<PAGE>

================================================================================

                United States Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     For the Fiscal Year ended June 30, 2001
                          Commission file Number 1-6537

                            ALL STAR GAS CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)

               MISSOURI                                   43-1494323
----------------------------------------          ----------------------------
    (State or other jurisdiction                         (IRS Employer
 of Incorporation or Organization)                      Identification No.)

       P.O. Box 303, 119 West Commercial Street, Lebanon, Missouri, 65536
       ------------------------------------------------------------------
              (Address of Principal Executive Offices and Zip Code)

                                 (417) 532-3103
               ---------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:

                               Title of Each Class
                       -----------------------------------
                        11% Senior Secured Notes Due 2003
                       9% Subordinated Debentures Due 2007

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part II of this Form 10-K or any
amendment to this Form 10-K. (X)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes  X  No
                                       ---   ---

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of close of business on September 28, 2001 is: $0.

Shares of Common Stock, $0.001 par value, outstanding as of close of business on
September 20, 2001: 1,586,891.

Upon request, All Star Gas Corporation will furnish a copy of an exhibit listed
but not contained herein. A fee of $.05 per page, to cover the Company's costs
in furnishing exhibits requested will be charged. Please direct all requests to:
Corporate Secretary, 119 W. Commercial Street, Lebanon, Missouri 65536;
Telephone (417) 532-3103.

                                       1
<PAGE>
                                     PART I


Items 1 and 2.  Business and Properties

Introduction

         All Star Gas Corporation ("All Star Gas" or the "Company") was founded
in 1963 and through its subsidiaries has been in operation for over 38 years.
The Company currently has operations located in Arizona, Arkansas, Colorado,
Idaho, Illinois, Missouri, North Carolina, South Carolina and Wyoming. The
Company is engaged primarily in:

(a) the retail marketing of propane to residential, agricultural, and commercial
customers,
(b) the retail marketing of propane-related appliances, supplies, and equipment,
and
(c) the providing of consumer propane storage tanks to residential and
commercial customers

Despite being plagued with five abnormally warm winters during the following
five winters, since 1994, the Company has successfully increased the average
retail service center sales to approximately 840,000 gallons from 494,000.
During the fiscal year ended June 30, 2001, All Star Gas supplied propane to
approximately 56,000 residential and commercial customers being serviced by 57
service centers which accounted for 51 million gallons of propane and just over
$57 million in sales.

         Propane, a hydrocarbon with properties similar to natural gas, is
separated from natural gas at gas processing plants and refined from crude oil
at refineries. It is stored and transported in a liquid state and vaporizes into
a clean-burning energy source that is recognized for its transportability and
ease of use relative to other forms of stand alone energy. Residential and
commercial uses include heating, cooking, water heating, refrigeration, clothes
drying, and incineration. Commercial uses also include metal cutting, drying,
container pressurization and charring, as well as use as a fuel for internal
combustion engines, such as over-the-road vehicles, forklifts, and stationary
engines. Agricultural uses include brooder heating, stock tank heating, crop
drying, tobacco curing, and weed control, as well as use as a motor fuel for
farm equipment and vehicles.

         Propane is recognized as a clean alternative transportation fuel "ATF"
by the Federal and state governments and is the most widely used ATF in the
United States. The Federal government has enacted certain mandates for use of
ATF's by government and private fleets under the Clean Air Act of 1990 and
Energy Policy Act of 1992. Federal and state governments have also provided
various economic incentives for use of ATF's which will positively impact
propane demand.

         The retail propane business is a "margin-based" business in which gross
profits depend on the excess of sales price over propane supply costs. Sales of
propane to residential and commercial customers, which account for the vast
majority of the Company's revenue, have provided a relatively stable source of
revenue for the Company. All Star's business mix for fiscal year ended June 30,
2001 was as follows:

                  Residential               63%
                  Commercial                16%
                  Agricultural & Other      21%

Though 63% of revenues were derived from residential customers, due to higher
gross margins, they accounted for 81% of the aggregate gross margin. While


                                       2
<PAGE>

commercial propane sales are generally less profitable than residential retail
sales, the Company has traditionally relied on this customer base to provide a
steady, non-cyclical source of revenues. No single customer accounts for more
than 1.0% of revenue from sales.

