10-Q 1 q601.txt JUNE 30, 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 - June 30, 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 June 30, 2001: 41,152,606 WINCO PETROLEUM CORPORATION CONDENSED BALANCE SHEET

~~March~~June 3130, 2001 September 30, 2000 (Unaudited) (Audited) ----------------- ------------------ ASSETS ------ CURRENT ASSETS: Cash and short-term investment $ ~~276~~259,~~397~~740 $ 302,799 Notes and accounts receivable - trade 2625,~~949~~738 25,411 Notes and accounts receivable - related party 2843,~~701~~121 50,665 ------------ ------------ TOTAL CURRENT ASSETS ~~332~~328,~~047~~599 378,875 INVESTMENTS IN OIL AND GAS PROPERTIES At Cost, Net (Using the full cost method of of accounting) ~~160~~150,~~415~~315 180,615 FURNITURE, FIXTURES AND VEHICLES, At Cost, Net of Allowances for Depreciation - - ------------ ------------ TOTAL ASSETS $ ~~492~~478,~~462~~914 $ 559,490 ============ ============ LIABILITIES AND STOCKHOLDERS' INVESTMENT ---------------------------------------- CURRENT LIABILITIES: Accounts payable to stockholders, Directors, and related parties $ 721,~~794~~685 $ 19,984 Accounts payable and accrued liabilities -34,693 9,084 ------------ ------------ TOTAL CURRENT LIABILITIES 756,~~794~~378 29,068 ------------ ------------ 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 1,293,520 1,293,520 Accumulated deficit (1,~~115~~177,~~249~~381) (1,069,495) Treasury stock ( 603) ( 603) ------------ ------------ TOTAL STOCKHOLDERS' INVESTMENT ~~484~~422,~~668~~536 530,422 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ ~~492~~478,~~462~~914 $ 559,490 ============ ============

2 WINCO PETROLEUM CORPORATION CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED ~~MARCH~~JUNE 3130, 2001 2000 ----------------- ----------------- REVENUES: Oil and gas sales $ 4073,~~521~~653 $ ~~117~~93,~~969~~410 Gain on sale of assets - - ------------ ------------ 4073,~~521~~653 ~~117~~93,~~969~~410 ------------ ------------ EXPENSES: Lease operating expenses 2257,~~090~~070 5974,~~581~~717 General and administrative 3368,~~181~~615 196,~~492~~400 Depreciation, depletion and Amortization 10,100 6,522 ------------ ------------ 65135,~~371~~785 8587,~~595~~639 ------------ ------------ Income (Loss) before income tax ( 2462,~~850~~132) 325,~~374~~771 Income tax expense (benefit) - - ------------ ------------ NET INCOME (LOSS) $( 2462,~~850~~132) $ 325,~~374~~771 ============ ============ NET INCOME (LOSS) PER COMMON SHARE - Primary and fully diluted $ - $ - ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 41,152,606 41,152,606 ============ ============

3 WINCO PETROLEUM CORPORATION CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

~~SIX~~NINE MONTHS ENDED ~~MARCH~~JUNE 3130, 2001 2000 ----------------- ----------------- REVENUES: Oil and gas sales $ ~~109~~182,~~246~~899 $ ~~164~~258,~~843~~253 Gain on sale of assets - - ------------ ------------ ~~109~~182,~~246~~899 ~~164~~258,~~843~~253 ------------ ------------ EXPENSES: Lease operating expenses 59116,~~883~~952 95170,~~949~~666 General and administrative 74143,~~919~~533 2531,~~553~~953 Depreciation, depletion and Amortization 2030,~~200~~300 1319,~~044~~566 ------------ ------------ ~~155~~290,~~002~~785 ~~134~~222,~~546~~185 ------------ ------------ Income (Loss) before income tax ( 45107,~~754~~886) 3036,~~297~~068 Income tax expense (benefit) - - ------------ ------------ NET INCOME (LOSS) $( 45107,~~754~~886) $ 3036,~~297~~068 ============ ============ NET INCOME (LOSS) PER COMMON SHARE - Primary and fully diluted $ - $ - ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 41,152,606 41,152,606 ============ ============

