-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AsrTI+a3kRyN7oyM7pl2HmhB/uuTy99t52mz1t3hkSj81R8s5sm/iFvC9AZBaldF H8sMEzUBWYYjATrmnGmktw== 0000847917-99-000001.txt : 19990218 0000847917-99-000001.hdr.sgml : 19990218 ACCESSION NUMBER: 0000847917-99-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINCANTON CORP CENTRAL INDEX KEY: 0000847917 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 911395124 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23712 FILM NUMBER: 99543603 BUSINESS ADDRESS: STREET 1: 3653 HEMLOCK COURT CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7028298812 MAIL ADDRESS: STREET 1: 3565 HEMLOCK CT CITY: RENO STATE: NV ZIP: 89509 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter period ending December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________to________________ Commission File No. 0-23712 Wincanton Corporation _________________________________________________________ (Exact name of Registrant as specified in its charter) Washington 91-1395124 _______________________ __________________________ State or other jurisdiction (I.R.S. Employer of incorporation or organization Identification No.) 3653 Hemlock Court, Reno, Nevada 89505 ____________________________________________________________ (Address of Principal executive offices) (Zip Code) (702) 829-8812 ____________________________________________________________ (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of 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. Yes X or No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding or each of the issuer's classes of common stock, as to the latest practicable date. 11,323,948 PART I FINANCIALS WINCANTON CORPORTION (a company in the development stage) Consolidated Balance Sheet (Expressed in U.S. dollars) as at September 30, 1 998 (unaudited, prepared by management) 1998 1997 Assets Current assets: Cash $ 3,172 14,733 Amounts and notes receivable and deposits (note 3) 6,001 6,001 9,173 20,734 Capital assets (note 5) 169,148 169,148 $ 178,321 189,882 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 2,000 7,433,907 Unearned revenue (note 3) 5,005,251 Due to a director (note 4) 7,300 100,000 Shareholders' equity (note 6) Capital stock Authorized: 15,000,000 preferred shares 15,000,000 common shares with a par value of $0.0001 per share Issued: 11,323,948 (September 30,1997 - 9,287,752) 1,059 835 4,195,895 preferred shares (September 30,1997 - 4,195,895) 5 5 Additional paid-in capital 7,305,811 6,494,596 Deficit accumulated during the development stage (7,137,854) (18,812,260) 169,021 (12,316,824) 178,321 189,882 See accompanying notes to consolidated financial statements. WINCANTON CORPORATION (a company in the development stage) Consolidated Statement of Operations and Deficit (Expressed in U.S. dollars) (unaudited, prepared by management) From inception on October 5, Three months 1987 to ended Year ended Year ended December 31, December 31, June 30, June 30, 1998 1998 1998 1997 Exploration and development expenditures $184,735 - - 1,864 Administrative expenses: Financing costs 99,372 50,066 - - Joint venture operations 96,002 - - 13,644 Consulting and other fees 10,391,197 - - - Other 692,589 6,625 (52,027) 27,051 Professional fees 1,214,667 16,231 107,605 159,149 Promotion 216,047 - - 1,531 Research and development 437,233 - - - Travel and entertainment 621,031 - - 22,496 Wages 381,913 - - 96,000 14,150,051 72,922 55,578 319,871 Other income (expenses) Gain on debt settlement 6,746,499 6,746,499 Gain on write off of Unearned revenue 5,005,251 5005,251 Unrealized loss on available for sale securities (101,428) - - - Loss on sale of capital assets (86,832) - - - Write-off of Real Estate Options (2,684,537) - - - Write-off of advances (1,223,203) - - 37,934 Write-down of license (1,500,000) - - - Legal settlement costs (400,000) - - (400,000) Loss on sale of investments (64,305) - - - 5,691,445 11,751,750 - (362,066) Loss before discontinued operations and non-controlling interest (8,643,341) 11,678,828 (55,578) (683,801) Minority interest in loss of subsidiary 212,477 Loss before discontinued operations (8,430,864) 11,678,828 (55,578) (683,801) Income from discontinued operations 1,476,402 1,485,899 Gain (loss) for the period (6,954,462) 11,687,828 1,430,321 (683,801) Deficit accumulated during the development stage, beginning of period - (18,816,682) (20,247,003) (19,563,202) Redemption of minority interest in subsidiary (183,392) Deficit accumulated during the development stage, end of period $(7,137,854) (7,137,854) (18,816,682) (20,247,003) Gain (loss) per share $ 1.20 0.15 (0.07) See accompanying notes to consolidated financial statements. WINCANTON CORPORATION (a company in the development stage) Consolidated Statement of Changes in Financial Position (Expressed in U.S. dollars) (unaudited, prepared by