         On August 15, 1995, the Company entered into a joint venture with
Northwestern Growth Corporation, a subsidiary of Northwestern Public Service
Corporation, to acquire the assets of Synergy Group Incorporated, the nation's
fifth largest LP gas distributor. The Company acquired, for $30,000, 30% of the
common stock of SYN, Inc. ("Synergy"), the acquisition entity. The Company
entered into a Management Agreement pursuant to which the Company provided all
management of the retail facilities and accounting services at the central
office. In exchange for those services, the Company received a $500,000 annual
base management fee, an incentive management fee, and $3.25 million annual
overhead reimbursement (adjusted annually for inflation). Unless specifically
referenced, all information contained herein excludes information pertaining to
the Synergy operations.

         On December 7, 1995, the Company entered into a joint venture with
Northwestern Growth Corporation, a subsidiary of Northwestern Public Service
Company to acquire the stock of Myers Propane Gas Company, a large Ohio LP gas
distributor. The Company acquired 49% of the common stock of Myers Acquisition
Company (Myers), the acquisition entity. The Company entered into a Management
Agreement pursuant to which the Company provided all management and
administrative services. In exchange for those services, the Company was
entitled to a management fee upon the attainment of certain performance goals.

         In December, 1996, the Company and Northwestern Growth Corporation
(NGC), completed an agreement for the sale of various interests of the Company
in Synergy and Myers and the modification and termination of certain agreements
between NGC, Synergy and Myers on the one hand and the Company on the other
hand. The agreement terminated the management agreements pursuant to which the
Company provided management activities for Synergy and Myers effective December
1996. The agreement resulted in a payment of $18 million to the Company
resulting in a gain reflected on the Statement of Operations of $16.9 million
(net of transaction and other costs and fees). The Company may be entitled to an
additional amount based on a third party's indemnification obligations to
Synergy.

         In July, 1999, the Company acquired Tres Hombres, Inc. The Company
issued 22,865 shares of stock previously held in treasury in exchange for all of
the outstanding common stock of Tres Hombres, Inc. Due to covenant requirements
established by its then existing working capital lender, the company sold Tres
Hombres, Inc. in December 2000.

         In May 2000, the Company redeemed 60% of its $127.2 million Senior
Secured Notes due 2004 for a purchase price of $60,000,000 or $786 per $1,000
principal amount without any further accrual of interest. The Company
accumulated the funds necessary to consummate the partial tender offer, through
the sale of 51 of its retail service centers located throughout the United
States. The redemption resulted in the Company recording an extraordinary gain
of approximately $12.6 million, less income taxes of $4.6 million.

         Under terms of the amendments consented to by the holders of the Senior
Secured Notes in the May 2000 partial tender offer, the maturity date of these
Notes was accelerated to July 31, 2000 and the Company was permitted to redeem
the remaining $50,880,000 principal amount of the Senior Secured Notes
outstanding at $786 per $1000 principal amount without any accrual of interest
by that maturity date. The Notes, however, were not redeemed and on February 16,
2001, the Company completed an exchange offer to restructure the Senior Secured
Notes. The Senior Secured Notes were exchanged for an aggregate principal amount
of $53,063,600 of its 11% Senior Secured Notes due 2003 (the "Senior Notes").
The new principal amount includes the amount of interest accrued from August 1,
2000 to November 30, 2000 on the Senior Secured Notes. The modification of terms
has resulted in an effective interest rate of 4.42% and interest expense through
2003 will be reduced accordingly. The Company may, at its option, redeem the
Senior Notes at any time prior to maturity.


                                       3
<PAGE>


         Sources of Supply. During fiscal 2001, approximately 95% of the
Company's propane purchases of its propane supply was on a contractual basis
(generally, one year agreements subject to annual renewal). The Company's two
largest suppliers provide 25% and 21% of the total supply purchased by the
Company. Supply contracts do not, generally, lock in prices, but rather provide
for pricing in accordance with posted prices at the time of delivery or
established by current major storage points, such as Mont Belvieu, TX, and
Conway, KS. The Company has established relationships with a number of suppliers
and believes it would have ample sources of supply under comparable terms to
draw upon to meet its propane requirements if it were to discontinue purchasing
from its two major suppliers. As financial resources permit, the Company takes
advantage of the spot market as appropriate. The Company has not experienced a
shortage that has prevented it from satisfying its customer's needs and does not
foresee any significant shortage in the supply of propane.

