U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                      For the Year Ended December 31, 2001
                          Commission File No. 000-31267

                             IWT TESORO CORPORATION
                             ----------------------
                 (Name of Small Business Issuer in Its Charter)

<TABLE>
<S>                                                                 <C>
                          NEVADA                                                 91-2048019
(State of Other Jurisdiction of Incorporation or Organization)     (I.R.S. Employer Identification Number)
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                     5 Wicks Lane, Wilton, Connecticut 06897
                     ---------------------------------------
              (Address f Principal Executive Offices and Zip Code)

                                 (203) 858-9951
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: None
                                                               ----

                                                           Name of Each Exchange
Title of Each Class                                        on Which Registered
NONE                                                       NONE
----                                                       ----

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value
                         ------------------------------
                                (Title of Class)

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports, and (2) has
been subject to such filing requirements for the past 90 days.
                                                               Yes [ ] No [X]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $-0-

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a date specified within the past 60
days: Not applicable.
                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 10.8 million shares of Common Stock,
$.001 par value, as of October 1, 2002.

Transitional Small Business Disclosure Format (check one)    Yes [ ] No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

IWT Tesoro ("Tesoro") is a Nevada corporation formed on May 3rd, 2000. As of
September 27, 2002, its principal place of business is located at 5 Wicks Lane,
Wilton, CT 06897, telephone number (203) 858-9951. Tesoro was originally
incorporated under the name "Ponca Acquisition Corporation" but changed its name
on September 23, 2002 to IWT Tesoro Corporation. At that time, Tesoro also
undertook a three for one forward stock split and authorized 25.0 million shares
of preferred stock, none of which are currently outstanding.

BACKGROUND

Tesoro was organized to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. Tesoro has been in the
developmental stage since inception and has no operations to date other than
issuing shares to its original shareholder.

Since its inception, Tesoro has attempted to locate and negotiate with a
business entity for the combination of that target company with Tesoro. The
combination will normally take the form of a merger, stock-for-stock exchange,
or stock-for assets exchange. In most instances the target company will wish to
structure the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended. These proposed business activities described Tesoro as a
"blank check" company. A "blank check" company is a development stage company
that has no specific business plan or purpose or has indicated that its business
plan is to engage in a merger or acquisition with an unidentified company or
companies. The Securities and Exchange Commission and certain states have
enacted statutes, rules and regulations limiting the sale of securities of blank
check companies.

In addition to being organized as a blank check company, Tesoro provides a
method for a foreign or domestic private company to become a reporting
("public") company with a class of common stock.

ASPECTS OF A REPORTING COMPANY

There are certain perceived benefits to being a reporting company like Tesoro.
These are commonly thought to include the following:

o    Increasing visibility in the financial community;
o    Providing information required under Rule 144 for trading of eligible
     securities; Complying with a requirement for admission to quote its
     securities on the OTC Bulletin Board maintained by Nasdaq or on the Nasdaq
     SmallCap Market;
o    Facilitating borrowing from financial institutions;
o    Improving trading efficiency;
o    Providing shareholder liquidity;
o    Raising capital with greater ease;
o    Compensation of key employees through stock options for which there may be
     a market valuation; C Enhancing Tesoro's corporate image.

There are also certain perceived disadvantages to being a reporting company.
These are commonly thought to include the following:

o    Requiring audited financial statements;
o    Publishing and fully disclosing corporate information;
o    Filing periodic and episodic reports with the Securities and Exchange
     Commission;
o    Complying with increased rules and regulations governing management,
o    Undertaking corporate activities and shareholder relations.

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COMPARISON WITH INITIAL PUBLIC OFFERING

Certain private companies may find a business combination more attractive than
an initial public offering of their securities. Reasons for this may include the
following:

o    Being unable to obtain an underwriter;
o    Increasing costs, fees and expenses;
o    Possible delays in the public offering process;
o    Greater dilution of Tesoro's outstanding securities.

Certain private companies may find a business combination less attractive than
an initial public offering of their securities. Reasons for this may include the
following:

o    No investment capital raised through a business combination;
o    No underwriter support of after-market trading.

SUBSEQUENT EVENTS

MEMORANDUM OF UNDERSTANDING WITH THE SHAREHOLDERS OF INTERNATIONAL WHOLESALE
TILE, INC.

On January 5, 2002, Tesoro entered into a Memorandum of Understanding with the
three shareholders of International Wholesale Tile, Inc. ("IWT") to acquire 100%
of the outstanding stock of IWT. In exchange for the IWT shares, the three
shareholders will receive an aggregate of 83% of the outstanding common stock of
Tesoro as of the date of closing. As a condition to closing, Tesoro has entered
into a letter of intent to secure a private equity line of credit facility in
the principal amount of up to $30.0 million. The closing of the transaction is
also subject to the approval of IWT's lender, Congress Financial Corporation
(Florida). The transaction closed effective October 1, 2002.

INTERNATIONAL WHOLESALE TILE, INC.

IWT is a ceramic tile and marble wholesaler that supplies over 2,000 retail
customers. IWT is a Florida corporation organized in May 1994 and currently
operates from an 80,000 square foot facility in Palm City, Florida. IWT's
customer base consists of retail flooring dealers, lumberyards, home centers,
regional distributors, and national buying groups. IWT currently has 65
employees with 15 salespeople currently servicing customers in the southeastern
United States by cut orders and pallets. Customers outside this distribution
area are serviced by purchasing full pallets and truckloads.

IWT believes that it purchases the best material available direct from
manufacturers throughout the world and markets its goods to customers by
providing custom sample displays produced in IWT's shop. In May 2001 IWT
introduced its proprietary brand Tesorotm that is a collection of porcelain
tiles and decorative inserts, borders, and accents that will be marketed
throughout the United States.

IWT believes that it has built its reputation by supplying quality products with
outstanding customer service at competitive prices. IWT also stays up to date
with the newest styles and trends. It also strives to introduce high quality new
products to the marketplace as soon as practicable. IWT also believes that it
has built confidence and loyalty among their customers by distributing its
products only on a wholesale level and not selling direct to the retail
consumer.

IWT will be moving to their new 146,000 square foot facility the first quarter
of 2003, which will enable them to stock more product for future growth. IWT
also hopes to increase their business with the home centers and with regional
stocking distributors by expanding the Tesorotm line of products and by building
the Tesorotm brand awareness. Through Tesoro, IWT also intends to further grow
by acquisitions or mergers with existing regional distributors, as well as by
opening other distribution points in new targeted markets that will be serviced
from their current location by increasing their sales force in those states.

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TESORO'S EMPLOYEES.

As of September 1, 2002, Tesoro had one employee, Henry J. Boucher, Jr., who
serves as its President, Chief Executive Officer and Chief Financial Officer.

RISK FACTORS

Tesoro's business is subject to numerous risk factors, including the following:

TESORO HAS NO OPERATING HISTORY NOR REVENUE AND MINIMAL ASSETS AND OPERATES AT A
LOSS. Tesoro has had no operating history nor any revenues or earnings from
operations. Tesoro has no significant assets or financial resources. Tesoro has
operated at a loss to date and will, in all likelihood, continue to sustain
operating expenses without corresponding revenues, at least until the
consummation of a business combination. See PART F/S "FINANCIAL STATEMENTS".

THE COMPANY HAS ONLY ONE DIRECTOR AND ONE OFFICER THROUGH DECEMBER 29, 2001.
Through December 29, 2001, Peter Goss served as the sole officer, director and
the controlling shareholder of Tesoro's then sole shareholder. Because
management has consisted of only one person, Tesoro does not benefit from
multiple judgments that a greater number of directors or officers would provide
and Tesoro will rely completely on the judgment of its sole officer and director
when selecting a target company. Through December 2001, Mr. Goss devoted only a
limited amount of time per month to the business of Tesoro.

THE PROPOSED OPERATIONS OF TESORO ARE SPECULATIVE. The success of Tesoro's
proposed plan of operation will depend to a great extent on the operations,
financial condition and management of the identified target company. While
business combinations with entities having established operating histories are
preferred, there can be no assurance that Tesoro will be successful in locating
candidates meeting such criteria. The decision to enter into a business
combination will likely be made without detailed feasibility studies,
independent analysis, market surveys or similar information which, if Tesoro had
more funds available to it, would be desirable. In the event Tesoro completes a
business combination the success of Tesoro's operations will be dependent upon
management of the target company and numerous other factors beyond Tesoro's
control. There is no assurance that Tesoro can identify a target company and
consummate a business combination.

