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, 1999
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 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
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(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
July 23, 1999 is 1,788,756 shares, $.01 par value.
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
INDEX
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Page No.
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PART I. FINANCIAL INFORMATION
-----------------------------
Balance Sheet - March 31, 1999 and June 30, 1999 (unaudited) 1
Statement of Operations - For the Three Months Ended June 30, 1998
and 1999 and Cumulative Amounts from Inception of the Development
Stage (July 26, 1990) through June 30, 1999 (unaudited) 2
Statement of Stockholders' Equity - For the Three Months Ended
June 30, 1999 (unaudited) 3
Statement of Cash Flows - For the Three Months Ended June 30, 1998
and 1999 and Cumulative Amounts from Inception of the Development
Stage (July 26, 1990) through June 30, 1999 (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, 1999 and June 30, 1999
(Unaudited)
ASSETS
------
March 31, June 30,
1999 1999
--------- --------
Current asset:
Cash, in interest bearing accounts $ 94,735 $ 90,364
Computer equipment, at cost, net of accumulated
depreciation of $2,569 (March) and $2,694 (June) 1,003 878
-------- --------
$ 95,738 $ 91,242
======== ========
STOCKHOLDERS' EQUITY
--------------------
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 $611,585 deficit
accumulated during the development stage) (1,976,550) (1,981,046)
---------- ----------
Total stockholders' equity $ 95,738 $ 91,242
========== ========
See accompanying notes.
1
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1998 and 1999 and Cumulative Amounts
from Inception of the Development Stage (July 26, 1990) Through June 30, 1999
(Unaudited)
Cumulative
Three Months Ended June 30 amounts from
1998 1999 Inception
---- ---- ---------
Revenues:
Interest income $ 1,137 $ 1,054 $ 34,071
Costs and expenses:
Legal fees - related party (Note 3) 5,760 1,460 162,253
Consulting and travel expenses -
related party 7,515 - 152,380
Dry hole costs (Note 3) - - 123,086
General and administration 3,136 3,965 205,243
Depreciation 195 125 2,694
-------- ------- ---------
Total costs and expenses 16,606 5,550 645,656
-------- ------- ---------
Net loss (Note 2) $(15,469) $(4,496) $(611,585)
======== ======= =========
Basic and diluted loss per common share $ (0.01) * $ (0.47)
======= ======= =======
Weighted average number of common
shares outstanding 1,788,756 1,788,756 1,298,866
========= ========= =========
* Less than $.01 per share
See accompanying notes.
2
<PAGE>
<TABLE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Three Months Ended June 30, 1999
(Unaudited)
<CAPTION>
Additional Total
Common stock paid-in Accumulated stockholders'
Shares Amount capital deficit equity
--------- -------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1999 1,788,756 $ 17,888 $2,054,400 $(1,976,550) $95,738
Net loss for the three months ended
June 30, 1999 - - - (4,496) (4,496)
--------- -------- ---------- ----------- -------
Balance, June 30, 1999 1,788,756 $ 17,888 $2,054,400 $(1,981,046) $91,242
========= ======== ========== =========== =======
</TABLE>
See accompanying notes.
3
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For The Three Months Ended June 30, 1998 and 1999 and Cumulative Amounts
from Inception of the Development Stage (July 26, 1990) Through June 30, 1999
(Unaudited)
Cumulative
Three Months Ended June 30, amounts from
1998 1999 Inception
---- ---- ---------
Cash flows from operating activities:
Net loss $ (15,469) $ (4,496) $ (611,585)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation expense 195 125 2,694
Consulting fees paid directly by
common stock purchasers - - 50,000
Increase in interest receivable (440) - -
Increase in accounts payable 3,930 - 4,997
-------- ------- --------
Net cash used in operations (11,784) (4,371) (553,894)
Cash flows from investing activities:
Purchase of certificate of deposit (100,000) - -
Purchase of computer equipment - - (3,572)
-------- ------- --------
Net cash used in investing activities (100,000) - (3,572)
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 (111,784) (4,371) 90,334
Cash and cash equivalents at
beginning of year 117,617 94,735 30
-------- ------- --------
Cash and cash equivalents at
end of year $ 5,833 $ 90,364 $ 90,364
======== ======== ========
See accompanying notes.
4
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 1999
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, 1999 and June 30, 1999, and the results of
operations and cash flows for the periods ended June 30, 1998 and 1999.
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).
2. Income taxes
No provision for income taxes is required at March 31, 1999 and June 30, 1999
because, in management's opinion, the effective tax rate for the years will
be zero.
As of March 31, 1999 and June 30, 1999, total deferred tax assets and
valuation allowance are as follows:
March 31, June 30,
1999 1999
---- ----
Deferred tax assets resulting from loss
carryforward $ 237,000 $ 239,000
Valuation allowance (237,000) (239,000)
--------- ---------
$ - $ -
========= =========
3. Related party transactions
For the period of inception of the development stage to June 30, 1999, 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, 1998, and 1999, and from inception of the
development stage, the Company incurred legal costs of $5,760, $1,460 and
$74,032, 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, 1999, the Company had working capital of $91,242 as compared to
working capital of $95,738 on March 31, 1999. The decrease is attributable
primarily to a net operating loss for the three month period of $4,496. This
was caused principally by costs and expenses consisting of legal fees of
$1,460, accounting fees of $3,275, miscellaneous expenses of $815 with
minimal offsetting interest and miscellaneous income of $1,054. No charges
have been made for management of the Company for the three month period ended
June 30, 1999 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.
Management has considered the impact of the year 2000 on its operations and
believes that some of its software and hardware may not be year 2000
compliant. The Company intends to upgrade its hardware and software, as
necessary to achieve year 2000 compliance. Management does not believe the
costs to upgrade the Company's hardware and software will have a material
effect on the results of operations.
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, 1999, 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: July 26, 1999 /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-QSB FOR THE QUARTER ENDED June 30, 1999 AND IS QUALIFIED IN
ITS ENTIRETY TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1999
<PERIOD-END> Jun-30-1999
<CASH> 90,364
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 90,364
<PP&E> 3,572
<DEPRECIATION> (2,694)
<TOTAL-ASSETS> 91,242
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17,888
<OTHER-SE> 73,354
<TOTAL-LIABILITY-AND-EQUITY> 91,242
<SALES> 0
<TOTAL-REVENUES> 1,054
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,550
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,496)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,496)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,496)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
