SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KS B
                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                       For the fiscal year ended 12-31-96
                         Commission file number 33-28188

                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                     --------------------------------------
             (Exact name of registrant as specified in its charter)

                          JEFFERSON CAPITAL CORPORATION
                          -----------------------------
                               Formerly known name

                Colorado                                   84-1116458
                --------                                   ----------
       (State of incorporation)                         (I.R.S. Employer
                                                       Identification No.)

                7535 E. Hampden Ave., Ste. 600, Denver, CO 80231
                ------------------------------------------------
               (Address of principal executive offices) (Zip Code)

            Registrant's telephone number, including area code: None

           Securities registered pursuant to Section 12(b) ofthe Act:

                            Title of each class: None

                 Name of each exchange on which registered: N/A

           Securities registered pursuant to Section 12(g) of the Act:

                            Title of each class: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                               Yes          No   X
                                   -----       ----- 

Check if disclosure of delinquent  filers pursuant 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.  
X
                  ---
State issuer's revenues for its most recent fiscal year. $0



<PAGE>



Transitional Small Business Disclosure Format:

                            Yes            X     No
                       -----             -----

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant as of December 31, 1996: $0

Number of outstanding  shares of the  registrant's no par value common stock, as
of December 31, 1996: 116,666.



<PAGE>



                                     PART 1
                                     ------

Item 1. Business

     Jefferson Capital  Corporation (the Company),  a development stage company,
     was organized under the laws of the State of Colorado on February 28, 1989.
     The Company is in the development  stage as defined in Financial  Standards
     Board Statement No. 7.

     On January 4,  1990,  the  Company  sold  10,000,000  units of no par value
     common stock in a "Blind Pool" public offering. The offering price for each
     unit was $.01.  Each unit  consisted  of one share of the  Company's no par
     value common stock and 25 Class A Common Stock Redeemable Purchase Warrants
     (Class A Warrants). The Class A Warrants are exercisable for 24 months from
     the effective  date of the  registration  statement  (October 30, 1989) and
     entitled  the holder  thereof to  purchase  25 shares of common  stock at a
     price of $.014 per share.  The Company  received  $72,730,  net of offering
     costs, from the sale of common stock in the public offering.

     Effective June 13, 1990, the Company  entered into a merger  agreement with
     Ohio & Southwestern  Energy Company (OSEC).  The Company issued  80,000,000
     shares of its common stock in exchange for all of the outstanding shares of
     OSEC.  After the  exchange  of shares,  OSEC's  sole  shareholder,  Members
     Service   Corporation   (MSC),  owned  80%  of  the  Company's  issued  and
     outstanding common stock. The name of the corporation was changed to Ohio &
     Southwestern Energy Company (OSEC).

     No  significant  business  activity was conducted by the Company during the
     fiscal year. As a result, no income was realized by the Company in its last
     fiscal year.

     While the company  commenced 1990 with a successful  public  offering,  the
     subsequent  merger agreement with Ohio & Southwestern  Energy Corp.  (OSEC)
     became an abortive transaction.  The new management of OSEC never completed
     the merger with assets represented,  and without authorization  distributed
     the corporate  funds to  unauthorized  parties or uses which  resulted in a
     total write off of the capital of the Company.

     The  majority  stockholder,   MSC,  failed  to  disclose  to  the  minority
     stockholders  the  distribution  of  corporate  funds during the year ended
     1990. The Company recorded an  extraordinary  loss in the amount of $69,116
     as a result of the unauthorized distribution of corporate funds in 1990.

     The minority  shareholders  filed a complaint in Arapahoe  County  Colorado
     District  Court,  Civil Division,  during April,  1991 alleging among other
     things  that  the  majority  shareholder,   MSC,  failed  to  disclose  the
     distribution  of corporate  funds,  failed to account for the operations of
    


<PAGE>



     the  corporation  and  transferred   assets  of  the  corporation   without
     stockholder or board  meetings.  The supposed  assets of OSEC did not exist
     and the Company (OSEC) was a sham.

     On August 28,  1991,  a Receiver was  appointed  and the court  ordered the
     80,000,000 shares of common stock issued to MSC to be canceled.  On January
     12, 1995, the minority  shareholders filed a motion for supplemental orders
     requesting that the merger between Jefferson  Capital  Corporation and Ohio
     and Southwestern Energy Company be declared null and void and a bar date of
     April 15,  1995,  be set  within  which any and all  creditors  must file a
     claim.

