SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1999
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)
73-1550360
(IRS Employer Identification Number )
2400 NW 30th, #814
0klahoma City, Oklahoma 73112
(405) 946-4850
(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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of June 30, 1999 there were
11,670,000 shares of the Company's common stock issued and outstanding.
Documents Incorporated by Reference: None
<PAGE>
PART 1. - FINANCIAL INFORMATION
Item 1. Financial Statements
LONE WOLF ENERGY, INC.
(A Development Stage Company)
BALANCE SHEETS
June 301, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
--------- ---------
<S> <C> <C>
ASSETS
Current Assets
Cash, general checking $ 655 $ 282
Accrued interest receivable 11,481 0
Current portion of notes receivable 60,496 0
--------- ---------
Total current assets 72,632 282
Notes receivable, excluding current portion 601,881 0
Investments 32,344 0
Cash, restricted savings 124,140 0
--------- ---------
TOTAL ASSETS $ 830,997 $ 282
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current installments of long-term obligations $ 51,854 $ 0
Accounts payable 18,273 0
Accrued interest payable 5,987 0
--------- ---------
Total current liabilities 76,114 0
Long-term obligations , excluding current installments 435,795 0
Deposits 24,140 0
Note payable-shareholder 100,000 0
Deferred revenue 173,283 0
--------- ---------
TOTAL LIABILITIES 809,332 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,
11,670,000 shares issued and outstanding at June 30, 1999 and
11,170,000 at December 31, 1998 11,670 11,170
Additional Paid in Capital 45,941 45,941
Retained Earnings (Deficit) 1,326 (19,557)
Deficit Accumulated During The Development Stage (37,272) (37,272)
--------- ---------
Total stockholders' equity 21,665 282
--------- ---------
TOTAL LIABILITIES' AND STOCKHOLDERS' EQUITY 830,997 $ 282
========= =========
</TABLE>
The accompanying notes are an integral part of the Financial Statements
2
<PAGE>
LONE WOLF ENRGY, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the three months and six months ended June 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ 68,919 $ 0 $ 68,919 $ 0
Expenses
Legal 233 260 22,233 2,944
Accounting 2,750 0 2,750 87
Consulting 5,500 0 8,500 0
Transfer Agent 653 397 1,028 778
Telephone 1,539 0 2,284 0
Office 332 0 332 0
Public Relations 945 0 945 0
Filing Fees 270 0 270 0
Interest 9,573 0 9,573 0
Miscellaneous 109 453 120 453
----------- ----------- ----------- -----------
Total Expenses 21,904 1,110 48,036 4,262
----------- ----------- ----------- -----------
Net Income(Loss) $ 47,015 $ (1,110) $ 20,883 $ (4,262)
----------- ----------- ----------- -----------
Weighted Average Shares Outstanding 11,670,000 4,250,000 11,670,000 4,250,000
----------- ----------- ----------- -----------
Loss Per Share $ 0.00 $ 0.00 $ 0.00 $ 0.00
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the Financial Statements
3
<PAGE>
LONE WOLF ENERGY INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the three months ended June 30, 1999 and 1998
(Unaudited)
June 30, June 30,
1999 1998
--------- ---------
Operating Activities:
Net Income (loss) $ 20,883 ($ 4,262)
Change in Accounts Payable 18,273 2,355
Increase in Interest Payable 5,987 --
Increase in Long-Term Debt 487,649 --
Increase in Deferred Revenue 173,283 --
Increase in Interest Receivable (11,481) --
Increase in Notes Receivable (662,377) --
Increase in Investments (32,344) --
--------- ---------
Cash Used In Operating Activities (127) (1,907)
--------- ---------
Financing Activities:
Common Stock Issued For Services Rendered 500 1,907
--------- ---------
Cash provided by financing activities 500 1,907
Investing Activities -- --
--------- ---------
Change in Cash 373 --
Cash at Beginning of Period 282 --
--------- ---------
Cash at End of Period $ 650 $ 0
--------- ---------
The accompanying notes are an integral part of the Financial Statements
4
<PAGE>
LONE WOLF ENERGY, INC.
A Development Stage Company
(Formerly K&S Ventures, Inc.)
NOTES TO FINANCIAL STATEMENTS
For the three months and six months ended June 30, 1999 and 1998
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. In February 1999 the Company signed a
Master Sales Agreement with Eagle Capital, Inc. (OTCBB: ECIC) to sell
specialized equipment used in producing patented IMSI blocks for mortarless dry
stack construction. The agreement calls for the Company to provide ten mobile
block plants and five portable Q-Bond plants over the next three years.