PURCHASE OF PENNY STOCKS CAN BE RISKY. In the event that a public market
develops for Tesoro's securities following a business combination, such
securities may be classified as a penny stock depending upon their market price
and the manner in which they are traded. The Securities and Exchange Commission
has adopted Rule 15g-9 which establishes the definition of "penny stock", for
purposes relevant to Tesoro, as any equity security that has a market price of
less than $5.00 per share or with an exercise price of less than $5.00 per share
whose securities are admitted to quotation but do not trade on the Nasdaq
SmallCap Market or on a national securities exchange. For any transaction
involving a penny stock, unless exempt, the rules require delivery by the broker
of a document to investors stating the risks of investment in penny stocks, the
possible lack of liquidity, commissions to be paid, current quotation and
investors' rights and remedies, a special suitability inquiry, regular reporting
to the investor and other requirements. Prices for penny stocks are often not
available and investors are often unable to sell such stock. Thus an investor
may lose his investment in a penny stock and consequently should be cautious of
any purchase of penny stocks.

LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. Tesoro has neither conducted,
nor have others made available to it, market research indicating that demand
exists for the transactions contemplated by Tesoro. Even in the event demand
exists for a transaction of the type contemplated by Tesoro, there is no
assurance Tesoro will be successful in completing any such business combination.

PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving the
issuance of Tesoro's common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in Tesoro. As
a condition of the business combination agreement, Mr. Peter Goss, the sole
shareholder of Tesoro, may agree to sell or transfer all or a portion of his
company's common stock so to provide the target company with all or majority
control. The resulting change in control of Tesoro will likely result in removal
of the present officer and director of Tesoro and a corresponding reduction in
or elimination of his participation in the future affairs of Tesoro.

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POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS COMBINATION. A business
combination normally will involve the issuance of a significant number of
additional shares. Depending upon the value of the assets acquired in such
business combination, the per share value of Tesoro's common stock may increase
or decrease, perhaps significantly.

TAXATION. Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination Tesoro may undertake. Currently, such
transactions may be structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions. Tesoro intends
to structure any business combination so as to minimize the federal and state
tax consequences to both Tesoro and the target company; however, there can be no
assurance that such business combination will meet the statutory requirements of
a tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes, which may have
an adverse effect on both parties to the transaction.

ITEM 2. DESCRIPTION OF PROPERTY

Tesoro has no properties and at this time has no agreements to acquire any
properties. Tesoro currently uses the office of Henry J. Boucher, Jr. at no cost
to Tesoro.

ITEM 3. LEGAL PROCEEDINGS

Tesoro is not a party to any legal proceedings.

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

On December 27, 2001, the sole shareholder of Tesoro, upon recommendation of its
sole Director, voted to approve the Tesoro 2001 Stock Incentive Plan and on
December 29, 2001, voted to elect Henry J. Boucher as a Tesoro Director and as
its President.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(A) Market Price. There is no trading market for Tesoro's Common Stock at
present and there has been no trading market to date. There is no assurance that
a trading market will ever develop or, if such a market does develop, that it
will continue. Through a market maker, Tesoro will be filing an application to
traded its common stock on the Over The Counter (OTC) Bulletin Board.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock", for purposes relevant to Tesoro, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:

(i) that a broker or dealer approve a person's account for transactions in penny
stocks and

(ii) the broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to be
purchased.

In order to approve a person's account for transactions in penny stocks, they
must

(i) obtain financial information and investment experience and objectives of the
person; and

(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks.

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The broker or dealer must also deliver, prior to any transaction in a penny
stock a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form,

(i) sets forth the basis on which the broker or dealer made the suitability
determination and

(ii) that the broker or dealer received a signed, written agreement from the
investor prior to the transaction. Disclosure also has to be made about the
risks of investing in penny stocks in both public offerings and in secondary
trading, and about commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny stock
transactions.

Finally, monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stocks.

(B) HOLDERS. Through December 31, 2001, there was one holder of Tesoro's Common
Stock. The issued and outstanding shares of Tesoro's Common Stock were issued in
accordance with the exemptions from registration afforded by Section 4(2) of the
Securities Act of 1933 and Rule 506 promulgated thereunder. Subsequent to
December 31, 2001 and through August 31, 2002, there were five shareholders of
record.

(C) DIVIDENDS. Dividends, if any, will be contingent upon Tesoro's revenues and
earnings, if any, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of Tesoro's Board of Directors.
Tesoro presently intends to retain all earnings, if any, for use in its business
operations and accordingly, the Board of Directors does not anticipate declaring
any dividends prior to a business combination.

TRADING OF SECURITIES IN SECONDARY MARKET.

The National Securities Market Improvement Act of 1996 limited the authority of
states to impose restrictions upon sales of securities made pursuant to Sections
4(1) and 4(3) of the Securities Act of companies which file reports under
Sections 13 or 15(d) of the Exchange Act. Upon effectiveness of this
registration statement, Tesoro will be required to, and will, file reports under
Section 13 of the Exchange Act. As a result, sale of Tesoro's common stock in
the secondary market by the holders thereof may then be made pursuant to Section
4(1) of the Securities Act (sales other than by an issuer, underwriter or
broker) without qualification under state securities acts.

Following a business combination, a target company will normally wish to cause
Tesoro's common stock to trade in one or more United States securities markets.
The target company may elect to take the steps required for such admission to
quotation following the business combination or at some later time.

In order to qualify for listing on the Nasdaq SmallCap Market, a company must
have at least (i) net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders and (vi) an
operating history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap Market, a company
must have at least (i) net tangible assets of $2,000,000 or market
capitalization of $35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market makers; and (v) 300
shareholders.

If, after a business combination, Tesoro does not meet the qualifications for
listing on the Nasdaq SmallCap Market, Tesoro may apply for quotation of its
securities on the NASD OTC Bulletin Board. In certain cases Tesoro may elect to
have its securities initially quoted in the "pink sheets" published by the
National Quotation Bureau, Inc. To have its securities quoted on the NASD OTC
Bulletin Board a company must:

(1) be a company that reports its current financial information to the
Securities and Exchange Commission, banking regulators or insurance regulators;

(2) has at least one market maker who completes and files a Form 211 with NASD
Regulation, Inc.

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The NASD OTC Bulletin Board is a dealer-driven quotation service. Unlike the
Nasdaq Stock Market, companies cannot directly apply to be quoted on the NASD
OTC Bulletin Board, only market makers can initiate quotes, and quoted companies
do not have to meet any quantitative financial requirements. Any equity security
of a reporting company not listed on the Nasdaq Stock Market or on a national
securities exchange is eligible.

In general there is greatest liquidity for traded securities on the Nasdaq
SmallCap Market, less on the NASD OTC Bulletin Board, and least through
quotation by the National Quotation Bureau, Inc. on the "pink sheets". It is not
possible to predict where, if at all, the securities of Tesoro will be traded
following a business combination.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

PLAN OF OPERATION

SEARCH FOR TARGET COMPANY

Tesoro has entered into an agreement with Peter Goss, the sole shareholder of
Tesoro, to supervise the search for target companies as potential candidates for
a business combination. The agreement will continue until such time as Tesoro
has effected a business combination. Peter Goss has agreed to pay all expenses
of Tesoro without repayment until such time as a business combination is
effected. Mr. Goss may only locate potential target companies for Tesoro and is
not authorized to enter into any agreement with a potential target company
binding Tesoro. Tesoro's agreement with Mr. Goss is not exclusive and Mr. Goss
has entered into agreements with other companies similar to Tesoro on similar
terms. Mr. Goss may provide assistance to target companies incident to and
following a business combination, and receive payment for such assistance from
target companies.

Through December 31, 2001, Mr. Goss owned 500,000 shares of Tesoro's common
stock for which he paid $500, or $.001, par value, per share.

Mr. Goss may seek to locate a target company through solicitation. Such
solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. If Mr. Goss engages in solicitation, no estimate can
be made as to the number of persons who may be contacted or solicited. To date
Mr. Goss has not utilized solicitation and expects to rely on consultants in the
business and financial communities for referrals of potential target companies.

GENERAL BUSINESS PLAN

Tesoro's purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in a business entity which desires to seek the perceived
advantages of a corporation which has a class of securities registered under the
Exchange Act. Tesoro will not restrict its search to any specific business,
industry, or geographical location and Tesoro may participate in a business
venture of virtually any kind or nature. Management anticipates that it will be
able to participate in only one potential business venture because Tesoro has
nominal assets and limited financial resources. See PART F/S, "FINANCIAL
STATEMENTS." This lack of diversification should be considered a substantial
risk to the shareholders of Tesoro because it will not permit Tesoro to offset
potential losses from one venture against gains from another.

