SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KS B
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended 12-31-95
Commission file number 33-28188
THE OHIO & SOUTHWESTERN ENERGY COMPANY
--------------------------------------
(Exact name of registrant as specified in its charter)
JEFFERSON CAPITAL CORPORATION
-----------------------------
Formerly known name
Colorado 84-1116458
-------- ----------
(State of incorporation) (I.R.S. Employer
Identification No.)
7535 E. Hampden Ave., Ste. 600, Denver, CO 80231
------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: None
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None
Name of each exchange on which registered: N/A
Securities registered pursuant to Section 12(g) of the Act:
Title of each class: None
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 the filing
requirements for at least the past 90 days.
Yes No X
----- -----
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will 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. X
---
State issuer's revenues for its most recent fiscal year. $0
<PAGE>
Transitional Small Business Disclosure Format:
Yes X No
----- -----
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1995: $0
Number of outstanding shares of the registrant's no par value common stock, as
of December 31, 1995: 116,666.
<PAGE>
PART 1
------
Item 1. Business
Jefferson Capital Corporation (the Company), a development stage company,
was organized under the laws of the State of Colorado on February 28, 1989.
The Company is in the development stage as defined in Financial Standards
Board Statement No. 7.
On January 4, 1990, the Company sold 10,000,000 units of no par value
common stock in a "Blind Pool" public offering. The offering price for each
unit was $.01. Each unit consisted of one share of the Company's no par
value common stock and 25 Class A Common Stock Redeemable Purchase Warrants
(Class A Warrants). The Class A Warrants are exercisable for 24 months from
the effective date of the registration statement (October 30, 1989) and
entitled the holder thereof to purchase 25 shares of common stock at a
price of $.014 per share. The Company received $72,730, net of offering
costs, from the sale of common stock in the public offering.
Effective June 13, 1990, the Company entered into a merger agreement with
Ohio & Southwestern Energy Company (OSEC). The Company issued 80,000,000
shares of its common stock in exchange for all of the outstanding shares of
OSEC. After the exchange of shares, OSEC's sole shareholder, Members
Service Corporation (MSC), owned 80% of the Company's issued and
outstanding common stock. The name of the corporation was changed to Ohio &
Southwestern Energy Company (OSEC).
No significant business activity was conducted by the Company during the
fiscal year. As a result, no income was realized by the Company in its last
fiscal year.
While the company commenced 1990 with a successful public offering, the
subsequent merger agreement with Ohio & Southwestern Energy Corp. (OSEC)
became an abortive transaction. The new management of OSEC never completed
the merger with assets represented, and without authorization distributed
the corporate funds to unauthorized parties or uses which resulted in a
total write off of the capital of the Company.
The majority stockholder, MSC, failed to disclose to the minority
stockholders the distribution of corporate funds during the year ended
1990. The Company recorded an extraordinary loss in the amount of $69,116
as a result of the unauthorized distribution of corporate funds in 1990.
The minority shareholders filed a complaint in Arapahoe County Colorado
District Court, Civil Division, during April, 1991 alleging among other
things that the majority shareholder, MSC, failed to disclose the
distribution of corporate funds, failed to account for the operations of
<PAGE>
the corporation and transferred assets of the corporation without
stockholder or board meetings. The supposed assets of OSEC did not exist
and the Company (OSEC) was a sham.
On August 28, 1991, a Receiver was appointed and the court ordered the
80,000,000 shares of common stock issued to MSC to be canceled. On January
12, 1995, the minority shareholders filed a motion for supplemental orders
requesting that the merger between Jefferson Capital Corporation and Ohio
and Southwestern Energy Company be declared null and void and a bar date of
April 15, 1995, be set within which any and all creditors must file a
claim.
On May 23, 1995, the Receiver issued his final report stating that no
claims of creditors had been filed by the bar date. The Receiver incurred
$36,395 in costs during receivership. Certain of the costs had been
advanced by the Receiver in the anticipation of issuance of shares of
common stock by the Board of Directors after the dismissal of the
Receivership.
On June 21, 1995, the Court ordered the merger null and void, approved the
Receiver's final report and restored the name of the Company to Jefferson
Capital Corporation. The Company engaged in no foreign operations or export
sales to date, has no product and has no full-time employees at year end.
