UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from To
Commission file number 0-730
PENN-PACIFIC CORPORATION.
(Exact name of small business issuer as specified in its charter)
Delaware 95-3227748
- -------------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
4525 W. Hacienda Ave, Ste 12H, Las Vegas, Nevada 89118
(Address of principal executive offices)
(800) 868-7233 ext 225
(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: April 20, 2001 1,168,698
Transitional Small Business Disclosure Format (check one). Yes ; No X ----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
Penn-Pacific Corporation
(A Development Stage Company)
We have reviewed the accompanying balance sheets of Penn-Pacific
Corporation (a development stage company) as of March 31, 2001 and September 30,
2000, and the related statements of operations, and cash flows for the three and
six month periods ended March 31, 2001 and 2000. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully submitted
/s/ ROBISON, HILL & CO.
Certified Public Accountants
Salt Lake City, Utah
April 23, 2001
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PENN PACIFIC CORPORATION
(A Development Stage Company)
BALANCE SHEETS
March 31, September 30,
------------ ------------
2001 2000
------------ ------------
ASSETS .............................................. $ -- $ --
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable .................................. 24,774 $ 24,671
Accrued expenses .................................. 23,714 22,341
Notes payable - stockholders ....................... 4,129 1,814
------------ ------------
Total Liabilities ......................... 52,617 48,826
------------ ------------
Stockholders' Equity
Preferred stock (par value ......................... $1.00),
50,000,000 shares authorized,
no shares issued at March 31, 2001
and September 30, 2000 ............................ -- --
Common stock to be issued ........................... 8,154 8,154
Common stock (par value $.10), 100,000,000 shares
authorized, 1,168,698 shares issued and outstanding
March 31, 2001 and September 30, 2000 .............. 116,870 116,870
Capital in excess of par value ...................... 35,686,059 35,686,059
Retained deficit .................................... (35,735,361) (35,735,361)
Deficit accumulated during development stage ........ (128,339) (124,548)
------------ ------------
Total Stockholders' Equity ................ (52,617) (48,826)
------------ ------------
Total Liabilities and Stockholders' Equity $ -- $ --
============ ============
See accompanying notes and accountants' report.
3
PENN PACIFIC CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
Cumulative
Since
January 13,
For the Three Months For the Six Months 1997
Ended Ended Inception of
March 31, March 31, Development
----------------- -----------------
2001 2000 2001 2000 Stage
------- ------- ------- ------- ---------
Revenues ................... $ -- $ -- $ -- $ -- $ --
------- ------- ------- ------- ---------
Expenses
Selling, general and
administrative expenses 825 4,950 825 4,950 56,504
------- ------- ------- ------- ---------
Operating Loss ............. (825) (4,950) (825) (4,950) (56,504)
Other income (expense):
Interest expense ........ (1,489) (1,277) (2,966) (2,406) (63,649)
Reorganization items:
Administrative fees ..... -- -- -- -- (8,186)
------- ------- ------- ------- ---------
Loss before taxes .......... (2,314) (6,227) (3,791) (7,356) (128,339)
Income taxes ............... -- -- -- -- --
------- ------- ------- ------- ---------
Net Loss ............ $(2,314) $(6,227)$ (3,791)$ (7,356) $ (128,339)
======= ======= ======= ======= =========
Per Share Amounts
Net Loss $ -- $ (0.01) $ -- $ (0.01)
======= ======== ======= =======
Weighted Average Shares
Outstanding 1,168,698 1,032,619 1,168,698 1,032,619
See accompanying notes and accountants' report.
4
PENN PACIFIC CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cumulative
Since
January 13,
1997
For the Six Months Ended Inception of
March 31, Development
---------------------------
2000 1999 Stage
------ ------- ---------
Cash Flows from Operating Activities:
Cash paid to suppliers and employees ........... $ -- $ -- $ --
------ ------- ---------
Reorganization Items:
Chapter 11 administrative fees .............. -- -- 7,000
------ ------- ---------
Net cash used in operating activities .... -- -- (7,000)
------ ------- ---------
Cash Flows from Investing Activities: ............ -- -- --
------ ------- ---------
Cash Flows from Financing Activities:
Proceeds from common stock ................... 2,000
Issuance of notes payable stockholders ....... -- -- 5,000
------ ------- ---------
Net cash provided by financing activities -- -- 7,000
------ ------- ---------
Net change in cash and cash equivalents .......... -- -- --
Cash and cash equivalents at beginning of year ... -- -- --
------ ------- ---------
Cash and cash equivalents at end of year ......... $ -- $ -- $ --
====== ======= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities:
Net loss ......................................... $(3,791) (7,356) $(128,339)
Adjustments used to reconcile net loss to Net
cash used in operating activities:
Common stock issued for expenses ................. -- -- 134,757
Increase (decrease) in accounts payable .......... 103 3,208 24,774
Increase (decrease) accrued expenses ............. 1,373 4,148 19,531
Common stock issued for notes payable ............ -- -- 1,186
Increase (decrease) in Notes Payable ............. 2,315 -- (871)
Decrease in liabilities not subject to
compromise:
Administrative fees .......................... -- -- (52,181)
Decrease in liabilities subject to compromise:
Priority claims .............................. -- -- (4,277)
Unsecured non-priority claims ................ -- -- (1,580)
------ ------- ---------
Net cash used in operating activities ............ $ -- $ -- $ (7,000)
====== ======= =========
See accompanying notes and accountants' report.