Tesoro may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.

Tesoro anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Management believes (but has
not conducted any research to confirm) that there are business entities seeking
the perceived benefits of a reporting corporation. Such perceived benefits may
include facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.

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Tesoro has, and will continue to have, no capital with which to provide the
owners of business entities with any cash or other assets. However, management
believes Tesoro will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a reporting company
without incurring the cost and time required to become a reporting company by
other means. Management has not conducted market research and is not aware of
statistical data to support the perceived benefits of a business combination for
the owners of a target company.

The analysis of new business opportunities will be undertaken by, or under the
supervision, of, the officer and director of Tesoro, who is not a professional
business analyst. In analyzing prospective business opportunities, management
may consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of Tesoro; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of Tesoro's virtually unlimited
discretion to search for and enter into potential business opportunities.

Tesoro is subject to all of the reporting requirements included in the Exchange
Act. Included in these requirements is the duty of Tesoro to file audited
financial statements as part of or within 60 days following the due date for
filing its Current Report on Form 8-K which is required to be filed with the
Securities and Exchange Commission within 15 days following the completion of a
business combination. Tesoro intends to acquire or merge with a company for
which audited financial statements are available or for which it believes
audited financial statements can be obtained within the required period of time.
Tesoro may reserve the right in the documents for the business combination to
void the transaction if the audited financial statements are not timely
available or if the audited financial statements provided do not confirm to the
representations made by the target company.

Tesoro will not restrict its search for any specific kind of business entities,
but may acquire a venture, which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business life.
It is impossible to predict at this time the status of any business in which
Tesoro may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which Tesoro may offer.

Following a business combination Tesoro may benefit from the services of others
in regard to accounting, legal services, underwritings and corporate public
relations. If requested by a target company, management may recommend one or
more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.

A potential target company may have an agreement with a consultant or advisor
providing that services of the consultant or advisor be continued after any
business combination. Additionally, a target company may be presented to Tesoro
only on the condition that the services of a consultant or advisor are continued
after a merger or acquisition. Such preexisting agreements of target companies
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target company.

TERMS OF A BUSINESS COMBINATION

In implementing a structure for a particular business acquisition, Tesoro may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. On the consummation of a
transaction, it is likely that the present management and shareholders of Tesoro
will no longer be in control of Tesoro. In addition, it is likely that Tesoro's
officer and director will, as part of the terms of the business combination,
resign and be replaced by one or more new officers and directors.

It is anticipated that any securities issued in any such business combination
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a


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negotiated element of its transaction, Tesoro may agree to register all or part
of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, it will be undertaken
by the surviving entity after Tesoro has entered into an agreement for a
business combination or has consummated a business combination and Tesoro is no
longer considered a blank check company. The issuance of additional securities
and their potential sale into any trading market which may develop in Tesoro's
securities may depress the market value of Tesoro's securities in the future if
such a market develops, of which there is no assurance.

While the terms of a business transaction to which Tesoro may be a party cannot
be predicted, it is expected that the parties to the business transaction will
desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.

With respect to negotiations with a target company, management expects to focus
on the percentage of Tesoro which target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, Tesoro's shareholders
will in all likelihood hold a substantially lesser percentage ownership interest
in Tesoro following any merger or acquisition. The percentage of ownership may
be subject to significant reduction in the event Tesoro acquires a target
company with substantial assets. Any merger or acquisition effected by Tesoro
can be expected to have a significant dilutive effect on the percentage of
shares held by Tesoro's shareholders at such time.

Tesoro will participate in a business combination only after the negotiation and
execution of appropriate agreements. Although the terms of such agreements
cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.

Peter Goss, individually, will pay all expenses in regard to his search for a
suitable target company. Tesoro does not anticipate expending funds itself for
locating a target company. Peter Goss, the officer and director of Tesoro, will
provide his services without charge or repayment by Tesoro after the effective
date of this registration statement. Tesoro will not borrow any funds to make
any payments to Tesoro's management, its affiliates or associates. If Peter Goss
stops or becomes unable to continue to pay Tesoro's operating expenses, Tesoro
may not be able to timely make its periodic reports required under the
Securities Exchange Act of 1934 nor to continue to search for an acquisition
target. In such event, Tesoro would seek alternative sources of funds or
services, primarily through the issuance of its securities.

The Board of Directors has passed a resolution which contains a policy that
Tesoro will not seek a business combination with any entity in which Tesoro's
officer, director, shareholders or any affiliate or associate serves as an
officer or director of holds any ownership interest.

UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES

As part of a business combination agreement, Tesoro intends to obtain certain
representations and warranties from a target company as to its conduct following
the business combination. Such representations and warranties may include (i)
the agreement of the target company to make all necessary filings and to take
all other steps necessary to remain a reporting company under the Exchange Act
(ii) imposing certain restrictions on the timing and amount of the issuance of
additional free-trading stock, including stock registered on Form S-8 or issued
pursuant to Regulation S and (iii) giving assurances of ongoing compliance with
the Securities Act, the Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws, rules and
regulations.

A prospective target company should be aware that the market price and trading
volume of Tesoro's securities, when and if listed for secondary trading, may
depend in great measure upon the willingness and efforts of successor management
to encourage interest in Tesoro within the United States financial community.
Tesoro does not have the market support of an underwriter that would normally
follow a public offering of its securities. Initial market makers are likely to
simply post bid and asked prices and are unlikely to take positions in Tesoro's
securities for their own account or customers without active encouragement and a
basis for doing so. In addition, certain market makers may take short positions
in Tesoro's securities, which may result in a significant pressure on their
market price. Tesoro may consider the ability and commitment of a target company
to actively encourage interest in Tesoro's securities following a business
combination in deciding whether to enter into a transaction with such company.


                                       8
<PAGE>

A business combination with Tesoro separates the process of becoming a public
company from the raising of investment capital. As a result, a business
combination with the Company normally will not be a beneficial transaction for a
target company whose primary reason for becoming a public company is the
immediate infusion of capital. Tesoro may require assurances from the target
company that it has or that it has a reasonable belief that it will have
sufficient sources of capital to continue operations following the business
combination. However, it is possible that a target company may give such
assurances in error, or that the basis for such belief may change as a result of
circumstances beyond the control of the target company.

Prior to completion of a business combination, Tesoro may require that it be
provided with written materials regarding the target company containing such
items as a description of products, services and company history; management
resumes; financial information; available projections, with related assumptions
upon which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, or service marks, or rights thereto;
present and proposed forms of compensation to management; a description of
transactions between such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks and
competitive conditions; a financial plan of operation and estimated capital
requirements; audited financial statements, or if they are not available,
unaudited financial statements, together with reasonable assurances that audited
financial statements would be able to be produced within a reasonable period of
time not to exceed 75 days following completion of a business combination; and
other information deemed relevant.

SUBSEQUENT EVENTS

Issuing New Shares of Tesoro Common Stock

Subsequent to the fiscal year ended December 31, 2001, Mr. Goss sold all of his
shares to five accredited investors. On December 29, 2001, Mr. Goss resigned as
the sole officer of Tesoro, but remained as a director until he resigned on
April 20, 2002. On May 5, 2002, the Company sold 100,000 shares of its common
stock to Mentus Consulting, LLC, an affiliate, for $20,000 ($.20 per share).

Memorandum of Understanding
---------------------------

On January 5, 2002, the Company entered into a Memorandum of Understanding with
International Wholesale Tile, Inc. The Company will acquire 100% of the
outstanding stock of the International Wholesale Tile, Inc. in exchange for 83%
of the outstanding common stock of IWT Tesoro Corporation. The closing of the
transaction is subject to the approval of the lending financial institution of
International Wholesale Tile, Inc. For accounting purposes, IWT Tesoro
Corporation expects to account for the acquisition as a capital transaction and
as a recapitalization of International Wholesale Tile, Inc. This transaction
closed October 1, 2002.

Amendment to Articles of Incorporation
--------------------------------------

On September 23, 2002, the board of directors and stockholders of the Company
adopted a resolution providing for an amendment to the articles of incorporation
as follows:

     1)   The name of the corporation was changed from Ponca Acquisition
          Corporation to IWT Tesoro Corporation.

     2)   Effective September 23, 2002, each share of issued and outstanding
          common stock of the Company was automatically reclassified into three
          shares of common stock. The Stock Incentive Plan of the Company was
          not affected by this forward stock split.