The Company was inactive and presently does not participate in any industry
segment. The Company had no material revenues, or operating profits or
identifiable assets attributable to its industry segment, but incurred
losses as a result of the merger agreement with Ohio & Southwestern Energy
Company.
Comparison of year Ended December 31, 1995 to year Ended December 31, 1994.
The Company ceased operations in June 1991, and has had no revenues or
sales of any type.
On August 30, 1995 the shareholders of the company voted to approve a
reverse split of up to one new share for 300 shares outstanding. On
September 25, 1995, the directors effectuated a reverse split on a one for
300 shares basis.
Item 2. Property
--------
The Company does not have any formal offices at year end. Records are
maintained and mail received at 7535 E. Hampden Ave., Ste. #600, Denver, CO
80231. The company owns no property.
Item 3. Legal Proceedings
-----------------
The Company is a party to no pending legal proceedings, nor is its property
subject to such proceedings, at year end 1995.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
a.) Comparison of year Ended December 31, 1995 to year Ended December 31,
1994. The Company ceased operations in June 1991, and has had no
revenues or sales of any type.
b.) On May 23, 1995, a shareholders meeting was held and the current
directors were elected.
PART II
-------
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
---------------------------------------------------------------------
As of the date of this report, management knows of no trading or quotation
of the Company's common stock. The range of high and low bid quotations for
each fiscal quarter since the last report, as reported by the National
Quotation Bureau Incorporated, was as follows:
1996 High Low
---- ---- ---
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
1995 High Low
---- ---- ---
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
- ------------------
* No quotations reported
The above quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not necessarily represent actual
transactions.
As of December 31, 1995 there were 42 record holders of the Company's
common Stock.
The Company has not declared or paid any cash dividends on its common stock
and does not anticipate paying dividends for the foreseeable future.
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
-----------------------------------------------------------------------
Financial Condition and Changes in Financial Condition
------------------------------------------------------
No operations were conducted and no revenues were generated in the fiscal
year. The Company at year end had no capital, no cash, and no assets
whatsoever. The Company at year end was totally illiquid and would have
needed cash infusions from shareholders to provide capital.
Liquidity
---------
The Company had no cash at December 31, 1995
The Company ceased active operations in 1991 and has no business at the
present time. It anticipates seeking acquisition or merger candidates in
the future.
During the course of the fiscal year ended December 31, 1995, the Company's
outstanding debt level decreased to $1,425 from $11,035 in fiscal year
ended December 31, 1994. This reduction was due to settlement of accounts
payable.
Stockholders deficit decreased to ($1,425) at December 31, 1995 compared to
($11,035) at December 31, 1994.
Capital Resources
-----------------
None. The Company currently has no capital resources.
The Company has no other known material commitments for capital
expenditures. The Company has no additional plans, agreements, or
commitments concerning any transaction which would require the Company to
use a significant amount of capital.
Results of Operations
---------------------
During the fiscal year ended December 31, 1995, the Company incurred
general and administrative expenses. $1,713 in administrative expenses were
incurred in 1994. At present, the Company has no business income or
operations. Accordingly, the reported financial information herein may not
be indicative of future operating results.
Comparison of year Ended December 31, 1995 to year Ended December 31, 1994.
The Company ceased operations in June 1991, and has had no revenues or
sales of any type.
<PAGE>
General and administrative expenses for the years ended December 31, 1995
and 1994 were $16,734 and $1,863 respectively.
The operating losses for years ended December 31, 1995 and 1994 were
($16,734) and ($1,863) respectively. The net loss for year ended December
31, 1995 was ($16,734). For year ended December 31, 1994, the net loss was
($1,863).
Loss per share for year ended December 31, 1995 was $.19 per share,
compared to approximately $.03 per share for year ended December 31, 1994.
The management of the Company does not believe that inflation has had any
material effect on the Company during the year ended December 31, 1994.
Item 7. Financial Statements and Supplementary Data
-------------------------------------------
Please refer to pages F-1 through F-10.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
--------------------------------------------------------------------
NONE
PART III
Item 9. Directors and Executive Officers of the Registrant and Compliance with
Section 16(a)
-----------------------------------------------------------------------
The directors and executive officers of the Company as of December 31, 1995
are as follows:**
Name Age Position
---- --- --------
Kevin D. Geiss 31 President, Director
Ernest A. Teed 57 Vice President, Director
Jimmy A. McKinnon 47 Secretary, Treasurer, Director
**Prior officers and directors removed from the company as part of the
Receivership have refused to respond or file any reports. The
Directors shown herein were duly elected in a shareholders meeting in
May 1995 and the officers duly appointed by the Board thereafter.