         Distribution. The Company purchases propane at refineries, gas
processing plants, underground storage facilities, and pipeline terminals and
transports the propane by railroad tank cars and tank trailer trucks to the
Company's retail service centers, each of which has bulk storage capacity
ranging from 16,000 to 180,000 gallons. The Company is a shipper on major
interstate LPG pipeline systems. The retail service centers have an aggregate
storage capacity of approximately 3.6 million gallons of propane, and each
service center has equipment for transferring the gas into and from the bulk
storage tanks. The Company operates 9 over-the-road tractors and 12 transport
trailers to deliver propane and consumer tanks to its retail service centers and
also relies on common carriers to deliver propane to its retail service centers.

         Deliveries to customers are made by means of 145 propane delivery
trucks owned by the Company. Propane is stored by the customers on their
premises in stationary steel tanks generally ranging in capacity from 25 to
1,000 gallons, with large users having tanks with a capacity of up to 30,000
gallons. Most of the propane storage tanks used by the Company's residential and
commercial customers are owned by the Company and leased, rented, or loaned to
customers.

         Operations. The Company has organized its operations in a manner that
the Company believes enables it to provide excellent service to its customers
and to achieve operating efficiencies. Personnel located at the retail service
centers in the various regions are primarily responsible for customer service
and sales.

         A number of functions are centralized at the Company's corporate
headquarters in order to achieve certain operating efficiencies as well as to
enable the personnel located in the retail service centers to focus on customer
service and sales. The corporate headquarters and the retail service centers are
linked via a computer system. Each of the Company's primary retail service
centers is equipped with a computer connected to the central management
information system in the Company's corporate headquarters. This computer
network system provides retail company personnel with accurate and timely
information on pricing, inventory, and customer accounts. In addition, this
system enables management to monitor pricing, sales, delivery, and the general
operations of its numerous retail service centers and to plan accordingly to
improve the operations of the Company. The Company makes centralized purchases
of propane through its corporate headquarters for resale through the retail
service centers enabling the Company to achieve certain advantages, including
price advantages, because of its status as a large volume buyer. The functions
of cash management, accounting, taxes, payroll, permits, licensing, asset
control, employee benefits, human resources, and strategic planning are also
performed on a centralized basis.

         Factors Influencing Demand. Because a substantial amount of propane is
sold for heating purposes, the severity of winter weather and resulting
residential and commercial heating usage have an important impact on the
Company's earnings. Approximately two-thirds of the Company's retail propane
sales usually occur during the five months of November through March. Sales and
profits are subject to variation from month to month and from year to year,
depending on temperature fluctuations.

                                       4
<PAGE>

         Competition. The Company encounters competition from a number of other
propane distributors in each geographic region in which it operates. The Company
competes with these distributors primarily on the basis of service, stability of
supply, availability of consumer storage equipment, and price. Propane competes
primarily with natural gas, electricity and fuel oil principally on the basis of
price, availability and portability.

         The Company also competes with suppliers of electricity. Generally
speaking, the cost of propane compares favorably to electricity allowing the
Company to enjoy a competitive advantage due to the higher costs of electricity.
Fuel oil does not present a significant competitive threat in the Company's
primary service areas due to the following factors: (i) propane is a
residue-free, cleaner energy source, (ii) environmental concerns make fuel oil
relatively unattractive, and (iii) fuel oil appliances are not as efficient as
propane appliances.

         Although propane is generally more expensive than natural gas on an
equivalent BTU basis comparison, propane serves as an alternative to natural gas
in rural areas where natural gas is not available. Propane is also utilized by
natural gas customers on a stand-by basis during peak demand periods. The costs
involved in building or connecting to a natural gas distribution system have
tempered natural gas growth in most of the Company's trade territory.