                                       9
<PAGE>

     3)   The amount of the total authorized capital stock of the Company is
          100,000,000 shares designated as common stock, and 25,000,000 shares
          designated as preferred stock. The par value of the common and
          preferred stock is $.001. The total authorized stock of the Company
          was not affected by this forward stock split nor was the number of
          shares reserved upon the Company's Stock Incentive Plan.

ITEM 7.   FINANCIAL STATEMENTS

The financial statements and supplemental data required by this Item 7 follow
the index of financial statements appearing at Item 13 of this Form 10-KSB.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On September 13, 2002, Ponca Acquisition Corporation, now known as IWT Tesoro
Corporation (the "Company") notified the accounting firm of Magee, Rausch &
Shelton, LLP, of Tulsa, OK ("MRS") that MRS had been replaced as the Company's
principal accountant. MRS reported on and audited the financial statements
prepared by the Company for the period since inception (May 3, 2000) and ending
July 15, 2000.

On August 23, 2002, the Company engaged the accounting firm of Sewell and
Company of Hollywood, Florida, as its principal accountant to audit the
financial statements prepared by the Company for the current fiscal year and for
its past filings. The decision to change accountants was recommended by the
Company's Board of Directors and was based on its belief that the Company's
operations would be more accessible and economically undertaken by a Florida SEC
qualified accounting firm since its soon to be wholly-owned subsidiary,
International Wholesale Tile, Inc. ("IWT") is a Florida corporation located in
Palm City, Florida.

None of MRS' reports on the financial statements for either the past two years
contained an adverse opinion or a disclaimer of opinion, nor were qualified or
modified as to uncertainty, audit scope, or accounting principles. Additionally,
during the Company's two most recent fiscal years and any subsequent interim
period preceding MRS' dismissal, there were no disagreements with the Company's
former accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures.

                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a).

The members of the Tesoro's Board of Directors serve until the next annual
meeting of the shareholders, or until their successors have been elected. The
officers serve at the pleasure of the Tesoro's Board of Directors. There are no
agreements for any officer or director to resign at the request of any other
person, and none of the officers or directors name below are acting on behalf
of, or at the direction of, any other person, as of October 1, 2002.

Name                   Age     Position
----                   ---     --------
Henry Boucher, Jr.     55      President, Chief Executive Officer,
                               Interim   Chief Financial Officer, Director
James R. Edwards       50      Director, Secretary
Paul F. Boucher        44      Director, President, International Wholesale Tile
Forrest Jordan         55      Director, Vice President, Secretary and
                               Treasurer, International Wholesale Tile
Grey Perna             46      Director, Vice President, International
                               Wholesale Tile
Peter Goss             66      Former Officer and Former Director


                                       10
<PAGE>

HENRY J. BOUCHER, JR., PRESIDENT, CHIEF EXECUTIVE OFFICER AND INTERIM CHIEF
FINANCIAL OFFICER, AND DIRECTOR: Mr. Boucher has served as President as a
Director of the Company since December 29, 2001 and as its Chief Financial
Officer and Interim Chief Financial Officer since September 2002. Mr. Boucher is
also a member of the Board of Directors of Hand Brand Distribution, Inc. and the
President and a Director of Borough Corporation. He received his M.S. in
economics from South Dakota State University in 1972. From 1992 to June 1999, he
was a Vice President of Mercer Management Consulting, a subsidiary of Marsh
McLennan, an insurance brokerage firm. Prior to joining Mercer, Mr. Boucher was
a partner with the accounting firm of Coopers and Lybrand (now PriceWaterhouse
Coopers). From June 1999 to July 2000, Mr. Boucher was a partner with Arthur
Andersen. He joined Business Edge Solutions, where he was a Vice President until
December 2000. From January 2001, Mr. Boucher has been a principal of Mentus
Consulting LLC.

JAMES R. EDWARDS, DIRECTOR: Mr. Edwards has served as a Director of the Company
since April 20, 2002. He has been the Vice President, General Counsel and
Secretary of Wireless Knowledge, Inc., a telecommunications company since March
2002. From April 2000 to March 2002, he served as the Vice President, General
Counsel and Secretary and Vice President of Finance & Administrative for
Vapotronics, Inc., a medical device company. From March 1987 to April 2000, he
was the Vice President, General Counsel and Secretary of General Atomics, a
medical device company.

PAUL F. BOUCHER, DIRECTOR, PRESIDENT, INTERNATIONAL WHOLESALE TILES, INC. Mr.
Boucher has served as a Director of the Company since October 1, 2002. Mr.
Boucher has been the President of IWT since April 1994 and in particular,
focuses on IWT's operations. He is the brother of Henry J. Boucher, Jr., the
Company's Chief Executive Officer, President and Interim Chief Financial
Officer.

FORREST JORDAN, DIRECTOR, VICE PRESIDENT, TREASURER AND SECRETARY, INTERNATIONAL
WHOLESALE TILE, INC. Mr. Jordan has served as a Director of the Company since
October 1, 2002. Mr. Jordan is a Vice President, Secretary and Treasurer of IWT
since April of 1994. He also serves as IWT's sales manager.

GREY PERNA, DIRECTOR, VICE PRESIDENT, INTERNATIONAL WHOLESALE TILE, INC. Mr.
Perna has served as a Director of the Company since October 1, 2002. He is also
a Vice President of IWT since January of 1997. He also serves as IWT's marketing
manager

PETER GOSS, FORMER SOLE OFFICER AND DIRECTOR. Mr. Goss resigned as the sole
Officer of the Company on December 29, 2001 and as a Director on April 20, 2002.
He graduated in 1959 from Temple University with a B.S. Degree in Business
Administration. In 1967, Mr. Goss received his M.B.A. in Industrial Relations
from Temple University through the Graduate School. Over the course of his
career, Mr. Goss has worked for the U.S. Government as a Management Analyst from
1961 to 1967, and for the Radio Corporation of America as a Senior System
Analyst from 1967 to 1969. Currently, Mr. Goss serves as President of Village
Mortgage Corporation and as Trustee of his land development and property
management for his family. Village Mortgage Corporation is involved with the
placement of residential and commercial loans, development of .com companies,
acquisition of venture capital, and land development and home building. Mr. Goss
has served as President for Village Mortgage Corporation since 1987.

It is the Board's intent to increase the size of the Board of Directors with
additional independent Directors in the near future.

Each Director is elected at the Company's Annual Meeting of Shareholders and
holds office until the next Annual Meeting of Shareholders, or until the
successors are elected and qualified. At present, the Company's bylaws provide
for not less than one or more than nine Directors. Currently, we have six
Directors. The bylaws permit the Board of Directors to fill any vacancy and such
director may serve until the next Annual Meeting of Shareholders or until his
successor is elected and qualified. Officers are elected by the Board of
Directors and their terms of office are, except to the extent governed by
employment contracts, at the discretion of the Board. Mr. Henry Boucher, Jr. and
Mr. Paul Boucher are brothers. The officers of the Company devote full time to
the business of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
Executive Officers, Directors and 10% Shareholders to file reports regarding



                                       11
<PAGE>

initial ownership and changes in ownership with the SEC. Executive Officers,
Directors, and 10% shareholders are required by SEC regulations to furnish us
with copies of all Section 16(a) forms they file. Our information regarding
compliance with Section 16 is based solely on a review of the copies of such
reports furnished to us by our Executive Officers, Directors and 10%
shareholders. These forms include (i) Form 3, which is the Initial Statement of
Beneficial Ownership of Securities, (ii) Form 4, which is a Statement of Changes
in Beneficial Ownership, and (iii) Form 5, which is an Annual Statement of
Changes in Beneficial Ownership.

Based on information provided to the Company, through December 31, 2001, all
required filings have been made.

ITEM 10.  EXECUTIVE COMPENSATION

Through December 29, 2001, Tesoro's then sole officer, Peter Goss, did not
receive any compensation for his services rendered to Tesoro, has not received
such compensation in the past, and is not accruing any compensation pursuant to
any agreement with Tesoro. Effective December 29, 2001, the Company entered into
an employment agreement with Henry J. Boucher, Jr. to serve as its President. In
consideration for his services, Mr. Boucher will receive a monthly salary of
$10,000. Mr. Boucher's employment may be terminated for cause at anytime and
within 30 days without cause. He is subject to non-disclosure and non-compete
provisions. No salary has been paid. Mr. Boucher signed a Salary Deferral
Agreement with the Company stating that no salary will be paid until the Company
has raised $500,000 in new equity.

