FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

  [ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

                 For the fiscal year ended:  March 31, 1997

                           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.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           Colorado                                              84-0914754
-------------------------------                              -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                             Mellon Financial Center
                         Suite 1001, 1775 Sherman Street
                                Denver, Colorado                  80203 
                     ---------------------------------------    ----------
                    (Address of principal executive offices)    (Zip Code)

                    Issuer's telephone number: (303) 894-0234

       Securities registered under Section 12(b) of the Exchange Act: None

       Securities registered under Section 12(g) of the Exchange Act: None

      Indicate by check mark  whether the issuer (1) filed all reports  required
to be filed by Section 13 or 15(d) of the Exchange  Act 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 at least the
past 90 days. Yes X    No   .
                 ---     ---

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of Regulation S-B 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. [ X ]

      Issuer's revenues for its most recent fiscal year: $4,781.

<PAGE>

      Aggregate  market value of voting stock held by  non-affiliates  as of May
15,  1997:  $-0-.  There is  currently  no trading  market for the  Registrant's
securities.

      Number of shares of Common Stock,  $.01 par value,  outstanding  as of May
15, 1997: 1,788,756.

      Documents incorporated by reference:  See Part IV, Item 13 - "Exhibits and
Reports on Form 8-K" for a listing of documents  incorporated  by reference into
this annual report on Form 10-KSB.

                                       -2-

<PAGE>

                           COGENCO INTERNATIONAL, INC.

                                   FORM 10-KSB

                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS
          -----------------------

(a)   BUSINESS DEVELOPMENT.

      Cogenco  International,  Inc.  ("Cogenco" or the  "Company") was organized
under the laws of the State of  Colorado  on June 27,  1983,  for the purpose of
engaging in the cogeneration business,  which is the simultaneous  production of
power,  either  mechanical or  electrical,  and useful thermal  energy,  such as
steam,  so that the waste heat which is a by-product of one process  becomes the
energy source for the other.  Cogenco commenced active business operations after
it completed  its initial  public  offering of  securities  in February of 1985,
pursuant  to which the Company  realized  total net  proceeds  of  approximately
$1,000,000.

      Cogenco  was not  successful  in the  cogeneration  business,  although it
completed  one  cogeneration  facility  in Arvada,  Colorado,  and  investigated
numerous other cogeneration project  opportunities.  Cogenco eventually depleted
its  financial  resources  and was not  able to  secure  additional  capital  to
continue active business  operations.  Cogenco ceased active business operations
in early 1988. The Company has been attempting to locate a business  opportunity
to combine with the Company since that time.

      During the time  subsequent  to cessation of active  business  activities,
Cogenco has been  maintained as a validly  existing  Colorado  corporation.  Its
activities  have consisted  primarily of the settlement of debts incurred by the
Company through the date it ceased active operations and  subsequently,  and the
maintenance  of books  and  records  to allow  the  Company  to  obtain  audited
financial statements for all years since inception. In addition, certain members
of  its  management  have  continuously  sought  to  locate  potential  business
opportunities for the Company.

      Meetings of shareholders of the Company were held in February 1992 and
August 1993 at which  restructurings of the Company's authorized and outstanding
capital  were  approved.  Share  numbers in this  Report  have been  restated to
reflect the recapitalizations approved by the Company's shareholders in February
1992 (50 for 1 reverse split) and August 1993 (10 for 1 reverse split).


                                       -3-

<PAGE>

(b)   BUSINESS OF ISSUER.

      Since the time it ceased active business operations in 1988, management of
Cogenco has been actively  seeking  business  opportunities.  Several  potential
candidates  were  located  between  1988  and  the  present  time;  however,  no
combination with any of these companies was ever completed.

      The Company has engaged in limited  activities in the oil and gas business
but has been  hampered in its  efforts due to its lack of capital.  It is likely
that the Company will need a  substantial  amount of  additional  capitalization
before  it  will be able to  participate  in any  activities  in the oil and gas
industry.  There is no  assurance  that the Company  will obtain any  additional
capitalization.

      In addition,  Cogenco may serve as the sponsor and/or  general  partner of
programs  and/or  entities  which  will  actually  operate  in the  oil  and gas
business. This may take the form of limited and/or general partnerships, working
interest programs, joint ventures or other methods of acquiring interests in oil
and gas properties and financing the operation thereof.

Competition
-----------

      Upon entering the oil and gas business through acquisition of interests in
oil and gas properties as described  above (of which,  however,  there can be no
assurance), the Company will be in competition with numerous companies and firms
which  are  larger,  better  established,   have  greater  financial  and  other
resources,  more employees, and more extensive facilities than will the Company.
The Company  will  therefore  be at a  competitive  disadvantage  to these other
entities.  The Company cannot expect to be a significant  participant in the oil
and gas  business  within  the  foreseeable  future  and will  face  significant
competition  from a substantial  number of businesses  and  individuals  who are
engaged in the oil and gas business.

Government Regulation
---------------------

      The oil and gas business is heavily regulated by statute and regulation by
various government entities,  both state and federal. In addition, tax treatment
of investments in oil and gas properties is constantly  undergoing change at the
federal level.  Although management  believes that despite such regulation,  the
oil and gas business can be  profitable,  and that oil and gas  companies of the
size  anticipated  for  the  Company  can  and do  operate  successfully  in the
industry,  no assurance can be given that such  governmental  regulation may not
adversely affect the Company in the future.


