10-Q 1 q301.txt MARCH 31, 2001 FORM 10-Q 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 - March 31, 2001 0-9295 ---------------------- Commission File Number WINCO PETROLEUM CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) COLORADO 84-0794604 ------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation of organization) P O BOX 342 GARDEN CITY, KANSAS 67846 ---------------------------------------- -------------- (Address of principle executive offices) (Zip Code) (316) 275-2963 ---------------------------------------------------- (Registrant's telephone number. Including area code) ----------------------------------------------------------- (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 ----- ----- 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, 2001: 41,152,606 WINCO PETROLEUM CORPORATION CONDENSED BALANCE SHEET

2 WINCO PETROLEUM CORPORATION CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

3 WINCO PETROLEUM CORPORATION CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

4 WINCO PETROLEUM CORPORATION STATEMENT OF CASH FLOW

5 WINCO PETROLEUM CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) CONDENSED FINANCIAL STATEMENTS ------------------------------ 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 March 31, 2001 and the results of operations and changes in financial position for the three months and six months then ended. Operating results for the three months and six months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2001. 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, 2000. INVESTMENTS IN OIL AND GAS PROPERTIES ------------------------------------- 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 $10,100 was made for the three months ended March 31, 2001, making the provision for the six months then ended a total of $20,200. Reserve for depreciation and depletion was $198,380 and $178,179 on March 31, 2001 and September 30, 2000, respectively. EARNINGS PER SHARE ------------------ 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 and six month periods ended March 31, 2001 and 2000. The weighted average number shares outstanding for the periods ending March 31, 2001 and 2000 were 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. PENDING MATTER -------------- 5. The Company has signed a preliminary letter of intent to enter into a merger agreement with an 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. 6 WINCO PETROLEUM CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES ------------------------------- During the three and six months ended March 31, 2001, the Company's working capital decreased $14,750 and 25,554, respectively. Working capital decreased as a result of higher than usual general and administrative expenses, due primarily to legal and accounting costs associated with the Company's pending merger. The Company's working capital at March 31, 2001 was $324,253. 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 MARCH 31, 2001 ---------------------------------------------------------- During the three and six months ended March 31, 2001, oil and gas sales decreased approximately $77,448 and $55,597, respectively, from the comparable periods in 2000. The decrease in sales resulted from increased down time on many of the leases, due to more weather-related problems in operations and less accessibility to the leases, also as a result of weather conditions. There was a corresponding decrease in lease operating expenses of $37,491 and $36,066, respectively for the same periods. 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 expenses increased by $13,689 and $49,366, respectively, from the comparable periods in 2000. This increase resulted primarily from costs associated with the Company's pending merger, including increases in audit and legal of $13,637 and $39,238, respectively, and SEC filing services of $3,307 and $7,627, respectively. 7 WINCO PETROLEUM CORPORATION PART II ------- 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 8 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 ----------------------------------------------- Cecil O'Brate, President Dated: April 25, 2001 9

WINCO PETROLEUM CORP 10-Q