4 WINCO PETROLEUM CORPORATION STATEMENT OF CASH FLOW

~~SIX~~NINE MONTHS ENDED ~~MARCH~~JUNE 3130, 2001 2000 ----------------- ----------------- Cash flows from operating activities: Net income (loss) $( 45107,~~754~~886) $ 3036,~~297~~068 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation, depletion and amortization 2030,~~200~~300 1319,~~044~~566 Gain on sale of assets Changes in current assets and current liabilities: Accounts Receivable - trade ( ~~1,538~~327) 2414,~~663~~409 Accounts Receivable - related 217,~~964~~544 - Accounts Payable - trade ~~( 9~~25,~~084)~~609 ( 2215,~~577~~933) Accounts Payable - related ~~( 12~~1,~~190)~~701 - ------------ ------------ Net cash provided (used) in operating activities ( 2643,~~402~~059) 4554,~~427~~110 Cash flows from (used in) investing activities: Investment in oil and gas properties - - Purchase of common stock for Treasury - -( 150) Proceeds from sale of oil & gas property - - ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 2643,~~402~~059) 4553,~~427~~960 Cash and Cash Equivalents at beginning of period 302,799 273,172 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ ~~276~~259,~~397~~740 $ ~~318~~327,~~599~~132 ============ ============

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 June 30, 2001 and the results of operations and changes in financial position for the three months and nine months then ended. Operating results for the three months and nine months ended June 30, 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 June 30, 2001, making the provision for the nine months then ended a total of $30,300. Reserve for depreciation and depletion was $208,480 and $178,179 on June 30, 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 nine month periods ended June 30, 2001 and 2000. The weighted average number shares outstanding for the periods ending June 30, 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. On June 25, 2001, at a Special Meeting of Shareholders of Winco Petroleum Corporation, Winco shareholders approved the proposal to adopt the merger agreement, and related transactions, among Winco, Winco Merger Corporation, Winco Spin-off Corporation (which name was changed to WNCO, Inc.) and Business Products, Inc., doing business as Rush Creek Solutions. Pursuant to such agreement, which was closed by the parties on August 2, 2001, Winco transferred all assets, liabilities and other obligations of Winco to WNCO in consideration for shares of Common Stock of WNCO which were distributed to the Winco shareholders, and thereafter, Rush Creek Solutions was merged into Winco Merger. Therefore, as of August 2, 2001, the financial statements of Winco became the financial statements of WNCO, and will be incorporated into the filings of WNCO (SEC file No. 000-31975) for the quarter ending September 30, 2001 and forward. The specific transactions accompanying this merger were discussed in more detail in Footnote 1 of the Financial Statements and other sections of Winco's latest 10-K and in the Proxy material provided to each shareholder for the Special meeting. 6 WINCO PETROLEUM CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES ------------------------------- During the three and nine months ended June 30, 2001, the Company's working capital decreased $52,032 and 77,586, 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 June 30, 2001 was $272,221. 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, 2001 --------------------------------------------------------- During the three and nine months ended June 30, 2001, oil and gas sales decreased approximately $19,757 and $75,354, respectively, from the comparable periods in 2000. The decrease in sales resulted primarily from lower prices for oil and gas, which had declined some from the high levels realized in late 2000. There was some down time on a few of the leases, which contributed to lower volumes of production and sales. There was a corresponding decrease in lease operating expenses of $17,647 and $53,714, 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 $62,215 and $111,580, respectively, from the comparable periods in 2000. This increase resulted from costs associated with the Company's merger, including increases in audit and legal of $10,343 and $49,580, respectively, SEC filing services of $3,219 and $14,115, respectively, and printing and postage of $34,405 and $34,449, 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: August 14, 2001 9

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