SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended 9/30/98
Commission file number 000-24623
SW Ventures, Inc.
________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Nevada 87-0559453
____________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization
455 East 400 South, Suite 100
Salt Lake City, Utah 84111
________________________________________
(Address of principal executive offices)
(801) 355-6524
________________________________________________
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports) Yes [ x ] No [ ], and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [ x ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of September 30, 1998, the issuer had outstanding 3,416,066 shares of
its Common Stock, $0.001 par value.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited financial statements of SW Ventures, Inc., a Nevada
corporation (the "Company"), as of September 30, 1998, were prepared by
Management and commence on the following page. In the opinion of Management
the financial statements fairly present the financial condition of the
Company.
<PAGE>
SW Ventures Inc.
Unaudited Balance Sheets
For the Nine Months Ended September 30, 1998
Balance Sheet at September 30, 1998 and December 31, 1997
Statement of Operations For the Nine Months Ended September 30, 1998 and 1997
and for the Three Months Ended September 30, 1998 and 1997
Statement of Cash Flows for the Nine Months Ended September 30, 1998 and 1997
Statement of Changes in Stockholder's Equity from May 7, 1996 (inception) to
September 30, 1998
<PAGE>
SW Ventures Inc.
Balance Sheet
As of September 30, 1998 and December 31, 1997
September 30 December 31
1998 1997
----------- ----------------
(Unaudited)
Assets
Current Assets:
Cash $ 4,504 $ 8,424
Accounts Receivable 10,889 5,878
Inventory 1,071 1,870
----------- ----------------
Total Current Assets 16,464 16,172
Mineral Property & Equipment:
Mineral property 144,200 74,325
Less cost depletion (15,036) (1,705)
Office equipment 4,291 1,953
Less accumulated depreciation (756) (228)
------------- --------------
Net Mineral Property &
Equipment 132,699 74,345
------------- ---------------
Total Assets $ 149,163 $ 90,517
============= ===============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,784 $ 12,648
Advances from officer 8,889 9,000
------------- --------------
Total Current Liabilities 12,673 21,648
Stockholders' Equity:
Common Stock, $.001 par value; authorized
50,000,000 shares, issued and outstanding
3,416,066 shares on Sept. 30, 1998
and 3,000,000 on December 31, 1997 3,416 3,000
Paid-in capital 167,268 111,750
Accumulated deficit (34,194) (45,881)
------------- --------------
Total Stockholders' Equity 136,490 68,869
------------- --------------
Total Liabilities & Stockholders' Equity $ 149,163 $ 90,517
============= =============
<PAGE>
SW Ventures, Inc.
Statement of Operations
For the three month period ended September 30, 1998 and 1997 and
For the nine month period ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
Sept. 30, 1998 Sept. 30, 1997 Sept. 30, 1998 Sept. 30, 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Oil revenue $ 20,124 $ 0 $ 62,629 0
Oil Production Costs 1,774 7,720
Oil production Taxes 2,225 0 7,251 0
General & administrative expenses 10,363 2,212 22,113 11,606
Depreciation expense 215 130 527 130
Cost depletion 5,386 0 13,331 0
----------------- --------------- ---------------- --------------
Total expenses 19,962 2,342 50,942 11,736
----------------- --------------- ---------------- --------------
Income(loss)Before Income Taxes 162 (2,342) 11,687 (11,736)
Income tax provision - - - -
----------------- ---------------- ---------------- --------------
Net Income (Loss) $ 162 $ (2,342) 11,687 (11,736)
================= =============== ================ ==============
Basic and diluted net
income (loss) per common share $ .000 $ (.001) $ 0.004 $ (0.006)
================= ============== ================= ===============
Weighted average shares outstanding 3,396,464 2,043,478 3,254,687 1,943,040
================= ============== ================= ===============
</TABLE>
<PAGE>
SW Ventures, Inc.
Statement of Cash Flows
for the nine months ended September 30, 1998 and September 30, 1997
For the For the
Nine Months Nine Months
Period Ended Period Ended
Sept. 30, 1998 Sept. 30, 1997
(Unaudited) (Unaudited)
-------------- ----------------
Cash flows used in operating activities:
Net loss/gain $ 11,687 $ (11,736)
Adjustments to reconcile income(loss)
to net cash used in operating activities:
Depreciation expense & cost depletion 13,859 130
Changes to operating assets & liabilities:
Increase in accounts receivable (5,011) 0
Decrease in accounts payable (8,864) (1,627)
Decrease in inventory 799 0
-------------- ---------------
Net cash used in operating activities 12,470 (13,233)
-------------- ---------------
Cash flows used in investing activities:
Purchase of equipment & mineral properties (72,213) (76,186)
-------------- ---------------
Net cash used in investing activities (72,213) (76,186)
Cash flows from financing activities:
Offering Cost for common stock issuance (1,976) (5,750)
Common stock issued for services - 4,500
Common stock issued for cash 48,910 103,000
Advances from officers 8,889 5,000
-------------- ---------------
Cash provided by financing activities 55,823 106,750
Net (decrease) increase in cash (3,920) 17,331
Cash, beginning period 8,424 9,175
------------ - ---------------
Cash, end of period $ 4,504 $ 26,506
============== ===============
No cash paid for income taxes or interest.
