<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1998
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934
For the transition period ended:
Commission File Number: 0-25006
Name of Small Business Issuer in Charter: UNITED PETROLEUM CORPORATION
State or Other Jurisdiction of Incorporation or Organization: DELAWARE
I.R.S. Employer I.D. Number: 13-3103494
Address of Principal Executive Offices: Suite N-425 1111 Northshore Drive
Knoxville, Tennessee 37919
Issuer's Telephone Number: (423) 909-0890
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes (X) No ( ) (2) Yes (X) No ( )
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the numbers of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
Common Voting Stock: 30,565,352 Date: May 13, 1998
Transitional Small Business Disclosure Format
(Check One): Yes ( ) No (X)
Page 1 of 16
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UNITED PETROLEUM CORPORATION AND SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Condensed Financial Statements (Unaudited)
Condensed consolidated balance sheets - March 31, 1998 and
December 31, 1997
Condensed consolidated statements of operations - Three months
ended March 31, 1998 and 1997
Condensed consolidated statement of stockholders' equity
Condensed consolidated statements of cash flows - Three months
ended March 31, 1998 and 1997
Notes to condensed consolidated financial statements - Sept.
30, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. Other Information
Signatures
Page 2 of 16
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PART I. - Financial Information Item 1. Financial Statements
United Petroleum Corporation and Subsidiaries
Consolidated Balance Sheets
At March 31, 1998 and December 31, 1997
Mar. 31, 1998 Dec. 31, 1997
------------ ------------
Current Assets
Cash ..................................... $ 159,874 $ 166,180
Accounts and Notes Receivable ............ $ 124,879 $ 112,377
Inventories .............................. $ 354,196 $ 321,948
Other Current Assets ..................... $ 53,204 $ 373,413
------------ ------------
$ 692,153 $ 973,918
Property and Equipment
Gas and Oil properties ................... $ 4,780,350 $ 4,798,795
Premises and Equipment ( Net ) ........... $ 8,366,919 $ 8,519,499
Intangibles and Other Assets ............... $ 372,741 $ 408,772
------------ ------------
Total Assets ............................... $ 14,212,163 $ 14,700,984
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable ......................... $ 647,087 $ 534,867
Accrued Expenses ......................... $ 2,174,074 $ 1,368,097
Bank Line Of Credit ...................... $ 247,829 $ 247,829
Current Maturities-Long Term Debt ........ $ 8,322,652 $ 9,241,801
------------ ------------
$ 11,391,642 $ 11,392,594
Long Term Liabilities
Long Term Debt-Less Current Maturities ... $ 3,260,063 $ 2,601,686
Deferred Income Taxes .................... $ 0 $ 0
------------ ------------
Total Liabilities .......................... $ 14,651,705 $ 13,994,280
Minority Interest .......................... $ 50,000 $ 200,000
Stockholders' Equity
Preferred Stock, $.01 Par Value
Series A ............................... $ 99 $ 99
Series B ............................... $ 18 $ 18
Common Stock, $.01 Par Value ............. $ 298,795 $ 292,795
(50,000,000 shares authorized,
29,879,515 and 29,279,515 issued)
Additional Paid-In Capital ............... $ 26,045,305 $ 26,036,305
Retained Earnings ........................ ($25,646,327) ($24,635,081)
------------ ------------
$ 697,890 $ 1,694,136
Less: Stockholder note receivable .......... ($ 1,187,432) ($ 1,187,432)
------------ ------------
Total Stockholders' Equity ................. ($ 489,542) $ 506,704
------------ ------------
Total Stockholders' Equity & Liabilities ... $ 14,212,163 $ 14,700,984
============ ============
The accompanying notes are an integral part of these financial statements.