         Risks of Business. The Company's propane operations are subject to all
the operating hazards and risks normally incident to handling, storing, and
transporting combustible liquids, such as the risk of personal injury and
property damages caused by accident or fire.

         Effective July 1, 2000, the Company's comprehensive general, auto and
excess liability policy provides for losses of up to $75.0 million with a
$250,000 self-insured retention for general and excess liability losses with a
$1 million aggregate cap. The Company's combined auto and workers' compensation
coverage is insured through participation in a captive insurance program.

Regulation

         The Company's operations are subject to various federal, state, and
local laws governing the transportation, storage and distribution of propane,
occupational health and safety, and other matters. All states in which the
Company operates have adopted fire safety codes that regulate the storage and
distribution of propane. In some states these laws are administered by state
agencies, and in others they are administered on a municipal level. Certain
municipalities prohibit the below ground installation of propane furnaces and
appliances, and certain states are considering the adoption of similar
regulations. The Company cannot predict the extent to which any such regulations
might affect the Company, but does not believe that any such effect would be
material. It is not anticipated that the Company will be required to expend
material amounts by reason of environmental and safety laws and regulations, but
inasmuch as such laws and regulations are constantly being changed, the Company
is unable to predict the ultimate cost to the Company of complying with
environmental and safety laws and regulations.

         All Star Gas currently meets and exceeds Federal regulations requiring
that all persons employed in the handling of propane gas be trained in proper
handling and operating procedures. All employees have participated, or will
participate within 90 days of their employment date, in hazardous materials
training. The Company has established ongoing training programs in all phases of
product knowledge and safety including participation in the National Propane Gas
Association's ("NPGA") Certified Employee Training Program.

                                       5
<PAGE>

Employees

         As of September 15, 2001 the Company had 289 employees, none of whom
was represented by unions. The Company has never experienced any significant
work stoppage or other significant labor problems and believes it has good
relations with its employees.

Item 3.  Legal Proceedings.

         The Company and its subsidiaries are defendants in various routine
litigation incident to its business, none of which is expected to have a
material adverse effect on the Company's financial position or results of
operations.

Item 4.  Submission of Matters to a Vote of Security Holders.

         The Company held its annual shareholder meeting on July 16, 2001. The
only matter presented for a vote was the re-election of Jim J. Shoemake as
director. Mr. Shoemake was re-elected with 1,586,915 votes cast in favor and no
votes cast against, withheld or abstaining. The term of office of the following
directors continued after the meeting: Paul S. Lindsey, Jr., Kristin L. Lindsey,
Jim J. Shoemake, and Bruce M. Withers, Jr.


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

         As of September 24, 2001, the Company's Common Stock was held of record
by 8 shareholders. There is currently no active trading market in the Company's
Common Stock.

         As of September 24, 2001, there are outstanding warrants to purchase
175,536 shares of the Company's Common Stock. Each warrant represents the right
to purchase one share of the Company's Common Stock of $.01 per warrant. The
warrants are exercisable currently and will expire July 15, 2004.

         As of September 24, 2001, there are 435,700 outstanding stock options
to purchase Company stock. The options have a weighted-average remaining
contractual life of approximately seven years with 313,680 options currently
exercisable.

         No dividends on the Common Stock of the Company were paid during the
Company's 2000 or 2001 fiscal years. The indenture relating to the 11% Senior
Secured Notes due 2003 contains dividend restrictions that prohibit the Company
from paying common stock cash dividends. As a result, the Company has no current
intention of paying cash dividends on the Common Stock.


                                       6
<PAGE>

Item 6.  Selected Financial Data.

