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
March 31, 1998 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.)
#450-650 W. Georgia Street, Vancouver, B.C., Canada V6B 4N8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 684-8662
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 X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
2,116,666 as of March 31, 1998
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEET
(unaudited)
March 31, December 31,
1998 1997
Current Assets:
Cash and cash equivalents $212 $212
Total current assets $212 $212
-------------------------------------------------
TOTAL ASSETS $212 $212
=================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $26,533 $11,069
Accounts payable, related parties $0 $0
-------------------------------------------------
Total current liabilities 26,533 11,069
-------------------------------------------------
STOCKHOLDER'S EQUITY:
Common stock, $0.0001 stated 105,530 105,530
value (Note C) Authorized
100,000,000 shares Issued and
outstanding 2,116,666 shares
Preferred stock, no par value,
100,000,000 shares authorized, no
shares outstanding
Contributed capital 25,442 25,442
Retained Earnings (deficit) (157,293) (141,829)
--------------------------------------------------
Total Stockholders' equity $(26,321) $(10,857)
--------------------------------------------------
TOTAL LIABILITIES & STOCKHOLDERS' $212 $212
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 Three Months
Ending March 31, Ending March 31,
1998 1997
--------------------- --------------------------
Revenue & interest $0 $0
Expenses, general $15,464 $0
and administrative
Provision for income - -
taxes
---------------------- -------------------------
Net income (loss) ($15,464) $0
for period
====================== =========================
Net income (loss) $(-) $(-)
per share
====================== =========================
Weighted average 1,683,818 116,666
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 Months Three Months
Ending Ending
March 31, March 31,
1998 1997
-------------- ----------------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $(15,464) $0
ADJUSTMENTS TO
RECONCILE NET INCOME
(LOSS) TO NET CASH
PROVIDED (USED) BY
OPERATING ACTIVITIES:
Amortization $0 $0
Rent $0 $0
CHANGES IN:
Accounts payable $(15,464) $0
Accounts payable - $0 $0
related parties
------------------ ----------------------
Cash provided (used) by $0 $0
operating activities
================== ======================
Cash at beginning of $212 $0
period
================== ======================
Cash at end of period $212 $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.
<PAGE>
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.
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
<PAGE>
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 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
In 1997, the Company issued 2 million common shares to certain persons and
entities for cash consideration of $21,900. Such shares constitute 94.4% of the
total outstanding stock of the Company.
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
The Company had experienced expenses for the three month period of $15,464 in
1998 and $0 in 1997. The Company had no revenues for the period in 1998 or 1997.
The Company recorded no income for the period in 1997 but had a net loss of
($15,464) in the same period 1998. The Company losses will 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 nominal cash capital at the end of the period. 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.
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: July 22, 1998 by:/s/Ralph Shearing
Ralph Shearing, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 212
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 212
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 212
<CURRENT-LIABILITIES> 26,533
<BONDS> 0
0
0
<COMMON> 105,530
<OTHER-SE> 25,442
<TOTAL-LIABILITY-AND-EQUITY> (26,321)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (15,464)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,464)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
