Exhibit 99.01
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEVADA
In re: Mid-Power Service Corporation Case No. BK-S-03-10874-RCJ
CHAPTER 11
MONTHLY OPERATING REPORT
(GENERAL BUSINESS CASE)
SUMMARY OF FINANCIAL STATUS
MONTH ENDED: Jun-03 PETITION DATE: 01/24/03
1. Debtor in possession (or trustee) hereby submits this Monthly Operating Report on the Accrual Basis of accounting (or if checked
here the Office of the U.S. Trustee or the Court has approved the Cash Basis of Accounting for the Debtor).
Dollars reported in $1
2. Asset and Liability Structure End of Current Month End of Prior Month As of Petition Filing
a. Current Assets $41,875 $47,854
b. Total Assets $32,572,619 $32,576,102 $47,925,781
c. Current Liabilities $619,424 $552,406 13,052.92
d. Total Liabilities $6,328,260 $6,261,243 $24,545,123
3. Statement of Cash Receipts & Disbursements for Month Current Month Prior Month Cumulative
(Case to Date)
a. Total Receipts $34,133 $56,923 $328,670
b. Total Disbursements $38,106 $54,740 $348,935
c. Excess (Deficiency) of Receipts Over Disbursements (a - b) ($3,973) $2,183 ($20,265)
d. Cash Balance Beginning of Month $5,671 $3,488 $21,963
e. Cash Balance End of Month (c + d) $1,698 $5,671 $1,698
Current Month Prior Month Cumulative
(Case to Date)
4. Profit/(Loss) from the Statement of Operations ($70,502) ($77,455) $10,655,584
5. Account Receivables (Pre and Post Petition) $0 $91
6. Post-Petition Liabilities $619,424 $552,406
7. Past Due Post-Petition Account Payables (over 30 days) $23,762 $30,205
At the end of this reporting month: Yes No
8. Have any payments been made on pre-petition debt, other than payments in the normal X
course to secured creditors or lessors? (if yes, attach listing including date of
payment, amount of payment and name of payee)
9. Have any payments been made to professionals? (if yes, attach listing X
including date of payment, amount of payment and name of payee)
10. If the answer is yes to 8 or 9, were all such payments approved by the court? X
11. Have any payments been made to officers, insiders, shareholders, relatives? (if yes, X
attach listing including date of payment, amount and reason for payment, and name of payee)
12. Is the estate insured for replacement cost of assets and for general liability? X
13. Are a plan and disclosure statement on file? X
14. Was there any post-petition borrowing during this reporting period? X
15. Check if paid: Post-petition taxes X; U.S. Trustee Quarterly Fees X; Check if filingis current for: Post-petition
tax reporting and tax returns: X.
(Attach explanation, if post-petition taxes or U.S. Trustee Quarterly
Fees are not paid current or if post-petition tax reporting and tax
return filings are not current.)
Total assets include a $30.6 million investment in Mid-Power Resource Corporation.
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The cumulative profit from the Statement of Operations includes an $11.4 million gain on legal settlement. On a consolidated, GAAP
basis of accounting, this gain would be completely offset by an $11.4 million impairment loss recorded on Mid-Power Resource Corp.'s
Statement of Operations.
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I declare under penalty of perjury I have reviewed the above summary and attached financial statements, and after making reasonable
inquiry believe these documents are correct.