         The following table presents selected consolidated operating and
balance sheet data of All Star Gas as of and for each of the years in the
five-year period ended June 30, 2001. The financial data of the Company as of
and for each of the years in the five-year period ended June 30, 2001, were
derived from the Company's audited consolidated financial statements. The
financial and other data set forth below should be read in conjunction with the
Company's consolidated financial statements, including the notes thereto,
included with this report.
<TABLE>
<CAPTION>
                                                                                    Year Ended June 30,
                                                                                    -------------------
                                                                 1997        1998        1999         2000         2001
                                                                 ----        ----        ----         ----         ----
                                                                   (In thousands except ratios and per share amounts)
<S>                                                             <C>         <C>         <C>          <C>         <C>
Operating Data:
   Operating Revenue                                            $94,543     $90,963     $83,563      $80,617     $57,052
   Gross Profit (1)                                              41,468      47,124      45,592       34,192      16,918
   Operating Expenses                                            28,853      33,340      32,057      (11,394)     16,288
   Depreciation & Amortization.                                   6,867       9,723       9,776        8,169       4,090
   Operating Income (Loss)                                        5,748       4,061       3,759       37,417      (3,966)

   Interest Expense:
      Cash Interest                                              10,605      11,577      11,965       18,062       5,489
      Amortization of Debt Discount & Expenses                    6,140       6,796       7,762        2,042       1,563
      Total Interest Expense                                     16,745      18,373      19,727       20,104       7,052
   Income (Loss) Before Extraordinary Items
      and Cumulative Effect of Change in Accounting
      Principle                                                   2,222     (11,092)    (10,771)       9,421     (10,705)

Other Operating Data:

   Capital Expenditures                                          18,444      19,444       4,563        5,442       3,175
   Proceeds From Sale of Retail Service Centers/
      Other                                                       5,478       2,821       3,131       91,646       2,929

   EBITDA  (3)                                                   13,347      13,444      12,988          646        (298)
   Basic & Diluted Income (Loss) Per Share Before
       Extraordinary Items and Cumulative Effect of
        Change in Accounting Principle                            $1.41     $ (6.99)    $ (6.79)       $5.94     $ (6.74)


                                                                                  Year Ended June 30,
                                                                                  -------------------

                                                                 1997        1998        1999         2000        2001
                                                                 ----        ----        ----         ----        ----
Balance sheet data:
   Total assets                                                $110,311    $116,529    $106,975      $49,495     $45,965
   Long-term debt (including current maturities)                127,870     143,709     147,710       61,074      71,219
   Stockholders' equity (deficit)                               (42,901)    (53,963)    (63,309)     (45,919)    (55,684)
</TABLE>

                                       7
<PAGE>
(1)  Represents operating revenue less the cost of products sold.

(2)  All Star Gas did not declare or pay dividends on its common stock during
     the five-year period ending June 30, 2001.

(3)  EBITDA consists of earnings before depreciation, amortization, interest,
     income taxes, and other non-recurring expenses. EBITDA is presented here
     because it is a widely accepted financial indicator of a highly leveraged
     company's ability to service and/or incur indebtedness. However, EBITDA
     should not be construed as an alternative either (i) to operating income
     (determined in accordance with generally accepted accounting principles) or
     (ii) to cash flows from operating activities (determined in accordance with
     generally accepted accounting principles).

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

         The following discussion and analysis of the Company's results of
operations, financial condition and liquidity should be read in conjunction with
the historical consolidated financial statements of All Star Gas and the notes
thereto included in this Report.

Results of Operations

Fiscal Years Ended June 30, 2001 and June 30, 2000

         Operating Revenues. Operating revenues decreased $23.5 million, or
29.2% to $57.1 million in fiscal year 2001 as compared to $80.6 million in
fiscal 2000. Propane sales decreased $18.7 million in fiscal 2001 compared to
fiscal 2000. Propane sales prices increased approximately $.20 per gallon or
22.7% over fiscal 2000. However, the Company experienced a 34.8% decrease in
gallons sold from fiscal 2000 due to the divestiture of retail service centers
during fiscal 2000. Comparing stores that were operated by the Company during
both 2001 and 2000, volumes increased 17.9% due to the colder winter weather
experienced. Heating degree days experienced by the Company during fiscal year
2001 increased 25% from fiscal year 2000. Other sales, including gas systems,
appliances and other fuels, had no significant impact on the change in revenues.

         During the fiscal years 2001 and 2000, the Company completed forward
purchase and sale contracts which resulted in buying and selling 43.4 million
gallons and 12.9 million gallons, respectively, of propane to other suppliers.