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.
Kevin D. Geiss, received his BA in Business Administration from the
University of Northern Colorado in December of 1985. Upon graduation, Mr. Geiss
<PAGE>
spent two years as a regional marketing director with Dynavex, Inc. a
manufacturer of oxygen related equipment. Currently Mr. Geiss owns and operates
an insurance agency affiliated with the Farmers Insurance Group of Companies.
Mr. Geiss also served as a Vice President, Treasurer and Director of ANCR, Inc.
in a public "Blank Check" company formed in Colorado in 1985. Mr. Geiss resigned
as part of a reverse acquisition transaction in October of 1987. Mr. Geiss was a
founding Director of Registrant, resigning in June 1990 from ANCR.
Ernest A. Teed, received his BA in secondary education from Western State
University, Gunnison, Colorado, in 1960 and his MA in 1964 from the University
of Denver. Mr. Teed, in 1993, retired from a 30 year career as a teacher, coach,
student advisor and activities director for the Denver Public Schools. Mr. Teed
was a founding director of Registrant, resigning in June 1990.
Jimmy A. McKinnon, owned and operated his own electric sign business in
Denver, Colorado for many years. He also served as a Vice President and Director
of Monterey Capital Corporation, a public "Blank Check" company formed in
Colorado in 1986. Mr. McKinnon resigned from Monterey as part of a reverse
acquisition transaction in May of 1988.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) that they file. No officers, directors or 10% shareholders have filed any
Reports pursuant to Section 16(a) at year end.
Item 10. Executive Compensation
-----------------------
The Company accrued a total of $0 in compensation to the executive officers
as a group for services rendered to the Company in all capacities during the
1995 fiscal year. No one executive officer received, or has accrued for his
benefit, in excess of $60,000. No cash bonuses were or are to be paid to such
persons. No compensation was deferred.
The Company does not have any employee incentive stock option plans.
There are no plans pursuant to which cash or non-cash compensation was paid
or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
<PAGE>
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.
Item 11. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table sets forth information, as of December 31, 1995, with
respect to the beneficial ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock, and by the Company's management.
Stock Names and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- --------- --------
Common Kevin D. Geiss 5,833 5%
President & Director
999 18th, #212
Denver, CO 80202
Common Ernest A. Teed 833 .7%
Vice President & Director
2090 S. Asbury Dr.
Lakewood, CO 80215
Common Jimmy A. McKinnon 833 .7%
Secretary & Director
6574 Field Ave.
Arvada, CO 80004
Common Stephen Bushansky 5,833 5%
2575 Palisade Ave.
Riverdale, NY 10463
Common Nicolette Lowry 5,833 5%
700 Morley Ct.
Dearborn, MI 48124
Common James E. Pansing 5,833 5%
3773 Cherry Creek N. Dr. #655
Denver, CO 80209
Common Robert Beaton 10,000 8.6%
12002 W. 14th Avenue
Golden, CO 80401
<PAGE>
Common Gene Hochevar 10,000 8.6%
1916 Oaks Way
Oklahoma City, OK 73131
Common Jim Hock 10,000 8.6%
21800 Burbank Blvd., #300
Woodland Hills, CA 91360
On May 23, 1995, a shareholders meeting was held and the current directors
were elected.
Officers and Directors as a group 7,500 6.4%
NOTE: 80,000,000 shares issued to Members Service Corp. was canceled pursuant to
Court Order in August 1991.
Item 12. Certain Relationships and Related Transactions
----------------------------------------------
During March 1989, the Company sold 10,000,000 units of no par value common
stock to its officers, directors and private investors. The offering price for
each unit was $.001. Each unit consisted of one share of the Company's no par
value common stock and 25 common stock purchase warrants. Each warrant enables
its holder to purchase one share of restricted common stock at $.014 per share
for a period of 24 months commencing with the effective date of the prospectus
(October 30, 1989). The Company received $10,000 in proceeds from the sale of
common stock to its officers, directors and private investors.
