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, 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
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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.
9,116,695 common shares as of June 30, 1998
<PAGE>
Part I: FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEETS (Stated in US
Dollars) (Unaudited--See Note 1)
ASSETS
June 30, December 31,
1998 1997
<S> <C>
Current
Cash $212 $212
-----------------------------------------------------------
$212 $212
===========================================================
LIABILITIES
Current
Accounts payable - $11,069
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STOCKHOLDERS' EQUITY
Preferred stock, no par value,
100,000,000 shares authorized,
none issued
Common stock, $0.01 par value
100,000,000 shares authorized;
9,116,695 issued & outstanding 112,530 105,530
Contributed capital 25,442 25,442
Deficit accumulated during the
development stage (137,760) (141,829)
-----------------------------------------------------------
212 (10,857)
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$212 $212
===========================================================
</TABLE>
SEE ACCOMPANYING NOTES
F-1
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the three and six month periods ended June 30, 1998 and 1997
(Stated in US Dollars)
(Unaudited - See Note 1)
Three months ending Six months ending Cumulative
June 30 June 30, from Feb.
1998 1997 1998 1997 28, 1989
---- ---- ---- ---- (Date of
Inception)
to June 30,
1998
----
<S> <C> <C> <C> <C>
Expenses
Amortization $- $- $- $- $750
General & Admin
Expenses - - 4,395 - 76,358
Management fees $7,000 $- $7,000 $- 7,000
-----------------------------------------------------------------------------------
Loss before the following: ($7,000) - (11,395) - (84,108)
Unauthorized distribution - - - - (69,116)
Gain on Settlement of debt 15,464 - 15,464 - 15,464
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Net income (loss) for the
period 8,464 - 4,069 - (137,760)
===================================================================================
Net income per share - - - -
===================================================================================
Weighted average number of
common shares outstanding 8,501,310 116,666 5,344,473 116,666
===================================================================================
</TABLE>
SEE ACCOMPANYING NOTES
F-2
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
for the period from February 28, 1989 (Date of Inception)t o June 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
During the
Common Stock Contributed Development
Shares Amount Capital Stage Total
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<S> <C> <C> <C> <C> <C>
Balance, February 28, 1989 - $ - $ - $ - $ -
Issuance of stock to
insiders on March 7, 1989
- - at $0.30 per share 33,347 10,000 - - 10,000
------------------------------------------------------------------------------------
Balance, December 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 33,348 72,730 - - 72,730
Net loss - - - (84,159) (84,159)
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Balance, December 31, 1990 66,695 82,730 - (84,159) (1,429)
Net loss - - - (3,416) (3,416)
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Balance, December 31, 1991 66,695 82,730 - (85,575) (4,845)
Net loss - - - (2,713) (2,713)
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Balance, December 31, 1992 66,695 82,730 - (90,288) (7,558)
Net loss - - - (1,614) (1,614)
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Balance, December 31, 1993 66,695 82,730 - (91,902) (9,172)
Net loss - - - (1,863) (1,863)
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Balance, December 31, 1994 66,695 82,730 - (93,765) (11,035)
</TABLE>
SEE ACCOMPANYING NOTES
F-3
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY Continued
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
for the period from February 28, 1989 (Date of Inception)t o June 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
During the
Common Stock Contrib Development
Shares Amount -uted Stage Total
Capital
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuances of stock for services 50,000 $ 1,500 $ - $ - $ 1,500
rendered at - $0.30 per share
Contributed capital
Net loss - - 24,842 - 24,842
- - - (16,735) (16,735)
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Balance, December 31, 1995 Net 116,695 84,230 24,842 (110,500) (1,428)
loss - - - (9,068) (9,068)
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Balance, December 31, 1996 116,895 84,230 24,842 (119,568) (10,496)
Issuance of share for cash 2,000,000 21,300 - - 21,300
Contributed capital - - 600 - 600
Net loss - - - (22,261) (22,261)
---------------------------------------------------------------------------------------
Balance, December 31, 1997 2,116,695 105,530 25,442 (141,829) (10,857)
Issuance of shares for
Services rendered at $.001 per
share 7,000,000 7,000 - - 7,000
Net income to 6/30/98 - - - 4,069 4,069
---------------------------------------------------------------------------------------
Balance, June 30, 1998 9,116,695 112,530 25,442 (137,760) 212
=======================================================================================
</TABLE>
SEE ACCOMPANYING NOTES
F-4
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the six months ended June 30, 1998 and 1997
and February 28, 1989 (Date of Inception) to June 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
Six months ended
June 30, 1998 June 30, 1997 Cumulative
for February
28, 1989
(Date of
Inception) to
June 30, 1998
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<S> <C> <C> <C>
Cash flow to operating activities:
Net gain (loss) $ 4,069 $ (6,046) $ (137,760)
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
Changes in non-cash items:
Accounts payable 4,395 6,064 4,395
--------------------------------------------------------------------
Net cash used in operating
activities - - (128,510)
--------------------------------------------------------------------
Cash flows to investing
activities - - (750)
Organization costs
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Net cash used in investing
activities: - - (750)
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Cash flows to financing
activities:
Proceeds from issuance of
common stock - - 131,300
Payment of offering costs - - (27,270)
Contributed capital - - 25,442
--------------------------------------------------------------------
Net cash provided by
financing activities - - 129,472
--------------------------------------------------------------------
Net increase in cash - - 212
Cash, beginning of period 212 - -
--------------------------------------------------------------------
Cash, end of period $212 $- $212
====================================================================
</TABLE>
SEE ACCOMPANYING NOTES
F-5
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Stated in US Dollars)
(Unaudited-See Note 1)
NOTE 1 - INTERIM REPORTING
These financial statements have not been auditied 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 thereon.
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 experienced expenses for the three month period of $7,000 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 income of $8,464
in the same period 1998 due to a gain on settlement of debt of $15,464. The
Company losses may continue until income can be achieved through business
operations. While the Company is seeking capital sources for investment; there
is no assurance that sources can be found.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998, COMPARED TO THE
SAME PERIOD IN 1997.
The Company had no revenues from operations for the six month period in 1998 or
in 1997. The Company incurred $11,395 in operating expenses in the period in
1998, resulting in an operating loss of ($11,395) compared to no expenses in
1997 and no profit or loss. The expenses in the 1998 period were incurred for
reporting costs and investigation services of the President related to seeking
an acquisition. The Company had net income of $4,069 in the period in 1998 as a
result of the settlement of $15,464 in debt. In the period in 1997, the Company
had no income or loss.
Losses on operations may continue until business revenues can be achieved of
which there is no assurance.
LIQUIDITY AND CAPITAL RESOURCES
The Company had no 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
<PAGE>
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.
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
-----------------------------------------
President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<NAME> OHIO & SOUTHWESTERN ENERGY COMPANY
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 212
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 212
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 212
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 137,972
<OTHER-SE> (137,760)
<TOTAL-LIABILITY-AND-EQUITY> 212
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,000)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 15,464
<CHANGES> 0
<NET-INCOME> 8,464
<EPS-PRIMARY> .000
<EPS-DILUTED> .000
</TABLE>