ADOPTION OF THE 2001 TESORO STOCK INCENTIVE PLAN.

On December 27, 2001, our then sole Director recommended approving the 2001
Tesoro Stock Incentive Plan (the "Plan") to our then sole stockholder, who, on
December 27, 2001, approved the Plan. Below is a summary of the Plan:

We believe that the Plan satisfies our objective of enhancing our profitability
and value for the benefit of our stockholders by enabling us to offer our
eligible employees, consultants and our affiliates stock-based incentives in us.
We believe that this will help to create a means to raise the level of stock
ownership by these individuals in order to attract, retain and reward such
individuals and strengthen the mutuality of interests between such individuals
and our stockholders.

Under the Plan, we may grant "non-qualified" and incentive stock options to
purchase, and restricted stock (collectively, the "Awards"). The aggregate
maximum number of shares for which Awards may be issued under the Plan will be
4.0 million shares of common stock. The Plan does provide for equitable
adjustment of the number of shares subject to the Plan and the number of shares
of each subsequent award of stock and of the unexercised portion of the stock
option award described below in the event of a change in our capitalization due
to a stock split, stock dividend recapitalization, merger or similar event.
Other than with regard to incentive stock options, the number of shares that may
be delivered under the Plan will be determined after giving effect to the use by
a participant of the right, if granted, to cause the Company to withhold from
the shares of common stock otherwise deliverable to him or her upon the exercise
of an Award for shares of Common Stock in payment of all or a portion of his or
her withholding obligation arising from such exercise.

The authority to control and manage the operation and administration of the Plan
is vested in a committee appointed by the Board of Directors from time to time.
The Plan is administered by a committee or subcommittee of the Board of
Directors (the "Committee") which consists of two or more directors, each of
whom is intended to be, to the extent required by Rule 16b-3 promulgated under
the Exchange Act ("Rule 16b-3"), a "non-employee director" as defined in Rule
16b-3 and, to the extent required by section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), an "outside director" as defined under section
162(m) of the Code. Currently, the Compensation Committee appointed by our Board
of Directors serves as the Committee. With regard to grants of non-qualified
stock options to non-employee directors, the Board of Directors serves as the
Committee.

The Committee has discretion

o    To determine the types, terms and conditions of all Awards, including
     exercise price or purchase price (if any), performance goals, and other
     earn-out and/or vesting contingencies and acceleration provisions,

o    To adopt, alter or repeal administrative rules, guidelines and practices
     (including special guidelines for non-U.S. employees),

                                       12
<PAGE>

o    To delegate administrative responsibilities,

o    To construe and interpret the terms of the Plan and any agreements
     evidencing Awards granted.

The Committee, in its sole discretion, may grant stock options and restricted
stock to our employees and consultants, our subsidiary corporations or parent
corporations. Participants will be selected on the basis of demonstrated ability
to contribute substantially to us. Our Board has authority to grant stock
options to non-employee directors according to the Plan. All awards are subject
to the terms of a written agreement between the participant and us.

The awards granted under the Plan may be either incentive stock options or
non-qualified stock options or restricted stock awards. The maximum number of
shares of Common Stock subject to any award of stock options or shares of
Restricted Stock is 100,000.

The vesting schedule for any option granted under the Plan, will be determined
by the Board of Directors or the Committee and will be set forth in a specific
option agreement. To the extent not exercised, installments will accumulate and
be exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the option expires. The Committee has the right to
accelerate the exercisability of any option.

Incentive Stock Options

Stock options qualify as "incentive stock options" ("ISOs") if they meet the
requirements of Section 422 of the Internal Revenue Code. Incentive stock
options ("ISOs") may only be granted to our employees and our affiliates and any
person holding our capital stock or any affiliate possessing more than 10% of
the total combined voting power of all classes of our capital stock or any
affiliate will not be eligible to receive ISOs unless the exercise price per
share is at least 110% of the fair market value of the stock on the date the
option is granted. Each ISO granted pursuant to the Plan is exercisable, during
the optionee's lifetime, only by the optionee or the optionee's guardian or
legal representative.

Non-Qualified Stock Options

Non-qualified stock options may be granted to employees or to directors who are
neither officers nor employees of us, to consultants and to other persons who
provide services to our affiliates and us. Stock options are non-qualified stock
options if they do not meet the requirements for ISOs.

Restricted Stock

The Committee may grant shares of restricted stock, which is an award of shares
of common stock that is subject to the attainment of pre-established performance
goals and other conditions, restrictions and contingencies as the Committee
determines. Awards of restricted stock may be granted solely to participants who
are our employees or consultants, or any of its subsidiaries or parent
corporations. Unless otherwise determined by the Committee at the time of the
grant, each award of restricted Stock will provide that if the participant
engages in detrimental activities (as defined in the Plan) prior to, or during
the one year period after, any vesting of restricted Stock, the Committee may
direct (at any times within two years thereafter) that all unvested Restricted
Stock be immediately forfeited to us and that the participant will pay us an
amount equal to the fair market value at the time of vesting of any restricted
stock that has vested in the period referred to above. (This does not apply upon
a Change of Control). The Committee will fix the purchase price of the
Restricted Stock.

Awards of restricted stock must be accepted within 90 days (or such shorter
period as the Committee may specify at grant) after the Award date by executing
a Restricted Stock Award agreement and paying whatever price (if any) the
Committee designates. Additionally, recipients of restricted stock are required
to enter into a restricted stock agreement, which states the restrictions to
which the shares are subject and the criteria or date or dates on which such
restrictions will lapse. Within these limits, based on service, attainment of
objective performance goals, and such other factors as the Committee may


                                       13
<PAGE>

determine in its sole discretion, the Committee may provide for the lapse of
such restrictions or may accelerate or waive such restrictions at any time. A
participant who receives an Award of restricted stock shall not have any rights
with respect to such award of restricted stock, unless and until such
participant has delivered a fully executed copy of a restricted stock award
agreement and has otherwise complied with the applicable terms and conditions of
such Award.

Awards of restricted stock may be intended to satisfy Section 162(m) of the
Code. Under the Plan, an Award of restricted stock may be conditioned upon or
subject to the attainment of performance goals. These performance goals will be
based on one or more of the objective criteria with regard to us (or any
subsidiary corporation, parent corporation, division, or other operational unit
of ours) as described in the Plan.

All options will lapse on the expiration of the option terms specified by the
Committee in a certificate evidencing such option, but in no event will
non-qualified or incentive stock options be exercisable after the expiration of
10 years from the date such option is granted (five years for participants who
own more than 10% of the total combined voting power of all classes of the stock
of ours, our corporations or our parent corporations).

The exercise price per share of Common Stock subject to an Incentive Stock
Option or a Stock Option intended to be "performance-based" for purposes of
Section 162(m) of the Code shall be determined by the Committee at the time of
grant but shall not be less than 100% of the fair market value of the shares of
Common Stock at the time of grant. However, if an Incentive Stock Option is
granted to a 10% Stockholder, the exercise price shall be no less than 110% of
the fair market value of the Common Stock. The Committee will determine the
exercise price per share of Common Stock subject to a non-qualified stock
option.

To the extent that the aggregate fair market value (determined as of the time of
grant) of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an employee during any calendar year under
this Plan and/or any other stock option plan of ours or any of our subsidiaries
or parent corporations exceeds $100,000, such options shall be treated as
non-qualified stock options. In addition, if an employee does not remain
employed by us or any of our subsidiary or parent corporations at all times from
the time an ISO is granted until three months prior to the date of exercise (or
such other period as required by applicable law), such option shall be treated
as a non-qualified stock option. Should any provision of this Plan not be
necessary in order for the Stock Options to qualify as Incentive Stock Options,
or should any additional provisions be required, the Committee may amend this
Plan accordingly, without the necessity of obtaining the approval of our
stockholders.

Payment of the purchase price is by (i) cash, (ii) check, or (iii) such other
consideration as the Plan Administrators, in their sole discretion, determine
and is consistent with the Plan's purpose and applicable law, or (iv) any
combination of the foregoing.

Upon the award of Restricted Stock, the recipient has all rights of a
stockholder with respect to the shares, including, without limitation, the right
to receive dividends, the right to vote those shares and, subject to and
conditioned upon the full vesting of the shares of restricted stock, the right
to tender those shares.

Optionees do not have stockholder rights (e.g., right to vote and receive
dividends) until they exercise their option and receive shares of Common Stock.

