SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the year ended December 31, 1997
Commission File No. 0-24684
LONE WOLF ENERGY, INC.
(Name of small business issuer in its charter)
Colorado
(State or other jurisdiction of Incorporation or Organization)
84-1214336
(IRS Employer Identification Number )
8908 South Yale Avenue, Suite 409
Tulsa, OK 74137
(918) 481-0167
(Address, including zip code and telephone number, including area
code of registrant's executive offices)
K&S VENTURES, INC.
(Former Name of Registrant)
Securities registered under Section 12 (b) of the Exchange Act: none
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of class)
Check whether the issuer (1) 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 [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.[ ]
Issuer's revenues for its most recent fiscal year: $ -0-
State the aggregate market value of the voting stock held by non-affiliates,
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within
the past 60 days: As of March 31, 1998: $-0-.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of March 31, 1998
there were 4,250,000 shares of the Company's common stock issued and
outstanding.
Documents Incorporated by Reference: None
<PAGE>
PART I
Item 1. Description of Business
Lone Wolf Energy, Inc. (the "Registrant" or 'Company") was incorporated on
March 4, 1991 in the state of Colorado. Formerly known as K&S Ventures, the
Registrant operated as a retail distributor of Herbalife products until
June 17, 1994, when those operations were discontinued. From June 1994
until December 1996, the Registrant had no operations. In January 1997, the
Registrant adopted an operating plan to purchase producing oil and gas
properties and to acquire companies in oil and gas related businesses and in
May 1997, the Registrant changed its name from K&S Ventures, Inc. to
Lone Wolf Energy, Inc.
Employees
- ---------
During the year ended December 31, 1997, the Company had no full-time
employees.
Item 2. Description of Property
Facilities
- ----------
The Company maintains its principal office at 8908 S. Yale Avenue, Tulsa, OK
74137. The office space is provided free of charge to the Company by its
officers. The Company owns no other property.
Item 3. Legal Proceedings
There are no material legal proceedings that are pending or have been
threatened against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
None
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder Matters
Market Information
- ------------------
There is no established trading market for the shares of common stock of the
Company. There is no assurance that a trading market will be established or,
if established, that such a market will be sustained.
Sales of Common Stock During 1997
- ---------------------------------
During the first quarter of 1997, 90,000 shares (or 3,825,000 shares as
adjusted for the stock dividend discussed below) of the Company's common
stock was purchased by Lone Wolf Exploration, Inc., a non-affiliated
privately held Oklahoma corporation ("LWX"), in exchange for $100,000 in
cash. The transaction resulted in LWX owning 90% of the issued and
outstanding common stock of the Registrant. In connection with the
transaction, the Company paid fees in the amount of $100,000 to certain
unrelated third parties.
Common Stock Dividend During 1997
- ---------------------------------
During 1997, the Board of Directors of the Company declared a common stock
dividend to all shareholders of record as of June 30, 1997, which increased
the number of common shares outstanding from 100,000 shares to 4,250,000
shares.
Common Stock Subject to Options or Warrants
- -------------------------------------------
There are no outstanding options or warrants to purchase common stock of the
Registrant. There are no securities convertible into common stock of the
Registrant
Common Stock that could be sold pursuant to Rule 144
- ----------------------------------------------------
Of the 4,250,000 shares outstanding, 425,000 shares are eligible for sale, as
of the date of this report, under Rule 144 of the Securities Act.
Holders
- -------
As of December 31, 1997, the Company had 103 shareholders of record.
Cash Dividends
- --------------
The Company has not paid any cash dividends on its Common Stock and does not
foresee that such dividends will be paid in the future.
Item 6. Management's Discussion and Analysis or Plan of Operation
Plan of Operations
- ------------------
The Registrant plans to accumulate oil and gas assets by acquiring producing
properties from major oil and gas companies or from larger independent
companies; by developing and selling industry prospects that have a carried
interest and a controlled risk for the Company; and by acquiring oil and gas
companies with existing production and proved reserves in exchange for
common stock of the Company.
Until such time as the Registrant has purchased oil and gas assets,
management anticipates that only nominal operating expenses, which are
primarily accounting and legal fees related to the Registrant's compliance
as an SEC reporting company, will be incurred. Such nominal operating
expenses have been and management expects will continue to be paid directly
by certain shareholders of the Registrant. There is no assurance, however,
that material expenses will not be incurred or that shareholders will have
or will make available sufficient funds to cover such material expenses.
<PAGE>
Item 7. Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of Lone Wolf Energy, Inc.:
We have audited the balance sheet of Lone Wolf Energy, Inc., a Colorado
corporation, as of December 31, 1997 and 1996 and the related statements of
operations, stockholders' equity, and cash flows for the years then ended.