Page 3 of 16
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United Petroleum Corporation and Subsidiaries
Consolidated Statement of Operations
For The Three Month Periods Ended March 31, 1998 and 1997
Mar. 31, 1998 Mar. 31, 1997
------------ ------------
Revenues ................................. $ 1,658,962 $ 3,698,647
Cost of Sales ............................ $ 1,132,679 $ 2,616,333
------------ ------------
Gross Profit ............................. $ 526,283 $ 1,082,314
Operating Expenses:
Salaries and Wages ..................... $ 241,086 $ 300,787
Payroll Taxes .......................... $ 48,113 $ 72,065
Other General and Administrative ....... $ 449,713 $ 589,633
Interest Expense ....................... $ 213,569 $ 1,086,725
Depreciation and Amortization .......... $ 190,330 $ 392,281
------------ ------------
$ 1,142,811 $ 2,441,491
Other Income ( Expense ) ................. $ 81,376 $ 13,885
------------ ------------
Net Income Before Income Taxes ........... ($ 535,152) ($ 1,345,292)
Provision For Income Taxes ............... $ 0 $ 0
------------ ------------
Net Income After Taxes ................... ($ 535,152) ($ 1,345,292)
============ ============
Primary Earnings Per Share ............... ($ 0.018) ($ 0.095)
============ ============
Weighted Average Shares Outstanding ...... 29,879,515 14,118,700
============ ============
Fully Diluted Earnings Per Share ......... ($ 0.018) ($ 0.095)
============ ============
Fully Diluted Weighted Average Shares
Outstanding ............................ 29,879,515 14,118,700
============ ============
The accompanying notes are an integral part of these financial statements.
Page 4 of 16
<PAGE>
United Petroleum Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Series A Series B Common Stock Additional Accumulated Stockholder Total
Preferred Preferred Shares Dollars Paid-In Capital Deficit Note
Receivable
--------- --------- ------ ------- --------------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1998 $ 99 $ 18 29,279,515 $292,795 $26,036,305 ($24,635,081) ($ 1,187,432) $ 506,704
Shares issued for services 600,000 $6,000 $9,000
Dividends Declared-
Class A ($439,930)
Class B ($36,164)
Net Loss ($535,152)
-------- -------- ---------- -------- ----------- ------------ ----------- ----------
Balance, March 31, 1998 $ 99 $ 18 29,879,515 $298,795 $26,045,305 ($25,646,327) ($ 1,187,432) ($ 489,542)
</TABLE>
Page 5 of 16
<PAGE>
United Petroleum Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For The Three Month Periods Ended March 31, 1998 and 1997
Mar. 31, 1998 Mar. 31, 1997
----------- -----------
Operating Activities
Net Income ................................... ($ 535,152) ($1,345,292)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and Amortization ............. $ 190,330 $ 392,281
Shares issued for services ................ $ 15,000 $ 207,356
Changes in operating assets and liabilities:
Decrease ( increase ) in-
Accounts notes receivable ................ ($ 12,502) $ 29,456
Inventories .............................. ($ 32,248) $ 244,452
Other Current Assets ..................... $ 320,209 $ 40,124
Increase ( decrease ) in -
Accounts Payable and Accrued Liabilities . $ 918,197 $ 495,924
----------- -----------
$ 863,834 $ 64,301
Investing Activities:
Property and Equipment Additions ............. ($ 324,374) $ 1,932,365
Acquisition of gas and oil properties ........ ($ 171,025) ($ 54,696)
Decrease ( increase ) in other assets ........ $ 36,031 $ 321,601
----------- -----------
($ 459,368) $ 2,199,270
Financing Activities:
Principal payments on debt ................... ($ 260,772) ($2,699,087)
Proceeds from short term borrowings .......... $ 0 $ 0
Payments on short term borrowings ............ $ 0 ($ 26,000)
Net proceeds from bank financing ............. $ 0 $ 0
Net proceeds from issuance of debentures ..... $ 0 $ 0
Redeem Preferred Shares ...................... ($ 150,000) $ 0
Proceeds from issuance of common stock ....... $ 0 $ 403,951
----------- -----------
($ 410,772) ($2,321,136)
----------- -----------
Increase(Decrease) in Cash and Cash Equivalents ($ 6,306) ($ 57,565)
Cash and Cash Equivalents, Beginning of Period . $ 166,180 $ 19,759
----------- -----------
Cash and Cash Equivalents, End of Period ....... $ 159,874 ($ 37,806)
=========== ===========
The accompanying notes are an integral part of these financial statements.
