FORM 10-KSB
SECURITY AND EXCHANGE COMMISSION
Washington, D.C. 20549
X Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1996.
OR
Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File No. 0-9249
UNITED TRANS-WESTERN, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1519286
(State of other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
4809 Cole Avenue
Suite 340
Dallas, Texas 75205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 526-1294
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
(Title of Class)
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 of the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-KSB, or any amendment to this Form 10-KSB.
YES X NO
The registrant's revenues for its most recent fiscal year were zero.
The aggregate market value of the voting stock held by nonaffiliates of
the registrant is not presently determinable. See "Item 5. Market for
Registrant's Common Stock and Refitted Stockholder Matters."
The number of shares outstanding of each of the registrant's classes of
common stock, as of March 14, 1997, was 8,698,842 shares of common stock.
Transactional Small Business Disclosure Format (check one):
YES X NO
PART I
<PAGE>
Item 1. Description of Business
Development of Business
The Company emerged from bankruptcy in August 1986 and was actively
engaged in the business of acquiring and developing oil and gas properties
until January 1994, when it sold all of its remaining oil and gas properties.
The proceeds from the property sale were used to repay all of the Company's
bank debt and a significant portion of its indebtedness to affiliates.
Business Activity
The Company is engaged, through its Hong Kong based subsidiary and in
conjunction with two other parties, in negotiations with Huayang Petroleum
Exploration and Development Corporation ("HYPC") for rights to enhance and
develop seven existing Chinese oil fields in Jiangsu Province, China.
As negotiations continue, it is anticipated that the Company will attempt
to involve one or more experienced oil and gas exploration and production
companies to perform field operations and to provide project financing.
There is no assurance that the negotiations with HYPC will be successful or
that the Company will be able to locate and engage an appropriate industry
participant to provide the necessary field operations and project financing.
Except for the negotiations with HYPC, the Company is not engaged at
present in any business activities. Management, however, continues to look
for opportunities to grow the Company. In this regard, it is anticipated
that the Company will grow, at least initially, by acquiring assets,
properties and businesses through the issuance of equity or by arranging
third party financing, or by a combination of both. There is no assurance,
however, that the Company will identify any desirable acquisition or that
the Company will be able to complete any acquisition on acceptable terms.
The Company does not have any paid employees at present.
Item 2. Properties
Corporate Headquarters
The Company's corporate headquarters are currently located in 1,487 square
feet of leased office space in Dallas, Texas. The space is leased by
PremierCap Ltd. an affiliate of the President of the Company ("Premier"),
but the Company shares this space with Premier based upon an informal
overhead allocation arrangement between the Company and Premier. The
Company's allocation is currently 30 percent of this office space,
or approximately 446 square feet. To date, Premier has not charged the
Company for the use of this office space. See also, "Item 13.
Certain Relationships and Related Transactions."
Other Properties
The Company does not own or lease any properties at present and has not
owned or leased any properties since it disposed of its oil and gas
properties in January 1994. See, "Item 1. Description of Business-
Development of Business and Item 6. Management's Discussion and
Analysis or Plan of Operation- Management's Discussion and Analysis."
<PAGE>
Item 3. Legal Proceedings
There are no material pending, or to the Company's knowledge, threatened
lawsuits against the Company requiring disclosure under this Item 3.
Item 4. Submissions of Matters to a Vote of Security Holders
During the fourth quarter of the year ended December 31, 1996, no matters
were submitted to a vote of security holders through solicitation of proxies
or otherwise.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
The Company is not aware of any public market for its common stock nor of
any quotations for its stock and no assurances can be given that a viable
trading market will develop. As of March 14, 1997, there were approximately
900 record holders of common stock of the Company. The Company has not paid
dividends on its common stock and the Board of Directors presently
intends to continue a policy of retaining any earnings for use in the Company's
operations.
Item 6. Management's Discussion and Analysis or Plan of Operation
Plan of Operation
The Company has been inactive since January 1994 and, with the exception of
a portion of the $160,000 raised by the Company through the private
placement of 160,000 shares of its common stock to Renwood Capital
Corporation in the first quarter of 1997 to fund certain costs and expenses
related primarily to the negotiations with HYPC, all of the funds necessary to
date to cover the Company's general and administrative costs have come from
loans from affiliates. In December 1996, all but $11,053 of these loans
were converted to equity. See "Item 12. Certain Relationships and Related
Transactions."
