-----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, UjlqI9NZmzSZH7p4mk0wbS79dU80Q3Z92uKWIParYI9DBRPP3NEgjfexFD2P6SQa CiO1x1OEGzEfWErCPLkxEA== 0000878808-97-000020.txt : 19970326 0000878808-97-000020.hdr.sgml : 19970326 ACCESSION NUMBER: 0000878808-97-000020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19970131 DATE AS OF CHANGE: 19970325 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEWGOLD INC CENTRAL INDEX KEY: 0000878808 STANDARD INDUSTRIAL CLASSIFICATION: 7500 IRS NUMBER: 161400479 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-20722 FILM NUMBER: 97558450 BUSINESS ADDRESS: STREET 1: 5190 NEIL ROAD, SUITE 320 CITY: RENO STATE: NV ZIP: 89502 BUSINESS PHONE: 7028234000 FORMER COMPANY: FORMER CONFORMED NAME: WAREHOUSE AUTO CENTERS INC /DE DATE OF NAME CHANGE: 19950510 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended October 31, 1996. Commission File Number: 0-20722 WAREHOUSE AUTO CENTERS, INC. (Debtor-in-Possession) (Exact Name of Small Business Issuer as Specified in Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 16-1400479 (IRS Employer Identification No.) 5190 Neil Road, Suite 320 Reno, Nevada 89502 (Address of Principal Executive Offices) (702) 823-4000 (Issuer's Telephone Number) Check whether Issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for shorter period that registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.) Yes x No Check whether registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes x No As of October 31, 1996, Registrant had 3,299,191 shares of Common Stock par value $.005, issued and outstanding. Documents Incorporated by Reference: Parts of the Exhibits filed with Regis- trant's Registration Statement on Form SB-2 (File No. 33-49920) and Amendments thereto, declared effective on October 15, 1993, and the Exhibits filed with Registrant's Form 10-KSB for the period ended January 31, 1996. Transitional Small Business Disclosure Format - Yes No x WAREHOUSE AUTO CENTERS, INC. FORM 10-QSB INDEX Page PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements 3 Balance Sheet - October 31, 1996 4 Statements of Operations - Three months ended October 31, 1996 and 1995 and nine months ended October 31, 1996 and 1995 5 Statements of cash flows - Three months ended October 31, 1996 and 1995 and nine months ended October 31, 1996 and 1995 6 Notes to condensed financial statements 7 ITEM 2. Management's Discussion and Analysis or Plan of Operation 9 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 9 ITEM 5. Other Information 9 ITEM 6. Exhibits and Reports on Form 8-K 10 Signatures 11 AUDITORS' COMPILATION REPORT To the Shareholders of Warehouse Auto Centers, Inc. We have compiled the accompanying balance sheet of Warehouse Auto Centers, Inc., a Delaware Corporation, as of October 31,1996. and the related state- ments of operations and cash flows for the three months ended October 31, 1996 and October 31, 1995 and for the nine months ended October 31, 1996 and 1995, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of inanagemeut. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. Management has elected to omit substantially all of the disclosures required by generally accepted accounting principles. If the omitted disclosures were included in the financial statements, they might influence the user's con- clusions about the Company's financial position, results of operations and cash flows. Accordingly, these financial statements are not designated for those who are not informed about such matters. The Company measures inventory and cost of goods sold for interim financial statements by use of historically developed gross profit percentages. Annually, the Company adjusts inventories to agree with the results of a physical count. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1, the Company was forced into involuntary bankruptcy under Chapter 11 of the Federal Bankruptcy Code in June, 1995, and was authorized to continue managing and operating the business as debtor-in-possession subject to the control and supervision of the bankruptcy court. Those conditions indicate that the Company may be unable to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Subsequent to the end of the quarter, the Company sold substantially all of its assets and received approval by their creditors on a plan of reorganization. As of the date of this report, the Company had substantially no assets, had discontinued existing auto parts operations and entered into a plan of merger with another company. CIACCIA & CATARISANO LLP Certified Public Accountants December 10, 1996 Rochester, New York WAREHOUSE AUTO CENTERS, INC. BALANCE SHEET As of October 31, 1996 ASSETS Current assets: Cash $ 31,709 Total current assets $ 31,709 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable - post petition $ 275,861 Accrued expense 22,970 Accrued franchise taxes 7,011 Total current Liabilities $ 305,842 Liabilities subject to settlement under reorganization proceedings - Unsecured 2,611,752 Total liabilities $ 2,917,594 Stockholders' equity: Common stock, par value $.005; authorized 10,000,000 shares $ 16,496 Additional paid-in capital 7,206,113 Accumulated deficit (10,108,494) Total stockholders' equity $ (2,885,885) $ 31,709 See Accountants' compilation report The accompanying notes are an integral part of these financial statements.