management) From inception on October 5, Three months 1987 to ended Year ended Year ended December 31, December 31, June 30, June 30, 1998 1998 1998 1997 Cash provided by (used in) CONTINUING OPERATIONS Operations: Loss from continuing operations $(8,420,864) 11,678,828 (55,578) (683,801) Items not involving cash Expenses and accounts payable paid by stock issuance 871,539 811,539 - - Write off of advances for research and development 50,780 - - - Write off of options to purchase real estate 2,684,537 - - - Write-off of advances 1,223,203 - - (37,934) Write-down of license 1,500,000 - - - Loss on sale of capital assets 86,832 - - - Loss on sale of investments 35,691 - - - Redemption of capital stock (100) (100) Other (55,175) - (57,303) 94 Change in non-cash operating working capital: Amounts and notes receivable and deposits 3,118,576 (2,212) 5,280 Due from (to) a director 69,226 (373,700 381,000 138,699 Accounts payable and accrued liabilities 762,595 (7,126,157) (288,287) 545,254 (3,088,411) (12,125) (22,380) (32,408) DISCONTINUED OPERATIONS Income (loss) from discontinued operations (note 12) 1,476,402 - 1,485,899 - Items not affecting cash: Loss on sale investments 587,826 - - - Gain on sale of plantation maintenance obligations (221,888) - - - Changes in non-cash working capital Accounts payable and accrued liabilities (693,695) - (1,485,460) - Income taxes payable - - - - Proceeds on sale of capital assets 394,231 - 2,530 - Proceeds on sale of investments 148,629 - - - Longterm debt - - - - Investments (736,435) - 20 - Capital assets (764,855) - - - Unearned revenue 692,000 - - - Other 31,921 - - - 914,136 - 2,989 - Financing: Unearned revenue 630,827 - - - Redemption of minority interest in subsidiary (183,392) - - - Additional paid in capital 1,682,774 - (1) - Issue of capital stock 2,024,147 - - - 4,154,356 - (1) - Investments: Options (143,645) - 0 - Resource properties - 1 - - Investments and advances (1,547,882) - 0 35,000 Capital assets (321,989) - 0 - Proceeds from sale of capital assets 16,436 - 0 - Proceeds from sale of investments 20,686 - 0 - Organization costs (515) - 0 - (1,976,909) - 1 35,000 Increase (decrease) in cash 3,172 (12,125,838) 19,391) 2,592 Cash, beginning of period - 15,297 34,688 32,096 Cash, end of period $ 4,459 4,459 15,297 34,688 See accompanying notes to consolidated financial statements. WINCANTON CORPORATION (a company in the development stage) Notes to Consolidated Financial Statements (Expressed in U.S. dollars) September 30, 1998 (unaudited, prepared by management) 1. Nature of operations: The Corporation was incorporated on October 5, 1987 under the laws of the State of Washington, U.S.A. The Corporation holds investments in other companies as follows: 90% of the shares of TRADESMAN Industries Inc., ("Tradesman") a company incorporated under the laws of the state of Delaware, U.S.A., whose principal business is the manufacturing, marketing and distribution of trucks, minivans and trailers with electro-hydraulic cargo beds and tailgate systems, which lower to the ground. The Corporation is investigating and evaluating various assets, properties and business opportunities. Accordingly, continuing operations are dependent upon obtaining additional financing to carry out its business plans. 2. Significant accounting policies: (a) Basis of presentation: These consolidated financial statements include the accounts of the Corporation and R's subsidiary, Tradesman. All significant inter-company transactions and balances have been eliminated. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. For United States reporting purposes, the corporation is considered to be in the development stage and the accompanying financial statements are those of a development stage enterprise. (b) Capital assets Capital assets are recorded at cost. The Company has not made provisions for depreciation as it is still considered to be in the development stage. (c) Research and development costs Research and development costs are charged to operations as incurred. (d) Gain (loss) per share: The loss per share is calculated based on the weighted average number of shares outstanding during the six month period ended December 31, 1998 and 1997 being 9,745,832 and 9,287,752 respectively. 