         Cost of products sold. Cost of products sold decreased $6.3 million, or
13.6% to $40.1 million in fiscal year 2001 as compared to $46.4 million in
fiscal year 2000. This was due to the divestitures of retail service centers
during fiscal year 2000 offset by the costs per gallon that increased
approximately $.28 or 53.9% over fiscal year 2000.

         Gross Profit. The Company's gross profit decreased $17.3 million or
50.6% to $16.9 million in fiscal year 2001 as compared to $34.2 million in
fiscal year 2000. This is due to the decrease in gallons sold due to
divestitures of retail service centers during fiscal year 2000. Average propane
margins decreased approximately $.08 per gallon or 22.7% due to the Company's
financial inability at appropriate times to hedge product purchases for the
fixed price, pre-buy and budget plan agreements with customers and, due to an
anomaly in the propane market, to pass along higher product gas costs as rapidly
as they were incurred.

                                       8
<PAGE>

         General and administrative expense. General and administrative expense
decreased $16.7 million to $16.4 million in fiscal year 2001 as compared to
$33.1 million in fiscal year 2000. In general, expenses decreased as a result of
the divestiture of 66 retail service centers and Tres Hombres, Inc. during
fiscal year 2000. The fiscal year 2001 effect from the sales of the retail
service centers affected salaries and employee benefits which decreased $7.2
million, office expense and other taxes which decreased $1.7 million and rent
and maintenance costs on premises and equipment which decreased $1.2 million.
Insurance and liability claims decreased $2.9 million mainly due to the Company
settling several claims and reaching the stop-loss limit on one specific claim
during fiscal year 2001. No other significant changes occurred in any individual
expense category other than those associated with the divestiture of the retail
service centers and Tres Hombres, Inc.

         Provision for doubtful accounts. The provision for doubtful accounts
decreased $123,000 from $464,000 in fiscal year 2000 to $341,000 in fiscal year
2001 due to the decreased charge-offs as a percentage of accounts receivable
compared to fiscal 2000. A decrease in the provision was deemed necessary in
order to bring the allowance for doubtful accounts to a level considered
adequate by the Company to provide for potential losses.

         Depreciation and amortization. Depreciation and amortization expense
decreased $4.1 million from $8.2 million in fiscal year 2000 to $4.1 million in
fiscal year 2001. The decrease is mainly due to the divestiture of 66 retail
service centers during fiscal year 2000.

         Forward and futures contracts. Loss on forward and futures contracts
for fiscal year 2001 was $506,000. The loss is the result of the decrease in
fair value of the Company's derivative instruments during fiscal year 2001. At
July 1, 2000, the initial adoption of SFAS Nos. 133 and 138 resulted in
recognition of derivative financial instruments as assets and liabilities in the
amounts of $3.1 million and $1.6 million, respectively, and a cumulative effect
adjustment of $940,000, net of applicable of income taxes.

         Interest expense. Interest expense decreased $12.6 million to $5.5
million in fiscal year 2001 from $18.1 million in fiscal year 2000. The decrease
is primarily due to payment in full on the revolving credit facility in February
2000, the partial redemption of the Company's Senior Secured Notes in May 2000
and the elimination of various mortgages related to the divestiture of 66 retail
service centers during fiscal year 2000.

Fiscal Years Ended June 30, 2000 and June 30, 1999

         Operating Revenue. Operating revenue decreased $3.0 million, or 3.5% to
$80.6 million in fiscal year 2000 as compared to $83.6 million in fiscal year
1999. The disposition of Tres Hombres, Inc. accounted for a $2.2 million
decrease in operating revenue in fiscal 2000 compared to fiscal 1999. Propane
sales decreased $340,000 in fiscal 2000 compared to fiscal 1999. Propane sales
prices increased an average of $.21 per gallon over fiscal 1999. However, the
Company experienced an 18% decrease in gallons sold from fiscal 1999. The
decrease in gallons sold is primarily due to the divestiture of retail service
centers during fiscal 2000. Comparing stores that were operated by the Company
during both 2000 and 1999, volumes decreased 3%. Also, a warmer than normal
heating season was experienced by the Company in its marketing territories.
Heating degree days experienced by the Company during fiscal year 2000 decreased
6% from fiscal 1999.

