SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT OF SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended - June 30, 2000
0-9295
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Commission File Number
WINCO PETROLEUM CORPORATION
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(Exact name of registrant as specified in its charter)
COLORADO 84-0794604
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation of organization)
P O BOX 342
GARDEN CITY, KANSAS 67846
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(Address of principle executive offices (Zip Code)
(316) 275-2963
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(Registrant's telephone number. Including area code)
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(Former name, former address, former fiscal year if changed since
last report)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
X Yes No
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INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS OF
COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT.
CLASS: COMMON STOCK, NO PAR VALUE
OUTSTANDING AS OF MARCH 31, 2000: 41,152,606
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 2000 September 30, 1999
(Unaudited) (Audited)
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<S> <C> <C>
ASSETS
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CURRENT ASSETS:
Cash and short-term investment $ 327,132 $ 273,172
Notes and accounts receivable - trade 38,024 28,127
Notes and accounts receivable - related party 24,664 48,970
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TOTAL CURRENT ASSETS 389,820 350,269
INVESTMENTS IN OIL AND GAS PROPERTIES
At Cost, Net (Using the full cost method of
of accounting) 201,422 220,989
FURNITURE, FIXTURES AND VEHICLES, At Cost,
Net of Allowances for Depreciation - -
OTHER ASSETS 1,000 1,000
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TOTAL ASSETS $ 592,242 $ 572,258
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LIABILITIES AND STOCKHOLDERS' INVESTMENT
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CURRENT LIABILITIES:
Accounts payable to stockholders,
Directors, and related parties $ 150 $ 35,447
Accounts payable and accrued
liabilities 21,697 2,334
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TOTAL CURRENT LIABILITIES 21,847 37,781
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STOCKHOLDERS' INVESTMENT
Common stock, no par value;
500,000,000 shares authorized;
41,152,606 shares issued and outstanding 307,000 307,000
Additional paid in capital 1,292,920 1,292,920
Accumulated deficit ( 997,088) (1,033,156)
Treasury stock ( 32,437) ( 32,287)
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TOTAL STOCKHOLDERS' INVESTMENT 570,395 534,477
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TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $ 592,242 $ 572,258
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</TABLE>
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
2000 1999
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<S> <C> <C>
REVENUES:
Oil and gas sales $ 93,410 $ 41,838
Interest income - 2,003
Gain on sale of assets - -
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93,410 43,841
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EXPENSES:
Lease operating expenses 74,717 28,118
General and administrative 6,400 24
Depreciation, depletion and
Amortization 6,522 9,154
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87,639 37,296
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Income (Loss) before income tax 5,771 6,545
Income tax expense (benefit) - -
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NET INCOME (LOSS) $ 5,771 $ 6,545
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NET INCOME (LOSS) PER COMMON
SHARE - PRIMARY AND FULLY DILUTED $ - $ -
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WEIGHTED AVERAGE SHARES OUTSTANDING 41,152,606 41,152,606
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</TABLE>
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
2000 1999
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<S> <C> <C>
REVENUES:
Oil and gas sales $ 258,253 $ 51,423
Interest income - 6,266
Gain on sale of assets - -
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258,253 57,689
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EXPENSES:
Lease operating expenses 170,666 36,475
General and administrative 31,953 6,143
Depreciation, depletion and
Amortization 19,566 18,169
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222,185 60,787
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Income (Loss) before income tax 36,068 ( 3,098)
Income tax expense (benefit) - -
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NET INCOME (LOSS) $ 36,068 $( 3,098)
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NET INCOME (LOSS) PER COMMON
SHARE - PRIMARY AND FULLY DILUTED $ - $ -
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WEIGHTED AVERAGE SHARES OUTSTANDING 41,152,606 41,152,606
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</TABLE>
<PAGE>
WINCO PETROLEUM CORPORATION
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30,
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 36,068 $( 3,098)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation, depletion and
amortization 19,566 18,169
Gain on sale of assets
Changes in current assets and
current liabilities:
Accounts Receivable 14,409 -
Accounts Payable ( 15,933) -
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Net cash provided (used) in
operating activities 54,110 15,071
Cash flows from (used in) investing activities:
Investment in oil and gas properties - ( 73,967)
Purchase of common stock for Treasury ( 150) ( 975)
Proceeds from sale of oil & gas property - -
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NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 53,960 ( 59,871)
Cash and Cash Equivalents at beginning of period 273,172 328,202
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 327,132 $ 268,331
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</TABLE>
<PAGE>
WINCO PETROLEUM CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED FINANCIAL STATEMENTS
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1. The accompanying, unaudited financial statements have been prepared in
accordance with Rule 10-01 of Regulation S-X and do not include all
principles for completed financial statements.