Page 6 of 16
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United Petroleum Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Periods Ended March 31, 1998 and 1997
Note 1 - Summary of Significant Accounting Policies
Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Certain reclassifications have been made to
the 1997 financial statements in order for them to conform with
classifications used in 1998. Operating results for the three months ended
March 31, 1998 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1998. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Registrant and Subsidiaries' annual report on Form 10-KSB for the year ended
December 31, 1997. The year end condensed balance sheet was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles.
Principles of Consolidation - The consolidated financial statements include
the accounts of United Petroleum Corporation (the "Company") and its wholly
owned subsidiaries, Calibur Systems, Inc., Jackson-United Petroleum
Corporation and CTV Studios, Inc.. All significant intercompany accounts and
transactions have been eliminated in consolidation. Results of operations of
companies purchased are included from the dates of acquisition.
Business Activities - The Company's business activities are conducted through
its subsidiaries and are contained within two primary industry segments.
Calibur Systems, Inc. operates convenience stores, express lube centers, and
car washes providing a variety of car wash and detail services, gasoline,
automotive, food and beverage and related products throughout middle and
eastern Tennessee and northern Georgia. Jackson-United Petroleum Corporation
was formed for the purpose of developing gas and oil properties and marketing
of gas and oil production. Currently all of the Company's gas and oil
properties are located within the United States in central and eastern
Kentucky, Pennsylvania and Missouri. CTV Studios, Inc. was formed to conduct
activities in the broadcasting industry and had not commenced operations as of
March 31, 1998.
Cash and Cash Equivalents - The Company considers cash on hand, deposits in
banks, certificates of deposit and investments with original maturity of three
months or less to be cash or cash equivalents.
Inventories - Inventories are stated at the lower of cost or market. Cost of
gasoline sales is determined using the first-in first-out method. Cost of
convenience store sales is determined using the average retail cost method.
Page 7 of 16
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United Petroleum Corporation and Subsidiaries
Notes to Consolidated Financial Statements - Continued
Periods Ended March 31, 1998 and 1997
Gas and Oil Properties - The Company follows the full cost method of
accounting for gas and oil properties. Accordingly, all costs associated with
acquisition, exploration and development of gas and oil reserves, including
directly related overhead costs, are capitalized.
All capitalized costs of gas and oil properties, including the estimated
future costs to develop proved reserves, are amortized on the
unit-of-production method using estimates of proved reserves. Investments in
unproved properties and major development projects are not amortized until
proved reserves associated with the projects can be determined or until
impairment occurs. If the results of an assessment indicate that the
properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized.
In addition, the capitalized costs are subject to a "ceiling test", which
basically limits such costs to the aggregate of the "estimated present value",
discounted at 10 percent interest rate of future net reserves from proved
reserves, based on current economic and operating conditions, plus lower of
cost or fair market value of unproved properties.
Retail Operations - Property and equipment of the retail operations is stated
at cost. Routine repairs and maintenance are charged to expense as incurred.
Upon disposition, the cost and related accumulated depreciation are removed
from the accounts and resulting gain or loss is reflected in operations of the
period. The Company generally depreciates property and equipment on a
straight-line basis over the useful lives of the related assets estimated to
be 15 to 20 years for buildings and improvements, 6 to 10 years for equipment,
and 3 to 4 years for vehicles.
Capitalized Interest - The Company capitalizes interest on construction in
progress and expenditures made in connection with exploration and development
projects that are not subject to current amortization. Interest is capitalized
only for the period that activities are in progress to bring these projects to
their intended use.
Income Taxes - Deferred Taxes are provided in accordance with Statement and
Financial Accounting Standards Number 109, Accounting For Income Taxes.
Deferred taxes are provided to account for accumulated temporary differences
for assets and liabilities for financial reporting and income tax purposes,
including alternative minimum taxes. The Company's temporary differences are
primarily due to different financial reporting and tax methods of accounting
for depreciation and intangible drilling costs.
Non-Cash Equity Transactions - Goods and services acquired through the
issuance of the Company's common stock are valued at the fair market value of
the stock on the date of
Page 8 of 16
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United Petroleum Corporation and Subsidiaries
Notes to Consolidated Financial Statements - Continued
Periods Ended March 31, 1998 and 1997
acquisition. When restricted shares are issued, the value of the shares given
in exchange is discounted approximately 50 % from the fair market value of
freely traded common stock. It is the intent of management to reduce the
discount related to the issuance of restricted shares if and when the market
for the Company's common stock becomes less volatile and the average daily
trading volume increases significantly.