     On May 23,  1995,  the  Receiver  issued his final  report  stating that no
     claims of creditors had been filed by the bar date.  The Receiver  incurred
     $36,395  in  costs  during  receivership.  Certain  of the  costs  had been
     advanced  by the  Receiver  in the  anticipation  of  issuance of shares of
     common  stock  by  the  Board  of  Directors  after  the  dismissal  of the
     Receivership.

     On June 21, 1995, the Court ordered the merger null and void,  approved the
     Receiver's  final  report and restored the name of the Company to Jefferson
     Capital Corporation. The Company engaged in no foreign operations or export
     sales to date, has no product and has no full-time employees at year end.

     The Company was inactive and presently does not participate in any industry
     segment.  The Company had no material  revenues,  or  operating  profits or
     identifiable  assets  attributable  to its industry  segment,  but incurred
     losses as a result of the merger agreement with Ohio & Southwestern  Energy
     Company.

     Comparison of year Ended December 31, 1995 to year Ended December 31, 1994.
     The  Company  ceased  operations  in June 1991,  and has had no revenues or
     sales of any type.

     On August  30,  1995 the  shareholders  of the  company  voted to approve a
     reverse  split  of up to one new  share  for  300  shares  outstanding.  On
     September 25, 1995, the directors  effectuated a reverse split on a one for
     300 shares basis.

Item 2. Property
        --------

     The  Company  does not have any  formal  offices at year end.  Records  are
     maintained and mail received at 7535 E. Hampden Ave., Ste. #600, Denver, CO
     80231. The company owns no property.







<PAGE>



Item 3. Legal Proceedings
        -----------------

     The Company is a party to no pending legal proceedings, nor is its property
     subject to such proceedings, at year end 1996.


Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

     No matters were submitted  during the fiscal year covered by this report to
     a vote of security  holders of the  Company,  through the  solicitation  of
     proxies or otherwise.

                                     PART II
                                     -------

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
        ---------------------------------------------------------------------

     As of the date of this report,  management knows of no trading or quotation
     of the Company's common stock. The range of high and low bid quotations for
     each fiscal  quarter  since the last  report,  as reported by the  National
     Quotation Bureau Incorporated, was as follows:

             1996                          High             Low
             ----                          ----             ---

         First quarter                      *                 *
         Second quarter                     *                 *
         Third quarter                      *                 *
         Fourth quarter                     *                 *

             1995                          High             Low
             ----                          ----             ---

         First quarter                      *                 *
         Second quarter                     *                 *
         Third quarter                      *                 *
         Fourth quarter                     *                 *

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

     * No quotations reported

     The above quotations reflect inter-dealer  prices,  without retail mark-up,
     mark-down,   or  commission  and  may  not  necessarily   represent  actual
     transactions.

     As of  December  31,  1996  there were 42 record  holders of the  Company's
     common Stock.

     The Company has not declared or paid any cash dividends on its common stock
     and does not anticipate paying dividends for the foreseeable future.




<PAGE>



Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations
        -----------------------------------------------------------------------

        Financial Condition and Changes in Financial Condition
        ------------------------------------------------------


     No operations  were  conducted and no revenues were generated in the fiscal
     year.  The  Company  at year end had no  capital,  no cash,  and no  assets
     whatsoever.  The  Company at year end was totally  illiquid  and would have
     needed cash infusions from shareholders to provide capital.

        Liquidity
        ---------

     The Company had no cash at December 31, 1996.

     The Company  ceased  active  operations  in 1991 and has no business at the
     present time. It anticipates  seeking  acquisition or merger  candidates in
     the future.

     During the course of the fiscal year ended December 31, 1996, the Company's
     outstanding  debt level  increased  to $10,496  from  $1,428 in fiscal year
     ended  December 31, 1995.  This  increase was due to  administrative  costs
     relating to company's public status, legal and accounting.

     Stockholders  deficit  increased to ($10,496) at December 31, 1996 compared
     to ($1,428) at December 31, 1995.

        Capital Resources
        -----------------

     None. The Company currently has no capital resources.

     The  Company  has  no  other  known   material   commitments   for  capital
     expenditures.   The  Company  has  no  additional  plans,  agreements,   or
     commitments  concerning any transaction  which would require the Company to
     use a significant amount of capital.

        Results of Operations
        ---------------------

     During the fiscal  year ended  December  31,  1996,  the  Company  incurred
     general and administrative  expenses,  which also were incurred in 1995. At
     present, the Company has no business income or operations. Accordingly, the
     reported  financial  information  herein  may not be  indicative  of future
     operating results.


     Comparison of year Ended December 31, 1996 to year Ended December 31, 1995.
     The  Company  ceased  operations  in June 1991,  and has had no revenues or
     sales of any type.


