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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
------- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
- ------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from To
-------------- ---------------
Commission file number: 2-87052-D
---------
Cogenco International, Inc.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 84-0914754
- ---------------------------- -----------------------------------
(State or other jurisdiction (IRS Employer Identification Number)
of incorporated or
organization)
Suite 1001, 1775 Sherman Street, Denver, Colorado 80203
-------------------------------------------------------
(Address of principal executive offices and Zip Code)
(303) 894-0234
-------------------------------
(Registrant's telephone number)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 subjected to
such filing requirements for the past 90 days: Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of February 4, 1998 is 1,788,756 shares, $.01 par value.
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheet - March 31, 1997 and December 31, 1997(unaudited) 1
Statement of Operations - For the Three Months Ended December 31
1996 and 1997 (unaudited) 2
Statement of Operations - For the Nine Months Ended
December 31, 1996 and 1997 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) through
December 31, 1997 (unaudited) 3
Statement of Stockholders' Equity - For the Nine Months
Ended December 31, 1997 (unaudited) 4
Statement of Cash Flows - For the Nine Months Ended
December 31, 1996 and 1997 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) through
December 31, 1997 (unaudited) 5
Notes to Unaudited Financial Statements 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
- -------- -----------------
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEET
March 31, 1997 and December 31, 1997
(Unaudited)
ASSETS
------
March 31, December 31,
1997 1997
--------- ------------
<S> <C> <C>
Current asset:
Cash, interest bearing accounts $ 125,699 $ 118,783
Computer equipment, at cost, net of accumulated
depreciation of $637 (March 31) and $1,501
(December 31) 2,935 2,071
---------- -----------
$ 128,634 $ 120,854
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable - related parties (Note 3) $ - $ -
Accounts payable - other - -
---------- ----------
Total current liabilities - -
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, $.01 par value; 50,000,000 shares
authorized, 1,788,756 shares issued and outstanding 17,888 17,888
Additional paid-in capital 2,054,400 2,054,400
Accumulated deficit (including $581,973 deficit
accumulated during the development stage at
December 31) (1,943,654) (1,951,434)
---------- ----------
Total stockholders' equity 128,634 120,854
---------- ----------
$ 128,634 $ 120,854
========== ==========
</TABLE>
See accompanying notes.
1
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended December 31, 1996 and 1997
(Unaudited)
Three Months Ended December 31,
-------------------------------
1996 1997
---- ----
<S> <C> <C>
Revenues:
Interest income $ 1,202 $ 1,049
Costs and expenses:
Legal fees - related party (Note 3) 599 1,617
Consulting and travel expenses -
related party 4,227 -
General and administrative 916 351
Depreciation - 288
--------- ---------
Total costs and expenses 5,742 2,256
--------- ---------
Net loss (Note 2) $ (4,540) $ (1,207)
========= =========
Basic and diluted loss per share * *
========= =========
Weighted average number of common
shares outstanding 1,788,756 1,788,756
========= =========
* Less than $.01 per share
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Nine Months Ended December 31, 1996 and 1997 and Cumulative
Amounts from Inception of the Development Stage (July 26, 1990)
Through December 31, 1997
(Unaudited)
Nine Months Ended December 31, Cumulative
------------------------------ amounts from
1996 1997 Inception
---- ---- ------------
<S> <C> <C> <C>
Revenues:
Interest income $ 3,719 $ 3,213 $ 27,127
Costs and expenses:
Legal fees - related party (Note 3) 5,277 5,831 147,091
Consulting and travel expenses -
related party 4,227 - 144,865
Dry hole costs - - 123,086
General and administrative 5,147 4,298 192,557
Depreciation - 864 1,501
--------- --------- ---------
Total costs and expenses 14,651 10,993 609,100
--------- --------- ---------
Net loss (Note 2) $ (10,932) $ (7,780) $(581,973)
========= ========= =========
Basic and diluted loss per share * * $ (0.48)
========= ========= =========
Weighted average number of common
shares outstanding 1,788,756 1,788,756 1,200,346
========= ========= =========
* Less than $.01 per share
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Nine Months ended December 31, 1997
(Unaudited)
Common Stock Additional Total
----------------------- paid-in Accumulated stockholders'
Shares Amount capital deficit equity
------ ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 1,788,756 $ 17,888 $ 2,054,400 $(1,943,654) $ 128,634
Net loss for the nine months ended
December 31, 1997 - - - (7,780) (7,780)
--------- -------- ----------- ----------- ---------
Balance, December 31, 1997 1,788,756 $ 17,888 $ 2,054,400 $(1,951,434) $ 120,854
========= ======== =========== =========== =========
</TABLE>
See accompanying notes.
