financial data are unaudited; however, in the opinion of
the management of Mid-Power Service Corporation ("Mid-Power Service" or the
"Company"), the interim data includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods. The interim financial statements should be read in conjunction
with the Company's annual report on Form 10-K for the year ended June 30, 2000,
including the financial statements and notes thereto.
Note 2: Changes in Control of the Company
On March 12, 2001, eight individuals purchased an aggregate of
1,500,000 shares of restricted common stock (187,500 each) from six stockholders
of the Company, at a price of $0.22 per share. Additionally, for the sum of
$25,000 (which will be credited against the purchase price if the option is
exercised), one investor purchased an irrevocable proxy to vote 500,000 shares
of outstanding common stock and an option to purchase 100,0000 outstanding
shares of restricted common stock. As a result of the foregoing transactions,
the eight purchasers have voting control over approximately 55% of the Company's
common stock.
Also on March 12, 2001, the stockholders of the Company, by majority
written consent, elected a new board of directors, which in turn elected new
officers. The Company then effected a two-to-one reverse split of the common
stock of the Company and to change its name to "Mid-Power Service Corporation,"
effective April 10, 2001, for all stockholders of record on April 9, 2001.
Note 3: Subsequent Event
On April 27, 2001, the Company completed the private sale of 3,000,000
shares of restricted common stock at $0.25 per share for a total of $750,000,
yielding net proceeds of approximately $738,000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Mid-Power Service Corporation, formerly Caplan Corporation, had no
active operations during the periods covered by this report.
During 1997, the Company obtained leasehold interests on acreage in
West Texas for possible future extraction of mineral substance, including
bentonite, zeolite, and other associated minerals. The Company discontinued
operations in this business segment during the year ended June 30, 2000. The
mineral extraction segment did not generate income during its existence.
Additionally, in March 2000, the Company issued restricted common stock in a
private placement. The purchasers in this private placement also purchased
additional shares from existing officers, directors, and stockholders of the
Company. Following the discontinuation of its investment in mineral interests,
the Company was inactive except for limited efforts related to an investigation
of business opportunities and activities other than oil and gas and minerals.
On March 12, 2001, eight individuals purchased an aggregate of
1,500,000 shares of restricted common stock (187,500 each) from six stockholders
of the Company, at a price of $0.22 per share. Additionally, for the sum of
$25,000 (which will be credited against the purchase price if the option is
exercised), one investor purchased an irrevocable proxy to vote 500,000 shares
of outstanding common stock and an option to purchase 100,0000 outstanding
shares of restricted common stock. As a result of the foregoing transactions,
the eight purchasers have voting control over approximately 56% of the Company's
common stock.
Also on March 12, 2001, the stockholders of the Company, by majority
written consent, elected a new board of directors, which in turn elected new
officers. The Company then effected a two-to-one reverse split of the common
stock of the Company and to change its name to "Mid-Power Service Corporation,"
effective April 10, 2001, for all stockholders of record on April 9, 2001.
Results of Operations
The Company had no operations during any of the reporting periods, so
its income consisted entirely of interest income on Company funds. Costs and
expenses, consisting of minimal expenses, required to maintain the corporate
good standing of the Company and meet its periodic reporting obligations under
the securities laws remained approximately constant throughout all of the
periods, resulting in approximately equal losses for all periods involved.
Liquidity and Capital Resources
Operating activities required cash of $20,590 and $23,711 for the nine
months ended March 31, 2001 and 2000, respectively, to fund the Company's net
loss from operations. In addition, during the nine months ended March 31, 2000,
the Company incurred additional cash operating expenditures to reduce accounts
payable--trade and affiliate and accrued liabilities. Cash flows were
principally impacted during the nine months ended March 31, 2000, by net cash of
$69,438 provided from financing activities, principally proceeds from the
private placement of common stock.
Capital Resources
As of March 31, 2001, the Company had no capital and was dependent on
obtaining additional capital to continue. The Company completed an initial phase
of financing in April 2001, through the sale of 3,000,000 shares of common stock
at $0.25 per share, for a total of $750,000, yielding net proceeds of
6
approximately $738,000. The Company anticipates that it may require additional
capital and may seek such funding through the sale of additional securities as
it begins to implement a specific business plan to trade and generate electrical
power and engage in other energy-related businesses and technologies.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not subject to material market risks.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On April 27, 2001, the Company completed a private placement of
3,000,000 shares of restricted common stock at $0.25 per share for a total of
$750,000, yielding net proceeds of approximately $738,000. The securities were
sold by executive officers of the Company, without the participation of any
underwriter. All of the investors were accredited investors who negotiated the
purchase of the securities through personal, face-to-face discussions with
executive officers of the Company. Each investor signed a subscription agreement
verifying such investor's status as an accredited investor, that the securities
were being acquired for investment without a view toward their distribution,
acknowledging that the certificates representing the securities would bear a
restrictive legend, and providing additional investor suitability
representations and acknowledgements. Certificates representing the shares
issued bear a notation conspicuously on their face that they constitute
"restricted securities."
The securities were issued in the foregoing offering in reliance on
Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
promulgated thereunder.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
By majority written consent of the holders of 2,000,000 shares, or 56%
of the issued and outstanding common stock, the stockholders approved a
two-to-one reverse split of the issued and outstanding common stock and a change
in the Company's name to Mid-Power Service Corporation, effective April 10,
2001, for all stockholders of record on April 9, 2001.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. None
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(b) Reports on Form 8-K. During the quarter ended March 31, 2001,
the Company filed the following item on Form 8-K:
Date of Event Reported Item Reported
---------------------- -------------
March 12, 2001 Item 1. Changes in Control of Registrant
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MID-POWER SERVICE CORPORATION
Date: May 14, 2001 By /s/ Kenneth M. Emter
--------------------
Kenneth M. Emter, Chief
Financial Officer
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