<PAGE>


     General and  administrative  expenses for the years ended December 31, 1996
     and 1995 were $9,068 and $16,734 respectively.

     The  operating  losses  for years  ended  December  31,  1996 and 1994 were
     ($9,068) and ($16,734)  respectively.  The net loss for year ended December
     31, 1996 was ($9,068).  For year ended  December 31, 1995, the net loss was
     ($16,734).

     Loss per share for year  ended  December  31,  1996 was  ($.08)  per share,
     compared  to  approximately  ($.19) per share for year ended  December  31,
     1995.

     The  management of the Company does not believe that  inflation has had any
     material effect on the Company during the year ended December 31, 1994.

Item 7. Financial Statements and Supplementary Data
        -------------------------------------------

        Please refer to pages F-1 through F-10.

Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
        -------------------------------------------------------------------

        NONE


                                    PART III

Item 9. Directors and Executive Officers of the Registrant and Compliance with
        Section 16(a)
        -----------------------------------------------------------------------

     The directors and executive officers of the Company as of December 31, 1996
     are as follows:

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

     Kevin D. Geiss                33          President, Director
     Ernest A. Teed                59          Vice President, Director
     Jimmy A. McKinnon             49          Secretary, Treasurer, Director

     The term of office  of each  director  and  executive  officer  ends at, or
immediately  after,  the next annual  meeting of  shareholders  of the  Company.
Except as otherwise indicated,  no organization by which any director or officer
has been  previously  employed  is an  affiliate,  parent or  subsidiary  of the
Company.

     Kevin  D.  Geiss,  received  his BA in  Business  Administration  from  the
University of Northern Colorado in December of 1985. Upon graduation,  Mr. Geiss
spent  two  years  as  a  regional  marketing  director  with  Dynavex,  Inc.  a
manufacturer of oxygen related equipment.  Currently Mr. Geiss owns and operates
an insurance  agency  affiliated with the Farmers  Insurance Group of Companies.
Mr. Geiss also served as a Vice President, Treasurer and  Director of ANCR, Inc.


<PAGE>



in a public "Blank Check" company formed in Colorado in 1985. Mr. Geiss resigned
as part of a reverse acquisition transaction in October of 1987. Mr. Geiss was a
founding Director of Registrant, resigning in June 1990 from ANCR.

     Ernest A. Teed,  received his BA in secondary  education from Western State
University,  Gunnison,  Colorado, in 1960 and his MA in 1964 from the University
of Denver. Mr. Teed, in 1993, retired from a 30 year career as a teacher, coach,
student advisor and activities director for the Denver Public Schools.  Mr. Teed
was a founding director of Registrant, resigning in June 1990.

     Jimmy A.  McKinnon,  owned and operated his own electric  sign  business in
Denver, Colorado for many years. He also served as a Vice President and Director
of Monterey  Capital  Corporation,  a public  "Blank  Check"  company  formed in
Colorado  in 1986.  Mr.  McKinnon  resigned  from  Monterey as part of a reverse
acquisition transaction in May of 1988.

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
"Exchange Act"), requires the Company's officers and directors,  and persons who
own more than 10% of a registered class of the Company's equity  securities,  to
file reports of ownership  and changes in ownership of equity  securities of the
Company  with the  Securities  and  Exchange  Commission  and NASDAQ.  Officers,
directors and  greater-than  10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) that they file. No officers,  directors or 10% shareholders have filed any
Reports pursuant to Section 16(a) at year end.

Item 10. Executive Compensation
         ----------------------

     The Company accrued a total of $0 in compensation to the executive officers
as a group for  services  rendered to the Company in all  capacities  during the
1995 fiscal year.  No one  executive  officer  received,  or has accrued for his
benefit,  in excess of $60,000.  No cash  bonuses were or are to be paid to such
persons. No compensation was deferred.

     The Company does not have any employee incentive stock option plans.

     There are no plans pursuant to which cash or non-cash compensation was paid
or  distributed  during  the last  fiscal  year,  or is  proposed  to be paid or
distributed in the future,  to the executive  officers of the Company.  No other
compensation not described above was paid or distributed  during the last fiscal
year to the executive  officers of the Company.  There are no compensatory plans
or  arrangements,  with respect to any  executive  office of the Company,  which
result or will result from the resignation,  retirement or any other termination
of such individual's  employment with the Company or from a change in control of
the Company or a change in the individual's  responsibilities following a change
in control.


<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------

     The following table sets forth  information,  as of December 31, 1996, with
respect to the  beneficial  ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock, and by the Company's management.


