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, 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
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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
January 27, 2000 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 December 31, 1999 (unaudited) 1
Statement of Operations - For the Three Months Ended December 31,
1998 and 1999 (Unaudited) 2
Statement of Operations - For the Nine Months Ended December 31,
1998 and 1999 and Cumulative Amounts from Inception of the
Development Stage (July 26, 1990) through December 31, 1999 (unaudited) 3
Statement of Stockholders' Equity - For the Nine Months Ended
December 31, 1999 (unaudited) 4
Statement of Cash Flows - For the Nine Months Ended December 31, 1998
and 1999 and Cumulative Amounts from Inception of the Development
Stage (July 26, 1990) through December 31, 1999 (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 7
-------------------------- -
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEET
March 31, 1999 and December 31, 1999
(Unaudited)
ASSETS
------
March 31, December 31,
1999 1999
---- ----
Current asset:
Cash, in interest bearing accounts $ 94,735 $ 88,740
Computer equipment, at cost, net of accumulated
depreciation of $2,569 (March) and $2,944 (Decemeber) 1,003 628
---------- ---------
$ 95,738 $ 89,368
========= =========
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 outsta 17,888 17,888
Additional paid-in capital 2,054,400 2,054,400
Accumulated deficit (including $613,459 deficit
accumulated during the development stage at
December 31, 1999) (1,976,550) (1,982,920)
----------- -----------
Total stockholders' equity $ 95,738 $ 89,368
=========== ===========
See accompanying notes.
1
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPRTATIONS
For the Three Months Ended December 31, 1998 and 1999
(Unaudited)
1998 1999
---- ----
Revenues:
Interest income $ 1,270 $ 1,017
Costs and expenses:
Legal fees - related party (Note 3) 1,680 506
General and administration 783 1,221
Depreciation 195 125
-------- ---------
Total costs and expenses 2,658 1,852
-------- ---------
Net loss (Note 2) $ (1,388) $ (835)
======== =========
Basic and diluted loss per common share * *
======== =========
Weighted average number of common
shares outstanding 1,788,756 1,788,756
========= =========
* Less than $.01 per share
See accompanying notes
2
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Nine Months Ended December 31, 1998 and 1999 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) Through December 31, 1999
(Unaudited)
Nine Months Ended December 31, Cumulative
------------------------------ amounts from
1998 1999 Inception
---- ---- ---------
Revenues:
Interest income $ 3,735 $ 3,098 $ 36,115
Costs and expenses:
Legal fees - related party (Note 3) 11,637 2,740 163,533
Consulting and travel expenses -
related party (Note 3) 7,515 - 152,380
Dry hole costs - - 123,086
General and administration 6,692 6,353 207,631
Depreciation 585 375 2,944
---------- --------- -----------
Total costs and expenses 26,429 9,468 649,574
---------- --------- -----------
Net loss (Note 2) $ (22,694) $ (6,370) $ (613,459)
========== ========= ===========
Basic and diluted loss per common
share * * $ (0.46)
========== ========= ===========
Weighted average number of common
shares outstanding 1,788,756 1,788,756 1,325,031
========== ========== ===========
* Less than $.01 per share
See accompanying notes
3
<PAGE>
<TABLE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Nine Months Ended December 31, 1999
(Unaudited)
<CAPTION>
Additional Total
Common stock paid-in Accumulated stockholders'
Shares Amount capital deficit equity
----------- --------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1999 1,788,756 $ 17,888 $ 2,054,400 $ (1,976,550) $ 95,738
Net loss for the nine months ended
December 31, 1999 - - - (6,370) (6,370)
---------- --------- ----------- ------------- ---------
Balance, December 31, 1999 1,788,756 $ 17,888 $ 2,054,400 $ (1,982,920) $ 89,368
========== ========= =========== ============= =========
</TABLE>
See accompanying notes
4
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended December 31, 1998 and 1999 and Cumulative Amounts from
Inception of the Development Stage (July 26, 1990) Through December 31, 1999
Nine Months Ended December Cumulative
-------------------------- amounts from
31, 1998 31, 1999 Inception
-------- -------- ---------
Cash flows from operating activities:
Net loss $(22,694) $(6,370) $(613,459)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation expense 585 375 2,944
Consulting fees paid directly by
common stock purchasers - - 50,000
Increase (decrease) in accounts
payable - - 4,997
-------- ------- ---------
Net cash used in operations (22,109) (5,995) (555,518)
Cash flows from investing activities:
Purchase of computer equipment - - (3,572)
-------- ------- ---------
Net cash used in investing activities - - (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 (22,109) (5,995) 88,710
Cash and cash equivalents at
beginning of year 117,617 94,735 30
-------- ------- ---------
Cash and cash equivalents at
end of year $ 95,508 $ 88,740 $ 88,740
======== ========= =========
Supplemental disclosure of non-cash financing activities:
Consulting fees paid directly by
common stock purchasers $ - $ - $ 50,000
======== ========= =========
Stock issued in settlement of an account
payable to a related party $ - $ - $ 15,256
======== ========= =========
See accompanying notes
5
<PAGE>
COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 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 December 31, 1999, and the results of
operations and cash flows for the periods ended December 31, 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 December 31,
1999 because, in management's opinion, the effective tax rate for the years
will be zero.
As of March 31, 1999 and December 31, 1999, total deferred tax assets and
valuation allowance are as follows:
March 31, December 31,
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 December 31, 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 nine months ended December 31, 1998, and 1999, and from inception of
the development stage, the Company incurred legal costs of $11,637, $2,740
and $75,312 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 nine months ended December 31, 1998, the Company reimbursed travel
expenses of $7,515 to the Company's president.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Material Changes in Financial Condition
At December 31, 1999, the Company had working capital of $88,740 as compared
to working capital of $94,735 on March 31, 1999. The decrease is attributable
primarily to a net operating loss for the nine month period of $6,370. This
was caused principally by costs and expenses consisting of legal fees of
$2,740, accounting fees of $4,505, miscellaneous expenses of $1,848 with
minimal offsetting interest income of $3,098. No charges have been made for
management of the Company for the nine month period ended December 31, 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. To date the company has experienced no
difficulty as a result of year 2000 compliance issues.
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 December 31, 1999, the Registrant has filed no
reports on Form 8-K.
7
<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: February 1, 2000 /s/ David W. Brenman
-----------------------------
David W. Brenman, President
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-START> Apr-01-1999
<PERIOD-END> Dec-31-1999
<CASH> 88,740
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88,740
<PP&E> 3,572
<DEPRECIATION> (2,944)
<TOTAL-ASSETS> 89,368
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17,888
<OTHER-SE> 71,480
<TOTAL-LIABILITY-AND-EQUITY> 89,368
<SALES> 0
<TOTAL-REVENUES> 3,098
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,468
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,370)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,370)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,370)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
