SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
July 3, 1996
------------------------------------------------
Date of Report (date of earliest event reported)
WINCO PETROLEUM CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-9295 84-0794604
- --------------- ----------- -------------------
(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
1645 Court Place
Suite 312
Denver, Colorado 80202
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(Address of Principal Executive Offices
Including Zip Code)
(303) 623-9095
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(Registrant's telephone number,
including area code)
Page 1 of 13.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Historical Summaries of Gross Revenues And Direct Expenses
Of Properties Acquired By Winco Petroleum Corporation From
American Warrior, Inc. As Of Nine Months Ended June 30, 1996
and Year Ended September 30, 1995 with Independent Auditors'
Report.
Item 7(a)
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INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
WINCO, INC.
We have audited the accompanying Historical Summaries of Gross Revenues and
Direct Operating Expenses of Properties Acquired by Winco, Inc. from
American Warrior, Inc. on July 3, 1996, for the nine months ended June 30,
1996 and the year ended September 30, 1995. The Historical Summaries are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the Historical Summaries based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the Historical Summaries are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Historical
Summaries. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall Historical Summaries presentation. We believe that our audits
provide a reasonable basis for our opinion.
The accompanying Historical Summaries were prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in the Form 8-K/A of Winco, Inc.) as described in
Note 1 and are not intended to be a complete presentation of the
properties' revenues and expenses.
In our opinion, the Historical Summaries referred to above present fairly
in all material respects, the revenue and direct operating expenses of the
properties acquired July 3, 1996, for the nine months ended June 30, 1996
and the year ended September 30, 1995, in conformity with generally
accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
August 23, 1996
Wichita, Kansas
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HISTORICAL SUMMARIES OF GROSS REVENUES AND
DIRECT OPERATING EXPENSES OF PROPERTIES ACQUIRED BY
WINCO, INC. FROM AMERICAN WARRIOR, INC.
Nine Months Ended June 30, 1996
and Year Ended September 30, 1995
NINE MONTHS Year Ended
ENDED September 30,
June 30, 1996 1995
-------------- -------------
Gross revenues - oil and gas sales $ 105,297 $ 108,148
Direct expenses 72,631 76,317
---------- ----------
Net revenues $ 32,666 $ 31,831
========== ==========
The accompanying notes are an integral
part of these summaries.
-4-
HISTORICAL SUMMARIES OF GROSS REVENUES AND
DIRECT OPERATING EXPENSES OF PROPERTIES ACQUIRED BY
WINCO, INC. FROM AMERICAN WARRIOR, INC.
NOTES TO HISTORICAL SUMMARIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The accompanying Historical Summaries of Gross
Revenues and Direct Operating Expenses relate to the operations of the
oil and gas properties acquired by Winco, Inc. on July 3, 1996 from
American Warrior, Inc. The properties were acquired in exchange for
17,259,977 shares of Winco, Inc. common stock.
HISTORICAL SUMMARY - The Historical Summaries presented herein were
prepared for the purposes of complying with the financial statement
requirements of a business acquisition to be filed on Form 8-K/A as
promulgated by Regulation S-B Item 3/10 of the Securities Exchange Act
of 1934.
OIL AND GAS PROPERTIES - The properties presented herein represent
purchased production. The properties are presented at their
historical cost basis. For individual properties that were acquired
as a part of a larger group of properties, cost was allocated to the
individual properties and the acquired equipment in accordance with
APB 16 based on the then estimated fair value of the producing
property; no amounts were allocated to undeveloped property.
Significant betterments and renewals have been capitalized.
Depreciation and depletion of the capitalized costs related to the oil
and gas properties have been recorded using a method which
approximates the units-of-production method.
REVENUE RECOGNITION - Revenues received from well production are
distributed to the owners based on their ownership interest in the
wells. The revenues presented represent American Warrior, Inc.'s
ownership interest in the wells.
GENERAL AND ADMINISTRATIVE EXPENSES - American Warrior, Inc., the
operator, charges these expenses to a property for estimated operating
overhead. On most properties these charges amount to approximately
$250 per month on each operating well.