    Stock           Names and Address               Beneficial     Percent
Title of Class     of Beneficial Owner               Ownership     of Class
--------------     -------------------               ---------     --------

Common           Kevin D. Geiss                      5,833           5%
                 President & Director
                 999 18th, #212
                 Denver, CO  80202

Common           Ernest A. Teed                        833           .7%
                 Vice President & Director
                 2090 S. Asbury Dr.
                 Lakewood, CO  80215

Common           Jimmy A. McKinnon                     833           .7%
                 Secretary & Director
                 6574 Field Ave.
                 Arvada, CO  80004

Common           Stephen Bushansky                   5,833            5%
                 2575 Palisade Ave.
                 Riverdale, NY 10463

Common           Nicolette Lowry                     5,833            5%
                 700 Morley Ct.
                 Dearborn, MI  48124

Common           James E. Pansing                    5,833            5%
                 3773 Cherry Creek N. Dr. #655
                 Denver, CO 80209

Common           Robert Beaton                      10,000           8.6%
                 12002 W. 14th Avenue
                 Golden, CO  80401

Common           Gene Hochevar                      10,000           8.6%
                 1916 Oaks Way
                 Oklahoma City, OK  73131

Common           Jim Hock                           10,000           8.6%
                 21800 Burbank Blvd., #300
                 Woodland Hills, CA  91360


<PAGE>


         On May 23,  1995,  a  shareholders  meeting  was held  and the  current
directors were elected.

Officers and Directors as a group                    7,500           6.4%

Item 12. Certain Relationships and Related Transactions
         ----------------------------------------------

     During March 1989, the Company sold 10,000,000 units of no par value common
stock to its officers,  directors and private investors.  The offering price for
each unit was $.001.  Each unit  consisted of one share of the  Company's no par
value common stock and 25 common stock purchase  warrants.  Each warrant enables
its holder to purchase one share of  restricted  common stock at $.014 per share
for a period of 24 months  commencing  with the effective date of the prospectus
(October 30, 1989).  The Company  received  $10,000 in proceeds from the sale of
common stock to its officers, directors and private investors.

     On January 4,  1990,  the  Company  sold  10,000,000  units of no par value
common stock in a "Blind Pool" public offering. The offering price for each unit
was $.01. Each unit consisted of one sharer of the Company's no par value common
stock  and 25  Class A  Common  Stock  Redeemable  Purchase  Warrants  (Class  A
Warrants). The Class A Warrants are exercisable for 24 months from the effective
date of the  registration  statement  (October  30, 1989) and entitle the holder
thereof to purchase 25 shares of common stock at a price of $.014 per share. The
Company received  $72,730,  net of offering costs, from the sale of common stock
in the public offering. All Warrants expired in October 1991.

     Effective June 13, 1990, the Company  entered into a merger  agreement with
Ohio & Southwestern  Energy Company (OSEC). The Company issued 80,000,000 shares
of its common stock in exchange for all of the outstanding shares of OSEC. After
the exchange of shares,  OSEC's sole  shareholder,  Members Service  Corporation
(MSC),  owned 80% of the Company's issued and outstanding common stock. The name
of the corporation was changed to Ohio & Southwestern Energy Company (OSEC).

     The minority  shareholders  filed a complaint in Arapahoe  County  District
Court, Colorado, Civil Division,  during April, 1991 alleging among other things
that the  majority  shareholder,  MSC,  failed to disclose the  distribution  of
corporate  funds,  failed to account for the operations of the  corporation  and
transferred assets of the corporation without stockholder or board meetings.

     On August 28,  1991,  a Receiver was  appointed  and the court  ordered the
80,000,000  shares of common stock issued to MSC to be canceled.  On January 12,
1995,  the  minority   shareholders  filed  a  motion  for  supplemental  orders
requesting that the merger between  Jefferson  Capital  Corporation and Ohio and
Southwestern  Energy  Company be declared  null and void and a bar date of April
15, 1995, be set within which any and all creditors must file a claim.

     On May 23,  1995,  the  Receiver  issued his final  report  stating that no
claims of  creditors  had been  filed by the bar  date.  The  Receiver  incurred



<PAGE>



$36,395 in costs during receivership.  Certain of the costs had been advanced by
the Receiver in the exception of issuance of shares of common stock by the Board
of Directors after the dismissal of the Receivership.

     On June 21, 1995, the Court ordered the merger null and void,  approved the
Receiver's  final  report and  restored  the name of the  Company  to  Jefferson
Capital Corporation.

     On July 25, 1995, the Company issued 50,000 shares adjusted for one for 300
reverse split of common stock for $.03 per share to seven unrelated  parties for
legal and consulting services rendered.

