UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998 Commission File Number 0-109659
-------------- --------
SOUTHWESTERN ENVIRONMENTAL CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 93-0962072
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2020 Alpine Drive, Colorado Springs, Colorado 80909
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(719) 633-5301
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
1801 Century Park East, 25th Floor, Los Angeles, California 90067
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check 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 such filing
requirements for 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.
Common stock, $.01 par value 3,999,929
- --------------------------------------------------------------------------------
Class Number of shares outstanding at June 26, 1998
- --------------------------------------------------------------------------------
This document is comprised of 8 pages.
<PAGE>
FORM 10QSB
2ND QUARTER
INDEX
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements *
Condensed balance sheet as of
March 31, 1998 (Unaudited)................................. 3
Condensed statements of operations Three and six months ended
March 31, 1998 and 1997 (Unaudited) ......................... 4
Condensed statements of cash flows Six months ended
March 31, 1998 and 1997 (Unaudited) ......................... 5
Notes to condensed financial statements (Unaudited) ........... 6
Item 2. Plan of operation..................................... 7
PART II OTHER INFORMATION ......................................... 7
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To A Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures .................................................... 8
* The accompanying financial statements are not covered by an independent
Certified Public Accountant's report.
<PAGE>
Part I. Item 1. Financial information
SOUTHWESTERN ENVIRONMENTAL CORP.
Condensed Balance Sheet
March 31, 1998
ASSETS
TOTAL ASSETS $__________________-
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
Accounts payable and accrued liabilities............... $ 67,623
Accrued interest payable .............................. 44,882
Accrued officer compensation........................... 14,000
Note payable .......................................... 150,000
-------------
TOTAL LIABILITIES 276,505
-------------
SHAREHOLDERS' DEFICIT
Common stock........................................... 40,000
Additional paid-in capital ............................ 3,468,704
Retained deficit ...................................... (3,785,209)
-------------
TOTAL SHAREHOLDERS' DEFICIT $ (276,505)
-------------
$ -
-------------
See accompanying notes to condensed financial statements
<PAGE>
SOUTHWESTERN ENVIRONMENTAL CORP.
Condensed Statements of Operations
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
------------------------- ------------------------
1998 1997 1998 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Expenses
Officers' compensation......... $ 12,000 $ - $ 14,000 $ -
-
Audit fees..................... - - 2,000 -
Interest...................... 3,395 3,172 6,688 6,344
------------ ----------- ----------- -----------
Net Income (Loss) $ (15,395) $ (3,172) $ (22,688) $ (6,344)
============ =========== =========== ===========
Basic loss per share ............ * * * *
Basic shares outstanding......... 3,999,929 3,999,929 3,999,929 3,999,929
============ =========== =========== ===========
</TABLE>
* Less than $.01 per share
See accompanying notes to condensed financial statements
<PAGE>
SOUTHWESTERN ENVIRONMENTAL CORP.
Condensed Statements of Cash Flows
Six Months Ended
March 31,
-----------------------
1998 1997
---------- ---------
NET CASH (USED IN)
OPERATING ACTIVITIES $ - $ -
NET CASH PROVIDED BY
INVESTING ACTIVITIES - -
NET CASH PROVIDED BY
FINANCING ACTIVITIES - -
---------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................ - -
Cash and cash equivalents,
beginning of year.................................. - -
---------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR................ - -
========== =========
See accompanying notes to condensed financial statements
<PAGE>
SOUTHWESTERN ENVIRONMENTAL CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1998
Note A: Basis of presentation
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its annual 10-KSB report dated
September 30, 1997 and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
Note B: Related party transactions
The Board of Directors voted to compensate the President and Secretary $2,000
per month each, commencing December 15, 1997. $14,000 has been accrued and is
unpaid at March 31, 1998.
Note C: Income taxes
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". Any deferred income
tax asset due to net operating losses is fully allowed for as there is no
assurance that the Company will have future net income to utilize the operating
losses.
Note D: Notes payable
The Company has a note payable due to a company in the amount of $150,000.
Interest has been accrued at 7% and is unpaid at December 31, 1997. The note is
convertible to common stock at 60% of the applicable market price at the option
of the holder.
Note E: Reverse stock split
On December 15, 1997, the Board of Directors approved a reverse split of the
outstanding shares of common stock, one existing share for up to twenty new
shares of the Company. The date and amount of the reverse split will be at the
discretion of the Board. At the time of the reverse split, there will be no
change in either the par value or the number of authorized common shares of the
Company.
<PAGE>
Part I. Item 2. Plan of operation
SOUTHWESTERN ENVIRONMENTAL CORP.
PLAN OF OPERATION
The plan of the Company's management, for the next twelve months, is to focus on
acquiring an operating entity. Management has been seeking possible merger
candidates and expects to consummate a transaction in the near future. Certain
members of management plan to work, deferring payment of compensation, to seek
and evaluate potential merger candidates. Principal shareholders plan to
underwrite the Company's obligations until such time as a merger is completed.
There is no assurance that the Company will be successful in consummating a
merger with a privately held company or that such a merger will result in
profitable operations.
RESULTS OF OPERATIONS
No operations were conducted during the most recent quarter. Since December
1994, the Company has been an inactive shell company. Any expenses incurred
since then have been related to legal, accounting and stock transfer agent fees
in order to provide stock transfer services to current shareholders and to
comply with reporting as required by the Securities Exchange Act of 1934.
FINANCIAL CONDITION
As of March 31, 1998 the Company had $126,505 of current liabilities related to
accounting and legal fees and interest expense.
PART II OTHER INFORMATION
Items 1 Through 5 - No response required.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits
27* Financial Data Schedule.
(b) The Company filed no reports on Form 8-K during the three months
ended March 31, 1998.
<PAGE>
SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the six months ended March 31, 1998 have been
included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SOUTHWESTERN ENVIRONMENTAL CORP.
(Registrant)
DATE: June 26, 1998 BY: ______________________________________
Joseph Dunn
President, Chief Executive Officer and
Chief Financial Officer
DATE: June 26, 1998 BY: ______________________________________
Michael C. Hinton
Secretary and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE SOUTHWESTERN ENVIRONMENTAL CORP. UNAUDITED BALANCE SHEET
AS OF MARCH 31, 1998 AND THE RELATED STATEMENT OF INCOME FOR THE
SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000700890
<NAME> SOUTHWESTERN ENVIRONMENTAL CORP.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 126,505
<BONDS> 0
0
0
<COMMON> 40,000
<OTHER-SE> (316,505)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 16,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,688
<INCOME-PRETAX> (22,688)
<INCOME-TAX> 0
<INCOME-CONTINUING> (22,688)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,688)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
