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
- ------------------ ----------------------
September 30, 1998 33-28188
THE OHIO & SOUTHWESTERN ENERGY COMPANY
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(Exact name of registrant as specified in its charter)
Colorado 84-1116458
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(State of incorporation) (I.R.S. Employer
Identification No.)
#450-650 W. Georgia Street, Vancouver, B.C. Canada V6B 4N8
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (605) 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.
9,736,695 common shares as of September 30, 1998
<PAGE>
Part I: FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEETS
September 30, 1998 and December 31, 1997
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C>
ASSETS
September 30, December 31,
1998 1997
Current
Cash $ 212 $ 212
---------------------------------------------------
$ 212 $ 212
===================================================
LIABILITIES
Current
Accounts Payable $ 25,410 $ 11,069
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STOCKHOLDERS' EQUITY
Preferred stock $0.01 par value;
100,000,000 shares authorized;
none issued
Common stock no par value;
1,000,000,000 shares authorized;
9,736,695 issued and outstanding 118,730 105,530
Contributed capital 25,442 25,442
Deficit accumulated during the
development stage (169,370) (141,829)
---------------------------------------------------
(25,198) (10,857)
---------------------------------------------------
$ 212 $ 212
===================================================
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SEE ACCOMPANYING NOTE
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the three and nine month periods ended September 30, 1998 and 1997
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C>
Three months ended Nine months ended Cumulative
September 30, September 30 from February
28, 1989
(Date of
Inception) to
September 30,
1998 1997 1998 1997 1998
---- ---- ---- ---- ----
Expenses
Amortization $ - $ - $ - $ - $ 750
General and admini-strative
expenses 410 21,900 4,805 21,900 76,768
Legal fees 25,000 - 25,000 - 25,000
Management fees - - 7,000 - 7,000
Consulting fees 6,200 - 6,200 - 6,200
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Loss before the following:
Unauthorized distribution (31,610) (21,900) (43,005) (21,900) (115,718)
Gain on settlement of debt
- - - - (69,116)
- - 15,464 - 15,464
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Net loss for the period ($31,610) ($21,900) ($27,541) ($21,900) ($169,370)
====================================================================================================
Net loss per share - $(0.03) - ($0.09)
==========================================================================================
Weighted average number of
common shares outstanding
9,550,695 705,555 6,694,695 235,185
==========================================================================================
</TABLE>
SEE ACCOMPANYING NOTE
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
for the period from February 28, 1989 (Date of Inception to September 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C>
Deficit
Accumulated
During the
Common Stock Contributed Development
Shares Amount Capital Stage Total
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Balance, Feb. 28, 1989 - $ - $ - $ - $ -
Issuance of stock to
insiders on March 7, 1989-
at $0.30 per share
33,347 10,000 - - 10,000
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Balance, Dec. 31, 1989 33,347 10,000 - - 10,000
Issuance of stock during
public offering for $3.00
per share, net of offering
costs of $27,270
Net loss 33,348 72,730 - - 72,730
- - - (84,159) (84,159)
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Balance, Dec. 31, 1990 66,695 82,730 - (84,159) (1,429)
Net loss - - - (3,416) (3,416)
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Balance, Dec. 31, 1991 66,695 82,730 - (85,575) (4,845)
Net loss - - - (2,713) (2,713)
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Balance, Dec. 31, 1992 66,695 82,730 - (90,288) (7,558)
Net loss - - - (1,614) (1,614)
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Balance, Dec. 31, 1993 66,695 82,730 - (91,902) (9,172)
Net loss - - - (1,863) (1,863)
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Balance, Dec. 31, 1994 66,695 82,730 - (93,765) (11,035)
Net loss - - -
</TABLE>
SEE ACCOMPANYING NOTE
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY Continued
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
for the period from February 28, 1989 (Date of Inception to September 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C>
Deficit
Accumulated
During the
Common Stock Contributed Development
Shares Amount Capital Stage Total
----------------------------------------------------------------------------------------------------
Issuances of stock for
services rendered at - $0.03
per share 50,000 1,500 - - 1,500
Contributed capital - - 24,842 - 24,842
Net loss - - - (16,735) (16,735)
----------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1995 116,695 84,230 24,842 (110,500) (1,428)
Net loss - - - (9,068) (9,068)
----------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1996 116,895 84,230 24,842 (119,568) (10,496)
Issuance of shares for cash
Contributed capital 2,000,000 21,300 - - 21,300
Net loss - - 600 - 600
- - - (22,261) (22,261)
----------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1997 2,116,695 105,530 25,442 (141,829) (10,857)
Issuance of shares for
services rendered at -
$.0.001 per share 7,000,000 7,000 - - 7,000
Issuance of shares for
services rendered at - $0.01
Net loss to 9/30/98 620,000 6,200 - - 6,200
- - - (27,541) (27,541)
----------------------------------------------------------------------------------------------------
Balance, Sept. 30, 1998
9,736,695 $118,730 $25,442 ($169,370) ($25,198)
====================================================================================================
</TABLE>
SEE ACCOMPANYING NOTE
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the nine month period ended September 30, 1998 and 1997
and February 28, 1989 (Date of Inception) to September 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