During the quarter the Company issued 600,000 shares for services. The
shares bear a restrictive legend and were issued at 50% of the market value as
of the date of issue. The shares were issued at $.025 per share which was half
of the market price per share on the date issued.
Page 9 of 16
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Item 2. - Management's Discussion and Analysis of Operations
The Company realized a net loss of ($535,152) for the three month period
ended March 31, 1998, compared to a net loss of ($1,345,292) for the same
period last year.
A summary of comparative results between the first quarter of 1998 and
the first quarter of 1997 is as follows:
Revenues were realized as follows:
Quarter Ended Quarter Ended
March 31, 1997 March 31, 1997
---------- ----------
Retail Subsidiary:
Gasoline ............................. $ 315,531 $1,359,799
Car Wash ............................. 931,691 1,487,432
Oil & Lube ........................... 307,624 368,432
Grocery .............................. 40,219 171,972
Other Sales .......................... 22,910 239,226
Energy Subsidiary:
Natural Gas .......................... 31,473 62,753
Crude Oil ............................ 9,514 9,032
---------- ----------
Total Revenue For Quarter .............. $1,658,962 $3,698,647
========== ==========
Retail Subsidiary (Calibur Systems, Inc.)
The Company experienced a increased gross profit margin on gasoline sales
from 4.1 % in the first quarter of 1997 to 8.7 % in the first quarter of 1998.
Volume decreased from 1,164,004 gallons in the first quarter of 1997 to
317,528 gallons in the first quarter of 1998 for a decrease of 73.0%. The
majority of the decrease, 846,476 gallons, is related to the sale or closing
of eight (8) Company locations which sold gasoline in the previous year. For
further information related to the sale or closing of these locations refer to
the annual report of the Company on Form 10-KSB for the period ended December
31, 1997.
Car wash revenue was $931,691 for the first quarter as compared to
$1,487,432 for the same quarter last year which represents a decrease of
$555,74 or approximately 37.3 %. The majority of this decrease can be
attributed to the sale of six (6) Company locations which offered full service
car washes in the previous year. For further information related to the sale
of these locations refer to the annual report of the Company on Form 10-KSB
for the period ended December 31, 1997.
Page 10 of 16
<PAGE>
Management's Discussion and Analysis of Operations - Continued
Oil and lube revenue was $307,624 for the quarter as compared to $368,432
for the same period last year which represents a decrease of 16.5%. As of the
end of the first quarter of this year the Company had ten oil and lube centers
in operation. During the past twelve months, the Company ceased operations at
two oil & lube centers which represented $109,121 in sales during the first
quarter last year and opened two additional oil & lube centers which had sales
of $50,041. This accounted for a decrease of $58,980 in revenue and a decrease
in same store revenues accounted for the remaining decrease in revenue of
$1,828.
Other sales was $22,910 for the first quarter as compared to $239,226 for
the same quarter last year which represents an decrease of $216,316 or
approximately 90%. The majority of this decrease is attributed to the sale or
closing of Company locations which contained food courts.
The Calibur Systems, Inc. subsidiary had a net loss of ($134,010) for the
quarter as compared to a net loss of ($16,395) for the same quarter last year.
Energy Subsidiary (Jackson-United Petroleum Corporation)
Natural gas revenue decreased to $31,473 for the first quarter as
compared to $62,753 in the first quarter of last year. The majority of the
decrease is attributed to a decline in the volume of gas produced in the
Company's sixteen Pennsylvania wells.
Oil revenue increased to $9,514 for the first quarter as compared to
$9,032 in the first quarter of last year. The majority of the oil revenue was
generated from several of the wells drilled in Pennsylvania during 1996.
The Jackson-United Petroleum Corporation subsidiary had a net loss of
($8,294) for the quarter as compared to a net income of $32,223 for the same
quarter last year. Cost of sales were $23,369 for the quarter as compared to
$5,685 for the same quarter last year. Selling, general and administrative
expenses for the subsidiary were $25,913 for the quarter as compared to
$33,877 for the same quarter last year. Included in the selling, general and
administrative expenses is $18,445 in depletion, depreciation and
amortization.