WAREHOUSE AUTO CENTERS, INC. STATEMENTS OF OPERATIONS For the periods ended October 31, 1996 and 1995
Three Months Ended Nine Months Ended October 31 October 31 1996 1995 1996 1995 Sales $ 67,993 $ 453,548 $ 822,196 $2,371,435 Cost of Sales (47,532) (315,000) (572,676) (1,660,000) Gross Profit $ 20,461 $ 138,548 $ 249,520 $ 711,435 Selling, general and administrative expenses $ (148,285) $ (581,360) $ (744,604) $(3,044,807) Depreciation and amortization 0 (13,818) 0 (59,076) Loss from operations $(127,824) $ (456,630) $ (495,084) $(2,392,448) Interest expense, net (4,000) 0 (16,000) (6,857) Loss before provision for franchise taxes $(131,824) $ (456,630) $ (511,084) $(2,399,305) Provision for franchise taxes (1,200) (3,500) (3,600) (10,500) Net loss $(133,024) $ (460,130) $ (514,684) $(2,409,805) Net loss per common share $ (.04) $ (.17) $ (.16) $ (.93) Weighted average number of common shares outstanding 3,299,191 2,675,274 3,299,191 2,598,638 See Accountants' compilation report The accompanying notes are an integral part of these financial statements.
WAREHOUSE AUTO CENTERS, INC. STATEMENTS OF CASH FLOWS For the periods ended October 31, 1996 and 1995
Three Months Ended Nine Months Ended October 31 October 31 1996 1995 1996 1995 Cash flow from operating activities: Net loss $(133,024) $(460,130) $(517,161)$(2,409,805) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 0 3,818 0 59,076 Proceeds from the sale of accounts receivable and inventory 300,502 0 300,502 0 Decrease in accounts receivable 0 10,284 3,607 6,474 Decrease in inventory 14,747 169,988 244,169 1,138,801 Stock Issued in exchange for services 0 0 0 273,273 Decrease in liabilities subject to settlement under reorganization proceedings-Secured (69,326) 0 (69,326) 0 Decrease in prepaid expenses and other assets 0 0 0 55,857 Increase (decrease) in accounts payable 20,322 173,916 150,960 (78,251) Increase (decrease) in accrued expenses 5,200 81,153 4,815 (197,491) Net cash used in operating activities $ 138,421 $ (10,971) $ (117,566) $(1,142,066) Cash flow from investing activities: Purchase of equipment and leasehold improvements, net $ 0 $ 0 $ 0 $ 671,861 Sale of equipment 74,498 0 74,498 0 Net cash flows from investing activities $ 74,498 $ 0 $ 74,498 $ 671,861 Cash flow from financing activities: Payments on notes payable $ (200,000)$ 0 $ (200,000)$ 0 Issuance of common stock, net 0 0 0 102,250 Net cash flows from financing activities $ (200,000) $ 0 $ (200,000)$ 102,250 Net increase (decrease) in cash $ 12,919 $ (10,971) $ (7,936)$ (367,955) Cash, beginning of period 18,790 (14,415) 39,645 342,569 Cash, end of period $ 31,709 $ (25,386) $ 31,709 $ (25,386)
WAREHOUSE AUTO CENTERS, INC NOTES TO FINANCIAL STATEMENTS October 31, 1996 Note 1: Chapter 11 proceedings and plan of reorganization: Warehouse Auto Centers, Inc. operated warehouse format auto parts and accessories superstores. On June 25, 1995, Warehouse Auto Centers, Inc. was forced into involuntary Chapter 11 bankruptcy by a group of creditors. As ofJanuary 31, 1996, the Company was operating its business as a debtor- in-possession under the jurisdiction of the United States Bankruptcy Court. The Company tried unsuccessfully to reorganize itself. On August 28, 1996, the Company sold its remaining assets to a group of investors led by its former President for $375,000 cash. Warehouse Auto Centers, Inc. is a publicly traded corporation with over 300 shareholders and in excess of 3 million shares of issued and out- standing common stock. Newgold, Inc., a gold mining company head- quartered in Reno, Nevada, was seeking a publicly traded shell. Newgold Inc. and Warehouse Auto Centers, Inc. entered into a merger agreement to take the company out of bankruptcy. The Plan of Reorganization, which was approved by the creditors on November 21, 1996, is summarized as follows: 1. Previously paid its secured creditors in full from the asset sale proceeds. 2. Will pay its liabilities subject to settlement - unsecured creditors in full with stock in the reorganized company's successor on the basis of one (1) share of stock for each $42 of debt. 3. Will offer the accounts payable - post-petition creditors the oppor- tunity to receive payment or convert their debt to equity in the reorganized company's successor as payment on the basis of one (1) share of stock for each $1 of debt. 4. Will pay Administrative Claims incurred during the Bankruptcy proceedings in cash or in stock; one share of stock for each $1 of debt. 5. Will merge with Newgold, Inc., a gold mining company, by acquiring 100% of the outstanding shares of Newgold's stock in exchange for shares of stock in the reorganized company. [FN] See Accountants' compilation report 6. Will dilute existing Warehouse Auto Centers, Inc.'s shareholders by a 1:65 reverse split of their pre-petition stock. 