Each stock option expires and is no longer exercisable on the dates that the
Plan administrators determine when the options are granted. Stock options can
also be terminated under certain circumstances following a "Change of Control".

According to our Plan, a "Change of Control" occurs if

o    We are dissolved or liquidated,

o    We are reorganized, merged or consolidated with one or more corporations
     where we are not the surviving entity, or

o    We transfer substantially all of our property or more than 80% of our then
     outstanding shares to another corporation not controlled by our
     stockholders.

                                       14
<PAGE>

Upon a Change of Control, the Plan and any outstanding options will terminate
unless we provide for the Plan to be assumed and continued with our options
either assumed or replaced with substitute options covering the shares of a
successor corporation. If no provision is made for Plan continuation, we will
give all option holders advance written notice of the Change of Control, all
options will become fully exercisable and the option holders will then have 30
days to exercise their options.

If our corporate structure changes or if our shares change (i.e. if we
recapitalize, our stock splits, we consolidate, we undertake a rights offering,
or we issue a stock dividend), the Plan administrators will make appropriate
adjustments to the number or class of shares which may be distributed under the
Plan and the option price or other price of shares subject to the outstanding
awards under the Plan in order to maintain the purpose of the original grant.

The following discussion of the federal income tax consequences of the granting
and exercise of stock options under the Restated Plan, and the sale of common
stock acquired as a result thereof is based on an analysis of the Code, existing
laws, judicial decisions, and administrative rulings and regulations, all of
which are subject to change. In addition to being subject to the federal income
tax consequences described below, a participant may also be subject to state,
local, estate and gift tax consequences, none of which is described below. This
discussion is limited to the U.S. federal income tax consequences to
individuals, who are citizens or residents of the United States, other than
those individuals who are taxed on a residence basis in a foreign country.

Incentive Stock Options.
------------------------

Neither the grant nor, provided the holding periods described below are
satisfied, the exercise of an incentive stock option will result in taxable
income, to a participant or a tax deduction for us. However, for purposes of the
alternative minimum tax, the excess of the fair market value of the shares
acquired upon exercise of an incentive stock option (determined at the time the
option is exercised) and the exercise price for such shares will be considered
part of the participant's income.

If the applicable holding periods described below are satisfied, the sale of
shares of common stock purchased upon the exercise of an incentive stock option
will result in capital gain or loss to the participant and will not result in a
tax deduction to us. To receive the foregoing incentive stock option tax
treatment as to the shares acquired upon exercise of an incentive stock option,
a participant must hold such shares for at least two years following the date
the incentive stock option is granted and for one year following the date of the
exercise of the incentive stock option. In addition, a participant generally
must be an employee of ours (or a subsidiary corporation or parent corporation
of ours) at all times between the date of grant and the date three months before
exercise of the option.

If the holding period rules are not satisfied, the portion of any gain
recognized on the disposition of the shares acquired upon the exercise of an
incentive stock option that is equal to the lesser of

oThe fair market value of the shares on the date of exercise minus the exercise
price, or oThe amount realized on the disposition minus the exercise price,

Will be treated as ordinary compensation income in the taxable year of the
disposition of the shares, with any remaining gain being treated as capital
gain. If the holding periods are not satisfied, we will generally be entitled to
a tax deduction equal to the amount of such ordinary income included in the
participant's taxable income, subject to Section 162(m) of the Code.

Non-Qualified Stock Options.
----------------------------

A participant will recognize no taxable income at the time a non-qualified stock
option is granted to him or her.

A participant will recognize ordinary compensation income at the time a
non-qualified stock option is exercised, and the amount of such income will be
equal to the excess of the fair market value on the exercise date of the shares
purchased by the optionee over the exercise price for such shares. Other than
with regard to non-employee directors, this ordinary compensation income will
also constitute wages subject to income tax withholding under the Code and we
will require the participant to make suitable arrangements to ensure that the
participant remits to us an amount sufficient to satisfy all tax withholding
requirements.

                                       15
<PAGE>

We will generally be entitled to a deduction for federal income tax purposes at
such time and in the same amount as the amount includable in the participant's
ordinary income in connection with his or her exercise of a non-qualified stock
option, subject to Section 162(m) described herein.

Upon a participant's subsequent sale or other disposition of shares purchased on
exercise of a non-qualified stock option, the participant will recognize capital
gain or loss (which may be short-term or long-term depending upon the
participant's holding period) on the difference between the amount realized on
such sale or other disposition and the participant's tax basis in the shares
sold. The tax basis of the shares acquired upon the exercise of the option will
be equal to the sum of the exercise price for such shares and the amount
includable in the participant's income with respect to such exercise and
acquisition of the shares.

All Stock Options.
-----------------

The following considerations may also apply to grants of non-qualified stock
options and/or incentive stock options:

o    Any of our officers and directors subject to Section 16(b) of the Exchange
     Act may be subject to special tax rules regarding the income tax
     consequences concerning their stock options,

o    Any entitlement to a tax deduction on the part of us is subject to the
     applicable tax rules (including, without limitation, Section 162(m) of the
     Code regarding a $1,000,000 limitation on deductible compensation), and

o    In the event that the exercisability or vesting of any stock option is
     accelerated because of a change in control, payments relating to the stock
     option (or a portion thereof), either alone or together with certain other
     payments, may constitute parachute payments under Section 280G of the Code,
     which excess amounts may be subject to excise taxes.

In general, Section 162(m) of the tax code does not allow a publicly held
corporation like us, for federal income tax purposes, to deduct compensation in
excess of $1.0 million per year per person to its chief executive officer and
the four other officers whose compensation is disclosed in its proxy statement,
subject to specific exceptions. Our Plan does not currently qualify for the
exceptions and is therefore subject to the limitations of Section 162(m).

Options may not be sold, assigned, transferred, pledged or encumbered, except by
will or by the laws of descent and distribution. The optionee may only exercise
an option during his or her lifetime or his or her estate, for a period of time
after the optionee's death.

Generally, our Board of Directors or the Committee have the power to amend,
terminate or suspend all or any portion of the Plan without stockholder
approval. However, no amendment may impair an existing award or alter the rights
of a recipient of options already granted under the Plan without the recipient's
consent. Additionally, the Board of Directors may not, without further approval
of our stockholders, according to California Law, solely to the extent required
by the applicable provisions of Rule 16b-3, Section 162(m) or 422 of the Code,
or the rules of any applicable exchange:

o    Increase the aggregate number of shares of Common Stock that may be issued
     under this Plan,

o    Increase the maximum individual Participant limitations for a fiscal year,

o    Change the classification of employees, Consultants or Non-Employee
     Directors eligible to receive Awards under this Plan,

o    Decrease the minimum option price of any Stock Option,

o    Extend the maximum Stock Option period,

o    Materially alter the Performance Criteria for the Award of Restricted
     Stock, or

o    Make any other amendment that would require stockholder approval under the
     rules of any exchange or system on which our securities are listed or
     traded.

                                       16
<PAGE>

Unless terminated by the Board of Directors earlier, the Plan shall terminate on
the earlier of December 31, 2012 or ten years after the date the Plan is
effective.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the Tesoro Common Stock owned beneficially by (i) each
of our Executive Officers, (ii) each of our current Directors, (iii) all
Executive Officers and Directors as a group, and (iv) each person known by us to
be the beneficial owner of more than five percent of our Common Stock, as of
October 1, 2002. "Beneficial ownership" is a technical term broadly defined by
the Securities and Exchange Commission to mean more than ownership in the usual
sense. For example, you beneficially own Common Stock not only if you hold it
directly, but also if you indirectly (through a relationship, a position as a
director or trustee, or a contract or understanding), have (or share the power
to vote the stock, or sell it) the right to acquire it within 60 days. Except as
disclosed in the footnotes below, each of the Executive Officers and Directors
listed have sole voting and investment power over his shares. As of October 1,
2002, there were 10,800,000 shares of Common Stock issued and outstanding and
approximately 62 holders of record. As of October 1, 2002, no Preferred Stock
was issued and outstanding.
<TABLE>
<CAPTION>
NAME (1)                     CURRENT TITLE                         SHARES BENEFICIALLY OWNED      PERCENT OF CLASS
--------                     -------------                         -------------------------      ----------------
<S>                                                                           <C>                       <C>
Henry J. Boucher, Jr.        Chief Executive Officer, President,              785,500                   7.3%
                             Chief Financial Officer, Director

James R. Edwards             Director, Secretary                                 0                       0

Paul F. Boucher              Director                                        3,000,000                 27.8%

Forrest Jordan               Director                                        3,000,000                 27.8%

Grey Perna                   Director                                        3,000,000                 27.8%

All Current Officers and                                                     9,785,500                 90.6%
Directors as a Group (five
persons)
</TABLE>

(1)  Unless otherwise specifically noted, all addresses are care of the Company
     at 5 Wicks Lane, Wilton, Connecticut.