In the opinion of Winco Petroleum Corporation the accompanying, unaudited,
condensed financial statements contain all adjustments (consisting of
normal adjustments) necessary to present fairly the financial position as
of June 30, 2000 and the results of operations for the three and nine
months then ended and changes in financial position for the nine months
then ended. Operating results for the three months and nine months ended
June 30, 2000 are not necessarily indicative of the results that may be
expected for the fiscal year ending September 30, 2000. These statements
should be read in conjunction with the financial statements and notes
thereto included in Form 10-K for the fiscal year ended September 30, 1999.
INVESTMENTS IN OIL AND GAS PROPERTIES
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2. Depreciation and depletion of the full cost pool is computed using a
unit-of-production method based on proved reserves as determined by the
Company and independent engineers. A provision of $6,522 was made for the
three months ended June 30, 2000. Reserve for depreciation and depletion
was $135,035 and $115,469 on June 30, 2000 and September 30, 1999, respectively.
EARNINGS PER SHARE
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3. Earnings per common share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
three month and nine month periods ended June 30, 2000 and 1999. The
weighted average number shares outstanding for the periods ending June 30,
2000 and 1999 was 41,152,606.
RELATED PARTY TRANSACTIONS
--------------------------
4. Oil and gas properties owned by the Company are operated by entities
considered related parties due to common ownership and management by
directors and officers of the Company. Operation by such parties are
on the same basis as outside third party operators. As a result of
such operations, some proceeds from revenues are usually in process of
distribution resulting in amounts considered receivable. Similarly,
charges for costs of operation of the Company's properties are usually
in process of billing and payment resulting in amounts considered payable.
SUBSEQUENT EVENT
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5. Subsequent to the quarter ended June 30, 2000 but prior to the release
of the Company's financial statements, the Company has signed a preliminary
letter of intent to enter into a merger agreement with another unrelated
corporation. Pursuant to the terms of such letter, the agreement anticipates
the spin-off of all the existing cash and oil and gas related assets and
liabilities to a subsidiary corporation, which will continue to be owned by
the Company's existing shareholders in the same proportions as of record at
the time of such spin-off. Subsequent to the spin-off, the Company will
merge with the other party, a corporation involved in the computer industry,
and the existing shareholders of the Company will be diluted to approximately
7.5% ownership of the merged company.
<PAGE>
WINCO PETROLEUM CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
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During the three months ended June 30, 2000, the Company's working capital
increased $12,144. Working capital increased as a result of the Company's
normal operations. The Company's working capital at June 30, 2000 was $367,973.
The Company intends to utilize funds to purchase producing properties. The
Company also may participate in oil and gas development programs through
sharing arrangements with industry participants. The Company will consider
those arrangements which are financially feasible under current conditions.
RESULTS OF OPERATIONS FOR THE PERIODS ENDED JUNE 30, 2000
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During the three months and nine months ended June 30, 2000, oil and gas
sales increased approximately $51,572 and $206,830, respectively, from the
comparable periods in 1999. The increase in sales resulted from the
additional production from properties purchased in the prior year and
improved oil prices. There was a corresponding increase in lease operating
expenses of $46,599 and $134,191, respectively, between the same periods.
Interest income decreased from the comparable period in 1999 due to
movement of cash balances to a non-interest-bearing account for purposes of
anticipated purchases.
Due to net operating loss carry forward and tax credits available for
financial and tax reporting purposes, the Company does not expect any
significant income tax effects in the current year.
General and administrative expense increased from the comparable periods in
1999, by $6,376 and $25,810, respectively, for audit and legal costs
associated with the Company's reporting requirements.
<PAGE>
WINCO PETROLEUM CORPORATION
PART II
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ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
WINCO PETROLEUM CORPORATION
/s/ CECIL O'BRATE
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Cecil O'Brate, President
Dated: August 14, 2000