Date: 8/22/2003 0:00 /s/ Mark Davis
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Responsible Individual
STATEMENT OF OPERATIONS
(General Business Case)
For the Period January 24 (bankruptcy filing) - June 30, 2003
Current Month
Actual Variance Cumulative Next Month
(Case to Date) Forecast
Revenues:
$0 - $0 1 Gross Sales - -
- - - 2 less: Sales Returns & Allowances - -
- - - 3 Net Sales - -
- - 4 less: Cost of Goods Sold (Schedule 'B') -
- - - 5 Gross Profit - -
2,723 - 2,723 6 Interest 5,421 -
- - - 7 Other Income: - -
- - - 8 Gain on Legal Settlement 11,426,648 -
- - - 9 - -
2,723 - 2,723 10 Total Revenues 11,432,069 -
Expenses:
- - - 11 Compensation to Owner(s)/Officer(s) - -
18,018 17,383 (635) -4% 12 Salaries 90,219 17,383
- - - 0% 13 Commissions - -
14,193 11,320 (2,873) -25% 14 Contract Labor 62,546 11,320
- - - 0% 15 Rent/Lease: 621 -
Personal Property
2,825 3,338 513 15% 16 Real Property 14,968 3,338
1,915 1,698 (217) -13% 17 Insurance 12,678 1,220
- - - 0% 18 Management Fees - -
318 - (318) 0% 19 Depreciation 636 -
1,731 1,415 (316) -22% 20 Taxes: 8,521 1,415
Employer Payroll Taxes
- - - 0% 21 Real Property Taxes - -
- - - 0% 22 Other Taxes 25 75
- - - 0% 23 Other Selling 9,950 -
2,413 4,962 2,549 51% 24 Other Administrative 17,616 4,962
5,199 - (5,199) 0% 25 Interest 156,459 -
- 0% 26 Other Expenses:
1,250 1,200 (50) -4% 27 Patent License Fees 6,700 1,200
21,503 30,000 8,497 28% 28 Product Development 225,357 -
(2,890) 5,000 7,890 158% 29 Auditors 11,219 15,000
2,377 3,294 917 28% 30 Travel 9,825 3,294
379 800 421 53% 31 U.S. Stock Transfer Group 2,063 800
485 1,000 515 52% 32 SEC attorney 25,808 7,500
- - - 0% 33 -
- 0% 34
69,716 81,410 11,694 35 Total Expenses 655,211 67,507
(66,993) (81,410) 14,417 36 Subtotal 10,776,858 (67,507)
(2,259) (15,000) (12,741) 37 Reorganization Items: (118,774) (15,000)
Professional Fees
- 38 Provisions for Rejected Executory Contracts
- 39 Interest Earned on Accumulated Cash from
Resulting Chp 11 Case
- 40 Gain or (Loss) from Sale of Equipment
(1,250) - 1,250 41 U.S. Trustee Quarterly Fees (2,500) 1,500
- 42
(3,509) (15,000) 11,491 43 Total Reorganization Items (121,274) (13,500)
(70,502) (96,410) 25,907 44 Net Profit (Loss) Before Federal & State Taxes 10,655,584 (81,007)
- 45 Federal & State Income Taxes
($70,502) ($96,410) $25,907 46 Net Profit (Loss) $10,655,584 ($81,007)
Attach an Explanation of Variance to Statement of Operations (For variances greater than +/- 10% only):
MID-POWER SERVICE CORPORATION
BK-S-10874-RCJ
STATEMENT OF OPERATIONS - VARIANCE EXPLANATIONS
Line 14 - Contract Labor
More hours billed during the transition of contract accountants in the month of
June.
Line 17 - Insurance Unbudgeted but valid car insurance.
Line 20 - Payroll Taxes
Under accrual of Nevada Business taxes in prior months as well as increase in
payroll taxes for the over budget payroll.
Line 24 - Other Administrative
Amounts fluctuate on a monthly basis.
Line 28 - Product Development
Expenditures lower in attempt to wrap-up projects.
Line 29 - Auditors
Accrual of accounting review for prior month was not reversed in the month the
actual invoice was recorded. Thus resulting in a credit balance for the current
month.
Line 30 - Travel
Amounts fluctuate on a monthly basis.
Line 31 - U.S. Stock Transfer Group
Amounts fluctuate on a monthly basis.
Line 32 - SEC Attorney
Forecast had anticipated filing of 10Q with SEC. Monthly 8-K filings, which
require less legal time, are filed instead.
Line 37 - Professional Fees
Forecast for legal fees relating to bankruptcy had been overestimated.
BALANCE SHEET
(General Business Case)
For the Month Ended 06/30/03
Assets
From Schedules Market Value
Current Assets
1 Cash and cash equivalents - unrestricted $1,698
2 Cash and cash equivalents - restricted $0
3 Accounts receivable (net) A $0
4 Inventory B $0
5 Prepaid expenses $5,177
6 Professional retainers $35,000
7 Other: $0
8
9 Total Current Assets $41,875
Property and Equipment (Market Value)
10 Real property C $0
11 Machinery and equipment D $900,000
12 Furniture and fixtures D $0
13 Office equipment D $5,331
14 Leasehold improvements D $0
15 Vehicles D $0
16 Other: D $0
17 D
18 D
19 D
20 D
21 Total Property and Equipment $905,331
Other Assets
22 Loans to shareholders $0
23 Loans to affiliates $931,818
24 Loans to unrelated parties, net of $328,575 allowance $79,305
25 Investment in Mid-Power Resource Corp. Footnote 2 $30,614,289
26
27
28 Total Other Assets $31,625,412
29 Total Assets $32,572,619
NOTE:
See footnotes following this balance sheet.