ITEMS 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Tesoro's former President, Mr. Goss, has also recently formed two other shell
companies, Osage Acquisition Corporation and Kaw Acquisition Corporation. Mr.
Goss is currently a shareholder in Tesoro and is also a shareholder in these
other two shell companies.

Osage Acquisition Corporation and Kaw Acquisition Corporation were formed on May
3rd, 2000, and will file a registration statement on Form 10-SB at the same time
Tesoro's Form 10-SB is filed. Said companies were structured substantially
identically to Tesoro. There is currently no market for the resale of the
outstanding shares of Osage Acquisition Corporation and Kaw Acquisition
Corporation.

CONFLICTS OF INTEREST

Peter Goss, a Tesoro director through April 20, 2002, has organized and expects
to organize other companies of a similar nature and with a similar purpose as
Tesoro. Consequently, there are potential inherent conflicts of interest in
acting as an officer and director of Tesoro. In addition, insofar as Mr. Goss is
engaged in other business activities, he may devote only a portion of his time
to Tesoro's affairs.

                                       17
<PAGE>

There are no binding guidelines or procedures for resolving potential conflicts
of interest. Failure by management to resolve conflicts of interest in favor of
Tesoro could result in liability of management to Tesoro.

                                    PART III


          (a)          Exhibits

3.1      Articles of Incorporation(1)
3.1.1    Articles of Amendment to Articles of Incorporation dated September 23,
         2002.(3)
3.2      Bylaws(1)
3.3      Specimen Stock Certificate(1)
10.1     Agreement with Peter Goss(1)
10.2     Shareholders Agreement(1)
10.3     2001 Ponca Acquisition Corporation Stock Incentive Plan.(2)
10.4     Employment Agreement between Ponca Acquisition Corporation and Henry
         Jr. Boucher, Jr. dated as of December 29, 2001.(2)
10.5     Memorandum of Understanding between Ponca Acquisition Corporation and
         the shareholders of International Wholesale Tile, Inc.(2)
10.6     Stock Purchase Agreement among the Shareholders of International
         Wholesale Tile, Inc., and IWT Tesoro Corporation, effective October 1,
         2002.(6)
99.1     MRS' letter to the Securities and Exchange Commission.(4)
99.2     Letter from Peter Goss regarding fiscal year end(5)
99.3     Certification by the Company's Chief Executive Officer and Chief
         Financial Officer.*

*Filed with this Form 10-KSB.

(1)      Filed as an Exhibit to the Company"s Form 10-SB, filed with the
         Securities and Exchange Commission on August 7, 2000.

(2)      Filed as an Exhibit to the Company"s Report on Form 8-K, filed with the
         Securities and Exchange Commission on September 11, 2002.

(3)      Filed as an Exhibit to the Company's Report on Form 8-K, filed with the
         Securities and Exchange Commission on October 1, 2002.

(4)      Filed as an Exhibit to the Company's Report on Form 8-K/A, filed with
         the Securities and Exchange Commission on October 8, 2002.

(5)      Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB
         for he period ended June 30, 2000.

(6)      Filed as an Exhibit to the Company's Report on Form 8-K, filed with
         the Securities and Exchange Commission on October 15, 2002.

          (b)          Reports on Form 8K

                       None.



                                       18
<PAGE>



                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the Company
caused this Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized.

IWT TESORO CORPORATION

By:  /s/ Henry J. Boucher, Jr.
     -------------------------
       Henry J. Boucher, Jr., President


Date: October 15, 2002

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Company and in the capacities and on the
dates indicated.

/s/ Henry J. Boucher, Jr.
-------------------------------
Henry J. Boucher, Jr., Principal Executive Officer


/s/ Henry J. Boucher, Jr.
-------------------------------
Henry J. Boucher, Jr., Interim Principal Financial Officer

/s/ Henry J. Boucher, Jr.
-------------------------------
Henry J. Boucher, Jr., Director

/s/ James R. Edwards, Director
-------------------------------
James Edwards, Director

/s/ Paul F. Boucher
-------------------------------
Paul F. Boucher, Director

/s/ Forrest Jordan
-------------------------------
Forrest Jordan]

/s/ Grey Perna
-------------------------------
Grey Perna



                                       19
<PAGE>


                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



                                TABLE OF CONTENTS



                                                                      Page No.
                                                                      --------

Independent Auditors' Report                                             F-2

Balance Sheets                                                           F-3

Statements of Operations                                                 F-4

Statements of Changes in Stockholder's Equity                            F-5

Statements of Cash Flows                                                 F-6

Notes to Financial Statements                                            F-7


                                      F-1

<PAGE>


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


To the Board of Directors
IWT Tesoro Corporation
F/k/a Ponca Acquisition Corporation
Wilton, CT

We have audited the accompanying balance sheets of IWT Tesoro Corporation, f/k/a
Ponca Acquisition Corporation (a development stage company) (the "Company") as
of December 31, 2001 and 2000, and the related statements of operations, changes
in stockholder's equity, and cash flows for the years then ended and for the
period from May 3, 2000 (inception) to December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IWT Tesoro Corporation f/k/a
Ponca Acquisition Corporation (a development stage company) as of December 31,
2001 and 2000, and the results of its operations, and its cash flows for the
years then ended and for the period from May 3, 2000 (inception) to December 31,
2001, in conformity with accounting principles generally accepted in the United
States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements, the Company has no operating history, no established source of
revenue or earnings from operations, as well as an accumulated deficit. This
raises substantial doubt about the Company's ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
6. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.




SEWELL AND COMPANY, PA


Hollywood, Florida
October 1, 2002


                                      F-2
<PAGE>

                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000

                                                              2001        2000
                                                              -----       -----
                                     Assets

Current assets
Cash                                                          $ 439       $ 474
                                                              -----       -----

Total current assets                                          $ 439       $ 474
                                                              =====       =====

                      Liabilities and Stockholder's Equity


Liabilities                                                   $  --       $  --

Stockholder's Equity
  Common stock $.001 par value; 100 million shares
  authorized; 500,000 issued and outstanding                    500         500
  Deficit accumulated during the development stage              (61)        (26)
                                                              -----       -----
                                                                439         474
                                                              -----       -----

                                                              $ 439       $ 474
                                                              =====       =====

                       See notes to financial statements.


                                      F-3
<PAGE>



                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
                                                                        FROM
                                                                     MAY 3, 2000
                                                                     (INCEPTION)
                                        YEARS ENDED DECEMBER 31,     TO DECEMBER
                                       2001             2000            31, 2001
                                     ---------       ---------       -----------
Income
Other income (net)                   $      --       $      --             $ --
                                     ---------       ---------             ----

Expenses
General and administrative                  35              26               61
                                     ---------       ---------             ----

Net loss                             $     (35)      $     (26)            $(61)
                                     =========       =========             ====



Earnings per share
   Net loss per common share         $  (0.000)        $(0.000)
                                     =========       =========

Weighted average of common shares
outstanding                            500,000         252,732
                                     =========       =========



                       See notes to financial statements.


                                      F-4
<PAGE>

                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                  STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
            FROM MAY 3, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2001
<TABLE>
<CAPTION>
                                                                                                    DEFICIT
                                                                                                  ACCUMULATED
                                                                                                  THROUGH THE
                                                        COMMON STOCK                 PAID IN      DEVELOPMENT
                                                    SHARES          AMOUNT           CAPITAL        STAGE          TOTAL
                                                   --------          -----          ---------      ---------       -----

<S>                                                 <C>              <C>            <C>            <C>              <C>
Initial stock issuance, on June 29, 2000            500,000          $ 500          $      --      $    --          $ 500

Net loss, December 31, 2000                              --             --                 --          (26)           (26)
                                                   --------          -----          ---------         ----          -----

Balance December 31, 2000                           500,000            500                 --          (26)           474

Net loss, December 31, 2001                              --             --                 --          (35)           (35)
                                                   --------          -----          ---------      -------          -----

Balance December 31, 2001                           500,000          $ 500                  -         $(61)         $ 439
                                                   ========          =====          =========      =======          =====
</TABLE>


                       See notes to financial statements.