Item 13. Disagreements with Accountants on Accounting and Financial Disclosure
         ---------------------------------------------------------------------

     There has been no change of Accountants since the 1989 Audit.

     In  connection  with audits of two most recent fiscal years and any interim
period preceding resignation,  no disagreements exist with any former accountant
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure, or auditing scope of procedure,  which disagreements if not resolved
to the  satisfaction  of the former  accountant  would  have  caused him to make
reference  in  connection   with  his  report  to  the  subject  matter  of  the
disagreement(s).

     The principal  accountant's  report on the financial  statements for any of
the past two years  contained no adverse  opinion or a disclaimer of opinion nor
was qualified as to uncertainty,  audit scope, or accounting  principles  except
for the "going concern" qualification.

                                     PART IV
                                     -------

Item 14. Exhibits and Reports on Form 8-K
         --------------------------------

     The following documents are filed as part of this report:

     1. Reports on Form 8-K: None
     2. Exhibits:

                                                                 Form 10-K 
Regulation                                                      Consecutive
S-K Number             Exhibit                                   Page Number
----------             -------                                   -----------

3.1               Articles of Incorporation                          *

3.3               Bylaws                                             *

24.2              Court Order dated August 23, 1991                  *

24.3              Court Order dated June 21, 1995                    *

 *Incorporated by reference to SEC filing #33-28188.
**Incorporated by reference to 10-KS B Report for 12/31/94 period.


<PAGE>



                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                      THE OHIO & SOUTHWESTERN ENERGY CO.
                                      ----------------------------------
                                      (Registrant)

Date: October 7, 1997
      ----------------

                                       /s/ Kevin D. Geiss
                                       -----------------------------------------
                                       President, Chief Executive Officer


Pursuant to the  Securities  Exchange  Act of 1934,  this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

                                       THE OHIO & SOUTHWESTERN ENERGY CO.
                                       ----------------------------------
                                       (Registrant)

Date: October 7, 1997
      ---------------
                                        /s/ Kevin D. Geiss
                                        ---------------------------------------
                                        Director

                                        /s/ Ernest A. Teed
                                        ---------------------------------------
                                        Director

                                        /s/ Jimmy A. McKinnon
                                        ---------------------------------------
                                        Director

<PAGE>


                    THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


<PAGE>


                          INDEX TO FINANCIAL STATEMENTS


                                                                     Page
                                                                     ----


Independent Auditors' Report                                          F-2

Financial Statements:

Balance Sheets                                                        F-3

Statements of Operations                                              F-4

Statements of Changes in Stockholders' Equity (Deficit)               F-5

Statements of Cash Flows                                              F-6

Notes to Financial Statements                                         F-7









                                      F-1

<PAGE>

                                                                A.J. ROBBINS, PC
                                                    Certified Public Accountants
                                                                 and Consultants



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of The Ohio and Southwestern Energy Company

We have audited the  accompanying  balance  sheets of The Ohio and  Southwestern
Energy Company (a development  stage company) as of December 31, 1996,  1995 and
1994, and the related statements of operations,  changes in stockholders' equity
(deficit),  and cash  flows for each of the years in the four year  period  then
ended and  cumulative  from  February  28,  1989  (inception).  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 audits.

We  conducted  our  audits  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 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 The Ohio and  Southwestern
Energy  Company as of December 31, 1996,  1995 and 1994,  and the results of its
operations and its cash flows for each of the years in the four year period then
ended and  cumulative  from February 28, 1989  (inception),  in conformity  with
generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company is in the development stage and has not earned
any  revenues  from  operations.  Its ability to continue as a going  concern is
dependent upon its ability to develop  additional  sources of capital,  locate a
merger candidate and ultimately achieve profitable operations.  These conditions
raise  substantial  doubt about its ability to continue as a going concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                       /s/  AJ ROBBINS, P.C.
                                      -----------------------------------------



July 11, 1997
Denver, Colorado





                                       F-2
        3033 East 1st Avenue, Suite #201, Denver, CO 80206 - 303-321-1281
                                Fax 303-321-1288


<PAGE>
<TABLE>
<CAPTION>
                               THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                                     (A Development Stage Company)
                                            BALANCE SHEETS

                                                ASSETS
                                                ------

                                                                                   December 31,
                                                                  -----------------------------------------------
                                                                    1996               1995               1994
                                                                  ---------          ---------          ---------

<S>                                                               <C>                <C>                <C>   
CURRENT ASSETS                                                    $    --            $    --            $   --
                                                                  ---------          ---------          ---------

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



                                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                 ----------------------------------------------