Supplemental non cash activities:
Issuance of common stock for loan
from affiliate $ 9,000 $ -
============== ===============
<PAGE>
SW Ventures, Inc.
Statements of Changes in Stockholders' Equity
From May 7, 1996 (Inception) to the year ended December 31, 1997
and the Nine Months ended September 30, 1998
<TABLE>
<CAPTION>
$.001
Par value
Common Common Accumu-
Stock Stock Paid-in lated Total
Shares Amount Capital Deficit Equity
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Shares issued to founders
on May 7, 1996 1,475,000 $ 1,475 $ 9,525 $ - $ 11,000
Shares issued for legal fees
(securities registration)
On May 7, 1996 115,000 115 735 - 850
Shares issued for cash on
December 7, 1996 260,000 260 12,740 - 13,000
Net loss for the period from
May 7, 1996 (inception)
through December 31, 1996 (14,728) (14,728)
----------- ---------- ---------- --------- ----------
Balances, December 31, 1996 1,850,000 1,850 23,000 (14,728) 10,122
Shares issued for cash
May 16, 1997 60,000 60 2,940 - 3,000
Shares issued for compensation
May 16, 1997 55,000 55 2,695 - 2,750
Shares issued for legal fees
(securities registration)
on May 16, 1997 35,000 35 1,715 - 1,750
Shares issued for cash (private
placement offering) on
September 26, 1997 net of
offering costs of $17,600 1,000,000 1,000 81,400 - 82,400
Net loss for the year ended
December 31, 1997 (31,153) (31,153)
----------- --------- ---------- --------- ---------
Balances, December 31, 1997 3,000,000 $ 3,000 $111,750 $(45,881) $ 68,869
Shares issued to officer upon
conversion of loan on
January, 1998 90,000 90 8,910 9,000
Shares issued for cash (in
private placement offering)
net of offering costs of
$1976; (275,000 shares in
April; 27,646 shares in June;
23,420 shares in September) 326,066 326 46,608 46,934
Net income for nine months
ended September 30, 1998 11,687 11,687
---------- --------- --------- ---------- ----------
Balance at Sept.30, 1998 3,416,066 $ 3,416 $167,268 $( 34,194) $ 136,490
========== ========== ========= ========= ==========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
The Company owns a 21.25% working interest in an oil and gas program
called the Montana Prospect Drilling Program (the "Program"). Since
purchasing its interest in the Program in August/September 1997, the Company
has participated in the drilling and completion of two wells on the Montana
Prospect, the Montana Berger Well #1 and the Montana Berger Well #2. The
Company has received revenues from operations since December of 1997, when it
received its first revenues from oil production from the Montana Berger Well
#1 which began oil production in October of 1997. An additional well, the
Montana Berger Well #2 began producing oil in April of 1998. From October 10,
1997 until September 30, 1998, the Company has received average gross monthly
revenues of $6,900. After taking into consideration lifting costs, taxes,
and well/administration expenses, the Company received net monthly revenues
averaging approximately $ 5,300 per month for that same approximate one year
period. Although the Company now has two producing oil wells, revenues from
oil production average almost the same as when the Company had only one
producing well due to the fact that oil prices have dropped dramatically since
October of 1997 when the Company first began seeing revenues. The price of
oil per barrel in the market in the third quarter of 1998 was approximately
half of what it was in the fourth quarter of 1997. Presuming the Company's
two producing wells continue to flow at a rate of approximately 100 barrels
per day each, the Company expects to continue to receive minimum gross
revenues from production from the two wells of approximately $7,000 per month,
depending on the price of oil in market which has risen slightly during the
latter half of the month of September although the Company cannot predict
whether this price increase will continue to rise, remain the same or decrease
again. The Company received and average of $13.54 per barrel at its year ended
December 31, 1997. The average price per barrel received during the first
three quarters of 1998 was approximately $7.60 per barrel with a low of $5.79
per barrel in August of 1998.
The Company expects to realize revenues in the next twelve months from
the two producing wells that are more than sufficient to meet the Company's
operating capital requirements but insufficient for any immediate business
expansion and insufficient for the Company to elect to participate in
additional wells in the Program.
During the three months ended September 30, 1998, the Company's net
income was $162 compared to a net loss of $2,342 for the three months ended
September 30, 1997. The Company's net income for the nine months ended
September 30, 1998, was $11,687 as compared to a net loss for the nine months
ended September 30, 1997, of $ 11,736.
The Company attributes the increased income for the three and nine month
periods ended September 30, 1998 primarily to revenues from its oil wells
which commenced production in late 1997. Although the Company experienced a
significant increase in expenses from $2,232 during the third quarter of 1997
to $19,962 for the third quarter 1998, the Company attributes this increase to
the commencement of activities associated with oil production, including taxes
and administration, well operating expenses, and cost depletion on the wells.