Consolidated Operations
Operating expenses were $1,142,811 for the first quarter of 1998 as
compared to $2,441,491 for the same period last year. This decrease is
attributed to several factors as follows: (1.) a decrease in interest paid on
debentures, (2.) a decrease in amortized costs associated with the issuance of
the debentures and (3.) a decrease in selling, general and administrative
expense due to the reduced number of Company locations.
Page 11 of 16
<PAGE>
Management's Discussion and Analysis of Operations - Continued
A loss was expected related to the expense associated with the debentures
issued in 1996. However, earnings for the first quarter did not meet the
expectations of management. The primary factors associated with the decreased
income were: (1.) lower than desired gasoline margins, (2.) lower than
expected gasoline volume and (3.) lower than expected car wash revenue during
the quarter.
Financial Condition -
The working capital deficit increased to approximately ($10,699,489) as
of March 31, 1998 as compared to approximately ($10,418,676) as of December
31, 1997. The majority of this increase can be attributed to accrued interest
related to the debentures issued in 1996. The primary reasons for the large
working capital deficit, in general, are contributed to two factors: (1.)
several of the Company's mortgages in the Calibur subsidiary have been called by
the banks holding mortgages in the amount of approximately $2,000,000 and (2.)
debentures in the amount of approximately $6,475,000 that are now in technical
default due to the fact that the Company ceased paying interest on the
debentures effective December 31, 1997. These two items, which total
approximately $8,475,000, are included in the current maturities of the Company.
In addition, the Company ceased payment of dividends related to the Company's
preferred stock effective December 31, 1997. The interest payable on debentures
is included in the payables of the Company which increases the deficit in
working capital.
The net worth of the Company decreased to ($489,542) as of March 31, 1998
as compared to $506,704 as of December 31, 1997. The decrease is attributed to
the operating loss of ($335,659) sustained by the Company in the first quarter
and non-operating expenses of $199,493 which combined create a loss for the
quarter of ($535,152). The net worth was further reduced by the amount of the
accrued preferred stock dividends for the quarter of $476,094. During the
quarter, interest on debentures in the amount of $373,920 was off-set due to
the amortization of unearned discounts related to the face value of debentures
forgiven by debenture holders pursuant to the restructure agreement completed
by the Company effective April 30, 1997. The remaining balance of the unearned
discount is $124,640. This amount is included in the Company's debt and will
be amortized in the second quarter of 1998.
During the quarter, the Company forfeited and wrote off a $50,000 deposit
posted last year regarding the purchase of movie studio in Florida. This
action was taken due to the Company's decision to discontinue efforts to
acquire the studio.
During the quarter, the Company sold the UCI Teleport, Inc. subsidiary.
The sale, which occurred in January of 1998, was in the amount of $420,000.
From this amount the Company retired the minority interest in the subsidiary
via the redemption of the subsidiaries preferred stock in the amount of
$150,000 plus accrued dividends equal to $3,500. The sale resulted in a gain
Page 12 of 16
<PAGE>
Item 2 - Management's Discussion and Analysis of Operations - Continued
during the quarter of $132,088. This gain is included in the "other income"
section of the income statement for the quarter. The only asset of the
subsidiary was the contractual right to purchase a teleport facility in Miami,
Florida and the associated $150,000 deposit associated with the purchase
contract. The sale was made to a non-affiliated communications company
headquartered in Las Vegas, Nevada. The purchase was made subject to the
Company redeeming the minority interest in the subsidiary.
During 1998, the Company will continue to seek additional sources of
capital for the following reasons:
(1.) To increase overall balance sheet liquidity of the Company.
Without the necessary liquidity to be able to act quickly the Company is
deprived of the opportunity to make acquisitions that could prove beneficial.
No assurance can be given that the Company will be able to obtain the desired
capital.
(2.) To expand the Company's drilling programs and to acquire
producing oil and gas properties. Acquisitions of this nature would allow the
Company to overcome the negative cashflow presently associated with the
Company's operations. There can be no assurance that the Company will locate
any attractive oil and gas acquisition candidates nor is there any assurance
that the appropriate capital and/or debt financing will be available to the
Company if such potential acquisitions should become available.