                                      F-5
<PAGE>


                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                     FROM MAY 3, 2000
                                          Years Ended December 31,    (INCEPTION) TO
                                              2001        2000       DECEMBER 31, 2001
                                              -----       -----      -----------------
<S>                                           <C>         <C>              <C>
Cash flows from operating activities
  Net loss                                    $ (35)      $ (26)           $ (61)
                                              -----       -----            -----

Adjustments to reconcile net loss to net cash
  used in operating activities:

  Net cash used in operating activities         (35)        (26)             (61)
                                              -----       -----            -----

Cash flows from financing activities:

Net proceeds from issuance of common stock       --         500              500
                                              -----       -----            -----

Net cash provided by financing activities        --         500              500
                                              -----       -----            -----

Net increase (decrease) in cash                 (35)        474              439

Cash, beginning of period                       474          --               --
                                              -----       -----            -----

Cash, end of period                           $ 439       $ 474            $ 439
                                              =====       =====            =====
</TABLE>


                       See notes to financial statements.

                                      F-6
<PAGE>


                                              IWT TESORO CORPORATION
                                        F/K/A PONCA ACQUISITION CORPORATION
                                           (A DEVELOPMENT STAGE COMPANY)
                                           NOTES TO FINANCIAL STATEMENTS
                                            DECEMBER 31, 2001 AND 2000



NOTE 1            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description
--------------------
IWT Tesoro Corporation ("the Company") was formed to serve as a vehicle to
effect a merger, exchange of capital stock, asset acquisition or other business
combination with a domestic or foreign private business.

The Company was incorporated in the state of Nevada on May 3, 2000 as Ponca
Acquisition Corporation. On September 23, 2002, the Company changed the name of
Ponca Acquisition Corporation to IWT Tesoro Corporation.

At December 31, 2001, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation and
proposed fund raising. The Company is considered to be in the development stage
and the accompanying financial statements represent those of a development stage
company. Activity during the development stage included organization of the
Company, and implementation and revision of the business plan.

Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company treats all short-term
investments with maturities of three months or less at the date of purchase to
be cash equivalents.

Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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.

Stock Options
-------------
The Company elected to account for stock options issued to employees in
accordance with Accounting Principles Board Opinion No. 25 (APB Opinion No. 25)
Accounting For Stock Issued to Employees and related interpretations, which
established financial accounting and reporting for compensation cost of stock
issued to employees through non-variable plans, variable plans, and
non-compensatory plans, and accounts for stock options and warrants issued to
non-employees in accordance with SFAS 123, Accounting for Stock-Based
Compensation, which established a fair value method of accounting for stock
compensation plans with employees and others.

Accounting Pronouncements
-------------------------
In June 2001, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 141, Business Combinations (SFAS No. 141), which
establishes financial accounting and reporting for business combinations and
supercedes APB Opinion No. 16, Business Combinations, and FASB Statement No. 38
Accounting for Preacquisition Contingencies of Purchased Enterprises. All
business combinations in the scope of this statement are to be accounted for
using the Purchase Method. SFAS No. 141 is applicable for fiscal years beginning
after June 30, 2001.


                                      F-7
<PAGE>

                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 1            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Accounting Pronouncements
-------------------------
Accounting Standards No. 142 Goodwill and Other Intangible Assets (SAFS No. 142)
addresses financial accounting and reporting for acquired goodwill and other
intangible assets and supersede APB Opinion No. 17. This statement addresses how
goodwill and intangible assets other than those acquired in a business
combination should be accounted for after they have been initially recognized on
the financial statements. SFAS No. 142 is applicable for fiscal years beginning
after December 15, 2001.

Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets
supercedes Statement No. 121 Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of ("SFAS 121"). Though it retains the
basic requirements of SFAS 121 regarding when and how to measure an impairment
loss, SFAS 144 provides additional implementation guidance. SFAS 144 excludes
goodwill and intangibles not being amortized among other exclusions. SFAS 144
also supersedes the provisions of APB 30, Reporting the Results of Operations,
pertaining to discontinued operations. Separate reporting of a discontinued
operation is still required, but SFAS 144 expands the presentation to include a
component of an entity, rather than strictly a business segment as defined in
SFAS 131, Disclosures about Segments of an Enterprise and Related Information.

SFAS 144 also eliminates the current exemption to consolidation when control
over a subsidiary is likely to be temporary. This statement is effective for all
fiscal years beginning after December 15, 2001. The Company believes that the
future implementation of SFAS 144 will not have a material effect on the
Company's financial position, results of operations or liquidity.

Concentration of Risk
---------------------
There were no cash balances at December 31, 2001 and 2000 that exceed federal
insurance limits.

Basic Earnings (Loss) per Share
-------------------------------
Basic earnings (loss) per share for each year is computed by dividing income
(loss) for the year by the weighted average number of common shares outstanding
during the year. Diluted earnings (loss) per share include the effects of common
stock equivalents to the extent they are dilutive.

Basic weighted average number of shares outstanding is as follows:
                                                          2001            2000
                                                       ---------        --------
   Basic weighted average number
       of shares outstanding                            500,000          252,732

NOTE 2            STOCKHOLDER'S EQUITY

Common Stock
------------
The Company is authorized to issue 100,000,000 shares of common stock at $0.001
par value. On June 29, 2000, the Company issued 500,000 shares of common stock
for an aggregate consideration of $500.



                                      F-8
<PAGE>
                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 3            INCOME TAXES

The Company has no current or deferred income tax due to its operating losses.

The Company has a federal net operating loss carryforward at December 31, 2001
and 2000 of $61 and $26, respectively, subject to annual limitations prescribed
by the Internal Revenue Code, that are available to offset future taxable income
through 2021. A 100% valuation allowance has been recorded to offset the net
deferred taxes due to uncertainty of the Company's ability to generate future
taxable income.

Due to the small loss carryforward, there are no deferred taxes for the years
ended December 31, 2001 and 2000.

NOTE 4            STOCK OPTIONS AND COMPENSATION PLAN

Stock Compensation Plan
-----------------------
On December 27, 2001, IWT Tesoro Corporation adopted the "Stock Incentive
Plan." The Company's Stock Incentive Plan provides that eligible employees,
consultants, and affiliates may be granted shares of common stock. Under the
plan, the options granted are non-qualified stock options, incentive stock
options, and restricted stock. The aggregate total common stock that may be
granted is 4,000,000 shares. Under the plan, no shares were granted for the year
ended December 31, 2001.

NOTE 5            EMPLOYMENT AGREEMENTS

On December 29, 2001, the sole stockholder and officer resigned, and a new
officer and director was appointed. The Company entered into an employment
agreement with the new director of the corporation to serve as President at an
annual salary of $120,000, to be paid semi-annually.


NOTE 6            GOING CONCERN UNCERTAINTY

These financial statements are presented assuming the Company will continue as a
going concern. The Company has no operating history, no established source of
revenue or earnings from operations, as well as an accumulated deficit. This
raises substantial doubt about the Company's ability to continue as a going
concern. Management's plan in regard to these matters includes active pursuit of
suitable business opportunities with which to negotiate business combinations on
terms favorable to the Company.


                                      F-9
<PAGE>

                             IWT TESORO CORPORATION
                       F/K/A PONCA ACQUISITION CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 7   SUBSEQUENT EVENT

Memorandum of Understanding
---------------------------
On January 5, 2002, the Company entered into a Memorandum of Understanding with
International Wholesale Tile, Inc. The Company will acquire 100% of the
outstanding stock of the International Wholesale Tile, Inc. in exchange for 83%
of the outstanding common stock of IWT Tesoro Corporation. The closing of the
transaction is subject to the approval of the lending financial institution of
International Wholesale Tile, Inc. For accounting purposes, IWT Tesoro
Corporation expects to account for the acquisition as a capital transaction and
as a recapitalization of International Wholesale Tile, Inc. This transaction
closed October 1, 2002.

Amendment to Articles of Incorporation
--------------------------------------
On September 23, 2002, the board of directors and stockholders of the Company
adopted a resolution providing for an amendment to the articles of incorporation
as follows:

         1)       The name of the corporation was changed from Ponca Acquisition
                  Corporation to IWT Tesoro Corporation.

         2)       Effective September 23, 2002, each share of issued and
                  outstanding common stock of the Company was automatically
                  reclassified into three shares of common stock. The Stock
                  Incentive Plan of the Company was not affected by this forward
                  stock split.

         3)       The amount of the total authorized capital stock of the
                  Company is 100,000,000 shares designated as common stock, and
                  25,000,000 shares designated as preferred stock. The par value
                  of the common and preferred stock is $.001.



                                      F-10