As stated under "Item 1. Description of Business-Business Activity," the
Company intends to attempt to identify and make acquisitions. However, any
such attempt will require, at least initially, that the Company obtain
financing through the issuance of securities, or by arranging third party
financing, or a combination of both. There are no assurances that the Company
will identify any desirable acquisition or that the Company will have access
to funding to complete any acquisition. Until such an acquisition and
funding is consummated, management anticipates that funding of the Company's
continuing general and administrative costs will continue to come from
loans from, and equity sales to, affiliates.
Management's Discussion and Analysis
In January 1994, the Company completed the sale of all of its remaining oil
and gas properties to Premier and used the proceeds to reduce outstanding
indebtedness. Details of the sale were included in an Information Statement
mailed to stockholders and filed with the Securities and Exchange Commission
on January 6, 1994, which Information Statement is incorporated by
reference herein. This sale left the Company with no oil and gas properties or
other productive assets. Since this sale, management of the Company has
investigated several acquisition opportunities, but to date no acquisition
has been consummated. As stated under "Item 1. Description of Business-
Business Activity," the Company and two other parties are currently
negotiating with HYPC to enhance and develop seven existing Chinese oil
fields, but there is not assurance that the negotiations will be successful
or that the Company will be able to arrange for the necessary expertise and
funding to enhance and develop the fields.
<PAGE>
As a result of Company's operational inactivity for all of 1996, the
Company did not have any operating revenues in 1996. It did, however, incur
the ongoing general and administrative expenses necessary for the Company to
maintain its corporate existence and status as a going concern, resulting in
a loss in 1996. Since the Company does not at present have any operations
with which to generate revenues to offset continuing general and
administrative expenses, management expects the Company's losses to
continue for the foreseeable future.
Item 7. Financial Statements
The Financial statements filed herewith begin of page F-1 hereof.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
United Trans-Western, Inc.
We have audited the accompanying balance sheet of United Trans-Western, Inc. as
of December 31, 1996, and the related statements of operations, changes in
stockholders' deficit and cash flows for the years ended December 31, 1996
and 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the 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 United Trans-Western, Inc.
as of December 31, 1996, and the results of its operations and its cash
flows for the years ended December 31, 1996 and 1995, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1, in
January 1994 the Company sold substantially all of its oil and gas
properties. Subsequent to the sale, the Company is without significant assets
or business operations, which raises substantial doubt about its ability to
continue as a going concern. Management's plans for the Company
are discussed in Note 2(d). The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Hein + Associates llp
Dallas, Texas
February 26, 1997
<PAGE>
UNITED TRANS-WESTERN, INC.
BALANCE SHEET
December 31, 1996
ASSET
CURRENT ASSET:
Cash $ 6,400
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 39,224
Advances from related parties 11,053
Total Current Liabilities 50,277
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value; 50,000,000 shares authorized,
8,698,842 shares issued and outstanding 86,988
Additional paid-in capital 1,739,286
Accumulated deficit (1,870,151)
Total Stockholders' Deficit (43,877)
Total Liabilities and Stockholders' Deficit $ 6,400
<PAGE>
UNITED TRANS-WESTERN, INC.
STATEMENTS OF OPERATIONS
Years ended December 31, 1996 and 1995
1996 1995
REVENUES $ - $ -
COSTS AND EXPENSES:
General and administrative 38,596 11,571
Interest expense, net 14,182 19,438
Total Costs and Expenses 52,778 31,009
NET LOSS $ (52,778) $ (31,009)
NET LOSS PER SHARE $ - $ -
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 8,494,169 8,425,944
<PAGE>
UNITED TRANS-WESTERN, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Period from January 1, 1995 through December 31, 1996
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
Balance,
January 1, 1995 8,425,944 $ 84,259 $ 1,469,117 $(1,786,364) $ (232,988)
Net loss - - - (31,009) (31,009)
Balance,
December 31, 1995 8,425,944 $ 84,259 1,469,117 (1,817,373) (263,997)
Conversion of debt
to equity 272,898 2,729 270,169 - 272,898
Net loss - - - (52,778) (52,778)
Balance,
December 31, 1996 8,698,842 $ 86,988 $ 1,739,286 $(1,870,151) $ (43,877)
<PAGE>
UNITED TRANS-WESTERN, INC.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1996 and 1995
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (52,778) $ (31,009)
Adjustments to reconcile net loss to net
cash from operating activities:
Interest expense paid with
common stock 14,182 -
Change in accounts payable
and accrued expenses 33,233 21,021
Net cash used in
operating activities (5,363) (9,988)
CASH FLOWS FROM FINANCING ACTIVITIES -
Proceeds from advances from stockholders 11,703 9,971
NET INCREASE IN CASH 6,340 (17)
CASH AT BEGINNING OF YEAR 60 77
CASH AT END OF YEAR $ 6,400 $ 60
SUPPLEMENTAL INFORMATION:
Debt and advances converted into equity $ 272,898 -
<PAGE>
UNITED TRANS-WESTERN, INC.
