SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
June 30, 1997 33-28188
THE OHIO & SOUTHWESTERN ENERGY COMPANY
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1116458
-------- ----------
(State of incorporation) (I.R.S. Employer
Identification No.)
7535 E. Hampden Ave., Ste. 600, Denver, CO 80231
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
116,666 as of June 30, 1997
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEET
(unaudited)
June 30, December 31,
1997 1996
----------- -----------
Current Assets:
Cash and cash equivalents $0 $0
Total current assets $0 $0
----------------------------------
TOTAL ASSETS $0 $0
==================================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $10,496 $10,496
Accounts payable, related parties $0 $0
----------------------------------
Total current liabilities $10,496 $10,496
----------------------------------
Stockholder's equity:
Common stock, $0.01 stated value 84,230 84,230
(Note C) Authorized 100,000,000
shares Issued and outstanding
116,666 shares
Preferred stock, no par value,
100,000,000 shares authorized, no
shares outstanding
Contributed capital 24,842 24,842
Retained Earnings (deficit) (119,568) (119,568)
----------------------------------
Total Stockholders' equity ($10,496) ($10,496)
----------------------------------
TOTAL LIABILITIES & STOCKHOLDERS' $0 $0
EQUITY
==================================
The accompanying notes are an integral part of the financial statements.
F-1
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF OPERATIONS
(unaudited)
Three months ending Six months ending
June 30 June 30,
------- --------
1997 1996 1997 1996
---- ---- ---- ----
Revenue & interest $0 $0 $0 $0
---------------------------------------------------
Expenses, general $0 $3,023 $0 $6,046
and administrative
Provision for income -- -- -- --
taxes
---------------------------------------------------
Net income (loss) $0 $(3,023) $0 ($6,046)
for period
===================================================
Net income (loss) $(-) $(.03) $(-) $(.05)
per share
===================================================
Weighted average 116,666 116,666 116,666 116,666
number of common
shares
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(unaudited)
Three Three Six Six
Months Months Months Months
Ending Ending Ending Ending
June 30, June 30, June 30, June 30,
1997 1996 1997 1997
---------------------- ----------------------
Cash flows from
operating activities:
Net income (loss) $0 ($3,023) $0 ($6,046)
Adjustments to
reconcile net income
(loss) to net cash
provided (used) by
operating activities:
Amortization $0 $0 $0 $0
Rent $0 $0 $0 $0
Changes in:
Accounts payable $0 $0 $0 $6,046
Accounts payable - $0 $0 $0 $0
related parties
---------------------- ----------------------
Cash provided (used) $0 $0 $0 $0
by operating
activities
====================== ======================
Cash at beginning of $0 $0 $0 $0
period
====================== ======================
Cash at end of period $0 $0 $0 $0
====================== ======================
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History
- -------
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.
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
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.
(See Note 5)
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.
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
<PAGE>
of liabilities in the normal course of business. The Company is in the
development stage and has not earned any revenues from operations.
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.
Organization Costs
- ------------------
Organization costs are being amortized over a 60-month period using the
straight-line method.
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 $93,765 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 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
<PAGE>
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 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 $.01 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 unissued.
In September 1995 the Board of Directors authorized a 1 for 300 reverse stock
split of its common stock, after a shareholders vote.
On August 7, 1995, the Company issued 15 million (150,000 post- split) shares of
common stock valued at $15,000 to seven unrelated entities who performed
services for the Company during the Receivership.
NOTE 3 - RELATED PARTY TRANSACTION
Outside legal counsel is also a shareholder.
The Company is not being charged office rental for space provided by its
president. Such amounts would be nominal.
NOTE 4 - EXTRAORDINARY ITEM
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. (See Note 1)
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED JUNE 30, 1997
- ----------------------------------------------------------------
The Company had no operating expenses for the three month period compared to
($3,023) in 1996. There were no revenues for the period in the 1996 or 1997
period. The Company recorded a net loss of $0 for the period in 1997 and
($3,023) in the 1996 period. The Company losses may continue until income can be
achieved. While the Company is seeking capital sources for investment; there is
no assurance that sources can be found.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company had no cash capital at the end of the period and $10,496 in current
liabilities. The Company will be forced to either borrow or make private
placements of stock in order to fund operations. No assurance exists as to the
ability to achieve loans or make private placements of stock.
RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997
- ------------------------------------------------------------------
The Company had no revenues for the period in 1996 or 1997. The Company incurred
general and administrative expenses of $0 for the period in 1997 and $6,046 in
1996. The net income for the six month period was $0 in 1997 and ($6,046) in
1996.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- -------------------------
None
ITEM 2. CHANGES IN SECURITIES
- -----------------------------
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
- --------------------------------------
None
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
- ----------------------------------------
No reports on Form 8-K were made for the period for which this report is
filed.
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
SIGNATURES
Pursuant to the requirements 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 AND SOUTHWESTERN ENERGY COMPANY
Date: November 13, 1997 /s/ Kevin D. Geiss
----------------------------------------
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> JUN-30-1997 DEC-31-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 10,496 10,496
<BONDS> 0 0
0 0
24,842<F1> 24,842<F1>
<COMMON> 84,230 84,230
<OTHER-SE> (119,568)<F2> (119,568)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 9,068
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (9,068)
<EPS-PRIMARY> 0 (.08)
<EPS-DILUTED> 0 (.08)
<FN>
<F1>Contributed Capital
<F2>Retained Earnings
</FN>
</TABLE>