The Company is considered to be a development stage enterprise, beginning
January 14, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts disclosed in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overa
resentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lone Wolf Energy, Inc.
as of December 31, 1997 and 1996 and the results of its operations and its
cash flows for the years then ended and from the inception of the development
stage in conformity with generally accepted accounting principles.
CROSS AND ROBINSON
/s/ CROSS AND ROBINSON
-----------------------------
Certified Public Accountants
May 27, 1998
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
BALANCE SHEETS
December 31, 1997 AND 1996
December 31, December 31,
1997 1996
----------- -----------
ASSETS
Current Assets
Cash $0 $0
------------ -----------
TOTAL ASSETS $0 $0
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $6,972 $0
------------ -----------
Total Liabilities $6,972 $0
------------ -----------
Stockholders' Equity
Preferred Stock, $0.001 par value,
20,000,000 shares authorized,
No shares issued and outstanding $0 $0
Common Stock, $0.001 par value,
100,000,000 shares authorized,
4,250,000 shares of $0.001 par
value issued and outstanding at
December 31, 1997 and 10,000
shares of $0.01 par value
issued and outstanding at
December 31, 1996 4,250 100
Additional Paid in Capital 19,165 19,457
Retained Earnings (Deficit) (19,557) (19,557)
Deficit Accumulated During
The Development Stage (10,830) 0
---------- ---------
Total Stockholders' Equity $(6,972) $0
---------- ---------
TOTAL LIABILITIES' AND STOCKHOLDERS'
EQUITY $0 $0
---------- ---------
The accompanying notes are an integral part of the Financial Statements
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
STATEMENTS OF OPERATIONS
For the years ended December 31, 1997 and 1996
And from inception of the development stage
From Inception
of the Develop- December 31, December 31,
ment Stage 1997 1996
-------------- ------------ ------------
Revenue $0 $0 $0
Expenses
Legal 6,973 6,973 0
Accounting 1,363 1,363 0
Transfer Agent 2,494 2,494 0
-------------- ------------ ------------
Total Expenses 10,830 10,830 0
-------------- ------------ ------------
Net Loss $(10,830) $(10,830) $0
-------------- ------------ ------------
Weighted Average Shares
Outstanding 2,520,833 2,520,833 10,000
-------------- ------------ ------------
Loss Per Share $0.00 $0.00 $0.00
-------------- ------------ ------------
The accompanying notes are an integral part of the Financial Statements
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997 and 1996
And from inception of the development stage
From Inception
of the Develop- December 31, December 31,
ment Stage 1997 1996
-------------- ----------- -----------
Operating Activities:
Net Loss $(10,830) $(10,830) $0
Change in Accounts Payable 6,972 6,972 0
-------------- ----------- -----------
Cash Used In Operating
Activities (3,858) (3,858) 0
-------------- ----------- -----------
Financing Activities:
Sale of Common Stock 100,000 100,000 0
Less: Issue Costs (100,000) (100,000) 0
Contribution of Capital
by Stockholders 3,858 3,858 0
------------- ----------- -----------
Cash Provided By Financing
Activities 3,858 3,858 0
------------- ----------- -----------
Investing Activities 0 0 0
------------- ----------- -----------
Change in Cash 0 0 0
Cash at Beginning of Period 0 0 0
------------- ----------- -----------
Cash at End of Period $0 $0 $0
------------- ----------- -----------
The accompanying notes are an integral part of the Financial Statements
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended December 31, 1997 and 1996
Deficit
Accumu-
lated
During
Addi- the Total
Shares of tional Develop- Accumu- Stock-
Common Common Paid in ment lated holders
Stock Stock Capital Stage Deficit Equity
--------- ------ ------- -------- ------- -------
Balance at
December 31, 1995 10,000 $100 $15,047 $0 $(19,557) $(4,410)
Capital Contributed
by Shareholders 0 0 4,410 0 0 4,410
--------- ------ ------- -------- ------- --------
Balance at
December 31, 1996 10,000 100 19,457 0 (19,557) 0
Common Stock
issued for Cash 90,000 900 99,100 0 0 100,000
Less: Issue Costs 0 0 (100,000) 0 0 (100,000)
Change in Par Value
(Note 2) 0 (900) 900 0 0 0
Stock Dividend
Issued in 1997 4,150,000 4,150 (4,150) 0 0 0
Capital Contributed
by Shareholders 0 0 3,858 0 0 3,858
Net Loss 0 0 0 (10,830) 0 (10,830)
--------- ------ ------- --------- ------- ---------
Balance at
December 31, 1997 4,250,000 $4,250 $19,165 $(10,830) $(19,557) $(6,972)
--------- ------ ------- --------- ------- ---------
The accompanying notes are an integral part of the Financial Statements
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Organization
- ------------
Lone Wolf Energy, Inc. (formerly K&S Ventures, Inc.) was incorporated on
March 4, 1991 in the state of Colorado. From 1992 until 1994, the Company
operated as a retail distributor of Herbalife products. On June 17, 1994,
the Company discontinued its retail distributor operations. In January 1997,
the Company adopted an operating plan to purchase producing oil and gas
properties and to acquire companies in oil and gas related businesses.