On January 4, 1990, the Company sold 10,000,000 units of no par value
common stock in a "Blind Pool" public offering. The offering price for each unit
was $.01. Each unit consisted of one sharer of the Company's no par value common
stock and 25 Class A Common Stock Redeemable Purchase Warrants (Class A
Warrants). The Class A Warrants are exercisable for 24 months from the effective
date of the registration statement (October 30, 1989) and entitle the holder
thereof to purchase 25 shares of common stock at a price of $.014 per share. The
Company received $72,730, net of offering costs, from the sale of common stock
in the public offering. All Warrants expired in October 1991.
Effective June 13, 1990, the Company entered into a merger agreement with
Ohio & Southwestern Energy Company (OSEC). The Company issued 80,000,000 shares
of its common stock in exchange for all of the outstanding shares of OSEC. After
the exchange of shares, OSEC's sole shareholder, Members Service Corporation
(MSC), owned 80% of the Company's issued and outstanding common stock. The name
of the corporation was changed to Ohio & Southwestern Energy Company (OSEC).
The minority shareholders filed a complaint in Arapahoe County District
Court, Colorado, Civil Division, during April, 1991 alleging among other things
that the majority shareholder, MSC, failed to disclose the distribution of
corporate funds, failed to account for the operations of the corporation and
transferred assets of the corporation without stockholder or board meetings.
<PAGE>
On August 28, 1991, a Receiver was appointed and the court ordered the
80,000,000 shares of common stock issued to MSC to be canceled. On January 12,
1995, the minority shareholders filed a motion for supplemental orders
requesting that the merger between Jefferson Capital Corporation and Ohio and
Southwestern Energy Company be declared null and void and a bar date of April
15, 1995, be set within which any and all creditors must file a claim.
On May 23, 1995, the Receiver issued his final report stating that no
claims of creditors had been filed by the bar date. The Receiver incurred
$36,395 in costs during receivership. Certain of the costs had been advanced by
the Receiver in the exception of issuance of shares of common stock by the Board
of Directors after the dismissal of the Receivership.
On June 21, 1995, the Court ordered the merger null and void, approved the
Receiver's final report and restored the name of the Company to Jefferson
Capital Corporation.
On July 25, 1995, the Company issued 50,000 shares adjusted for one for 300
reverse split of common stock for $.03 per share to seven unrelated parties for
legal and consulting services rendered.
Item 13. Disagreements with Accountants on Accounting and Financial Disclosure
---------------------------------------------------------------------
There has been no change of Accountants since the 1989 Audit.
In connection with audits of two most recent fiscal years and any interim
period preceding resignation, no disagreements exist with any former accountant
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope of procedure, which disagreements if not resolved
to the satisfaction of the former accountant would have caused him to make
reference in connection with his report to the subject matter of the
disagreement(s).
The principal accountant's report on the financial statements for any of
the past two years contained no adverse opinion or a disclaimer of opinion nor
was qualified as to uncertainty, audit scope, or accounting principles except
for the "going concern" qualification.
PART IV
-------
Item 14. Exhibits and Reports on Form 8-K
---------------------------------
The following documents are filed as part of this report:
1. Reports on Form 8-K: None
<PAGE>
2. Exhibits:
Form 10-K
Regulation Consecutive
S-K Number Exhibit Page Number
- ---------- ------- -----------
3.1 Articles of Incorporation *
3.3 Bylaws *
24.2 Court Order dated August 23, 1991 *
24.3 Court Order dated June 21, 1995 *
*Incorporated by reference to SEC filing #33-28188.
**Incorporated by reference to 10-KS B Report for 12/31/94 period.
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 on its
behalf by the undersigned, thereunto duly authorized.
THE OHIO & SOUTHWESTERN ENERGY CO.
----------------------------------
(Registrant)
Date: October 7, 1997
---------------
/s/ Kevin D. Geiss
----------------------------------
President, Chief Executive Officer
Pursuant to 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
and on the dates indicated.
THE OHIO & SOUTHWESTERN ENERGY CO.