7. Has canceled all warrants, options and other employee benefits. 8. Has appointed a new Board of Directors and management in the reorganized company. The Company has ceased operating its auto parts business and redirected is business by becoming engaged in the natural resource industry. Note 2: Basis of presentation. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and article 10 of Regulation S-X. Accordingly, they do not include all of the informa- tion and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. The condensed financial statements should be read in conjunction with the financial statements for the fiscal year ended January 31, 1996, contained in the Company's Form 10-KSB for the fiscal year ended January 31, 1996. [FN] See Accountants' compilation report Item 2. Managements Discussion and Analysis or Plan of Operations. General As a result of its inability to timely meet its financial obligations, on June 29, 1995, Registrant was involuntarily placed into Chapter 11 Bankruptcy by certain of its unsecured creditors, all pursuant to the U.S. Bankruptcy Code. Registrant attempted to continue its business operations in the normal course of business, but steadily experienced a serious decline in its cash flow and suffered substantial losses over the year it was under protection of the U.S. Bankruptcy Court. Results of Operations. Sales revenues for the three months ended October 31, 1996 totaled $67,993 and gross profit totaled $20,461, compared to sales revenues of $453,548 and gross profits of $138,548 for the three months ended October 31, 1995. For the three months ended October 31, 1996, selling, general and administrative expenses totaled $148,285 compared to $581,360 for the three months ended October 31, 1995. Sales revenues for the six months ended October 31, 1996 totaled $822,196 and gross profit totaled $249,520, compared to sales revenues of $2,371,435 and gross profits of $711,435 for the six months ended October 31, 1995. For the six months ended October 31, 1996, selling, general and administrative expenses totaled $744,604 compared to $3,044,807 for the six months ended October 31, 1995. The net loss for the three months ended October 31, 1996 was $133,024, or $.04 per share, compared to $460,130, or $.17 per share, for the three months ended October 31, 1995, reflecting losses as a result of Registrant's inability to timely meet its financial obligations and involuntary placement into Chapter 11 bankruptcy by certain of its unsecured creditors. Liquidity and Capital Resources At October 31, 1996, Registrant had current assets of $31,709 and current liabilities of $305,842, reflecting working capital of $(274,133). At October 31, 1996, Registrant was operating its business as a debtor-in- possession under the jurisdiction of the U.S. Bankruptcy Court. Unable to successfully reorganize, on August 28, 1996, Registrant sold its remaining assets to a group of investors led by its former President for $375,000 cash which was used to pay its secured creditors in full. Cash in the bank at October 31, 1996 was $31,709 as a result of Registrant's losses from operations and involuntary filing into Chapter 11 bankruptcy by certain of its unsecured creditors. On or about August 1, 1996, Registrant determined that it could no longer operate as a going concern in the auto parts business and on August 28, 1996 pursuant to an Order of the U.S.Bankruptcy Court, sold all of its assets to a group of investors led by its former President for the cash sum of $375,000. The monies were used to pay secured and administrative claims of creditors under the Chapter 11 bankruptcy proceeding, leaving a balance of $28,287.65 in cash in an escrow account for Registrant. The holders of post-petition accounts payable, in the amount of $275,861 at October 31, 1996, will be allowed the opportunity to receive payment in full or convert their debt to equity in the Reorganized Debtor (Newgold, Inc.) on the basis of one share of Common Stock for each $1.00 of debt. Total liabilities subject to settlement under the terms of the Plan