Liabilities and Equity
(General Business Case)
Liabilities From Schedules
Post-Petition
Current Liabilities
30 Salaries and wages $0
31 Payroll taxes $677
32 Real and personal property taxes $0
33 Income taxes $0
34 Sales taxes $0
35 Notes payable (short term) $0
36 Accounts payable (trade) A $69,147
37 Real property lease arrearage $0
38 Personal property lease arrearage $0
39 Accrued professional fees (accrued but not yet approved by Trustee) $200,415
40 Current portion of long-term post-petition debt (due within 12 months) $326,564
41 Other: Accrued ordinary course expenses $16,164
42 Interest expense - DIP loan $6,458
43 Accrued trustee fees
44 Total Current Liabilities $619,424
45 Long-Term Post-Petition Debt
46 Total Post-Petition Liabilities $619,424
Pre-Petition Liabilities (allowed amount)
47 Secured claims F $0
48 Priority unsecured claims F $0
49 General unsecured claims F $5,708,836
50 Total Pre-Petition Liabilities $5,708,836
51 Total Liabilities $6,328,260
Equity (Deficit) Footnotes 1, 2
52 Retained Earnings/(Deficit) at time of filing ($5,519,415)
53 Capital Stock, $.001 Par Value, 100,000,000 shares
authorized, 27,972,276 issued and outstanding $10,847
54 Additional paid-in capital $25,489,153
55 Cumulative profit/(loss) since filing of case $10,655,584
56 Post-petition contributions/(distributions) or (draws)
57
58 Market value adjustment ($4,391,810)
59 Total Equity (Deficit) $26,244,359
60 Total Liabilities and Equity (Deficit) $32,572,619
Mid-Power Service Corporation
BK-S 03-10874-RCJ
Footnotes to the Balance Sheet
As Of June 30, 2003
Footnote 1
Mid-Power Service Corporation is presented on a stand-alone basis for bankruptcy
reporting purposes. Mid-Power Service Corporation's financial statements do not
represent financial statements prepared in accordance with generally accepted
accounting principles for the consolidated, SEC-registered Mid-Power Service
Corporation. The monthly operating report of Mid-Power Resource Corporation, a
wholly owned subsidiary of Mid-Power Service Corporation, should be read in
conjunction with reading these financial statements. The operations of other
wholly owned subsidiaries have not been reflected in these financial statements.
Mid-Power Service Corporation's cumulative profit since filing of the case
includes an $11.4 million gain on legal settlement. On a consolidated, generally
accepted accounting principle basis, this gain is completely offset by the $11.4
million impairment loss recorded on Mid-Power Resource Corporation.
Footnote 2
The value of Mid-Power Service's wholly owned investment, Mid-Power Resource
Corporation, was adjusted in the March operating report to reflect Mid-Power
Resource's equity balance on March 31, 2003. This valuation reflected the $11.4
million impairment Mid-Power Resource recorded on its Clear Creek property in
March 2003. The application of generally accepted accounting principles might
provide different results. This adjustment was reflected in the market value
component of the equity section. In addition, the market value adjustment
reflects the removal of a GAAP-calculated $8.5 million deferred tax liability
included in the February monthly operating report but which did not reflect an
existing claim by the IRS.
SCHEDULES TO THE BALANCE SHEET
(General Business Case)
Schedule A
Accounts Receivable and (Net) Payable
Receivables and Payables Agings Accounts Receivable Accounts Payable Past Due
[Pre and Post Petition] [Post Petition] Post Petition Debt
0 -30 Days 0 45,385
31-60 Days 0 $20,593
61-90 Days 0 $1,270 $23,762
91+ Days 0 $1,899
Total accounts receivable/payable $0 $69,147
Allowance for doubtful accounts
Accounts receivable (net) $0
Schedule B
Inventory/Cost of Goods Sold
Types and Amount of Inventory(ies) Cost of Goods Sold
Inventory(ies) Inventory Beginning of Month
Balance at
End of Month
Add -
Retail/Restaurants - Net purchase
Product for resale Direct labor
Manufacturing overhead
Distribution - Freight in
Products for resale Other:
Manufacturer -
Raw Materials
Work-in-progress Less -
Finished goods Inventory End of Month
Shrinkage
Other - Explain Personal Use
Cost of Goods Sold $0
TOTAL $0
Method of Inventory Control Inventory Valuation Methods
Do you have a functioning perpetual inventory system? Indicate by a checkmark method of inventory used.