                                       -4-

<PAGE>

Employees and Consultants
-------------------------

      The Company's President, Mr. David Brenman, is the only person who is
actively  involved  in  day  to  day  operations  of  the  Company.   Management
anticipates that additional employees and/or consultants will be retained as may
be necessary to operate the Company.  The Company believes that this arrangement
is  adequate  to meet the needs of the  Company  during its  process of pursuing
business opportunities.

ITEM 2.  DESCRIPTION OF PROPERTY
         -----------------------

      The Company currently maintains its offices at no charge in the business
office of the law firm which  represents it in general  corporate and securities
law matters. See Item 12 - "Certain Relationships and Related Transactions." The
office facilities are provided to the Company pursuant to an oral agreement, and
the  value of such  facilities  is de  minimis.  Management  believes  that this
arrangement will be suitable for its needs for the immediate future.

      The Company owns no real property and no material personal property.

ITEM 3.  LEGAL PROCEEDINGS
         -----------------

      The  Company  is  not a  party  to  any  legal  proceedings  and  no  such
proceedings are known to be contemplated.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
         ---------------------------------------------------

      None.

                                       -5-

<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         --------------------------------------------------------

(a)   MARKET INFORMATION.

      The  Company's  Common  Stock is not  eligible  for  listing on the NASDAQ
system, and trading,  if any, has been strictly limited to the  over-the-counter
market.  The Common Stock has been quoted from time to time in the "Pink Sheets"
maintained  by the  National  Quotation  Bureau,  Inc.  Since  1988,  management
believes that no established trading market has existed for the Company's Common
Stock.

(b)    HOLDERS.

      (b)(1) The  approximate  number of record holders of the Company's  Common
Stock,  $.01 par value, as of May 15, 1997 was 841. This figure does not reflect
an indeterminable number of shareholders whose shares are held in "street name."

(c)   DIVIDENDS.

      The Company has not paid a dividend with respect to its Common Stock
and cannot be expected to pay a dividend on its Common Stock in the  foreseeable
future.

      The Company's  ability to pay dividends is restricted by provisions of the
Colorado Business Corporation Act which provides that a Colorado corporation may
only pay  dividends if, after giving  effect to the  dividend,  the  corporation
would  be able to pay its  debts  as they  become  due in the  usual  course  of
business,  or the  corporation's  total  assets  would be less  than  its  total
liabilities plus the amount that would be needed,  if the corporation were to be
dissolved at the time of the dividend,  to satisfy the preferential  rights upon
dissolution  of  shareholders  whose  preferential  rights are superior to those
receiving the dividend.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
          ---------------------------------------------------------

RESULTS OF OPERATIONS

Years Ended March 31,1996 and 1997.
----------------------------------

      As stated above,  the Company has been  essentially  inactive  since early
1988 until the 1993 fiscal  year.  The Company  raised  $500,000 in July 1993 in
consideration for the issuance of 50,000 shares of the Company's Common Stock to
a  non-affiliated  individual.  In  addition,  the Company  began  investigating
investment  alternatives  in the oil and gas industry.  As a result,  during the
last two fiscal years the Company achieved no operating revenues, but recognized


                                       -6-

<PAGE>



a net loss of $(25,813)  for the fiscal year ended March 31, 1996 as compared to
a net loss of $(12,021) for the fiscal year ended March 31, 1997. The larger net
loss during the 1996 fiscal year was due to travel  expenses of $10,000  paid to
the Company's  President in 1996 as compared to $4,228 paid in 1997,  legal fees
of $18,654 in 1996 and $5,863 in 1997, and general and  administrative of $5,966
in 1996 and $6,074 in 1997. The Company also received  reimbursement of Dry Hole
costs of $2,587 in 1996.  The  Company is  attempting  to finance  new  business
operations at the present time.

LIQUIDITY AND CAPITAL RESOURCES

      The Company has been without adequate funds since 1987. At the time it
ceased active business operations,  it was essentially out of money and has been
unable to raise any  substantial  amounts of money since that time.  The Company
settled a substantial  portion of its outstanding  debt for shares of its stock,
and for cash  raised in selling its stock in private  placements.  In July 1993,
the Company raised $500,000 from one unaffiliated investor.

PLAN OF OPERATION

      In July 1993, the Company  raised  $500,000 from the sale of 50,000 shares
of its Common Stock. Certain persons who became control shareholders  invested a
total of $185,000 in shares of the  Company's  Common Stock in early 1993.  Such
individuals  subsequently  have  sold  their  shares  of  Common  Stock  to  two
unaffiliated entities, one of whom has transferred 543,334 to Brenman Bromberg &
Tenenbaum,  P. C.  (formerly  Brenman Key & Bromberg,  P.C.) for legal  services
performed for one of the  individuals.  Prior to the  disposition  of the shares
held by these control shareholders,  they had expressed their desire to have the
Company  consider the acquisition of interests in oil and gas properties and the
entry into the oil and gas  industry.  As a result,  the  Company  entered  into
letters of intent with Cody Resources, Inc. Since the Company was unable to meet
the financial  requirements of the letters of intent, the agreements  terminated
without additional obligations to the Company.