----------------------------------
(Registrant)
Date: October 7, 1997
---------------
/s/ Kevin D. Geiss
----------------------------------
Director
/s/ Ernest A. Teed
----------------------------------
Director
/s/ Jimmy A. McKinnon
----------------------------------
Director
<PAGE>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditors' Report F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4
Statements of Changes in Stockholders' Equity (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
F-1
<PAGE>
A.J. ROBBINS, PC
Certified Public Accountants
and Consultants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of The Ohio and Southwestern Energy Company
We have audited the accompanying balance sheets of The Ohio and Southwestern
Energy Company (a development stage company) as of December 31, 1996, 1995 and
1994, and the related statements of operations, changes in stockholders' equity
(deficit), and cash flows for each of the years in the four year period then
ended and cumulative from February 28, 1989 (inception). 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 The Ohio and Southwestern
Energy Company as of December 31, 1996, 1995 and 1994, and the results of its
operations and its cash flows for each of the years in the four year period then
ended and cumulative from February 28, 1989 (inception), 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 to the
financial statements, the Company is in the development stage and has not earned
any revenues from operations. Its ability to continue as a going concern is
dependent upon its ability to develop additional sources of capital, locate a
merger candidate and ultimately achieve profitable operations. These conditions
raise substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ AJ ROBBINS, P.C.
-----------------------------------------
July 11, 1997
Denver, Colorado
F-2
3033 East 1st Avenue, Suite #201, Denver, CO 80206 - 303-321-1281
Fax 303-321-1288
<PAGE>
<TABLE>
<CAPTION>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEETS
ASSETS
------
December 31,
-----------------------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
CURRENT ASSETS $ -- $ -- $ --
--------- --------- ---------
$ -- $ -- $ --
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES, accounts payable $ 10,496 $ 1,428 $ 11,035
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 100,000,000 shares
authorized, none issued and outstanding -- -- --
Common stock, no par value, 1,000,000,000 shares
authorized, 116,666, 116,666 and 66,666 issued
and outstanding, respectively 84,230 84,230 82,730
Contributed capital 24,842 24,842 --
(Deficit) accumulated during the development stage (119,568) (110,500) (93,765)
--------- --------- ---------
Total Stockholders' Equity (Deficit) (10,496) (1,428) (11,035)
--------- --------- ---------
$ -- $ -- $ --
========= ========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative from
February 28, 1989
For the Years Ended (Inception to)
December 31, December 31,
--------------------------------------------------------- ------------
1996 1995 1994 1993 1996
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ - $ -
------------- ----------- ----------- ----------- ------------
COSTS AND EXPENSES:
Amortization - - 150 150 750
General and administrative 9,068 16,734 1,713 1,464 49,702
------------- ----------- ----------- ----------- ------------
Total Costs and Expenses 9,068 16,734 1,863 1,614 50,452
------------- ----------- ----------- ----------- ------------
(LOSS) BEFORE
EXTRAORDINARY ITEM (9,068) (16,734) (1,863) (1,614) (50,452)
EXTRAORDINARY ITEM,
UNAUTHORIZED DISTRIBUTION - - - - 69,116
------------- ----------- ----------- ----------- ------------
NET (LOSS) $ (9,068) $ (16,734) $ (1,863) $ (1,614) $ (119,568)
============ ========== ========== =========== ============
NET (LOSS) PER COMMON SHARE $ (.08) $ (.19) $ (.03) $ (.02)
============ ========== ========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 116,666 88,447 66,666 66,666
============= =========== =========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM FEBRUARY 28, 1989 (INCEPTION)
TO DECEMBER 31, 1996
(Deficit)
Accumulated
Common Stock During the
----------------- Contributed Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Balances, February 28, 1989 $ -- $ -- $ -- $ -- $ --
Issuance of stock to insiders
on March 7, 1989
at $.30 per share 33,333 10,000 -- -- 10,000
Net income December 31, 1989 -- -- -- -- --
--------- --------- --------- --------- ---------
Balances, December 31, 1989 33,333 10,000 -- -- 10,000
Issuance of stock during public
offering for $3.00
per share, net of offering