3. Amounts and notes receivable and deposits As at September 30, 1998, the Corporation had the following amounts and notes receivable and deposits: 1999 1998 Work Recovery, Inc. $ 1 1 Other amounts receivable 6,000 6,000 $6,001 6,001 Work Recovery, Inc. The Corporation entered into an agreement with WRI to issue common shares representing a 1 0% interest in Tradesman. The Corporation received common shares of WRI with a market value of $2,500,000 as consideration, realizing a dilution gain of $1,682,774, which was treated as an addition to paid-in capital. In addition, Tradesman entered into an agreement with WRI to sell marketing rights for the cargo bed and tail gate systems in exchange for common shares of WRI with a market value of $5,005,251. The Corporation sold all but 40,116 of the common shares received and has recorded the value of the common shares in WRI at $1. The revenue of $5,005,251 recorded on the sale of the marketing rights has been reflected as unearned. These amounts will be recognized as revenue on a straight line basis as the performance criteria under the license agreement are met, including the delivery of a minimum number of units of manufactured product. If the performance criteria are not met, the Corporation may be liable to repay the license fee. In conjunction with the sale of the Tradesman shares and the marketing rights to WRI, the Company entered into an agreement with WRI whereby WRI would provided consulting services with respect to the cargo bed and tailgate system technology during the year ended June 30,1995 for aggregate consideration of $9,600,000. Of this amount, approximately $2,850,000 was paid, with the remaining $6,750,000 included in accounts payable at September 30, 1998. The Company is unable to confirm whether these services were actually performed by WRI and is contemplating an attempt to recover the $2,850,000 paid to date. There is no assurance that the Company will be able to recover any of the amounts. The Company will retain the $6,750,000 in accounts payable and accrued liabilities until such time as R has determined the liability has been legally dismissed. During the year ended June 30, 1998+C465, WRI was awarded a default judgement against the Company in the amount of $6,750,000. The Company has retained counsel and has successfully reopened the default judgement. 4. Due to a Director Amounts due to a director and to companies controlled by a director bear interest at 1 0% per annum. The loan is secured by the assets of the Company. Capital assets: September 30 September 30 1998 1997 Accumulated Net book Net book Cost Depreciation value value Vehicles $169,148 - 169,148 169,148 6. Capital stock and additional paid-in capital: Capital stock issued from incorporation of the Corporation on October 5, 1987 to September 30, 1998 (a) Common Stock Common stock Additional Shares Amount paid-in capital Total 1987 Issuedforcashat$0.10pershare, net of offering costs of $500 100,000 10 $ 9,490 $ 9,500 1988 Issuedforcashat$0.10pershare, net of offering costs of $500 100,000 10 9,490 9,500 Issued for cash at $0.0001 per share 1,000,000 100 - 100 1991 Issued for cash at $0.0333 per share 3,000 1 99 100 1993 Issued for business acquisition 800,000 1 - 1 Issued for cash at $0.01 per share 2,000,000 200 19,800 20,000 Issued for cash at $0.02 per share 2,000,000 200 39,800 40,000 Issued for cash at $1.00 per share 514,796 51 514,745 514,796 Balance December 31, 1993 6,517,796 573 593,424 593,997 1994 Issued for cash at $.0l per share 13,384 1 40,151 40,152 Issued for cash at $.0l per share 140,000 14 349,986 350,000 Issued for licenses 2,075,000 208 - 208 Balance June 30,1994 8,746,180 796 983,561 984,357 Issued for cash at $1.01 per share 116,000 12 116,988 117,000 Issued in exchange for 100,000 shares of Work Recovery, Inc. 200,000 20 187,480 187,500 Issued as security on mortgage payable 210,000 1 - 1 Issued in exchange for option 784,572 78 2,540,809 2,540,887 Issued in exchange for cash net of offering costs of $77,000 100,000 10 922,990 923,000 Shares returned and cancelled (Note 6) (875,000) (88) - (88) Issued for services rendered 6,000 6 59,994 60,000 Gain on dilution of interest in Tradesman (Note 6) - - 1,682,774 1,682,774 Balance June 30,1995,1996 and 1997 9,287,752 835 6,494,596 6,495,431 Security on mortgage shares cancelled (210,000) (1) (1) (Note 8) Balance June 30,1998 9,077,752 834 6,494,596 6,495,430 Shares returned pursuant to the Page law suit (1,000,000) (100) - (100) Issued in exchange for debt 3,246,196 325 811,215 811,540 Balance September 30,1998 11,323,948 1,059 7,305,811 7,306,870 (b) Preferred stock Shares Amount Class A convertible preferred stock 918,000 $ 1 convertible into common stock at $4.80 per share Class B convertible preferred stock 381,323 1 convertible into common stock at $5.20 per share Class C convertible preferred stock 836,035 1 convertible into common stock at $5.60 per share Class D convertible preferred stock 1,055,700 1 convertible into common stock at $6.00 per share Class E convertible preferred stock 1,004,837 1 convertible into common stock at $7.86 per share 4,195,895 5 The preferred shares: - - are non transferable - - are convertible into common stock, on a one for one basis, at prices shown above - - have no voting rights (c) On November 16, 1994 the Corporation granted 800,000 employee share purchase options. The share purchase options entitle the holder to purchase one share of the Corporation for each option held at a price of $4.00 per share for a period of 10 years. (d) On December 5, 1994 the Corporation issued 2,500,000 warrants. Each warrant gives the holder the right to purchase one common share in the Corporation in exchange for the exercise price noted, as follows: Number of Warrants Exercise price 1,000,000 $ 1.00 500,000 2.50 500,000 3.50 500,000 4.50 The warrants expire on December 6, 1999. 