      The  Company  will  continue  reviewing  opportunities  in the oil and gas
industry,  however,  and may propose other investments.  Because the Company may
need a  substantial  amount  of  capital  from  third  parties,  there can be no
assurance that the Company will be able to complete any investment obligation.

      As of this date, the Company has not identified any properties to be
acquired at the present  time.  Until  properties  are  acquired,  the Company's
available  cash is expected to satisfy its cash  requirements  during the fiscal
year ending March 31, 1998. For more  information,  see Item 1  "Description  of
Business."


                                       -7-

<PAGE>

Item 7.   FINANCIAL STATEMENTS

The  following  financial  statements  are filed as a part of this  Form  10-KSB
immediately following the signature page:


         Report of Independent Certified Public
         Accountants.......................................................  F-1

         Balance Sheet - March 31, 1996 and 1997...........................  F-2

         Statement of  Operations  - For the Years Ended March 31, 1996
           and  1997  and  Cumulative  Amounts  from  Inception  of the
           Development Stage (July 26, 1990)
           through March 31, 1997..........................................  F-3

         Statement of Stockholders' Equity (Deficit) -
           For the Period from Inception of the Development
           Stage (July 26, 1990) through March 31, 1997....................  F-4

         Statement of Cash Flows - For the Years
           Ended March 31, 1996 and 1997 and
           Cumulative Amounts from Inception of
           the Development Stage (July 26, 1990) through
           March 31, 1997..................................................  F-7

         Notes to Financial Statements - For the
           Years Ended March 31, 1996 and 1997 ............................  F-8


ITEM 8.   CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
          ----------------------------------------------------------------------
          FINANCIAL DISCLOSURE.
          --------------------

      Since  inception,  the Company has not filed a Form 8-K reporting a change
of  accountants,   nor  has  there  been  any  material  disagreement  with  its
accountants on any matter regarding accounting or financial disclosure.


                                       -8-

<PAGE>



                                    PART III


ITEM 9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS AND  CONTROL PERSONS; COM-
          ----------------------------------------------------------------------
          PLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
          ----------------------------------------------

(a)   IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS.

      The  directors  of the Company  are elected to hold office  until the next
annual meeting of shareholders and until their  respective  successors have been
elected  and  qualified.  Officers  of the  Company  are elected by the Board of
Directors and hold office until their successors are elected and qualified.

      The current sole officer and director of the Company is:

Name                              Age         Position
----                              ---         --------

David W. Brenman                  41          Director, President, Secretary and
                                              Treasurer

The sole director intends to appoint additional directors when appropriate.

      DAVID W. BRENMAN, age 41, is currently engaged as an independent financial
consultant,  which he has been since 1988.  From 1987 to 1988 Mr.  Brenman was a
vice  president  of  Lloyds  International  Corporation,  the  merchant  banking
subsidiary of Lloyds Bank Plc. From 1984 to 1986 Mr. Brenman served as President
of the Company  and from 1984 until the  present has served as a director.  From
1979 until  1984,  Mr.  Brenman  was an  associate  with the law firm of Brenman
Raskin & Friedlob, P.C. of Denver,  Colorado, where he specialized in the fields
of taxation and  securities  law. Mr.  Brenman  received a B.A.  degree from the
University of Washington in  accounting,  a J.D.  degree from the  University of
Denver,  College of Law and an L.L.M. in taxation from New York University.  Mr.
Brenman  serves on the board of directors of U. S. Energy Corp., a publicly held
corporation  engaged in the mining business.  Mr. Brenman currently serves,  and
since  December  1990 has served,  as President and Treasurer of the Company and
has served as the Company's Secretary since December 1994.


(b)   SIGNIFICANT EMPLOYEES.

      The Company has no significant employees at the present time.


                                       -9-

<PAGE>



(c)   FAMILY RELATIONSHIPS.

      Currently  there are no family  relationships  among any of the  Company's
officers and/or directors.

(d)   INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.

      During the past five years, no director,  executive  officer,  promoter or
control person of the Company has:

      (1) Had any bankruptcy  petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that date;

      (2) Been  convicted in a criminal  proceeding or been subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);

      (3) Been  subject to any order,  judgement,  or decree,  not  subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently or temporarily enjoining,  barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

      (4) Been found by a court of competent jurisdiction (in a civil
action),  the  Commission or the Commodity  Futures  Trading  Commission to have
violated a federal or state  securities or commodities  law, where the judgement
has not been reversed, suspended, or vacated.

(e)   COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

      Not applicable.



                                      -10-

<PAGE>

ITEM 10.   EXECUTIVE COMPENSATION

CASH COMPENSATION.

      During the past three (3) fiscal years, no officer of the Company received
any compensation.  David W. Brenman, the Company's president and chief executive
officer,  received total cash reimbursements of $11,770,  $10,000 and $4,228 for
travel  expenses  incurred by him during the 1995,  1996 and 1997 fiscal  years,
respectively.