costs of $27,270 33,333 72,730 -- -- 72,730
Net (loss) December 31, 1990 -- -- -- (84,159) (84,159)
--------- --------- --------- --------- ---------
Balances, December 31, 1990 66,666 82,730 -- (84,159) (1,429)
Net (loss) December 31, 1991 -- -- -- (3,416) (3,416)
--------- --------- --------- --------- ---------
Balances, December 31, 1991 66,666 82,730 -- (87,575) (4,845)
Net (loss) December 31, 1992 -- -- -- (2,713) (2,713)
--------- --------- --------- --------- ---------
Balances, December 31, 1992 66,666 82,730 -- (90,288) (7,558)
Net (loss) December 31, 1993 -- -- -- (1,614) (1,614)
--------- --------- --------- --------- ---------
Balances, December 31, 1993 66,666 82,730 -- (91,902) (9,172)
Net (loss) December 31, 1994 -- -- -- (1,863) (1,863)
--------- --------- --------- --------- ---------
Balances, December 31, 1994 66,666 82,730 -- (93,765) (11,035)
Issuance of stock for services
rendered at $.03 per share 50,000 1,500 -- -- 1,500
Contributed capital -- -- 24,842 -- 24,842
Net (loss) December 31, 1995 -- -- -- (16,735) (16,735)
--------- --------- --------- --------- ---------
Balances, December 31, 1995 116,666 84,230 24,842 (110,500) (1,428)
Net (loss) December 31, 1996 -- -- -- (9,068) (9,068)
--------- --------- --------- --------- ---------
Balances, December 31, 1996 116,666 $ 84,230 $ 24,842 $(119,568) $ (10,496)
========= ========= ========= ========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative from
For the Years Ended February 28, 1989
December 31, (Inception to)
--------------------------------------------------------- December 31,
1996 1995 1994 1993 1996
--------- --------- --------- --------- ---------
CASH FLOWS (TO) OPERATING ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Net (loss) from operations $ (9,068) $ (16,735) $ (1,863) $ (1,614) $(119,568)
Adjustments to reconcile
net (loss) to net cash
used by operating
activities:
Amortization -- -- 150 150 750
Changes in:
Accounts payable 9,068 (8,107) 1,713 1,464 11,996
--------- --------- --------- --------- ---------
Net Cash (Used) by
Operating Activities -- (24,842) -- -- (106,822)
--------- --------- --------- --------- ---------
CASH FLOWS (TO) INVESTING ACTIVITIES:
(Increase) in organization costs -- -- -- -- (750)
--------- --------- --------- --------- ---------
Net Cash (Used) by
Investing Activities -- -- -- -- (750)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common
stock to insiders -- -- -- -- 10,000
Proceeds from issuance of common
stock to the public -- -- -- -- 100,000
Payment of offering costs from
issuance of common stock to
the public -- -- -- -- (27,270)
Contributed capital -- 24,842 -- -- 24,842
--------- --------- --------- --------- ---------
Net Cash Provided by
Financing Activities -- 24,842 -- -- 107,572
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH -- -- -- -- --
CASH, beginning of period -- -- -- -- --
--------- --------- --------- --------- ---------
CASH, end of period $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-6
</TABLE>
<PAGE>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
===========================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History
- -------
The Ohio and Southwestern Energy Company (OSEC) (the Company) (also known as
Jefferson Capital Corporation or JEFFCO), a development stage company, was
organized under the laws of the State of Colorado on February 28, 1989. The
Company is in the development stage as defined in Financial Standards Board
Statement No. 7.
Effective June 13, 1990, JEFFCO entered into a merger agreement with OSEC.
JEFFCO issued 80,000,000 (pre-split) shares of its common stock in exchange for
all of the outstanding shares of OSEC. After the exchange of shares, OSEC's sole
shareholder, Members Service Corporation (MSC), owned 80% of the Company's
issued and outstanding common stock. The name of the surviving corporation
became Ohio & Southwestern Energy Company (OSEC).
The minority shareholders filed a complaint during April, 1991 alleging among
other things that the majority shareholder, MSC, failed to disclose the
distribution of corporate funds, failed to account for the operations of the
corporation and transferred assets of the corporation without stockholder or
board meetings.
On August 28, 1991, a Receiver was appointed and the court ordered that the
80,000,000 (pre-split) shares of common stock issued to MSC be cancelled. On
January 12, 1995, the minority shareholders filed a motion for supplemental
orders requesting that the merger between JEFFCO and OSEC be declared null and
void and a bar date of April 15, 1995 be set within which any and all creditors
must file a claim.