         Cost of products sold. Costs of products sold increased $8.5 million or
22.3% to $46.4 million in fiscal year 2000 as compared to $37.9 million in
fiscal year 1999. This was primarily due to substantially higher propane product
costs experienced throughout the year. Propane costs increased an average of
$.20 per gallon over fiscal 1999.

         Gross Profit. The Company's gross profit decreased $11.4 million to
$34.2 million in fiscal year 2000 as compared to $45.6 million in fiscal year
1999. This decrease is primarily due to the decrease in gallons sold due to
divestitures of retail service centers and the significantly warmer than normal
heating season in the Company's marketing territories. Average propane margins
decreased 8% due to the inability to pass along higher product costs as rapidly
as they were incurred.

                                       9
<PAGE>
         General and administrative expenses. General and administrative
expenses increased $705,000 to $33.1 million in fiscal year 2000 as compared to
$32.4 million in fiscal year 1999. Insurance and liability claims increased $2.1
million due to increased costs on outstanding claims including a significant
increase in the Company's self-insurance reserve to cover anticipated losses on
two specific claims. Professional fees increased $734,000 mainly due to costs
associated with the sale of retail service centers, debt restructuring issues
and the Company's downsizing program during the year. Offsetting these
increases, salaries and employee benefit costs decreased $3.0 million due to the
divestiture of 66 retail service centers and the continued downsizing of the
Company's corporate office staffing levels.

         Provision for doubtful accounts. The provision for doubtful accounts
increased $237,000 from $227,000 in fiscal year 1999 to $464,000 in fiscal year
2000 due to the increased charge-offs as a percentage of accounts receivable
compared to fiscal 1999. An increase in the provision was deemed necessary in
order to bring the allowance for doubtful accounts to a level considered
adequate by the Company to provide for potential losses.

         Depreciation and amortization. Depreciation and amortization expense
decreased $1.6 million from $9.8 million in fiscal year 1999 to $8.2 million in
fiscal year 2000. The decrease is mainly due to divestiture of 66 retail service
centers during fiscal 2000.

         Interest expense. Interest expense increased $6.1 million to $18.1
million in fiscal year 2000 from $12.0 million in fiscal year 1999. The increase
is primarily due to effect of the interest rate increase under the terms of the
Company's 12 7/8% Senior Secured Notes, due 2004.

Liquidity and Capital Resources

         The Company's liquidity requirements have arisen primarily from funding
its working capital needs, capital expenditures, and debt service requirements.
Historically, the Company has met these requirements from cash flows generated
by operations, borrowings under notes payable to banks and advances from its
principal shareholder.

         Cash flow used in operating activities was $1.0 million in fiscal year
2001 compared to cash flow used in operating activities of $18.1 million in
fiscal year 2000. This change was due to a number of factors. First, operating
income increased $3.1 million (excluding gains on sales of assets) from fiscal
year 2000 to fiscal year 2001 mainly due to the $20.9 million decrease in
operating costs and expenses which is the result of the significant disposition
of retail service centers during fiscal year 2000. This decrease in operating
costs and expenses was offset by the $17.3 million decrease in gross profit
mainly due to the significant disposition of retail service centers during
fiscal year 2000 and the inability of the Company to pass along higher product
costs as rapidly as they were incurred. Secondly, the Company has decreased its
levels of inventory and decreased accounts payable and certain accrued
liabilities. Thirdly, the Company's prepaid product program allows customers to
prebuy product at an established price, reducing their risk of winter price
fluctuations brought about by changes in demand and allowing the Company to
improve its seasonal cash flow and further enhance its hedging of product
purchases and marketing programs to its customers. The balance of customer
prepayments related to the program, increased to $10.2 million as of June 30,
2001 compared to $5.0 million as of June 30, 2000.

         Cash flow provided by investing activities was $804,000 in fiscal year
2001 compared to cash flow provided by investing activities of $85.5 in fiscal
year 2000. This change is primarily due to the $88.7 million decrease in
proceeds from sales of retail service centers and other assets during fiscal
2001.