CURRENT LIABILITIES, accounts payable                             $  10,496          $   1,428          $  11,035
                                                                  ---------          ---------          ---------

COMMITMENTS AND CONTINGENCIES:

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 100,000,000 shares
     authorized, none issued and outstanding                           --                 --                 --
Common stock, no par value, 1,000,000,000 shares
     authorized, 116,666, 116,666 and 66,666 issued
     and outstanding, respectively                                   84,230             84,230             82,730
Contributed capital                                                  24,842             24,842               --
(Deficit) accumulated during the development stage                 (119,568)          (110,500)           (93,765)
                                                                  ---------          ---------          ---------

                   Total Stockholders' Equity (Deficit)             (10,496)            (1,428)           (11,035)
                                                                  ---------          ---------          ---------

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

                            SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS








                                                  F-3
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                                      (A Development Stage Company)
                                        STATEMENTS OF OPERATIONS


                                                                                                    Cumulative from
                                                                                                   February 28, 1989
                                                    For the Years Ended                              (Inception to)
                                                       December 31,                                   December 31,
                                      ---------------------------------------------------------       ------------
                                           1996            1995          1994           1993              1996
                                      -------------    -----------   -----------    -----------       ------------

<S>                                   <C>              <C>           <C>            <C>               <C>    
REVENUE                               $      -         $    -        $    -         $     -           $     -
                                      -------------    -----------   -----------    -----------       ------------

COSTS AND EXPENSES:
     Amortization                            -              -                150            150                750
     General and administrative               9,068         16,734         1,713          1,464             49,702
                                      -------------    -----------   -----------    -----------       ------------

         Total Costs and Expenses             9,068         16,734         1,863          1,614             50,452
                                      -------------    -----------   -----------    -----------       ------------

(LOSS) BEFORE
     EXTRAORDINARY ITEM                     (9,068)       (16,734)       (1,863)         (1,614)           (50,452)

EXTRAORDINARY ITEM,
UNAUTHORIZED DISTRIBUTION                    -              -              -              -                 69,116
                                      -------------    -----------   -----------    -----------       ------------

NET (LOSS)                            $     (9,068)    $  (16,734)   $   (1,863)    $    (1,614)      $   (119,568)
                                      ============     ==========    ==========     ===========       ============


NET (LOSS) PER COMMON SHARE           $       (.08)    $     (.19)   $     (.03)    $      (.02)
                                      ============     ==========    ==========     ===========

WEIGHTED AVERAGE NUMBER
     OF COMMON SHARES
     OUTSTANDING                            116,666         88,447        66,666         66,666
                                      =============    ===========   ===========    ===========

                                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS




                                                        F-4

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                     THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                                           (A Development Stage Company)
                              STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                 FOR THE PERIOD FROM FEBRUARY 28, 1989 (INCEPTION)
                                               TO DECEMBER 31, 1996
                                                                                     
                                                                                 (Deficit)
                                                                                Accumulated
                                                  Common Stock                   During the
                                               -----------------   Contributed   Development
                                               Shares     Amount      Capital      Stage        Total
                                               ------     ------      -------      -----        -----

<S>                                           <C>         <C>         <C>         <C>          <C>    
Balances, February 28, 1989                  $    --     $    --     $    --     $    --      $    --

Issuance of stock to insiders
   on March 7, 1989
   at $.30 per share                            33,333      10,000        --          --         10,000

Net income December 31, 1989                      --          --          --          --           --
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1989                     33,333      10,000        --          --         10,000

Issuance of stock during public
   offering for $3.00
   per share, net of offering
   costs of $27,270                             33,333      72,730        --           --         72,730

Net (loss) December 31, 1990                      --          --          --       (84,159)     (84,159)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1990                     66,666      82,730        --       (84,159)      (1,429)

Net (loss) December 31, 1991                      --          --          --        (3,416)      (3,416)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1991                     66,666      82,730        --       (87,575)      (4,845)

Net (loss) December 31, 1992                      --          --          --        (2,713)      (2,713)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1992                     66,666      82,730        --       (90,288)      (7,558)

Net (loss) December 31, 1993                      --          --          --        (1,614)      (1,614)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1993                     66,666      82,730        --       (91,902)      (9,172)

Net (loss) December 31, 1994                      --          --          --        (1,863)      (1,863)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1994                     66,666      82,730        --       (93,765)     (11,035)

Issuance of stock for services
   rendered at $.03 per share                   50,000       1,500        --          --          1,500

Contributed capital                               --          --        24,842        --         24,842

Net (loss) December 31, 1995                      --          --          --       (16,735)     (16,735)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1995                    116,666      84,230      24,842    (110,500)      (1,428)