Yes [ ] No [ ]
How often do you take a complete physical inventory? Valuation methods -
FIFO cost
Weekly LIFO cost
Monthly Lower of cost or market
Quarterly Retail method
Semi-annually Other
Annually Explain
Date of last physical inventory was ________________________________
Date of next physical inventory is _________________________________
Schedule C
Real Property
Description Cost Market Value
0
0
0
Total 0 $0 $0
Schedule D
Other Depreciable Assets
Description Cost Market Value
Machinery & Equipment -
Two GG4A-7 Non-Flight Pratt and Whitney turbine engines $900,000 $900,000
Total $900,000 $900,000
Furniture & Fixtures -
Total $0 $0
Office Equipment -
Computers, furniture, etc. $5,331 $5,331
Total $5,331 $5,331
Leasehold Improvements -
Total $0 $0
Vehicles -
Total $0 $0
Schedule E
Aging of Post-Petition Taxes
(As of End of the Current Reporting Period)
Taxes Payable 0-30 Days 31-60 Days 61-90 Days 91+ Days Total
Federal
Income Tax Withholding $0 $0
FICA - Employee $0 $0
FICA - Employer $0 $0
Unemployment (FUTA) $677 $677
Income $0 $0
Other (Attach List) $0 $0
Total Federal Taxes $677 $0 $0 $0 $677
State and Local
Income Tax Withholding $0 $0
Unemployment (UT) $0 $0
Disability Insurance (DI) $0 $0
Empl. Training Tax (ETT) $0 $0
Sales $0 $0
Excise $0 $0
Real property $0 $0
Personal property $0 $0
Income $0 $0
Other (Attach List) $0 $0
Total State & Local Taxes $0 $0 $0 $0 $0
Total Taxes $677 $0 $0 $0 $677
Schedule F
Pre-Petition Liabilities
List Total Claims For Each Classification - Claimed Allowed
Amount Amount (b)
Secured claims (a)
Priority claims other than taxes
Priority tax claims
General unsecured claims $5,708,836
(a) List total amount of claims even it under secured.
(b) Estimated amount of claim to be allowed after compromise or
litigation. As an example, you are a defendant in a lawsuit
alleging damage of $10,000,000 and a proof of claim is filed in
that amount. You believe that you can settle the case for a
claim of $3,000,000. For Schedule F reporting purposes you
should list $10,000,000 as the Claimed Amount and $3,000,000 as
the Allowed Amount.
Schedule G
Rental Income Information
Not applicable to General Business Cases
Schedule H
Recapitulation of Funds Held at End of Month
Account 1 Account 2 Account 3 Account 4
--------- --------- --------- ---------
Bank Wells Fargo
Account Type Checking
Account No. 100-9350453
Account Purpose Operating
Balance, End of Month $1,698
Total Funds on Hand for all Accounts $1,698
Attach copies of the month end bank statement(s), reconciliation(s), and the check register(s) to the Monthly Operating Report.
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
Increase/(Decrease) in Cash and Cash Equivalents
For the Month Ended 06/30/03
Actual Cumulative
Current Month (Case to Date)
Cash Receipts
1 Rent/Leases Collected $0 $0
2 Cash Received from Sales - -
3 Interest Received - 6
4 Borrowings 34,133 326,564
5 Funds from Shareholders, Partners, or Other Insiders - -
6 Capital Contributions - -
7 Collection of accounts receivable - 2,100
8 -
9 -
10 -
11 -
12 Total Cash Receipts 34,133 328,670
Cash Disbursements
13 Payments for Inventory -
14 Selling 9,950
15 Administrative 5,613 40,860
16 Capital Expenditures -
17 Principal Payments on Debt -
18 Interest Paid -
Rent/Lease: -
19 Personal Property 620
20 Real Property 9,154
Amount Paid to Owner(s)/Officer(s) -
21 Salaries -
22 Draws -
23 Commissions/Royalties -
24 Expense Reimbursements -
25 Other -
26 Salaries/Commissions (less employee withholding) 13,330 69,800
27 Management Fees -
Taxes: -
28 Employee Withholding 4,688 25,761
29 Employer Payroll Taxes 1,457 9,511
30 Real Property Taxes -
31 Other Taxes 25
32 Other Cash Outflows:
33 Ordinary Course Professionals - 15,419
34 Contract Labor 5,416 52,834
35 Product Development 6,352 102,781
36 Patent License Fees 1,250 5,450
37 U.S. Trustee - 1,250
38 Advance to Mid-Power Resources 5,520
39 Total Cash Disbursements: 38,106 348,935
40 Net Increase (Decrease) in Cash (3,973) (20,265)
41 Cash Balance, Beginning of Period 5,671 21,963
41 Cash Balance, End of Period $1,698 $1,698