      Mr. Brenman has received no stock  options,  employee  benefits,  or other
form of direct or indirect  remuneration  from the Company during the 1995, 1996
and 1997  fiscal  years.  Mr.  Brenman  is  currently  devoting  such time as is
necessary to the affairs of the Company to facilitate the  reorganization of the
Company as an oil and gas company.

COMPENSATION UNDER PLANS.

      Stock  Option and Bonus  Plans.  The Company has a stock option plan and a
stock bonus plan pursuant to which the Board of Directors had the right to issue
stock  options and stock bonuses as  compensation  to qualified  employees.  One
option was granted under the stock option plan to a director of the Company, but
expired  unexercised in 1990. No stock bonuses were ever granted under the stock
bonus plan.

OTHER COMPENSATION.

      Other  than  as  described  above,  no  other  compensation  was  paid  or
distributed  to any officer or director of the Company for services  rendered to
the Company during the last three fiscal years.


COMPENSATION OF DIRECTORS.

      The  Company  does  not pay  its  directors  for  their  services  in that
capacity;   however,   officers  and   directors   receive   reimbursement   for
out-of-pocket  expenses  incurred by them in connection with the business of the
Company.  Currently,  the Company does not pay any directors fees for attendance
at board meetings.

      The Company has no other  arrangements  pursuant to which any  director of
the  Company  was  compensated  during the fiscal  year ended March 31, 1997 for
services as a director.

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL.

         The Company has no compensation plan or arrangement with respect to any
executive  officer  which plan or  arrangement  results or will  result from the
resignation, retirement or any other termination of such individual's employment
with the Company. The Company has no plan

                                      -11-

<PAGE>



or arrangement  with respect to any such persons which will result from a change
in  control  of the  Company  or a change in the  individual's  responsibilities
following a change in control.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          --------------------------------------------------------------

(a)(b) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      The following  table sets forth  information as of May 15, 1997, as to the
beneficial  ownership  of  shares of the  Company's  only  outstanding  class of
securities,  its Common  Stock,  by each  person who,  to the  knowledge  of the
Company at that date,  was a beneficial  owner of 5% or more of the  outstanding
shares of Common Stock,  by each person who is an officer and/or director of the
Company and by all officers and  directors of the Company as a group.  The table
does not include information  regarding shares of Common Stock held in the names
of certain  depositories/clearing  agencies as nominee  for various  brokers and
individuals. No such broker or individual is believed to hold greater than 5% of
the Company's Common Stock.

                                                        Amount and
                     Name and Address                    Nature of
 Title of              of Beneficial                    Beneficial      Percent
  Class                    Owner                           Owner        of Class
---------            ----------------                   ----------      --------

Common           David W. Brenman                       497,042 (1)       27.8%
Stock            599 Lexington Avenue
                 23rd Floor
                 New York, NY  10019

Common           Beldin Investments, Inc.               750,000(1)(2)     29.5%
Stock            c/o Richard Green
                 9665 Wilshire Blvd.
                 Suite 410
                 Beverly Hills, CA  90212

Common           Saga Investments, Inc.                 543,334(1)        30.4%
Stock            c/o Peter Desjardins
                 Suite 1301, Arbift Tower
                 P. O. Box 5724
                 Dubai, United Arab Emirates

Common           Brenman Bromberg & Tenenbaum, P.C.     593,476 (1)(3)    33.2%
Stock            1775 Sherman Street
                 Suite 1001
                 Denver, CO  80203


                                      -12-

<PAGE>



Common           Officers and                           497,042 (1)       27.8%
Stock            directors as a
                 group (one
                 person)

----------------

(1)  Ownership is direct.

(2)  Includes stock purchase warrants to acquire 750,000 shares of the Company's
     Common Stock exercisable at $10 per share until June 30, 1998.

(3)  Includes 543,334 shares  transferred to Brenman Bromberg & Tenenbaum,  P.C.
     by Beldin  Investments,  Inc.,  4,850 shares owned by Albert Brenman who is
     president, a director and shareholder of Brenman Bromberg & Tenenbaum, P.C.
     and 45,292  shares  owned by A.  Thomas  Tenenbaum  who is Vice  President,
     Assistant  Secretary,  Assistant  Treasurer,  a director and shareholder of
     Brenman Bromberg & Tenenbaum,  P.C. See "Item 12. Certain Relationships and
     Related Transactions."


(c)   CHANGES IN CONTROL.

      Management is not aware of any  arrangements  which may result in a change
of control of the Company.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------
 
(a)(b)(c) TRANSACTIONS WITH MANAGEMENT AND OTHERS.

      LEGAL REPRESENTATION.  The law firm of Brenman Bromberg & Tenenbaum, P. C.
(formerly Brenman Key & Bromberg, P.C.) ("BBT") provides legal representation to
the  Company.  A principal  of BBT,  Albert  Brenman,  is the father of David W.
Brenman,  the sole officer and director of the Company.  BBT owns 543,334 shares
of the  Company's  Common Stock and  employees of the law firm of BBT own 50,142
shares of the Company's  Common Stock.  BBT is paid its standard hourly fees for
legal representation of the Company. BBT currently provides office facilities to
the Company at no charge as the value of such facilities is de minimis.