NOTES TO FINANCIAL STATEMENTS
1. Nature of Operations
United Trans-Western, Inc. (the "Company") emerged from bankruptcy on August
29, 1986. The Company is incorporated in Delaware and until January 1994
was engaged in oil and gas producing activities. At December 31, 1993,
Golodetz Corporation ("Golodetz") and certain of its affiliates owned 83%
of the common stock of the Company. A substantial majority of these shares
were sold to another party in January 1994 at which time the Company
also sold all of its oil and gas properties and paid most of its
liabilities.
2. Summary of Significant Accounting Policies
(a) Income Taxes
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently
due plus deferred taxes related primarily to differences between
the financial and income tax reporting bases of assets and
liabilities. The deferred tax assets and liabilities represent
the future tax return consequences of those differences, which
will either be taxable or deductible when the assets and
liabilities are recovered or settled.
(b) Statements of Cash Flows
For purposes of the statement of cash flows, the Company considers
cash on deposit and all highly liquid investments with original
maturities of three months or less to be cash equivalents.
(c) Net loss Per Common Share
Net loss per common share has been computed based upon the weighted
average number of common shares outstanding during each year.
(d) Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
above, in January 1994 the Company sold substantially all of its
oil and gas properties. Subsequent to the sale, the Company has
been without significant assets or business operations, which
raises substantial doubt about its ability to continue as a going
concern. Management intends to attempt to acquire oil and gas
properties or other businesses or assets by issuing Company stock
or by arranging financing with third parties in order to return
the Company to the status of an operating business concern.
(e) Use of Estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the
Company's management to make estimates and assumptions that affect
the amounts reported in these financial statements and accompanying
notes. Actual results could differ from those estimates.
UNITED TRANS-WESTERN, INC.
NOTES TO FINANCIAL STATEMENTS
3. Liabilities and common stock
During 1996, the Company converted $272,898 of debt payable to one of the
Company's major stockholders into 272,898 shares of common stock. The
debt consisted of $180,767 of notes payable, $43,413 of advances,
and $48,718 of accrued interest. As of December 31, 1996, the Company
has outstanding advances from stockholders totaling $11,053. The
advances are non-interest bearing and contain no specific repayment
terms.
4. Income Taxes
The Company had substantial Federal income tax net operating loss
carryforwards, statutory depletion carryforwards and investment tax
credit carryforwards available at December 31, 1996. However, following
a change in control of the Company in January 1994, use of the
carryforwards were severely limited. Net operating loss carryforwards
subsequent to the change in control, which may be applied to offset future
taxable income, amounted to approximately $120,000 at December 31, 1996
and will expire in 2009 through 2011.
The components of the Company's deferred tax assets and liabilities at
December 31, 1996 and 1995 were as follows:
December 31
1996 1995
Deferred tax asset -
net operating loss carryforward $ 42,000 $ 27,000
Less valuation allowance (42,000) (27,000)
Net deferred tax $ - $ -
5. Subsequent Events
Subsequent to December 31, 1996, the Company entered an arrangement with
two other parties to acquire an interest in a joint venture with a
regional Chinese energy company to develop existing oil and gas
properties in China. The Company also privately placed 160,000 shares of
newly issued common stock for $160,000. A portion of the funds was used
to help fund the preliminary costs of pursuing the joint venture.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
For the fiscal year ended December 31, 1996, there were no disagreements
between the Company and Hein + Associates LLP on matters of accounting
principles or practices, financial statement disclosures, or auditing scope
or procedure, which disagreements, if not resolved to the satisfaction of
Hein + Associates LLP would have caused it to make a reference to the
subject matter of the disagreements in connection with its reports.
PART III
Item 9. Directors and Executive Officers of the Registrant
The following table sets forth certain information as of March 14, 1997
concerning the directors and executive officers of the Company:
Name Age Position
J. W. Brown 50 President, Secretary,
Treasurer and Director
Shelia Penn 53 Assistant Secretary
Each director serves until the next annual meeting of stockholders and
until his successor is duly elected and qualified. Officers serve at the
discretion of the Board of Directors.