Net (loss) December 31, 1996                      --          --          --        (9,068)      (9,068)
                                             ---------   ---------   ---------    ---------    ---------

Balances, December 31, 1996                    116,666   $  84,230   $  24,842   $(119,568)   $ (10,496)
                                             =========   =========   =========    =========    =========

                                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                                                        F-5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                       THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                                              (A Development Stage Company)
                                                 STATEMENTS OF CASH FLOWS


                                                                                                                      
                                                                                                             Cumulative from
                                                                     For the Years Ended                     February 28, 1989
                                                                       December 31,                         (Inception to)
                                               ---------------------------------------------------------      December 31,
                                                 1996             1995           1994            1993            1996
                                               ---------       ---------       ---------       ---------       ---------

CASH FLOWS (TO) OPERATING ACTIVITIES:
<S>                                            <C>             <C>             <C>             <C>             <C>       
     Net (loss) from operations                $  (9,068)      $ (16,735)      $  (1,863)      $  (1,614)      $(119,568)
     Adjustments to reconcile
          net (loss) to net cash
               used by operating
              activities:
          Amortization                              --              --               150             150             750
          Changes in:
               Accounts payable                    9,068          (8,107)          1,713           1,464          11,996
                                               ---------       ---------       ---------       ---------       ---------

               Net Cash (Used) by
                    Operating Activities            --           (24,842)           --              --          (106,822)
                                               ---------       ---------       ---------       ---------       ---------

CASH FLOWS (TO) INVESTING ACTIVITIES:
     (Increase) in organization costs               --              --              --              --              (750)
                                               ---------       ---------       ---------       ---------       ---------

               Net Cash (Used) by
                    Investing Activities            --              --              --              --              (750)
                                               ---------       ---------       ---------       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common
          stock to insiders                         --              --              --              --            10,000
     Proceeds from issuance of common
          stock to the public                       --              --              --              --           100,000
     Payment of offering costs from
          issuance of common stock to
               the public                           --              --              --              --           (27,270)
     Contributed capital                            --            24,842            --              --            24,842
                                               ---------       ---------       ---------       ---------       ---------

               Net Cash Provided by
                    Financing Activities            --            24,842            --              --           107,572
                                               ---------       ---------       ---------       ---------       ---------

NET INCREASE (DECREASE) IN CASH                     --              --              --              --              --

CASH, beginning of period                           --              --              --              --              --
                                               ---------       ---------       ---------       ---------       ---------

CASH, end of period                            $    --         $    --         $    --         $    --         $    --
                                               =========       =========       =========       =========       =========







                                   SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                                    F-6

</TABLE>

<PAGE>

                    THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

                           ===========================

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History
-------
The Ohio and  Southwestern  Energy  Company  (OSEC) (the Company) (also known as
Jefferson  Capital  Corporation or JEFFCO),  a development  stage  company,  was
organized  under the laws of the State of  Colorado on February  28,  1989.  The
Company is in the  development  stage as defined in  Financial  Standards  Board
Statement No. 7.

Effective  June 13,  1990,  JEFFCO  entered into a merger  agreement  with OSEC.
JEFFCO issued 80,000,000  (pre-split) shares of its common stock in exchange for
all of the outstanding shares of OSEC. After the exchange of shares, OSEC's sole
shareholder,  Members  Service  Corporation  (MSC),  owned 80% of the  Company's
issued and  outstanding  common  stock.  The name of the  surviving  corporation
became Ohio & Southwestern Energy Company (OSEC).

The minority  shareholders  filed a complaint during April,  1991 alleging among
other  things  that the  majority  shareholder,  MSC,  failed  to  disclose  the
distribution  of corporate  funds,  failed to account for the  operations of the
corporation and transferred  assets of the  corporation  without  stockholder or
board meetings.

On August 28,  1991,  a Receiver was  appointed  and the court  ordered that the
80,000,000  (pre-split)  shares of common stock issued to MSC be  cancelled.  On
January 12, 1995,  the  minority  shareholders  filed a motion for  supplemental
orders  requesting  that the merger between JEFFCO and OSEC be declared null and
void and a bar date of April 15, 1995 be set within which any and all  creditors
must file a claim.

On May 23, 1995, the Receiver  issued his final report stating that no claims of
creditors had been filed by the bar date. The Receiver incurred $36,395 in costs
during  receivership.  Certain of the costs had been advanced by the Receiver in
the  expectation of issuance of shares of common stock by the Board of Directors
after the dismissal of the Receivership.