(d)   TRANSACTIONS WITH PROMOTERS.

      Not applicable.

                                      -13-

<PAGE>
                                     PART IV


ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K.

      (a)  Exhibits  required  to be filed are listed  below and,  except  where
incorporated by reference, immediately follow the Financial Statements.

  Number                              Description
  ------                              -----------

   3.1     Articles of Incorporation, as amended, incorporated by reference from
           the  Annual  Report  on  Form 10-KSB for  the five fiscal years ended
           March 31, 1992

   3.2     Bylaws, incorporated by reference from  the Annual Report on Form 10-
           KSB for the five fiscal years ended March 31, 1992

   3.3     Articles of Amendment to the Articles of Incorporation,  incorporated
           by reference from the Form 8-K dated August 16, 1993 filed August 26,
           1993.

   27      Financial Data Schedule


      (b) During  the last  quarter  of the  period  covered by this  report the
Company filed no reports on Form 8-K.


--------------------------------------------------------------------------------

SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE EXCHANGE ACT BY REGISTRANTS  WHICH HAVE NOT  REGISTERED  SECURITIES
PURSUANT TO SECTION 12 OF THE EXCHANGE ACT:

The Registrant  has not sent to its security  holders any annual report or proxy
material  during the last  fiscal  year.  If such  report or proxy  material  is
furnished to security holders  subsequent to the filing of this Form 10-KSB, the
Registrant  shall furnish copies of such material to the  Commission  when it is
sent to security holders.


                                      -14-

<PAGE>


                                   SIGNATURES

      In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of
1934,  the  Registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

Date:  June 18, 1997
                                       COGENCO INTERNATIONAL, INC.


                                       By  /s/ David W. Brenman
                                         ---------------------------------------
                                         David W. Brenman, President


      In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following person on behalf of the Registrant and in the
capacities and on the date indicated.



Date:  June 18, 1997                   By /s/ David W. Brenman
                                         ---------------------------------------
                                         David W. Brenman, President, Principal
                                         Executive Officer, Principal Accounting
                                         Officer, Principal Financial Officer
                                         and sole Director








                                      -15-

<PAGE>
                           COGENCO INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 1996 AND 1997
                                      WITH
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors and Shareholders
Cogenco International, Inc.

We have audited the balance sheet of Cogenco International,  Inc. (a development
stage  company) as of March 31, 1996 and 1997,  and the  related  statements  of
operations, stockholders' equity and cash flows for the years then ended and for
the period from inception of the development stage (July 26, 1990) through March
31, 1997.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based upon our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Cogenco International,  Inc. as
of March 31, 1996 and 1997, and the results of its operations and its cash flows
for the years then ended and the period from inception of the development  stage
through  March 31,  1997,  in  conformity  with  generally  accepted  accounting
principles.


                                            /s/ Causey Demgen & Moore Inc.
Denver, Colorado                            CAUSEY DEMGEN & MOORE INC.
May 5, 1997


                                       F-1

<PAGE>


                                     COGENCO INTERNATIONAL, INC.
                                    (A Development Stage Company)


<TABLE>
<CAPTION>
                                            BALANCE SHEET

                                       MARCH 31, 1996 and 1997


                                                ASSETS
                                                ------

                                                                   1996                   1997
                                                                ----------             ----------
<S>                                                             <C>                    <C> 
Current asset:
    Cash, interest bearing accounts                             $  141,105             $  125,699

Computer equipment, at cost, net of
    accumulated depreciation of $637                                    --                  2,935
                                                                ----------             ----------

                                                                $  141,105             $  128,634
                                                                ==========             ==========


                               LIABILITIES AND STOCKHOLDERS' EQUITY
                               ------------------------------------

Current liabilities:
    Accounts payable - related parties
        (Note 5)                                                $     450              $      --

Contingencies (Note 2)

Stockholders' equity (Note 3):
    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
        $574,193 deficit accumulated
        during the development stage)                          (1,931,633)            (1,943,654)
                                                               ----------             ----------

           Total stockholders' equity                             140,655                128,634
                                                               ----------             ----------
                                                               $  141,105             $  128,634
                                                               ==========             ==========
</TABLE>


                                    See accompanying notes.

                                             F-2

<PAGE>
                                    COGENCO INTERNATIONAL, INC.
                                   (A Development Stage Company)


<TABLE>
<CAPTION>
                                      STATEMENT OF OPERATIONS

                           For the Years Ended March 31, 1996 and 1997 and
               Cumulative Amounts from Inception of the Development Stage (July 26, 1990)
                                       Through March 31, 1997

                                                                                      Cumulative
                                                                                     amounts from
                                                1996                 1997             Inception
                                              --------             --------          ------------
<S>                                          <C>                  <C>                  <C>
Revenues:
    Interest income                          $   6,220            $   4,781            $  23,914

Costs and expenses:
    Legal fees - related party
        (Note 5)                                18,654                5,863              141,260
    Consulting and travel expenses -
        related party                           10,000                4,228              144,865
    Dry hole costs (Note 6)                    (2,587)                   --              123,086
    General and administrative                   5,966                6,074              188,259
    Depreciation                                    --                  637                  637
                                            ----------            ---------            ---------

           Total costs and expenses             32,033               16,802              598,107
                                            ----------            ---------            ---------

               Net loss (Note 4)            $  (25,813)           $ (12,021)           $(574,193)
                                            ==========            =========            =========


Net loss per common share                   $     (.01)           $    (.01)           $    (.51)
                                            ==========            =========            =========


Weighted average number of common
    shares outstanding (Note 3)             1,788,756             1,788,756            1,134,030
                                            =========             =========            =========

</TABLE>

                                              See accompanying notes.