In May 1997, the Company changed its name from K&S Ventures, Inc. to Lone
Wolf Energy, Inc.
Basis of Accounting
- -------------------
Assets, liabilities, equity, revenue and expenses are recorded under the
accrual method of accounting in conformity with generally accepted accounting
principles.
Cash and cash equivalents
- -------------------------
The Company considers all cash and marketable securities as cash equivalents.
Income Taxes
- ------------
For the years prior to 1997, the Company was taxed under the provisions of
Subchapter S of the Internal Revenue Code. Under the provisions of the Code,
all losses or taxable income flowed to the stockholders of the Company.
In January 1997, the Company's standing as a Subchapter S corporation, as
defined by the Internal Revenue Code, was changed because of the purchase of
common stock during 1997 by a corporate shareholder. Beginning with the year
ended December 31, 1997, the Company will be considered a "C" corporation for
income tax purposes.
Fiscal Year End
- ---------------
The Company's fiscal year end is December 31.
Earnings (Loss) per Share
- -------------------------
Primary income (loss) per share is calculated by dividing net income (loss)
by the weighted average shares of common stock of the Company outstanding
during the period (See Note 5).
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported revenues and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
2. STOCKHOLDERS' EQUITY
Issuance of Common Stock
- ------------------------
During the first quarter of 1997, 90,000 shares of the Company's common stock
was purchased by Lone Wolf Exploration, Inc., a non-affiliated privately held
Oklahoma corporation ("LWX"), in exchange for $100,000 in cash. The
transaction resulted in LWX owning 90% of the issued and outstanding common
stock of the Registrant. In connection with the transaction, the Company
paid certain fees in the amount of $100,000 to an unrelated third party.
Change in Par Value
- -------------------
In June, 1997, the par value of the Company's common stock was changed from
$0.01 per share to $0.001 per share.
Common Stock Dividend
- ---------------------
In June, 1997, the Board of Directors of the Company declared a common stock
dividend for the purpose of increasing the number of common shares
outstanding. The stock dividend resulted in each shareholder of the Company
owning 42.5 shares for each share owned, which increased the number of shares
of common stock outstanding from 100,000 shares to 4,250,000 shares.
3. INCOME TAXES
The deferred tax assets and liabilities are as follows:
Net operating loss carryforward $4,332
Less: valuation allowance (4,332)
-----------
Net deferred tax asset 0
-----------
As of December 31, 1997, the Company has a net operating loss carryforward
of approximately $11,000 for income tax purposes which expires in 2012.
Deferred taxes reflect a combined federal and state tax rate of approximately
40%.
4. DEVELOPMENT STAGE OPERATIONS
The Company is a development stage enterprise. Its primary focus since
inception of the new operating plan has been raising capital.
5. EARNINGS (LOSS) PER SHARE
Common Shares Outstanding 4,250,000
Effect of using weighted average
common and common equivalent shares
outstanding (1,729,167)
-----------
Weighted average common shares
outstanding 2,520,833
-----------
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors are elected for one-year terms or until the next annual meeting
of shareholders and until their successors are duly elected and qualified.
Officers serve at the discretion of the Board of Directors.
The officers and directors devote only such time as is necessary to the
operations of the Company. Each officer and director maintains outside
employment at non-affiliated companies.
The Directors and Officers of the Registrant as of the date of this report
are as follows:
Name Age Position
---------------- --- --------
Gifford M. Mabie 57 President and Director
Rhonda R. Vincent 34 Vice President, Secretary, Treasurer and
Director
James G. Borem 51 Director
Gifford M. Mabie, age 57, has been President and a Director of the Company
since 1997. Mr. Mabie is also President, CEO and a Director of Maxxon, Inc.