7. Discontinued operations On January 12, 1994, the Company incorporated Wincanton (Aust) Pty Ltd. ('Wincanton (Aus)") under the laws of Australia. Wincanton (Aus) commenced operations in Australia in January 1994, its principal business was growing trees. During the year ended June 30,1996 Wincanton (Aus) ceased operations due to continuing and unsustainable losses. At June 30, 1996 there were assets of $45 and liabilities of $810,371. The Company's remaining investment in and advances to Wincanton (Aus) were written-off. During the quarter ended September 30, 1997 the Company sold all of its interest in Queensland Industries, Inc. to a director. At September 30, 1997 there were assets of $1,251 and liabilities of $1,503,1 1 0. The Company's remaining investment in and and advances to Queensland were written-off. 8. Income taxes At September 30, 1998, the Company has the following approximate amounts available to reduce taxable income of future years, the tax benefits of which has not been reflected in the accounts United States Losses - expiring 2000 to 2009 $450,000 Amounts deducted for tax purposes in excess of amounts deducted for accounting 5,015,000 $5,465,000 9. Contingency (a) A claim for approximately $30,000,000 has been made against the Company, Tradesman, certain of its directors, officers et al. alleging various acts of fraud, securities violations and breaches of fiduciary duties. Counsel is of the opinion that the plaintiffs have breached their agreement to provide technology to the Company and Tradesman and that no loss should be incurred. The Company is defending the claim and is unable to determine at this time what liability, if any, it may ultimately have as a result of this claim. Any settlement resulting from this claim will be treated retroactively. During the year ended June 30, 1997 the action was stayed pending full payment by the Company of $400,000 by May 28, 1998. Under the settlement agreement, the Company is required to pay $300,000 in cash by May 28, 1998 and repurchase 1,000,000 common shares of the Company from the plaintiff for $1 00,000 by May 28,1998. Upon payment in full, the Company will be dismissed with prejudice. If payment in full is not made, plaintiffs have the right to continue the litigation. The Company The Company has fulfilled its obligations and the law suit has been dismissed with prejudice. (b) During the quarter ended September 30,l997, WRI was awarded a default judgement against the Company in the amount of $6,750,000. The Company has retained counsel and has successfully reopened the default judgement. PART II - OTHER INFORMATION Item 1. Legal Proceedings In December 1995, Robert Page and McGee Settlement Trust brought suit against the Registrant, its subsidiary Tradesman Industries Inc., the company's directors, employees, certain consultants and other unrelated individuals alleging in sum, various acts of fraud, securities violations and breaches of fiduciary duty. The defendants moved to stay the proceedings and to compel arbitration, which motion was granted. The arbitration date has not yet been set. The plaintiffs have claimed damages in the amount of $30,000,000 and to seek the appointment of a receiver for Wincanton and Tradesman. The Company contends that Page and McGee Settlement Trust breached their agreement to provide technology and that no loss should be incurred. During the Quarter ended September 30, 1997, the action was stayed pending full payment by the Registrant of $400,000 by May 28, 1998. The Registrant has fulfilled its requirements and has been dismissed with predjudice. On April 29, 1997, Work Recovery, Inc. brought a suite against the Registrant for collection of $6,750,000 plus interest and attorneys' fees, due under a Consulting Agreement entered into on July 1, 1994. The Registrant is defending the action. The Registrant is unable to confirm whether these consulting services were actually performed by Work Recovery, Inc. and is contemplating anattempt to recover the $2,850,000 already paid. During the Quarter ended September 30, 1997, Work Recovery, Inc. was awarded a default judgement against the Registrant in the amount of $6,750,000. The Registrant has retained counsel and has successfully reopened the default judgement. 