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, 2000 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.)
REGISTERED OFFICE:
-----------------
7535 E. Hampden Ave., Ste. 600, Denver, CO 80231
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
EXECUTIVE OFFICES:
-----------------
450-650 West Georgia St., Vancouver, B.C. Canada
-------------------------------------------------------
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.
9,736,695 as of September 30, 2000
<PAGE>
ITEM 1. FINANCIAL INFORMATION
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
BALANCE SHEET
as at September 30, 2000 and December 31, 1999
(Unaudited - See Note 1)
<S> <C> <C>
30-Sep December 31,
2000 1999
------ ------------
LIABILITIES
Current
Accounts Payable $ 73,361 $ 27,188
Due to related party $ 79,640 $ 58,772
-------------- -----------
$ 153,001 $ 85,960
-------------- -----------
STOCKHOLDERS' DEFICIENCY
Share capital
Authorized:
100,000,000 common shares, no par value
100,000,000 preferred shares, $0.01 par value
Issued:
9,736,695 common shares - Note 2 144,172 144,172
Deficit accumulated during the development stage $ (297,173) $ (230,132)
-------------- -----------
$ (153,001) $ (85,960)
-------------- -----------
$ - $ -
============== ===========
</TABLE>
SEE ACCOMPANYING NOTES
Business Acquisition - Note 3
F-1
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF OPERATIONS AND DEFICIT
for the three and nine month periods ended September 30, 2000 and 1999
and February 28, 1989 (Date of Inception) to September 30, 2000
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C> <C> <C>
February 28, 1989
Three Three Nine Nine (Date of
months ended months ended months ended months ended Inception) to
September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
Operating expenses $ 56,976 $ 3,397 $ 67,041 $ 29,931 $ 243,521
--------------- ------------- ------------ -------------- ----------------
Loss before other items ( 56,976) ( 3,397) ( 67,041) ( 29,931) ( 243,521)
Other items
Unauthorized distribution - - - - ( 69,116)
Gain on settlement of debt - - - - 15,464
--------------- ------------- ------------ -------------- ----------------
Net loss for the period ( 56,976) ( 3,397) ( 67,041) ( 29,931) ( 297,173)
Deficit, beginning of period ( 240,197) ( 220,671) ( 230,132) ( 194,137) -
--------------- ------------- ------------ -------------- ----------------
$ ( 297,173) $ ( 224,068) $ ( 297,173) $ ( 224,068) $ ( 297,173)
=============== ============= ============ ============== ================
Loss per share $ ( 0.00) $ ( 0.00) $ ( 0.01) $ ( 0.00)
=============== ============= ============ ============== ================
Weighted average number of common shares
outstanding 9,736,695 9,736,695 9,736,695 9,736,695
=============== ============= ============ ==============
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for three and nine month periods ended September 30, 2000 and 1999
and February 28, 1989 (Date of Inception) to September 30, 2000
(Unaudited - See Note 1)
<S> <C> <C> <C> <C> <C>
February 28, 1989
Three Three Nine Nine (Date of
months ended months ended months ended months ended Inception) to
September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
Cash Flows from Operating Activities
Net (loss) $ ( 56,976) $ ( 3,397) $ ( 67,041) $ ( 29,931) $ ( 297,173)
Add (deduct) items not affecting cash
Amortization - - - - 750
Consulting fees - - - - 6,200
Gain on settlement of debt - - - - ( 15,464)
Management fees - - - - 7,000
------------ ----------- ------------- ------------- ----------------
( 56,976) ( 3,397) ( 67,041) ( 29,931) ( 298,687)
Change in non-cash items
Prepaid expenses - - - ( 343) -
Accounts payable 45,434 782 46,173 3,547 90,325
Due to related party 11,542 2,615 20,868 26,727 79,640
------------ ----------- ------------- ------------- ----------------
Net cash (used by) from operating activities - - - - ( 128,722)
------------ ----------- ------------- ------------- ----------------
</TABLE>
F-3
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
THE OHIO & SOUTHWESTERN ENERGY COMPANY Continued
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
for the three and nine month periods ended September 30, 2000 and 1999
and for the period February 28, 1989 (Date of Inception) to September 30, 2000
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C> <C> <C>
February 28, 1989
Three Three Nine Nine (Date of
months ended months ended months ended months ended Inception) to
September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
Cash flow from investing activities
Organization costs - - - - ( 750)
------------ ------------ ---------- --------- ------------
Net cash (used) by investing activities - - - - ( 750)
------------ ------------ ---------- --------- ------------
Cash flows from financing activities
Proceeds from issuance of common shares - - - - 131,300
Payment of offering costs - - - - ( 27,270)
Contributed capital - - - - 25,442
------------ ------------ ---------- --------- ------------
Net cash provided by financing activities - - - - 129,472
------------ ------------ ---------- --------- ------------
Net increase (decrease) in cash - - - - -
Cash, beginning of period - - - - -
------------ ------------ ---------- --------- ------------
Cash, end of period $ - $ - $ - $ - $ -
============ ============ ========== ========= ============
</TABLE>
F-4
SEE ACCOMPANYING NOTES
<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, 2000
(Stated in US Dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C> <C> <C>
Deficit
Accumulated
During the
Common Stock Contributed Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