of Reorganization payable to unsecured creditors are $2,611,752. The Allowed Claims of Unsecured Creditors will be paid in full with Common Stock in the Reorganized Debtor on the basis of one share of Common Stock for each $42.00 of debt. All Allowed Administrative Claims incurred during the bankruptcy proceedings will be paid in cash or in stock, at the option of the claimant/ holder, in the amount of one share of Common Stock for each $1.00 of debt. All pre-petition warrants, options and employee benefits of whatsoever nature have been canceled under the Plan of Reorganization and all outstanding Common Stock of Registrant at the time of entry of the Order Confirming the Plan of Reorganization has been reverse split on the basis of one share of the Reorganized Debtor (Newgold, Inc.) for 65 shares of Registrant. Subsequent to the date of this report, on November 21, 1996, the U.S. Bankruptcy Court approved a Plan of Reorganization for Registrant wherein Registrant acquired 100% of the outstanding shares of Common Stock of Newgold, Inc., a Nevada corporation engaged in the mining business in exchange for 12,000,000 restricted shares of Common Stock of the reorganized company. Under the terms of the Plan of Reorganization, the name of Registrant was changed to Newgold, Inc. As of November 21, 1996, Registrant, as Warehouse Auto Centers, Inc., had substantially no assets, employees or properties. PART II OTHER INFORMATION Item 1. Legal Proceedings. Registrant continues to operate as a Debtor-in-Possession under the U.S. Bankruptcy Code, pursuant to the involuntary filing of a Chapter 11 bankruptcy by certain of its creditors in June,1995. On November 21, 1995, Registrant's Plan of Reorganization was approved by the U.S. Bankruptcy Court and, pursuant thereto, Registrant merged with Newgold, Inc., a Nevada corporation engaged in the mining business. The reorganized company is in the process ofimplementing the requirements and terms of said Plan of Reorganization, including filing current reports and financial information for Registrant. Any and all pending litigation and/or claims against Registrant were resolved in the Chapter 11 Plan. Item 5. Other Information As of November 21, 1996, Registrant, as Warehouse Auto Centers, Inc., had sub- stantially no assets, no employees or properties and any and all liabilities and/or pending litigation was resolved in the Order approving the Chapter 11 Plan of Reorganization, merging Newgold, Inc. into Warehouse Auto Centers, Inc. SEC Reporting Requirements Registrant has not been current in its reporting with the Securities and Exchange Commission; however, the Reorganized Debtor, Newgold, Inc., has agreed to compensate the accounting firm of Ciaccia & Catarisano, LLP to bring Registrant's books and records current and to complete the 10-KSB for the year ending January 31, 1996, as well as the requisite 10-QSB's and federal, state and local tax returns for 1996, which are due or will be due up to and includ- ing the date hereof. Additionally, Newgold has commissioned its independent accountants, Burnett Umphress & Kilgur, to audit and certify its books and records. It is anticipated that by the due date for the Form 10-KSB for the period ended December 31, 1996, the Reorganized Debtor's books and records (i.e. for both Warehouse Auto Centers, Inc. and Newgold, Inc.) will be completed and certified so as to facilitate the accounting merger of the two entities for SEC and NASDAQ purposes. Item 6. Exhibits and Reports on Form 8-K a. Exhibit 27. Financial Data Schedule And parts of Exhibits previously filed as (a) Exhibits with Registrant's Registration Statement on Form SB-2 (File No. 33-49920), and Amendments thereto, declared effective on October 15, 1993, and (b) as Exhibits to Registrant's Form 10-KSB for the period ended January 31, 1996, filed January 23, 1997. b. No reports have been filed on Form 8-K during this reporting period. 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. WAREHOUSE AUTO CENTERS, INC. (now NEWGOLD, INC.) January 23, 1997 By: /s/ Arthur Scott Dockter, President January 23, 1997 By: /s/ Robert W. Morris, Chief Financial Officer EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-QSB
5 3-MOS JAN-31-1996 OCT-31-1996 31,709 0 0 0 0 31,709 0 0 31,709 305,842 0 0 0 16,496 7,206,113 31,709 67,993 67,993 (47,532) (47,532) (142,285) (1,200) (4,000) (133,024) 0 0 0 0 0 (133,024) (.04) (.04)
-----END PRIVACY-ENHANCED MESSAGE-----