                                                       F-3

<PAGE>

                                            COGENCO INTERNATIONAL, INC.
                                           (A Development Stage Company)

<TABLE>
<CAPTION>
                                    STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                            For the Period from Inception of the Development Stage (July 26,
                                           1990) through March 31, 1997

                                                                                                                    Total
                                                     Common stock           Additional                          stockholders'
                                                  ------------------         paid-in         Accumulated           equity
                                                  Shares      Amount         capital           deficit            (deficit)
                                                  ------      ------        ----------       ------------       -------------
<S>                                               <C>         <C>           <C>              <C>                  <C>  
Balance at July 25, 1990                          72,415      $  724        $1,358,508       $(1,369,461)         $(10,229)

Sale of common stock to employees of
    the related law firm for cash ($.50
    per share) July 26, 1990                      13,600         136             6,664                --             6,800

Sale of common stock to an unrelated
    entity for cash ($.50 per share)
    July 26, 1990                                 12,000         120             5,880                --             6,000

Shares of common stock issued in
    settlement of an account payable
    to the related law firm in October
    1990 ($.50 per share)                          1,985          20               973                --               993

Net loss for the period ended
    March 31, 1991                                    --          --                --           (11,922)          (11,922)
                                               ---------     -------        ----------       -----------         ---------

Balance at March 31, 1991                        100,000       1,000         1,372,025        (1,381,383)           (8,358)

Shares of common stock issued in
    settlement of an account payable to
    the related law firm ($.50 per
    share) in February 1992                       28,756         288            13,975                --            14,263

Net loss for the year ended
    March 31, 1992                                    --          --                --           (13,545)          (13,545)
                                               ---------     -------        ----------       -----------         ---------

Balance at March 31, 1992                        128,756       1,288         1,386,000        (1,394,928)           (7,640)


</TABLE>


                                         (Continued on following page)

                                            See accompanying notes.

                                                      F-4

<PAGE>


                                           COGENCO INTERNATIONAL, INC.
                                          (A Development Stage Company)



<TABLE>
<CAPTION>
                                     STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                            For the Period from Inception of the Development Stage (July 26,
                                             1990) through March 31, 1997

                                            (Continued from preceding page)


                                                                                                                 Total
                                                     Common stock          Additional                        stockholders'
                                                  ------------------        paid-in        Accumulated          equity
                                                  Shares      Amount        capital          deficit           (deficit)
                                                  ------      ------       ----------      ------------      -------------
<S>                                               <C>         <C>          <C>             <C>                 <C>  
Balance at March 31, 1992                           128,756    1,288       1,386,000       (1,394,928)           (7,640)

Sale of common stock to two
    individuals for cash and
    cash payments to the Company's
    president in March 1993 ($.11
    per share) (Note 3)                           1,610,000   16,100         158,900               --           175,000

Net loss for the year ended
    March 31, 1993                                       --       --              --         (100,291)         (100,291)
                                                  ---------  -------       ---------       ----------          ---------

Balance at March 31, 1993                         1,738,756   17,388       1,544,900       (1,495,219)           67,069

Capital contribution of two
    shareholders consisting of
    cash payment to the Company's
    president in April 1993
    (Note 3)                                             --       --          10,000               --            10,000

Sale of stock to an individual
    for cash ($10.00 per share)
    (Note 3)                                         50,000      500         499,500               --           500,000

Net loss for the year ended
    March 31, 1994                                       --       --              --         (368,020)         (368,020)
                                                  ---------  -------       ---------       ----------          --------

Balance at March 31, 1994                         1,788,756   17,888       2,054,400       (1,863,239)          209,049

</TABLE>






                                          (Continued on following page)

                                             See accompanying notes.

                                                      F-5

<PAGE>


                                          COGENCO INTERNATIONAL, INC.
                                         (A Development Stage Company)


<TABLE>
<CAPTION>
                                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                           For the Period from Inception of the Development Stage (July 26,
                                           1990) through March 31, 1997

                                          (Continued from preceding page)

 
                                                                                                                   Total
                                                     Common stock           Additional                         stockholders'
                                                  ------------------         paid-in         Accumulated          equity
                                                  Shares      Amount         capital           deficit           (deficit)
                                                  ------      ------        ----------       ------------      -------------
<S>                                               <C>         <C>           <C>               <C>                 <C>  
Balance at March 31, 1994                         1,788,756    17,888        2,054,400         (1,863,239)         209,049

Net loss for the year ended
    March 31, 1995                                       --        --               --            (42,581)         (42,581)
                                                  ---------   -------       ----------        -----------         --------

Balance at March 31, 1995                         1,788,756    17,888        2,054,400         (1,905,820)         166,468

Net loss for the year ended
    March 31, 1996                                       --        --               --            (25,813)         (25,813)
                                                  ---------   -------       ----------        -----------         --------

Balance at March 31, 1996                         1,788,756    17,888        2,054,400         (1,931,633)         140,655

Net loss for the year ended
    March 31, 1997                                       --        --               --            (12,021)         (12,021)
                                                  ---------   -------       ----------        -----------         --------

Balance at March 31, 1997                         1,788,756   $17,888       $2,054,400        $(1,943,654)        $128,634
                                                  =========   =======       ==========        ===========         ========

</TABLE>

                                                  See accompanying notes.