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PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2001 AND 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Penn Pacific Corporation is
presented to assist in understanding the Company' financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of March 31, 2001 and for the three
and six months then ended reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly state the
financial position and results of operations for the three and six months.
Operating results for interim periods are not necessarily indicative of the
results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the state of Delaware on May
18, 1971. From 1979 to 1991 the primary business of Penn Pacific and its
subsidiaries was the acquisition, exploration, development, production and
operation of oil and gas properties. Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United States Bankruptcy Code on January 27, 1994. On January 13, 1998, the
Company emerged from bankruptcy pursuant to a final decree of the United States
Bankruptcy Court for the Northern District of Oklahoma. The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.
Nature of Business
The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all highly
liquid debt instruments purchased with maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
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PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2001 AND 2000
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
- --------------------------------------------------------------------
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Net Loss per Common Share
The effect of outstanding common stock equivalents are antidilutive for
2001 and 2000 and are thus not considered.
The reconciliations of the numerators and denominators of the basic EPS
computations are as follows:
Three Months Ended Three Months Ended
March 31, 2001 March 31, 2000
----------------------------------- ----------------------------------
Number Loss Number Loss
of Per of Per
Loss Shares Share Loss Shares Share
(numerator) (denominator) (numerator)(denominator)
----------- ------------- --------- ---------- ------------ ----------
Loss to Common
Shareholders $ (2,314) 1,168,698 $ -- $ (6,227) 1,032,619 $ (0.01)
=========== ============= ========= ========== ============ ==========
Six Months Ended Six Months Ended
March 31, 2001 March 31, 2000
----------------------------------- ----------------------------------
Number Loss Number Loss
of Per of Per
Loss Shares Share Loss Shares Share
(numerator) (denominator) (numerator)(denominator)
----------- ------------- --------- ---------- ------------ ----------
Loss to Common
Shareholders $ (3,791) 1,168,698 $ -- $ (7,356) 1,032,619 $ (0.01)
=========== ============= ========= ========== ============ ==========
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PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2001 AND 2000
(Continued)
NOTE 2 - INCOME TAXES
The Company has accumulated tax losses estimated at $15,000,000 expiring in
years 2000 through 2013. Current tax laws limit the amount of loss available to
be offset against future taxable income when a substantial change in ownership
occurs. Therefore, the amount available to offset future taxable income may be
limited. No tax benefit has been reported in the financial statements, because
the Company believes there is a 50% or greater chance the carryforwards will
expire unused. Accordingly, the potential tax benefits of the loss carryforwards
are offset by a valuation allowance of the same amount
NOTE 3 - DEVELOPMENT STAGE
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of March 31, 2001 all activities of the Company have been conducted by
corporate officers from either their homes or business offices. Currently, there
are no outstanding debts owed by the company for the use of these facilities and
there are no commitments for future use of the facilities.
NOTE 5 - 1 FOR 20 STOCK SPLIT
On February 23, 1998 the Board of Directors approved a 1 for 20 reverse
stock split. The financial statements have been retroactively adjusted to
reflect the stock split as if it had happened effective on the earliest period
presented.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
General - This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's annual report for the year ended September 30, 2000.
Results of Operations - The Company was incorporated under the laws of the state
of Delaware on May 18, 1971. From 1979 to 1991 the primary business of Penn
Pacific and its subsidiaries was the acquisition, exploration, development,
production and operation of oil and gas properties. Penn Pacific has been
inactive since 1991. The Company filed a voluntary petition of reorganization
under Chapter 11 of the United States Bankruptcy Code on January 27, 1994. On
January 13, 1997, the Company emerged from bankruptcy pursuant to a final decree
of the United States Bankruptcy Court for the Northern District of Oklahoma. The
Company is in the development stage since January 13, 1997 and has not commenced
planned principal operations.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current
operations. There are no formal commitments from banks or other lending sources
for lines of credit or similar short-term borrowing, but the Company has been
able to borrow any additional working capital that has been required. From time
to time in the past, required short-term borrowing have been obtained from a
principal shareholder or other related entities.
The Company will be required to generate cash and other liquid assets with
proceeds from borrowing, the sale of additional securities, or other sources.
There can be no assurance that any such required additional funding will be
available or, if available, that it can be obtained on terms favorable to the
Company.
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PART II - OTHER INFORMATION
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 Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
The Company did not file a report on Form 8-K during the three months
ended March 31, 2001.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PENN-PACIFIC CORPORATION
(Registrant)
DATE: May 1, 2001 By: /s/
-------------------- ----
James O'Brien, CEO/President
(Principal Financial and
Accounting Officer)
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