The Company also increased its general administrative expenses due to
additional legal and accounting expenses associated with the filing of its
Registration Statement on Form 10SB, as well as compensation paid to one of
the officers of the Company for services rendered to the Company.
PLAN OF OPERATION
During the next 12 months the Company plans to participate in additional
wells to be drilled by the Montana Prospect Drilling Program in which the
Company is a 21.25% working interest participant, at an average cost for
drilling and completion of a well of approximately $65,000 to the Company. In
order to fund its share of the Montana Berger #2, drilled and completed in
April of 1998, as well as the third well originally scheduled to be spudded
in August/September 1998, the Company commenced an offering of 1,200,000
shares of its common stock at $.15 per share, which offering is believed to
be exempt from the registration requirements of Section 5 of the Securities
Act of 1933, as amended (the "1933 Act"), under Section 3(b) of the 1933 Act,
and Rule 504 of Regulation D of the Securities and Exchange Commission. The
Company closed its offering on September 13, 1998 with 326,066 shares sold for
aggregate gross proceeds of $48,910. Such proceeds were insufficient to drill
the Montana Berger #2 well, which required cash advances from an officer and
director of approximately $11,200, of which $2300 has been repaid, as well as
the use of revenues from operations. Due to the low price of oil in the
market, the drilling of the third well has been delayed. As of the date
hereof, the Company does not know if the third well will be drilled this year
or in early Spring although the Company intends to participate in the drilling
of the third well and will require funding for its proportionate share of the
drilling and completion. The funding of the third well in the Montana
Prospect Drilling Program, the Betty Wesley Well #1, will require additional
funds be raised and will likely involve both the use of operating capital and
cash advances from officers and directors along with possible purchase of
investment stock by certain sophisticated investors.
In the next twelve months, the Company is considering the purchase of an
additional working interest in the Montana Prospect Drilling Program or some
other similar drilling program, or acquiring an interest in other
oil/gas/mineral related entities in order to expand and diversify its
operations within the oil and gas industry. The Company, as of this date, is
only investigating such opportunities and has no commitments, understandings
or agreements with any party regarding any of the foregoing. If the Company
elects to participate in any one of the opportunities it is investigating, or
some other opportunity should it become available, the Company will require
additional funding. Such funding will be obtained from operating revenues,
private placements of the Company's stock, or loans from officers and
directors. In the alternative, especially if larger amounts of capital are
required to fund a transaction, the Company is contemplating registering for
sale shares of its common stock. There is no guarantee, however, that the
Company would be successful in such endeavor or successful in attracting an
underwriter.
The Company does not expect to hire any additional employees in the next
twelve months although the Company does have an understanding with Mr. Guido
Cloetens, an officer and director of the Company, that it will, in the near
future, enter into a consulting agreement with Mr. Cloetens or an entity to be
formed by Mr. Cloetens for such purpose, whereby the Company would pay Mr.
Cloetens, or the to-be-formed entity, $2,000 per month for consulting
services. The Company expects to consummate the agreement with Mr. Cloetens
during the fourth quarter of 1998.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
During the Company's third quarter of 1998, the Company closed its
offering being conducted pursuant to the exemption provided for under Section
3(b) and Rule 504 of Regulation D, of the Securities Act of 1933, as amended.
Such offering was commenced on March 16, 1998 with the offer of up to
1,200,000 shares of the Company's unregistered common stock at $.15 per share.
The offering closed on September 13, 1998 with 326,066 common shares sold for
gross proceeds of $48,910. Of the 326,066 shares sold, 29,660 shares were
issued to satisfy an outstanding balance due to the Company's attorney of
$4,449. In addition, an officer and director of the Company, Ms. Terri Jackson
purchased 6,000 shares of stock for $900; the $900 had been due and owing Ms.
Jackson since April of 1998. All of the remaining shares in the offering were
purchased for cash. At June 30, 1998, a total of 302,426 shares had been
subscribed for in the offering. The only shares subscribed for and issued
pursuant to the offering during the Company's third quarter were 23,420
shares.
Item 3. Defaults Upon Senior Securities
Not applicable.
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.
(a)There are no exhibits included with this report.
(b} Reports on Form 8-K -- None
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SW VENTURES, INC.
(Registrant)
Date: October 19, 1998 By: /s/ Terri Jackson
------------------------
Terri Jackson
Director and
Secretary/Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,504
<SECURITIES> 0
<RECEIVABLES> 10,889
<ALLOWANCES> 0
<INVENTORY> 1,071
<CURRENT-ASSETS> 16,464
<PP&E> 132,699
<DEPRECIATION> 15,792
<TOTAL-ASSETS> 149,163
<CURRENT-LIABILITIES> 12,673
<BONDS> 0
0
0
<COMMON> 3,416
<OTHER-SE> 133,074
<TOTAL-LIABILITY-AND-EQUITY> 149,163
<SALES> 62,629
<TOTAL-REVENUES> 62,629
<CGS> 28,302
<TOTAL-COSTS> 28,302
<OTHER-EXPENSES> 22,640
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 11,687
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,687
<EPS-PRIMARY> .004
<EPS-DILUTED> .004
</TABLE>