ESTIMATES USED IN HISTORICAL SUMMARIES - The preparation of Historical
Summaries in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect: 1)
the reported amounts of assets and liabilities, 2) disclosures such as
contingencies, and 3) the reported amounts of revenues and expenses
included in such Historical Summaries. Actual results could differ
from those estimates.
INCOME TAXES - No provision has been made for income taxes.
(Continued)
-5-
HISTORICAL SUMMARIES OF GROSS REVENUES AND
DIRECT OPERATING EXPENSES OF PROPERTIES ACQUIRED BY
WINCO, INC. FROM AMERICAN WARRIOR, INC.
NOTES TO HISTORICAL SUMMARIES
(Continued)
2. RESERVES (UNAUDITED)
Estimates of proved oil and gas reserves for the properties were
prepared in accordance with the guidelines established by the
Securities and Exchange Commission and the Financial Accounting
Standards Board, which require that reserve reports be prepared under
existing economic and operating conditions with no provision for price
and cost escalations except by contractual agreement. These estimates
are expected to change as future information becomes available. All
of the reserves are located onshore in the continental United States.
The following unaudited table sets forth the proved net oil reserves
for the properties at June 30, 1996 and September 30, 1995, together
with the changes therein:
Proved Developed Reserves: (Unaudited)
Oil
------------
BBLS
------------
Balance at October 1, 1994 90,228
Production (8,117)
----------
Balance at September 30, 1995 82,111
Production (6,691)
----------
Balance at June 30, 1996 75,420
==========
Standardized Measure of Discounted Future (Unaudited)
Net Cash Flows Relating to Proved Reserves: June 30,
1996
----------
Future cash flows $ 1,429,343
Future production costs and tax expenses 726,159
----------
Future net cash flows 703,184
10% discount to reflect timing
of net cash flows 225,828
----------
Standardized measure of
discounted future net cash flows $ 477,356
===========
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(b) Pro Form Financial Information.
Item 7(b)
WINCO, INC.
PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Nine Months Ended June 30, 1996
The following unaudited pro forma balance sheet of Winco, Inc. is based on
the historical balance sheet as of June 30, 1996, adjusted to give effect
for the acquisition of the American Warrior, Inc. oil and gas properties
acquired July 3, 1996, as if the acquisitions had been consummated at the
balance sheet date. The historical statements of operations of the Company
for the nine months ended June 30, 1996 and the year ended September 30,
1995 have been adjusted to give effect for the acquisition as if the
acquisition had been consummated at the beginning of each respective period
presented.
The pro forma balance sheet and statements of operations have been prepared
based on estimates and assumptions deemed by management of the company to
be appropriate and do not purport to be indicative of the results of
operations which would actually have been obtained if the acquisitions had
occurred as presented in such statements, or which may be obtained in the
future. The pro forma balance sheet and statement of operations should be
read in conjunction with the historical financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the year
ended September 30, 1995 and the Company's Quarterly Report on Form 10-QSB
for the nine months ended June 30, 1996, which have been filed with the
Securities and Exchange Commission.
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WINCO, INC.
PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Nine Months Ended June 30, 1996
CURRENT ASSETS
--------------
Winco Pro forma Combined
Historical Adjustments Pro forma
---------- ----------- ----------
Current assets:
Cash and short-term cash
investments $ 118,531 $ -- $ 118,531
Notes and accounts receivable 66,881 -- 66,881
Prepaid expenses and other 4,650 -- 4,650
--------- --------- ---------
Total current assets 190,062 -- 190,062
Investments in oil and gas
properties at cost, net (using
the full cost method of
accounting) 104,136 146,187 250,323
Well equipment inventory
at lower of cost or market 59,993 -- 59,993
Furniture, fixtures and vehicles
at cost, net of allowances for
depreciation 1,549 -- 1,549
Other assets 9,000 -- 9,000
--------- --------- ---------
$ 364,740 $ 146,187 $ 510,927
========= ========= =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
Current liabilities:
Accounts payable to
stockholders and directors $ 75 $ -- $ 75
Accounts payable and accrued
liabilities 38,372 -- 38,372
--------- --------- ---------
Total current liabilities 38,447 -- 38,447
--------- --------- ---------
Stockholders' investment:
Common stock, no par value;
50,000,000 shares authorized;
23,000,000 shares issued and
outstanding (40,259,977 shares
issued and outstanding
on a proforma basis) 173,000 146,187 319,187
Additional paid-in capital 1,249,320 (1,096,027) 153,293
Accumulated deficit (1,096,027) 1,096,027 --
--------- --------- ---------
Total stockholders' investment 326,293 146,187 472,480
--------- --------- ---------
$ 364,740 $ 146,187 $ 510,927
========= ========= =========
See Notes to Unaudited Pro Forma Financial Statements.