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 .
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.
5
<PAGE>
2. STOCKHOLDERS' EQUITY
Issuance of Common Stock
During 1998 6,500,000 shares were issued at 0.001 for services rendered by
related parties and stockholders. There were 500,000 additional shares of stock
that were to be issued which were overlooked in 1998 and were Issued in the
current quarter.
3. INCOME TAXES
The deferred tax assets and liabilities are as follows:
Net operating loss carryforward $14,909
Less: valuation allowance 14,909
-------
Net deferred tax asset $ 0
-------
As of December 31, 1998, the Company has a net operating loss carryforward
of approximately $37,000 for income tax purposes and expires as follows:
Year of Loss Expires Carryforward Amount Deferred Tax Asset
or (Liability)
1997 2012 $ 11,000 $ 4,332
1998 2013 26,000 10,577
---------------- -------------
$ 37,000 $ 14,909
================ =============
Deferred taxes reflect a combined federal and state tax rate of
approximately 40%.
4. DEVELOPMENT STAGE OPERATIONS
The Company has been is a development stage enterprise. Its primary focus
since inception of the new operating plan has been raising capital. In 1999 it
is being reported as an operating entity.
5. NOTES RECEIVABLE
The Company purchased a piece of equipment for resale for $500,000. The
sale call for the Company to receive 84 monthly installments of $12,000
beginning in May of 1999. The sale price was imputed using an interest rate of
12%, which resulted in a sale price of $679,000. The current and long-term
portions of the note receivable represent the balance due on this debt.
6. CASH-RESTRICTED SAVINGS
This represents a $24,000 deposit for the last two payments on the
equipment sold plus $100,000, which was loaned to the Company by a shareholder
which is pledged to the bank as additional collateral on the loan the Company
has against the equipment purchased.
7. LONG-TERM OBLIGATIONS
This is an 8 1/2% seven year note payable to a bank in monthly installments
of $7,918 including principal and Interest on the equipment the Company
purchased and resold. It is secured by the equipment, $100,000 cash loaned by a
shareholder and the personal guarantee of another shareholder. The bank also
received an option to purchase 500,000 shares of the Company's stock at $0.15
per share for making the loan.
8. DEFERRED REVENUE
This is the difference between the purchase price of the equipment sold and
the imputed sale price. The $179,700 is being recognized on the installment
method with $2,193 per month being recognized over the 84 month term of the
agreement.
6
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Plan of Operations
In February of 1999 the Company signed a Master Equipment Sales Agreement
with Eagle Capital, Inc, (OTCBB:ECIC) to sell specialized equipment used in
producing patented IMSI blocks for mortarless dry stack construction. The
Agreement calls for the Company to provide ten mobile blocks plants and five
portable Q-Bond plants over the next three years. Through the guarantees of
certain key shareholders the Company has already obtained $500,000 in financing
for the first plant. In April of 1999 Eagle ordered the first plant and paid a
deposit of $48,000 covering the first two and last two payments on the plant.
The Company incurred approximately $22,000 in legal fees to get this contract
signed.
In May of 1999 the company signed a letter of intent to acquire EP
Distributing Company. EP Distributing and its affiliated groups brokers in the
nutritional area with its primary line being Earths' Pharmacy products which
include 17 private labeled nutritional products which are sold through some
retail pharmacies, Doctors, Radio Talk show sponsorship and the internet
(www.epphysiciansformula.com). The Company is currently negotiating financing to
complete this acquisition.
Results of operations
Due to problems incurred on the sale contract the Company negotiated a
payment of approximately $44,000 in cash and stock which is included in the
current quarter revenues.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Change in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
Exhibits
None
Reports on Form 8-K
None
7
<PAGE>
SIGNATURES
In accordance with the requirements 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/ Douglas A. Newman
-------------------------
By: Douglas A. Newman, Sec,y
Date: August 8, 1999
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM LONE WOLF
ENERGY, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 655
<SECURITIES> 0
<RECEIVABLES> 71,799
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 72,632
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 830,997
<CURRENT-LIABILITIES> 76,114
<BONDS> 0
0
0
<COMMON> 11,670
<OTHER-SE> 9,995
<TOTAL-LIABILITY-AND-EQUITY> 830,997
<SALES> 0
<TOTAL-REVENUES> 68,919
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 48,036
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,883
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,883
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,883
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