(OTCBB: MXON), a development-stage company co-founded by Mr. Mabie in 1996
to develop and commercialize a patented disposable safety syringe. From 1994
to 1997, Mr. Mabie was a consultant to Corporate Vision, Inc. (OTCBB: CVIA),
a multimedia software development company. From 1982 to 1994, Mr. Mabie was
Senior Vice President of CIS Technologies, Inc. (NASDAQ: CISI), a leading
healthcare information company that was purchased by National Data
Corporation (NYSE: NDC) in 1996.
Rhonda R. Vincent, age 34, has been Vice President, Secretary, Treasurer and
Director of the Company since 1997. Ms. Vincent is also Vice President,
Secretary, Treasurer and Director of Maxxon, Inc. (OTCBB: MXON), a develop-
ment-stage company co-founded by Ms. Vincent in 1996 to develop and
commercialize a patented disposable safety syringe. From 1994 to 1997,
Ms. Vincent was Vice President, Secretary, Treasurer and Director of
Corporate Vision, Inc. (OTC BB: CVIA), a multimedia software development
company. For five years prior to joining Corporate Vision, Ms. Vincent was
Assistant Vice President of CIS Technologies, Inc. (NASDAQ: CISI), a leading
healthcare information processing company that was purchased by National Data
Corporation (NYSE: NDC) in 1996.
James G. Borem, age 51, has been a Director of the Company since 1997.
Mr. Borem is President, CEO and Director of Oil City Petroleum, Inc., an SEC
reporting company. From 1991 to 1995, Mr. Borem was President, Chief
Operating Officer and Co-Founder of LaTex Resources, Inc. (OTC BB: LATX), a
publicly-traded oil and gas company. While at LaTex, he was responsible for
increasing the company's assets from $3 million to more than $60 million.
Item 10. Executive Compensation
For the years ended December 31, 1997 and 1996, the Company paid no salary or
compensation to its executive officers. During those periods, there were no
bonus or incentive plans in effect, nor were there any liabilities incurred
for the payment of compensation to the Company's officers related to past,
present or future services.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as by all directors and officers of
the issuer. Unless otherwise indicated, the shareholders listed possess
sole voting and investment power with respect to the shares shown:
Amount and Nature
Title of Name and Address of of Beneficial Percent of
Class Beneficial Owner Ownership Class
---------- ------------------- ----------------- ----------
Common William G. Morgan
2048 West Houston Beneficial Owner
Broken Arrow, OK 74012 350,000 shares 8.24%
Common Gifford M. Mabie
8908 S. Yale Ave. #409 Officer/Director
Tulsa, OK 74137 200,000 shares 4.71%
Common Rhonda R. Vincent
8908 S. Yale Ave. #409 Officer/Director
Tulsa, OK 74137 200,000 shares 4.71%
Common James G. Borem
8908 S. Yale Ave. #409 Officer/Director
Tulsa, OK 74137 200,000 shares 4.71%
Common All Officers and
Directors as a group
(3 persons) 600,000 shares 14.12%
Item 12. Certain Relationships and Related Transactions
For the years ended December 31, 1997 and 1996, there were no related
party transactions.
Item 13. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit No. Page
----------- ----
23.0 Consent of Cross & Robinson
24.0 Power of attorney Included on Signature Page of this
Form 10-KSB
27.0 Financial Data Schedule For electronic filing only
b. Reports on Form 8-K
There were no reports on Form 8-K filed during the last quarter of the
period covered by this report.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
LONE WOLF ENERGY, INC.
/s/ RHONDA R. VINCENT
______________________________________
By: Rhonda R. Vincent, Vice President,
Secretary and Treasurer
Date: May 27, 1998
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below hereby constitutes and appoints Rhonda R. Vincent, his or her true and
lawful attorneys-in-fact and agents, to sign any or all amendments to this
Report on Form 10-KSB, and to file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person hereby ratifying and
confirming that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Exchange Act of 1934, this Report on
Form 10-KSB has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
/s/ GIFFORD M. MABIE President and Director May 27, 1998
- ---------------------
Gifford M. Mabie
/s/ RHONDA R. VINCENT Vice President, Secretary,
- ---------------------- Treasurer and Director May 27, 1998
Rhonda R. Vincent
/s/ JAMES G. BOREM Director May 27, 1998
- ----------------------
James G. Borem
<PAGE>
Exhibit 23.0
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of Lone Wolf Energy, Inc.
We hereby do consent to the inclusion of the December 31, 1997 independent
auditor's report in the Lone Wolf Energy, Inc. FORM 10-KSB for the year ended
December 31, 1997.
CROSS AND ROBINSON
/s/ CROSS AND ROBINSON
- ----------------------------
Certified Public Accountants
May 27, 1998
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<PERIOD-START> JAN-01-1997
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