4
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended December 31, 1996 and 1997 and Cumulative
Amounts from Inception of the Development Stage (July 26, 1990)
Through December 31, 1997
(Unaudited)
Nine Months Ended December 31, Cumulative
------------------------------ amounts from
1996 1997 Inception
---- ---- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(10,932) $ (7,780) $(581,973)
Consulting fees paid directly by
common stock purchasers - - 50,000
Depreciation expense - 864 1,501
Increase in interest receivable (1,202) - -
Increase in accounts payable 362 - 4,997
-------- -------- --------
Net cash used in operations (11,772) (6,916) (525,475)
Cash flows from investing activities:
Purchase of computer equipment (3,572) - (3,572)
-------- -------- --------
Net cash used in investing (3,572) - (3,572)
activities
Cash flows from financing activities:
Proceeds from sale of common - - 647,800
stock
Short-term borrowings - - 100,000
Repayments of short-term
borrowings - - (100,000)
-------- -------- --------
Net cash provided by financing - - 647,800
activities
Net increase (decrease) in cash (15,344) (6,916) 118,753
-------- -------- --------
Cash and cash equivalents at
beginning of period 141,105 125,699 30
-------- -------- --------
Cash and cash equivalents at
end of period $125,761 $118,783 $118,783
======== ======== ========
</TABLE>
See accompanying notes.
5
<PAGE>
COGENCO INTERNATIONAL, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1997
1. Basis of presentation
---------------------
The accompanying financial statements have been prepared by the Company,
without audit. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary for a fair presentation of the financial
position as of March 31, 1997 and December 31, 1997, and the results of
operations and cash flows for the periods ended December 31, 1996 and 1997.
Concentrations of credit risk:
-----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash. The Company
places its cash with high quality financial institutions, which deposits
are insured up to $100,000 per institution by the Federal Deposit Insurance
Corporation (FDIC). At March 31, 1997, the Company's cash deposits exceeded
the FDIC insurance limit of $100,000, by $25,699 at the one institution and
at December 31, 1997 by $18,783.
2. Income taxes
------------
No provision for income taxes is required at December 31, 1996 or 1997
because, in management's opinion, the effective tax rate for the years will
be zero.
As of March 31, 1997 and December 31, 1997, total deferred tax assets and
valuation allowance are as follows:
March 31, December
1997 31, 1997
---------- ---------
Deferred tax assets resulting from $225,000 $228,000
loss carryforward
Valuation allowance (225,000) (228,000)
-------- --------
$ - $ -
======== ========
3. Related party transactions
--------------------------
For the period from inception of the development stage to December 31,
1997, the Company incurred legal costs of $88,221, from a law firm which
was formerly a principal stockholder. A former principal of that law firm
is a relative of an officer and director of the Company.
For the nine months ended December 31, 1996 and 1997 and from inception of
the development stage, the Company incurred legal costs of $5,277, $5,831
and $58,870, respectively, from a law firm in which a principal of the law
firm is a relative of an officer and director of the Company.
6
<PAGE>
COGENCO INTERNATIONAL, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Material Changes in Financial Condition
---------------------------------------
At December 31, 1997, the Company had working capital of $118,783 as
compared to working capital of $125,699 on March 31, 1997. The decrease is
attributable primarily to a net operating loss for the nine month period of
$7,780. This was caused principally by costs and expenses consisting of
legal fees of $5,831, accounting fees of $3,197, miscellaneous expenses of
$1,965 with minimal offsetting interest and miscellaneous income of $3,213.
No charges have been made for management of the Company for the nine month
period ended December 31, 1997 since the officers of the Company waived any
management fees payable by the Company. No charge has been made for rent,
since the cost would be minimal. The Company expects to continue incurring
expenses for seeking and evaluating business prospects until it acquires or
participates in a business opportunity. Since the Company became
inoperative in 1988, its management has been seeking an appropriate
acquisition candidate to acquire
Material Changes in Results of Operations
-----------------------------------------
The Company is not operating in any business at this time but is continuing
to seek out business opportunities and, if appropriate financing is
obtained, will operate in the oil and gas business. It is anticipated that
the Company will continue to incur losses in the near future.
PART II
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
A. Exhibits
Exhibit 27.1 - Financial Data Schedule
B. Reports on Form 8-K
During the three months ended December 31, 1997, the Company filed no
reports on Form 8-K.
7
<PAGE>
COGENCO INTERNATIONAL, INC.
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.
/s/ David W. Brenman
Date: February 9, 1997 ---------------------------------
David W. Brenman, President
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED DECEMBER 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 118,783
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 118,783
<PP&E> 3,572
<DEPRECIATION> 1,501
<TOTAL-ASSETS> 120,854
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17,888
<OTHER-SE> 2,054,400
<TOTAL-LIABILITY-AND-EQUITY> 120,854
<SALES> 0
<TOTAL-REVENUES> 3,213
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,993
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,780)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,780)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,780)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
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