Nine months ended
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<S> <C> <C> <C>
Cumulative
from February
28, 1989 (Date
of Inception)
September 30, September 30, to September
1998 1997 30, 1998
----------------------------------------------------------------------------------------
Cash flows from operating
activities
Net loss ($27,541) ($21,900) ($169,370)
Adjustments to reconcile net
loss to net cash used in
operations
Accounts payable (15,464) - (2,895)
Management fees 7,000 - 7,000
Amortization - - 750
Consulting fees 6,200 - 6,200
Changes in non-cash items:
Accounts payable 29,805 - 29,805
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Net cash used in operating
activities - (21,900) (128,510)
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Cash flows from investing activities:
Organization costs - - (750)
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Net cash used in investing
activities - - (750)
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Cash flows from financing
activities:
Proceeds from issuance of
common stock - - 131,300
Payment of offering costs - - (27,270)
Contributed capital - - 25,442
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Net cash provided by financing
activities - - 129,472
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Net increase in cash - - 212
Cash, beginning of period 212 - -
Contributed capital - 21,900 -
----------------------------------------------------------------------------------------
Cash, end of period $ 212 - $ 212
========================================================================================
</TABLE>
SEE ACCOMPANYING NOTE
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Stated in US Dollars)
(Unaudited-See Note 1)
NOTE 1 - INTERIM REPORTING
These financial statements have not been audited or reviewed and have been
prepared on a compilation basis only. Readers are cautioned that these
statements may not be appropriate for their purposes. While the information
presented in the accompanying interim six month financial statements is
unaudited, it includes all adjustments which are, in the opinion of management,
necessary to present fairly the financial position, result of operations, and
changes in cash flows for the interim period presented. It is suggested that
these financial statements be read in conjunction with the December 31, 1997
audited financial statements and notes thereto.
NOTE 2 - 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.
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.
<PAGE>
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
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 (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 3 - 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
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.
<PAGE>
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 (50,000 post-split) shares of
common stock valued at $1,500 to seven unrelated entities who performed services
for the Company during the Receivership.
In 1997, the Company issued 2 million common shares to certain persons and
entities for cash consideration of $21,900.
NOTE 4 - RELATED PARTY TRANSACTION
On April 6, 1998, the Company issued seven million shares of common stock for
$7,000 in services rendered to its President, Robert Kropf, who was also a
director.
The Company is not being charged office rental for space provided by its
president. Such amounts would be nominal.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD IN 1998 COMPARED TO THE SAME PERIOD
IN 1997. The Company had no operations in the period in 1998 or in 1997.
Although the Company contracted to acquire as a wholly owned subsidiary, CanArab
Technology, Inc., with the intent to enter the shrimp aquaculture and processing
business, no operations in such subsidiary have commenced, and it is still in
the organizational and business plan stage, and the transaction is yet
incomplete.
The Company underwent a change in control in July 1998, and it incurred legal
expenses in connection therewith of $25,000, and incurred consulting fees of
$6,200 relating to issuance of shares registered on Form S-8 for services
rendered.
The Company had expenses for the three month period of $31,610 in 1998 compared
to $21,900 in 1997. The Company had no revenues for the period in 1998 or 1997.
The Company recorded a ($31,610) net loss for the period in 1998 and had a net
loss of ($21,900) in the same period 1997. 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. In the third
quarter, the Company recognized $15,464 in extraordinary income from settlement
of debt.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO
THE SAME PERIOD IN 1997.
In 1998 for the nine month period, the Company incurred general and
administrative expenses of $4,805, legal fees of $25,000, consulting fees of
$6,200, and manufacturing fees of $7,000. In 1997, for the period, the Company
incurred $21,900 in general and administrative expenses. The loss for the period
in 1998 was ($27,541) as compared to the loss on operations for the period in
1997 of ($21,900). In the third quarter, the Company recognized $15,464 in
extraordinary income from settlement of a debt.
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. At period end current liabilities exceeded assets
by $25,198.
<PAGE>
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
Reports on Form 8-K were made for the period for which this report is
filed as follows:
a. 8-K filed July 13, 1998
b. 8-K filed September 10, 1998
<PAGE>
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.
Date: _______________, 1999
THE OHIO AND SOUTHWESTERN ENERGY COMPANY
/s/ Ralph Shearing
-------------------------------------------
Ralph Shearing, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 212
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 25,410
<BONDS> 0
0
0
<COMMON> 118,730
<OTHER-SE> (143,928)
<TOTAL-LIABILITY-AND-EQUITY> 212
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 43,005
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (43,005)
<DISCONTINUED> 0
<EXTRAORDINARY> 15,464
<CHANGES> 0
<NET-INCOME> (27,541)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
