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 June 30, 1998
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
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Cogenco International, Inc.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 84-0914754
- ------------------------------- -----------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
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)
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 such filing
requirements for the past 90 days: Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's classes of common stock, as of
August 6, 1998 is 1,788,756 shares, $.01 par value.
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
INDEX
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Page No.
--------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheet - March 31, 1998 and June 30, 1998 (unaudited) 1
Statement of Operations - For the Three Months Ended June 30, 1997
and 1998 and Cumulative Amounts from Inception of the Development
Stage (July 26, 1990) through June 30, 1998 (unaudited) 2
Statement of Stockholders' Equity - For the Three Months Ended
June 30, 1998 (unaudited) 3
Statement of Cash Flows - For the Three Months Ended June 30, 1997
and 1998 and Cumulative Amounts from Inception of the Development
Stage (July 26, 1990) through June 30, 1998 (unaudited) 4
Notes to Unaudited Financial Statements 5
Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
PART II. OTHER INFORMATION 6
- -------- -----------------
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEET
March 31, 1998 and June 30, 1998
(Unaudited)
ASSETS
------
March 31, June 30,
1998 1998
--------- --------
Current assets:
Cash and cash equivalents $ 117,617 $ 5,833
Certificate of deposit - 100,000
Interest receivable - 440
---------- ----------
Total current assets 117,617 106,273
Computer equipment, at cost, net of accumulated
depreciation of $1,789 (March 31) and $1,984
(June 30) 1,783 1,588
---------- ----------
$ 119,400 $ 107,861
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable - related parties (Note 3) $ - $ 795
Accounts payable - other - 3,135
---------- ----------
Total current liabilities - 3,930
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 $598,896 deficit
accumulated during the development stage at
June 30, 1998) (1,952,888) (1,968,357)
----------- -----------
Total stockholders' equity 119,400 103,931
----------- ----------
$ 119,400 $ 107,861
=========== ==========
See accompanying notes.
1
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1997 and 1998 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) Through June 30, 1998
(Unaudited)
Three Months Ended June 30, Cumulative
--------------------------- amounts from
1997 1998 Inception
---- ---- ------------
Revenues:
Interest income $ 1,092 $ 1,137 $ 29,281
Costs and expenses:
Legal fees - related party (Note 3) 2,722 5,760 154,217
Consulting and travel expenses -
related party (Note 3) - 7,515 152,380
Dry hole costs - - 123,086
General and administrative 2,587 3,136 196,510
Depreciation 288 195 1,984
--------- --------- ---------
Total costs and expenses 5,597 16,606 628,177
--------- --------- ---------
Net loss (Note 2) $ (4,505) $ (15,469) $(598,896)
========= ========= =========
Basic and diluted loss per share $ * $ (0.01) $ (0.48)
========= ========= =========
Weighted average number of common
shares outstanding 1,788,756 1,788,756 1,237,122
========= ========= =========
* Less than $.01 per share
See accompanying notes.
2
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Three Months ended June 30, 1998
(Unaudited)
<CAPTION>
Common stock Additional Total
------------------- paid-in Accumulated stockholders'
Shares Amount capital deficit equity
------ ------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1998 1,788,756 $17,888 $2,054,400 $(1,952,888) $119,400
Net loss for the three months ended
June 30, 1998 - - - (15,469) (15,469)
--------- ------- ---------- ----------- --------
Balance, June 30, 1998 1,788,756 $17,888 $2,054,400 $(1,968,357) $103,931
========== ======= ========== =========== ========
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Three Months Ended June 30, 1997 and 1998 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) Through June 30, 1998
(Unaudited)
Three Months Ended June 30, Cumulative
--------------------------- amounts from
1997 1998 Inception
---- ---- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (4,505) $(15,469) $(598,896)
Adjustment to reconcile net loss to net
cash used in operating activities
Depreciation expense 288 195 1,984
Consulting fees paid directly by
common stock purchasers - - 50,000
Increase in interest receivable - (440) (440)
Increase in accounts payable 2,944 3,930 8,927
-------- -------- ---------
Net cash used in operations (1,273) (11,784) (538,425)
Cash flows from investing activities:
Purchase of certificate of deposit - (100,000) (100,000)
Purchase of computer equipment - - (3,572)
-------- -------- ---------
Net cash used in investing
activities - (100,000) (103,572)
Cash flows from financing activities:
Proceeds from sale of common
stock - - 647,800
Short-term borrowings - - 100,000
Repayments of short-term
borrowings - - (100,000)
-------- -------- ---------
Net cash provided by financing
activities - - 647,800
-------- -------- ---------
Net increase (decrease) in cash (1,273) (111,784) 5,803
Cash and cash equivalents at
beginning of period 125,699 117,617 30
-------- -------- ---------
Cash and cash equivalents at
end of period $124,426 $ 5,833 $ 5,833
======== ======== =========
</TABLE>
See accompanying notes.
4
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 1998
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, 1998 and June 30, 1998, and the results of
operations and cash flows for the periods ended June 30, 1997 and 1998.
Concentration 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, 1998, the Company's cash deposits exceeded
the FDIC insurance limit of $100,000 by $17,617 at one institution and at
June 30, 1998 by $6,273.
2. Income taxes
------------
No provision for income taxes is required at March 31, 1998 and June
30,1998 because, in management's opinion, the effective tax rate for the
years will be zero.
As of March 31, 1998 and June 30, 1998, total deferred tax assets and
valuation allowance are as follows:
March 31, June 30,
1998 1998
--------- --------
Deferred tax assets resulting
from loss carryforward $ 228,000 $ 234,000
Valuation allowance (228,000) (234,000)
--------- ---------
$ - $ -
========= =========
3. Related party transactions
--------------------------
For the period of inception of the development stage to June 30, 1998, 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 three months ended June 30, 1997, and 1998, and from inception of
the development stage, the Company incurred legal costs of $2,722, $5,760
and $65,996, respectively, from a law firm in which a principal of the law
firm is a relative of an officer and director of the Company.
During the three months ended June 30, 1998, the Company reimbursed travel
expenses of $7,515 to the Company's president.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Material Changes in Financial Condition
---------------------------------------
At June 30, 1998, the Company had working capital of $102,343 as compared
to working capital of $117,617 on March 31, 1998. The decrease is
attributable primarily to a net operating loss for the three month period
of $15,469. This was caused principally by costs and expenses consisting of
legal fees of $5,760, accounting fees of $2,600, travel expenses of $7,515,
miscellaneous expenses of $536 with minimal offsetting interest and
miscellaneous income of $1,137. No charges have been made for management of
the Company for the three month period ended June 30, 1998 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 - Financial Data Schedule
B. Reports on Form 8-K
During the quarter ended June 30, 1998, the Registrant has filed no
reports on Form 8-K.
6
<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: August 11, 1998 /s/ David W. Brenman
----------------------------------
David W. Brenman, President
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-KSB FOR THE FISCAL YEAR ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FORM 10-KSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 105,833
<SECURITIES> 0
<RECEIVABLES> 440
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 106,273
<PP&E> 3,572
<DEPRECIATION> 1,984
<TOTAL-ASSETS> 107,861
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17,888
<OTHER-SE> 86,043
<TOTAL-LIABILITY-AND-EQUITY> 107,861
<SALES> 0
<TOTAL-REVENUES> 1,137
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,606
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,469)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,469)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