                                                          F-6

<PAGE>


                                                COGENCO INTERNATIONAL, INC.
                                               (A Development Stage Company)
<TABLE>
<CAPTION>
                                                  STATEMENT OF CASH FLOWS

                                     For the Years Ended March 31, 1996 and 1997 and
                        Cumulative Amounts from Inception of the Development Stage (July 26, 1990)
                                                  Through March 31, 1997


                                                                                                                     Cumulative
                                                                                                                    amounts from
                                                                                 1996               1997             Inception
                                                                               --------           --------           ---------
<S>                                                                           <C>                <C>                 <C>
Cash flows from operating activities:
    Net loss                                                                  $(25,813)          $(12,021)           $(574,193)
    Adjustments to reconcile net loss to net
        cash used in operating activities:
           Depreciation expense                                                     --                637                  637
           Consulting fees paid directly
               by common stock purchasers                                           --                 --               50,000
           Increase (decrease) in accounts
               payable                                                         (12,142)              (450)               4,997
                                                                              --------           --------            ---------

               Net cash used in operations                                     (37,955)           (11,834)            (518,559)

Cash flows from investing activities:
    Purchase of computer equipment                                                  --             (3,572)              (3,572)
                                                                              --------           --------            ---------

               Net cash used in
                  investing activities                                              --             (3,572)              (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                                                (37,955)           (15,406)             125,669

Cash balance at beginning of year                                              179,060            141,105                   30
                                                                              ---------          --------            ---------

Cash balance at end of year                                                   $141,105           $125,699            $ 125,699
                                                                              ========           ========            =========


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


</TABLE>
                                                  See accompanying notes.

                                                          F-7

<PAGE>


                           COGENCO INTERNATIONAL, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 1996 and 1997


1.   Significant accounting policies
     -------------------------------

     Organization:

     Cogenco  International,  Inc. (the "Company") was incorporated in the State
     of Colorado  on June 27, 1983 as an  investment  of  Scientific  Management
     Corporation,  a privately owned business development company. Prior to July
     26, 1990,  the Company was engaged in the  development of  cogeneration  of
     electricity  and the sale of the  electricity  to  end-users  on site or to
     public  utilities.  The  Company  is  currently  considered  to be  in  the
     development  stage  as  more  fully  defined  in the  Financial  Accounting
     Standards  Board  Statement  No. 7. The  Company  has  engaged  in  limited
     activities in the oil and gas business,  but has not generated  significant
     revenues to date. The Company is currently seeking business opportunities.

     Use of estimates:

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Fair value of financial instruments:

     The carrying amount of cash and cash  equivalents is assumed to approximate
     fair value because of the short maturities of those instruments.

     Loss per share:

     Net loss per common share is based on the weighted average number of shares
     outstanding during each period.

     Income taxes:

     The Company has adopted  Statement of Financial  Accounting  Standards  No.
     109,  ACCOUNTING FOR INCOME TAXES. This statement  provides for a liability
     approach under which deferred  income taxes are provided based upon enacted
     tax laws and rates  applicable  to the  periods  in which the taxes  become
     payable.

     Cash flows:

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid debt instruments purchased with a maturity of three months or
     less to be cash equivalents.

                                       F-8

<PAGE>
                           COGENCO INTERNATIONAL, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 1996 and 1997


1.   Significant accounting policies (continued)
     ------------------------------------------

     Concentrations 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, 1996 and 1997, the Company's cash deposits
     exceeded  the FDIC  insurance  limit of $100,000  by $41,105  and  $25,699,
     respectively, at one institution.

     Computer equipment:

     Computer  equipment  is stated at cost.  Depreciation  is  provided  by the
     Company on  straight-line  and  accelerated  methods over estimated  useful
     lives of three to five years.

2.   Cogeneration facilities and equipment
     -------------------------------------

     In March 1985,  the Company  entered  into an  agreement  with an unrelated
     entity  whereby the Company  would  design,  install,  operate and maintain
     cogeneration equipment at a swimming pool in Arvada, Colorado for a 15-year
     period ending in 2000.

     On January 9, 1986, the Arvada Pool facility was sold to Anjo  Construction
     Company  (Anjo),  a company owned by certain  officers and directors of the
     Company, and the Company entered into a 60 month leaseback agreement.

     The Company assigned its rights to the cogeneration facility, its rights in
     several  lawsuits  (as  a  plaintiff),   and  its  obligations   under  the
     cogeneration contract to Anjo in January 1990.