Mr. Brown has served as a director and officer of the Company since
January 1994. Mr. Brown is the founder and general partner of Premier
Capital, Ltd, a Texas limited partnership ("PCL"), and its affiliate,
Premier, a Texas limited liability company, both of which are engaged in
providing investment banking services to the energy industry. Mr. Brown
has served as the General Partner of PCL since its inception in August 1991
and has served as a Manager of Premier since its formation in March 1993.
From January 1989 to August 1991, Mr. Brown was a founder and principal of
Wes-Al Capital Corp., an energy investment banking firm, and prior to that
he was employed in the oil and gas business in private companies which he
formed and managed and in the private practice of law.
Mrs. Penn has served as an officer of the Company since April 1994.
Mrs. Penn also serves as administrative assistant to the General Partner
of PCL.
Item 10. Executive Compensation.
No officer or director received any compensation from the Company during
the year ended December 31, 1996. The Company has no formal employment
agreement with any of its officers or directors, and has no retirement,
profit sharing, pension or insurance plans covering them. No officer
received any bonus, restricted stock award, options or stock appreciation
rights, long-term incentive plan payouts, insurance or other benefits from
the Company during the year ended December 31, 1996.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information indicating the Common Stock
beneficially owned as of March 14, 1996, by each director, by all officers
and directors as a group and by each person known to the Company to be the
beneficial owner of more than five percent of the Company's common stock:
Amount and Nature of Percent of
Name and Address Beneficial Ownership (1)(2) Class
J. W. Brown 1,009,459 (3) 11.60
All Directors and
officers as a group
(2 persons) 1,034,458 11.89
New West Resources Inc. 2,000,000 23.73
David A. Pallett 2,719,361 22.99
Bullard & Associates 505,000 5.99
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to dispose or to
direct the disposition) with respect to a security whether through any
arrangement, understanding, relationship or otherwise.
(2) Except as otherwise indicated, the named person has sole voting and
investment power with respect to the Common Stock set forth opposite
his name.
(3) Shared voting and investment power with respect to 272,898 of these
shares as result of being a principal of Premier Capital, Ltd.
Item 12. Certain Relationships and Related Transactions.
In December, 1996, PCL and the Company consummated a transaction whereby
$272,898 of indebtedness of the Company to PCL was converted, on the basis
of one share of the Company's common stock for each $1.00 of indebtedness,
into 272,898 shares of common stock.
As described under "Item 2. Properties - Corporate Headquarters,"
Premier furnishes office space to the Company. To date, Premier has not
charged the Company for use of this office space.
PART IV
Item 13. Exhibits and Reports on Form 8-K.
A. The following documents are filed as a part of this Annual Report
on Form 10-KSB:
3.1 Certificate of Incorporation of the Company annexed as Exhibit B
to the Information Statement for the Annual Meeting of Stockholders held May
31, 1989 and incorporated herein by reference.
3.2 Bylaws of the Company annexed as Exhibit B to the Information
Statement for the Annual Meeting of Stockholders held May 31, 1989 and
incorporated herein by reference.
B. Reports on Form 8-K. The following current reports on Form 8-K
were filed by the Company during the quarter ended December 31, 1995.
A Form 8-K was filed by the Company on December 24, 1996
reporting on the agreement by New West Resources, Inc. ("NWR") to sell, and
the agreement of Bullard & Associates ("B&A") to purchase, all of the shares
of common stock of the Company owned by NWR, and the assignment by B&A
of the right and option to purchase a portion of those shares to David A.
Pallett, who exercised the option by purchasing 2,719,361 shares from NWR on
December 12, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed by on its behalf by the undersigned, thereunto duly authorized, on
the 31 day of March, 1997.
UNITED TRANS-WESTERN, INC.
(Registrant)
By: s/s J. W. Brown
J. W. Brown
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the dates indicated.
Name Capacities Date
s/s J. W. Brown Director, President, Treasurer 3/31/97
J. W. Brown (Principal Financial Officer)
and Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
3.1 Certificate of Incorporation of United Trans-Western, Inc. annexed as
Exhibit B to the Information Statement for the Annual Meeting of
Stockholders held May 31, 1989 and incorporated herein by reference.
3.2 Bylaws of United Trans-Western, Inc. annexed as Exhibit B to the
Information Statement for the Annual Meeting of Stockholders held
May 31, 1989 and incorporated herein by reference.
<PAGE>
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<PERIOD-END> DEC-31-1996
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<ALLOWANCES> 0
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<CURRENT-ASSETS> 6,400
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