-8-
WINCO, INC.
PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Nine Months Ended June 30, 1996
Winco Pro forma Combined
Historical Adjustments Pro forma
---------- ----------- ---------
Revenues:
Oil and gas sales $ 78,891 $ 105,297 $ 184,188
Interest 3,520 -- 3,520
--------- --------- ---------
82,411 105,297 187,708
Lease operating expenses and
royalties 50,729 38,468 89,197
General and administrative 54,111 -- 54,111
Depreciation, depletion and
amortization 18,850 34,163 53,013
--------- --------- ---------
123,690 72,631 196,321
--------- --------- ---------
Loss before income tax (41,279) 32,666 (8,613)
Income tax expense (benefit) -- -- --
--------- --------- ---------
Net loss $ (41,279) $ 32,666 $ (8,613)
========= ========= =========
Net loss per common share:
Primary and fully diluted $ -- $ -- $ --
========= ========= ==========
Weighted average shares
outstanding 23,000,000 17,259,977 40,259,977
========== ========== ==========
See Notes to Unaudited Pro Form Financial Statements.
-9-
WINCO, INC.
PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Year Ended September 30, 1995
Winco Pro forma Combined
Historical Adjustments Pro forma
----------- ----------- ----------
Revenues:
Oil and gas sales $ 106,740 $ 108,148 $ 214,888
Interest 5,130 -- 5,130
Other (2,207) -- (2,207)
--------- --------- ---------
109,663 108,148 217,811
Lease operating expenses and
royalties 79,438 41,294 120,732
General and administrative 68,230 -- 68,230
Depreciation, depletion and
amortization 21,876 35,023 56,899
--------- --------- ---------
169,544 76,317 245,861
Loss before income tax (59,881) 31,831 (28,050)
Income tax expense (benefit) -- -- --
--------- --------- ---------
Net loss $ (59,881) $ 31,831 $ (28,050)
========= ========= =========
Net loss per common share:
Primary and fully diluted $ -- $ -- $ --
========= ========= =========
Weighted average shares
outstanding 23,000,000 17,259,977 40,259,977
========== ========== ==========
See Notes to Unaudited Pro Forma Financial Statements.
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WINCO, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following adjustments have been reflected in the accompanying pro forma
balance sheet as of June 30, 1996 and Statements of Operations for the nine
months ended June 30, 1996 and the year ended September 30, 1995 to give
effect for the acquisition of American Warrior, Inc. oil properties on July
3, 1996.
A. The properties were acquired in a transaction considered to be a
reverse acquisition and, accordingly, are presented at the carryover
cost basis of the predecessor company, American Warrior, Inc. (AWI).
B. To reflect the direct revenues and direct operating expenses of the
properties, no additional general and administrative expenses are
provided for in the pro forma. Direct operating expenses include
overhead charges from the operator, AWI, in the amounts of $14,017 and
$17,073 for the period ended June 30, 1996 and September 30, 1995,
respectively. Management expects AWI to continue to operate the
properties and overhead charges are not expected to change as a result
of the acquisition.
C. Additional depreciation and depletion on oil properties was estimated
using the predecessor company's method which approximates the units of
production method used by Winco, Inc.
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(c) Exhibits: Filed herewith pursuant to Reg. S-K Item 601.
EXHIBIT NO. PAGE DESCRIPTION
N/A N/A N/A
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
WINCO PETROLEUM CORPORATION
DATED: November 1, 1996 By: /s/ CECIL O'BRATE
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Cecil O'Brate
President