3.   Stockholders' equity
     --------------------

     Stock plans:

     On July 15,  1983,  the  Company's  Board  of  Directors  and  stockholders
     authorized  and approved an Incentive  Stock Option Plan covering up to 798
     shares of the  Company's  common stock for  employees  and officers  and/or
     directors.  The Board of Directors is  authorized to determine the exercise
     price, the exercise period,  the number of shares subject to the option and
     the individuals to receive the options.

     The  Company  also has a Stock  Bonus Plan which has been  approved  by the
     Board of Directors and for which 499 shares of the  Company's  common stock
     have been  reserved.  As of March 31, 1997, no options have been  exercised


                                       F-9

<PAGE>


                           COGENCO INTERNATIONAL, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 1996 and 1997


3.   Stockholders' equity (continued)
     -------------------------------

     and no charges to income  have been made  inconnection  with the  Incentive
     Stock Option Plan or the Stock Bonus Plan

     Stock issuances:

     On March 4, 1993,  the  Company  entered  into a letter of intent  with two
     individuals,  previously  unrelated to the  Company,  pursuant to which the
     individuals agreed to provide funding to the Company of $175,000. 1,610,000
     shares of common  stock were  issued for the  $175,000  subscription  price
     (approximately $.11 per share).  These individuals have sold 483,334 shares
     to the  Company's  president,  40,000  shares to a former  director  of the
     Company,  transferred  543,333  shares  to a  non  affiliated  company  and
     transferred 543,333 shares to the Company's law firm for services performed
     for that individual.

     The  two  individuals  agreed  to  advance  $10,000  per  month  to pay the
     Company's  President for time and services  rendered in connection with the
     operation of the Company prior to  consummation  of the above  transaction.
     The Company's  President was paid $50,000 ($10,000 per month) from December
     1992 through April 1993  pursuant to the letter of intent.  The $50,000 was
     recorded as additional  paid-in  capital and  consulting  expense.  The two
     individuals  also loaned  $100,000 to the Company,  due upon demand with no
     interest and unsecured. This loan was repaid in full in March 1993.

     On July 6, 1993,  the Company  issued  50,000  shares of its $.01 par value
     common stock to a previously unrelated individual for cash consideration of
     $500,000, in a private offering. A portion of the proceeds of this offering
     ($200,000  in  the  aggregate)  was  used  to  fund  the  initial  drilling
     requirements  of an oil and gas prospect in Texas,  as discussed more fully
     in Note 6.

     On January 15, 1994, a company owned by the two  individuals  purchased for
     $10 warrants to purchase  750,000  shares of the Company's  common stock at
     $10 per share  exercisable  through  June 30,  1998.  These  warrants  were
     transferred to another company on May 11, 1995.

4.   Income taxes
     ------------

     No  provision  for income  taxes is required  for the years ended March 31,
     1996 and 1997 or the period from inception of the  development  stage (July
     26,  1990)  through  March 31, 1997  because the Company has  incurred  net
     operating losses for the periods. The net operating losses generated may be
     carried   forward  to  offset  future   taxable   income.   The  amount  of
     carryforwards from 1993 and prior years that may be used in the future will
     be limited pursuant to Sections 382 and 383 of the Internal Revenue Code of
 

                                      F-10

<PAGE>


                           COGENCO INTERNATIONAL, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 1996 and 1997


4.   Income taxes (continued)
     -----------------------

     1986,  as  amended.  The  1993  and  prior  aggregate  net  operating  loss
     carryforward  for  Federal  income  tax  reporting  purposes  is limited to
     approximately  $177,000, of which only $11,800 may be used in any one year.
     If not used to offset future taxable income,  the carryforwards will expire
     as follows:

                        2003                          $ 19,000
                        2004                            36,000
                        2006                             5,000
                        2007                            14,000
                        2008                           103,000
                        2009                           368,000
                        2010                            43,000
                        2011                            26,000
                        2012                            11,000
                                                      --------

                                                      $625,000
                                                      ========

     As of March 31,  1996 and 1997,  total  deferred  tax assets and  valuation
     allowance are as follows:

                                                         1996            1997
                                                       --------         ------
     Deferred tax assets resulting from
        loss carryforward                              $221,000        $225,000
     Valuation allowance                              (221,000)        (225,000)
                                                      --------         --------

                                                      $      -         $      -
                                                      ========         ========

5.   Related party transactions
     --------------------------

     For the years  ended  March  31,  1996 and 1997 and from  inception  of the
     development  stage, the Company incurred legal costs of $0, $0 and $88,221,
     respectively, 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 years  ended  March  31,  1996 and 1997 and from  inception  of the
     development stage, the Company incurred legal costs of $18,654, $5,863, and
     $53,039 respectively,  from a law firm in which a principal of the law firm
     is a relative of an officer and  director of the  Company.  As of March 31,
     1996, $450 was owed to this related law firm.

6.   Dry hole costs
     --------------

     The Company  entered into a letter of intent with Cody  Resources,  Inc., a
     privately-held  corporation engaged in the oil and gas production industry,
     in April of 1993,  which  provided  for the  drilling of a test well in the
     West Pine  Prospect,  Victoria  County,  Texas.  The results of the initial
     drilling were  unsuccessful.  The  Company's  share of the related dry hole
     costs amounted to $123,086.

                                      F-11