Expansion and Capital Improvements
As of March 31, 1998 the Company is not committed to any expansion
projects in the retail subsidiary or the oil and gas subsidiary.
Page 13 of 16
<PAGE>
Part II - Other Information
Item 1 Legal Proceedings
None
Item 2 Changes In Securities
None
Item 3 Defaults Upon Senior Securities
The Company has been deemed to be in technical default
on several mortgages totaling approximately $2,000,000 by a
lender to the Company's Calibur Systems, Inc. subsidiary. The
lender has demanded full payment of the loans and has notified
the Company that if payment is not made in full by May 18, 1998
the bank will refer the matter to the bank's counsel with
instructions to begin foreclosure of the underlying properties.
There can be no assurance that the Company will be able to
prevent the properties being sold by the bank in satisfaction
of the loans.
The Company is presently in default regarding both the
Company's outstanding debentures and preferred stock. The
Company ceased paying interest on the debentures and ceased
paying dividends on the outstanding preferred stock effective
December 31, 1997. Prior to this date the Company had been
paying interest on the debentures via the issuance of common
stock in the Company and had been paying the dividend on
preferred stock via the issuance of common stock of the
Company. Accrued interest on debentures due and payable for the
quarters ended December 31, 1997 and March 31, 1998 totals
$562,541. Accrued dividends on preferred stock for the quarters
ended December 31, 1997 and March 31, 1998 totals $962,768.
Item 4 Submission of Matters to a Vote of Security Holder
None, not applicable
Item 5 Other Information
Subsequent to the end of the quarter, the Company sold
four (4) wells and one (1) lease in eastern Kentucky for a
total of $340,000. Three of the wells known as the Bogar #1,
the Wilson #1 and the TL #1 which were located in Pike County,
Kentucky were sold to Penn Virginia Oil & Gas Co. for $240,000.
The
Page 14 of 16
<PAGE>
Part II - Other Information - Continued
fourth well known as the Stepp #1 and a lease known as the
Robinson/Duncan lease both located in Martin County, Kentucky
were sold to Interstate Natural Gas for $100,000.
As a result of the sale, the Company was able to
satisfy all liens, payables and judgments associated with the
oil and gas subsidiary. The net cash provided to the Company
after the payments of all expenses, liens, judgments and
payables associated with the wells was approximately $33,000.
In addition, subsequent to the end of the quarter, the
Company obtained a loan in the amount of $750,000. The loan
bears an interest rate of twelve percent (12%) and matures on
September 30, 1998. The loan is secured by the Company's stock
in each Company subsidiary and further secured by the assets of
the oil and gas subsidiary. The loan allowed the Company to
bring numerous taxes and other payables current. However, the
amount of the loan was approximately $500,000 less than the
amount required to bring all payables current as of the date of
the closing. The Company is presently negotiating a real estate
refinancing which would include the additional $500,000
required. No assurance can be given that such loan can be
obtained by the Company.
Item 6 Exhibits and Reports on Form 8-K
(a.) Exhibits - None
(b.) Reports on Form 8-K - None
Page 15 of 16
<PAGE>
Signatures
Pursuant to the requirement 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.
United Petroleum Corporation
Dated: May 19, 1998 By: /s/Michael F. Thomas
--------------------------
Michael F. Thomas
President & CEO
Page 16 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 159,874
<SECURITIES> 0
<RECEIVABLES> 124,879
<ALLOWANCES> 0
<INVENTORY> 354,198
<CURRENT-ASSETS> 692,153
<PP&E> 13,147,269
<DEPRECIATION> 190,330
<TOTAL-ASSETS> 14,212,163
<CURRENT-LIABILITIES> 11,391,642
<BONDS> 4,723,966
0
11,745,333
<COMMON> 298,795
<OTHER-SE> 26,045,305
<TOTAL-LIABILITY-AND-EQUITY> 14,212,163
<SALES> 1,658,962
<TOTAL-REVENUES> 1,658,962
<CGS> 1,132,679
<TOTAL-COSTS> 1,142,811
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 213,569
<INCOME-PRETAX> (535,152)
<INCOME-TAX> 0
<INCOME-CONTINUING> (535,152)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (535,152)
<EPS-PRIMARY> (0.018)
<EPS-DILUTED> (0.018)
</TABLE>