On May 23, 1995, the Receiver issued his final report stating that no claims of
creditors had been filed by the bar date. The Receiver incurred $36,395 in costs
during receivership. Certain of the costs had been advanced by the Receiver in
the expectation of issuance of shares of common stock by the Board of Directors
after the dismissal of the Receivership.
On June 21, 1995, the court ordered the merger agreement null and void, approved
the Receiver's final report and restored the name of the Company to Jefferson
Capital Corporation. The Company decided its name would remain The Ohio and
Southwestern Energy Company.
Going Concern
- -------------
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company is in the
development stage and has not earned any revenues from operations.
F-7
<PAGE>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
===========================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company is currently devoting its efforts to locating merger candidates. The
Company's ability to continue as a going concern is dependent upon its ability
to develop additional sources of capital, locate a merger candidate, and
ultimately, achieve profitable operations. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
Income Taxes
- ------------
Effective January 1, 1990, the Company adopted 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.
For federal income tax purposes, substantially all expenses must be deferred
until the Company commences business and may be written off over a 60-month
period. The Company is not in business at this date. Therefore, $119,568 of net
losses incurred to date have not been deducted for tax purposes and represent a
deferred tax asset at this date. The Company is providing a valuation allowance
in the full amount of the deferred tax asset since there is no assurance of
future taxable income.
Income (Loss) Per Share
- -----------------------
Net income (loss) per share is calculated by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Fully diluted and primary earnings per common share are the same amounts for
each of the periods presented. Dilutive common stock equivalents consist of
stock warrants. In loss periods, dilutive common stock equivalent shares are
excluded as the effect would be antidilutive.
NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)
During March 1989, the Company sold 33,333 units of no par value common stock to
its officers, directors and private investors. The offering price for each unit
was $.30. Each unit consisted of one share of the Company's no par value common
stock and 25 common stock purchase warrants. Each warrant enables its holder to
purchase one share of restricted common stock at $4.20 per share for a period of
24 months commencing with the effective date of the prospectus (October 30,
1989). The Company received $10,000 in proceeds from the sale of common stock to
its officers, directors and private investors.
On July 25, 1995, the Company issued 50,000 shares of common stock for $.03 per
share to seven unrelated parties for legal and consulting services rendered.
F-8
<PAGE>
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
===========================
NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
On January 4, 1990, the Company sold 33,333 units of no par value common stock
in a public offering. The offering price for each unit was $3.00. Each unit
consisted of one share of the Company's no par value common stock and 25 Class A
Common Stock Redeemable Purchase Warrants (Class A Warrants). The Class A
Warrants are exercisable for 24 months from the effective date of the
registration statement (October 30, 1989) and entitle the holder thereof to
purchase 25 shares of common stock at a price of $4.20 per share. The Company
received $72,730, net of offering costs, from the sale of common stock in the
public offering. All warrants have expired unexercised.
On September 26, 1995, the Board of Directors approved a one for 300 share
reverse split. All financial information and per share data have been restated
to reflect this event.
NOTE 3 - RELATED PARTY TRANSACTIONS
Former legal counsel for the Company was also a stockholder. Total legal fees
during 1990 were $650.
The Company borrowed $363 from its president/stockholder during December 1989.
These funds were repaid in January 1990.
The Company is not being charged office rental for space provided by its former
president. Such amounts would be nominal.
NOTE 4 - EXTRAORDINARY ITEM
The former majority stockholder, MSC, failed to disclose to the minority
stockholders the distribution of corporate funds during the year ended 1990. The
Company recorded an extraordinary loss in the amount of $69,116 as a result of
the unauthorized distribution of corporate funds (see Note 1).
NOTE 5 - SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS FOR NON-CASH
FINANCING ACTIVITIES
The Company issued 50,000 shares of common stock with a value of $1,500 for
legal and consulting services rendered.
NOTE 6 - SUBSEQUENT EVENTS
On March 20, 1997, the Company received $21,300 for 2,000,000 subscribed shares
of common stock. The proceeds were designated to pay outstanding transfer agent,
legal, accounting and miscellaneous bills.
F-9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1,428
<BONDS> 0
0
0
<COMMON> 84,230
<OTHER-SE> 24,842
<TOTAL-LIABILITY-AND-EQUITY> (1,428)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,734
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,734)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,734)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
</TABLE>