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)
------------ -------- ------ ----------- ---------
Balance, December 31, 1990 66,695 82,730 - (84,159) (1,429)
Net Loss - - - (3,416) (3,416)
------------ -------- ------ ----------- ---------
Balance, December 31, 1991 66,695 82,730 - (85,575) (4,845)
Net Loss - - - (2,713) (2,713)
------------ -------- ------ ----------- ---------
Balance, December 31, 1992 66,695 82,730 - (90,288) (7,558)
Net Loss - - (1,614) (1,614)
------------ -------- ------ ----------- ---------
Balance, December 31, 1993 66,695 82,730 - (91,902) (9,172)
Net Loss - - (1,863) (1,863)
------------ -------- ------ ----------- ---------
Balance, December 31, 1994 66,695 $ 82,730 $ - $ (93,765) $ (11,035)
</TABLE>
.... /Continued
F-5
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
GENUS INTERNATIONAL CORPORATION Continued
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES TO STOCKHOLDERS EQUITY
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
<S> <C> <C> <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, December 31, 1995 116,695 84,230 24,842 ( 110,500) ( 1,428)
Net loss - - - ( 9,068) ( 9,068)
------------ --------- -------- ------------- -------------
Balance, December 31, 1996 116,895 84,230 24,842 ( 119,568) ( 10,496)
Issuance of stock for cash
- at $0.011 per share 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 stock for
services rendered
- at $0.001 per share 7,000,000 7,000 - - 7,000
- at $0.01 per share 620,000 6,200 - - 6,200
Net loss - - - ( 52,308) ( 52,308)
------------ --------- -------- ------------- -------------
Balance, December 31, 1998 9,736,695 118,730 25,442 ( 194,137) ( 49,965)
Net loss - - - ( 35,995) ( 35,995)
------------ --------- -------- ------------- -------------
Balance, December 31, 1999 9,736,695 118,730 25,442 ( 230,132) ( 85,960)
Net loss for the period - - - ( 67,041) ( 67,041)
------------ --------- -------- ------------- -------------
Balance, September 30, 2000 9,736,695 $ 118,730 $ 25,442 $ ( 297,173) $ ( 153,001)
============ =========== ======== ============= =============
</TABLE>
F-6
SEE ACCOMPANYING NOTES
<PAGE>
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
Note 1 Interim Reporting
-----------------
While the information presented in the accompanying interim nine
months financial statements is unaudited it includes all
adjustments which are, in the opinion of management, necessary to
present fairly the financial position, results of operations and
cash flows for the interim periods presented. All adjustments are
of normal recurring nature. It is suggested that these financial
statements be read in conjunction with the company's December 31,
1999 annual financial statements.
Note 2 Common Stock
------------
Commitments
The company's board of directors approved an employee's stock
option plan. The plan allows for the granting of not greater than
1,000,000 share purchase options at a price of not less than 100%
of the fair market value of the stock. The plan expires on
September 30, 2010.
Note 3 Business Acquisition
--------------------
The company has entered into an Agreement and Plan of
Reorganization dated July 31, 2000 to acquire 100% of the issued
and outstanding common shares of Canarab Technology Limited
("Canarab") a Yukon corporation. As consideration, the company
will issue 5,280,907 common shares. Canarab owns a 40% interest in
Strategic Profits Inc. ("Strategic"), a private company
incorporated in British Columbia. Strategic through
Communitystorefronts.com, provides a market place for shopping and
fundraising securely on-line for small to mid-sized business,
not-for-profit and registered charitable organizations in Canada.
2,675,000 common shares of the total 5,280,907 common shares
issued are to be held as escrow shares subject to various release
provisions. Canarab has the option to acquire an additional 35% of
Strategic for 2,400,000 common shares. This transaction will be
null and void if Canarab fails to provide $200,000 of funding not
later than November 30, 2000. The acquisition will be accounted
for using the purchase method of accounting. The Agreement and
Plan of Reorganization is subject to further due diligence and has
not yet been finalized.
F-7
<PAGE>
Development Stage Company
-------------------------
The company is a development stage company as defined in Statement of Financial
Accounting Standards No. 7. The company is devoting substantially all of its
present efforts to acquire a new business and none of its planned principal
operations have commenced. All losses accumulated since inception have been
considered as part of the company's development stage activities.
Income Taxes
------------
The company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards, No. 109 "Accounting for Income
Taxes.
Loss Per Share
--------------
Loss per share figures have been calculated based upon the weighted average
number of shares outstanding during the years.
Fair Value of Financial Instruments
-----------------------------------
The carrying value of cash, accounts payable and due to related parties
approximates fair value because of the short maturity of these instruments.
Note 4 Capital Stock -
-------------
i) Preferred Stock
a) Authorized:
100,000,000, $0.01 par value
b) Issued:
None issued
ii) Common stock
a) Authorized:
1,000,000,000, no par value
b) Issued: # $
--- ---
Balance, Sept. 30, 2000 and 1999 9,736,695 118,730
========= =======
iii) On October 22, 1997, the company completed a reverse split
on a one common share for 300 common shares basis. All
common share transactions prior to the split have been
restated to reflect this split.