On June 21, 1995, the court ordered the merger agreement null and void, approved
the  Receiver's  final  report and restored the name of the Company to Jefferson
Capital  Corporation.  The Company  decided  its name would  remain The Ohio and
Southwestern Energy Company.

Going Concern
-------------
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in  the  normal  course  of  business.  The  Company  is in the
development stage and has not earned any revenues from operations.






                                       F-7


<PAGE>


                    THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

                           ===========================

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company is currently devoting its efforts to locating merger candidates. The
Company's  ability to continue as a going concern is dependent  upon its ability
to  develop  additional  sources  of  capital,  locate a merger  candidate,  and
ultimately,   achieve  profitable  operations.   The  accompanying  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of these uncertainties.

Income Taxes
------------
Effective  January  1,  1990,  the  Company  adopted  the  liability  method  of
accounting  for income  taxes  pursuant to  Statement  of  Financial  Accounting
Standards  No. 109.  Under this  method,  deferred  income taxes are recorded to
reflect the tax  consequences in future years of temporary  differences  between
the tax basis of the assets and liabilities and their financial  amounts at year
end.

For federal  income tax  purposes,  substantially  all expenses must be deferred
until the  Company  commences  business  and may be written  off over a 60-month
period. The Company is not in business at this date. Therefore,  $119,568 of net
losses  incurred to date have not been deducted for tax purposes and represent a
deferred tax asset at this date. The Company is providing a valuation  allowance
in the full amount of the  deferred  tax asset since  there is no  assurance  of
future taxable income.

Income (Loss) Per Share
-----------------------
Net income  (loss) per share is  calculated by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Fully  diluted and primary  earnings  per common  share are the same amounts for
each of the periods  presented.  Dilutive  common stock  equivalents  consist of
stock warrants.  In loss periods,  dilutive common stock  equivalent  shares are
excluded as the effect would be antidilutive.

NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)

During March 1989, the Company sold 33,333 units of no par value common stock to
its officers,  directors and private investors. The offering price for each unit
was $.30.  Each unit consisted of one share of the Company's no par value common
stock and 25 common stock purchase warrants.  Each warrant enables its holder to
purchase one share of restricted common stock at $4.20 per share for a period of
24 months  commencing  with the effective  date of the  prospectus  (October 30,
1989). The Company received $10,000 in proceeds from the sale of common stock to
its officers, directors and private investors.

On July 25, 1995,  the Company issued 50,000 shares of common stock for $.03 per
share to seven unrelated parties for legal and consulting services rendered.





                                       F-8



<PAGE>


                    THE OHIO AND SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

                           ===========================

NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

On January 4, 1990,  the Company  sold 33,333 units of no par value common stock
in a public  offering.  The  offering  price for each unit was $3.00.  Each unit
consisted of one share of the Company's no par value common stock and 25 Class A
Common  Stock  Redeemable  Purchase  Warrants  (Class A  Warrants).  The Class A
Warrants  are  exercisable  for  24  months  from  the  effective  date  of  the
registration  statement  (October  30,  1989) and entitle the holder  thereof to
purchase  25 shares of common  stock at a price of $4.20 per share.  The Company
received  $72,730,  net of offering costs,  from the sale of common stock in the
public offering. All warrants have expired unexercised.

On  September  26,  1995,  the Board of  Directors  approved a one for 300 share
reverse split.  All financial  information and per share data have been restated
to reflect this event.

NOTE 3 - RELATED PARTY TRANSACTIONS

Former legal  counsel for the Company was also a  stockholder.  Total legal fees
during 1990 were $650.

The Company borrowed $363 from its  president/stockholder  during December 1989.
These funds were repaid in January 1990.

The Company is not being charged  office rental for space provided by its former
president. Such amounts would be nominal.

NOTE 4 - EXTRAORDINARY ITEM

The  former  majority  stockholder,  MSC,  failed to  disclose  to the  minority
stockholders the distribution of corporate funds during the year ended 1990. The
Company recorded an  extraordinary  loss in the amount of $69,116 as a result of
the unauthorized distribution of corporate funds (see Note 1).

NOTE 5 -  SUPPLEMENTAL  INFORMATION  TO  STATEMENTS  OF CASH FLOWS FOR  NON-CASH
FINANCING ACTIVITIES

The  Company  issued  50,000  shares of common  stock with a value of $1,500 for
legal and consulting services rendered.

NOTE 6 - SUBSEQUENT EVENTS

On March 20, 1997, the Company received $21,300 for 2,000,000  subscribed shares
of common stock. The proceeds were designated to pay outstanding transfer agent,
legal, accounting and miscellaneous bills.







                                       F-9