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. (a) Exhibits. None (b) Reports on Form 8-K. None. PART II - OTHER INFORMATION Item 1. Legal Proceedings In December 1995, Robert Page and McGee Settlement Trust brought suit against the Registrant, its subsidiary Tradesman Industries Inc., the company's directors, employees, certain consultants and other unrelated individuals alleging in sum, various acts of fraud, securities violations and breaches of fiduciary duty. The defendants moved to stay the proceedings and to compel arbitration, which motion was granted. The plaintiffs have claimed damages in the amount of $30,000,000 and to seek the appointment of a receiver for Wincanton and Tradesman. The Company contends that Page and McGee Settlement Trust breached their agreement to provide technology and that no loss should be incurred. During the Quarter ended December 31, 1997, the action was stayed pending full payment by the Registrant of $400,000 by May 28, 1998. The Registrant has fulfilled its requirements and has been dismissed with prejudice. On April 29, 1997, Work Recovery, Inc. brought a suite against the Registrant for collection of $6,750,000 plus interest and attorneys' fees, due under a Consulting Agreement entered into on July 1, 1994. The Registrant is defending the action. The Registrant is unable to confirm whether these consulting services were actually performed by Work Recovery, Inc. and is contemplating an attempt to recover the $2,850,000 already paid. During the Quarter ended December 31, 1997, Work Recovery, Inc. was awarded a default judgement against the Registrant in the amount of $6,750,000. The Registrant has retained counsel and has successfully reopened the default judgement. During the Quarter ended December 31, 1998, the Registrant has negotiated a settlement agreement and mutual release with Work Recovery, Inc. whereby Work Recovery Inc. released all claims of action and causes for action against the Registrant in exchange for a settlement payment of $5,000. 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. (a) Exhibits. None (b) Reports on Form 8-K. None. Wincanton Corporation Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and capital resources At December 31, 1998, the Registrant had $9,173 of current assets and $2,000 of current liabilities compared to $20,734 of current assets and $7,401,455 of current liabilities as at December 31, 1997. Current assets went down from $20,734 to $9,173. Current liabilities include accounts payable and accrued liabilities of $2,000 compared to $7,401,455. The decrease in payables is due to the settlement of $811,540 of debt through issuance of 3,246,196 common shares and the negotiated settlement with Work Recovery, Inc. whereby accounts payable in the amount of $6,751,499 was settled for cash payment of $5,000. The Registrant was active only in defending itself against the lawsuits described in Part II. Future operations will include developing its interests in marketing, licenses and other business opportunities. It is anticipated that the Registrant will require further working capital to fund current operating expenses and current liabilities other than those mentioned above. It is expected that such funds will be obtained by the sale of additional capital stock of the Registrant although there can be no assurance that the Registrant will be able to obtain such funds. Results of Operations Six-month period ended December 31, 1998 compared to the year ended June 30, 1998. The Registrant's profit for the Six month period ended December 31, 1998 was $11,678,828 compared to a gain of $1,430,321 for the year ended June 30, 1998. Administrative expenses for the Six month period ended December 31, 1998 were $72,922 compared to $55,578 for the year ended June 30, 1998, such difference due to the recording of interest on the amount due to a company controlled by a director during the current period. The Registrant has been inactive except for the legal defense of the aforementioned lawsuit. As a result of the settlement agreement reached with Work Recovery, Inc., the Registrant has recorded a gain on debt settlement of $6,746,499 and a gain on write off of unearned revenue of $5,005,251. During the year ended June 30, 1998, income from discontinued operations includes a gain on the sale of Queensland Industries, Inc. which was sold to a director of the Registrant during the quarter for nominal proceeds. The gain results from the reduction in account payable and accrued liabilities, which remain on the accounts of Queensland. 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 thereunto duly authorized. WINCANTON CORPORATION (Registrant) Date: February 16, 1999 Henri Hornby Henri Hornby, Director Neil F. Hornby Neil F. Hornby, Director EX-27 2
5 9-MOS JUN-30-1998 Dec-31-1998 3,172 0 0 0 0 9,173 0 0 178,321 2,000 0 0 15,000,000 15,000,000 0 178,321 0 0 0 0 0 0 0 (6,954,462) 0 (6,954,462) 0 0 0 (6,954,462) (0.01) (0.004)
-----END PRIVACY-ENHANCED MESSAGE-----