F-7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------
RESULTS OF OPERATIONS
---------------------
The Company has experienced expenses for the nine-month period of $67,041 in
2000 and $29,931 in 1999. The Company had no revenues for the period in 2000 or
1999. The Company had a net loss of ($67,041) for the period in 2000 and a net
loss of ($29,931) in the same period 1999. 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 no cash capital at the end of the period and no assets. 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.
RELATED PARTIES
---------------
The Company accrued management fees for three months totaling $21,000.00 for two
directors of the Company.
On July 1st, 2000, the Company entered into a Management Agreement with a
company wholly owned by a director of the Company. The term of the Agreement is
for two years expiring on July 1, 2002. Thereafter, the Agreement will be
automatically renewed for successive 12-month terms. The director through his
company shall provide management services to the Company, which include
administration of the Company's affairs, liaising with, advising and reporting
to the Board and any other such duties as may be reasonably directed from time
to time by the Board. In consideration for the services, the Company will pay
US$3,500 per month. In the event that the Company is unable to pay due to
insufficient working capital, the fee will accrue and be payable at such time as
is mutually agreed.
On July 1st, 2000, the Company entered into a Management Agreement with a
director of the Company. The term of the Agreement is for two years expiring on
July 1, 2002. Thereafter, the Agreement will be automatically renewed for
successive 12-month terms. The director shall provide management services to the
Company, which include administration of the Company's affairs, liaising with,
advising and reporting to the Board and any other such duties as may be
reasonably directed from time to time by the Board. In consideration for the
services, the Company will pay US$3,500 per month. In the event that the Company
<PAGE>
is unable to pay due to insufficient working capital, the fee will accrue and be
payable at such time as is mutually agreed.
REGISTRANT'S EMPLOYEE STOCK OPTION PLAN 2000
--------------------------------------------
A Registrant's Employee Stock Option Plan was adopted by the Board of Directors
on September 30, 2000. The Plan will expire on September 30, 2010.
<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. ACQUISITION OR DISPOSITION OF ASSETS
------ ------------------------------------
On July 31, 2000, the Company entered into a definitive agreement with CanArab
Technology Limited, a Yukon corporation, to acquire 100% of the common stock of
CanArab Technology for 5,280,907 shares of common stock of the Company. CanArab
Technology recently entered into a Letter of Agreement to acquire 40% of
Strategic Profits, Inc. (SPI), a Canadian British Columbian company, and has an
option to purchase an additional 35% of the outstanding common stock of
Strategic Profits Inc.by issuance of 2,400,000 shares conditioned upon CanArab
providing $200,000 in capital by November 30,2000. The Letter of Agreement will
be null and void if CanArab fails to fund $200,000 in capital by November 30,
2000.
Formed in 1998, SPI partnered with Industry Canada, Royal Bank of Canada, GE
Capital IT solutions, and Open Market to launch Communitystorefronts.com, as a
marketplace for shopping and fundraising securely on line. SPI was approached to
supply a business model, training and software licenses for over 300 small to
<PAGE>
mid-sized business (SMEs) not-for-profit (NPO), and registered charitable
organizations in Canada. As of May 1, 1999 Community storefrons.com is a fully
commercialized e-commerce solution and one of Royal Bank of Canada's Internet
Commerce solutions providers. SPI has completed the switch of over 180 online
merchants into HP Verifone's Internet payment solution.
Currently, SPI offers a full service for small to mid-sized businesses,
not-for-profits and charities. SPI provides on-line educational training, web
hosting, web design, database development, shopping cart/secure CGI form
solutions, Internet marketing strategies, digital certificates and virtually
everything else that is required to help merchants, not-for-profit and
registered charities go on-line and achieve their goals.
SPI's mission is to provide outstanding customer service, high quality turnkey
and customized e-commerce solutions at affordable prices to SMEs, NPOs,
government institutions and registered charitable organizations globally.
Furthermore, SPI provides e-commerce training and skills for the creation of
online commerce. SPI creates partnerships globally with key leaders in
e-commerce; banks, software developers, telecoms and educational curriculum
providers, to provide customer service packages.
The Letter of Agreement with SPI contemplates that the Company will raise
$2,400,000(CDN) to fund operations in the first year. Sources of the capital
have not been obtained or committed. Certain of the shares (2,675,000) are to be
held in escrow subject to the Company's repurchase option @ $0.01 per share, in
the event that revenue projections are not achieved as set forth in the
Agreement.
There are numerous conditions to the closing, which are yet to be fulfilled, and
the Company cannot assure that the acquisition will be closed.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------ --------------------------------
Exhibits:
Employee Stock Option Plan
Reports on Form 8-K were made for the period for which this report
is filed as follows:
8-K filed August 11, 2000
<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 6, 2000
/s/ Ralph Shearing
By: ------------------------------------
Ralph Shearing, President