                                       10
<PAGE>

         Cash flow provided by financing activities was $291,000 in fiscal year
2001 compared to cash flow used in financing activities of $68.3 million in
fiscal year 2000. This change is mainly due to the $4.8 million in repayments on
the working capital facility and the $60 million principal payment made on the
Company's Senior Secured Notes, due 2004, during fiscal 2000.

         Due to the nonpayment of interest, the Company is in default with
respect to the $9,729,000 principal balance of the 9% Subordinated Debentures
due 2007 (the "Subordinated Debentures"). The Company is prohibited under the
terms of the Subordinated Debentures from making any interest payments if such
payment shall create a default in the payment of amounts due on any Senior
indebtedness. As a result of the defaults, the holders of the Subordinated
Debentures have the right to accelerate the balance due and require immediate
payment in full. Accordingly, the entire balance of the obligations under the
Subordinated Debentures is included in current liabilities at June 30, 2001 and
2000.

         In the event that the Company continues to fail to make any interest
payment otherwise payable pursuant to the Subordinated Debentures, the trustee
and the holders of such indebtedness may choose to pursue any and all remedies
contained in the indenture or at law relating to such indebtedness. If the
holders of the Subordinated Debentures accelerate the Company's obligations
under such indebtedness, such events would have a material adverse effect on the
Company's liquidity and financial position. Under these circumstances, the
Company's financial position would necessitate the development of an alternative
financial structure. Considering the limited financial resources and the
existence of certain defaults, there can be no assurances that the Company would
succeed in formulating and consummating an acceptable alternative financial
structure.

         On February 23, 2001, the Company exchanged an aggregate principal
amount of $53,063,600 of its 11% Senior Secured Notes due 2003 (the "Senior
Notes") for all of the issued and outstanding $50,880,000 principal amount of
its Senior Secured Notes, due 2004 (the "Old Senior Notes") from the registered
holders thereof. The additional principal amount of the Senior Notes includes
the amount of interest accrued from August 1, 2000 to November 30, 2000 and was
distributed to the registered holders on a pro-rata basis.

         The Senior Notes bear interest beginning December 1, 2000 at the rate
of 11% per annum payable quarterly on each March 30, June 30, September 30 and
December 30 until maturity. Except for certain purchase money secured equipment
financing and lease obligations of the Company incurred in the ordinary course
of its business, the Senior Notes are secured obligations of the Company, and
rank pari passu with all existing and future secured and senior indebtedness of
the Company. The Senior Notes are secured by a pledge of certain outstanding
shares of stock of the Company and all of the outstanding shares of stock of
certain subsidiaries of the Company. The Senior Notes are also secured by a lien
on certain tangible and intangible assets of All Star Gas Inc. of Colorado and
the right to obtain a lien on certain of the remaining current and future assets
of the Company and its subsidiaries.

         The Company may, at its option, redeem the Senior Notes at any time, in
whole or from time to time in part, until maturity, upon not less than 30 nor
more than 60 days' notice, at the following redemption prices (expressed as
percentages of the principal amount of the Senior Notes being redeemed) plus
accrued and unpaid interest thereon to the redemption date:

                  On or prior to                Redemption Percentage
                  --------------                ---------------------

                  December 31, 2001                    90.38%
                  June 30, 2002                        93.59%
                  December 31, 2002                    96.79%
                  June 30, 2003                       100.00%



                                       11
<PAGE>

         The Senior Notes evidence the same class of debt as the Old Senior
Notes and were issued pursuant to, and are entitled to the benefits of, an
indenture, which the Company and State Street Bank and Trust Company, as
trustee, executed.

         As a result of the Company's significant disposition of retail service
centers during fiscal 2000, the Company has incurred a $7.7 million federal tax
liability that was due September 15, 2000. The Company was unable to pay the
obligation when due. The Internal Revenue Service ("IRS") has placed liens on
Company assets. The Company has agreed to a workout plan with the IRS to pay the
current tax obligation in monthly installments that commenced in October 2000
and will continue until paid in full. At September 24, 2001, the current federal
tax obligation due is approximately $3.4 million.

Impact of Recent Accounting Pronouncements

         The Financial Accounting Standard Board (FASB) recently issued
Statement of Financial Accounting Standards (SFAS) 141, Business Combinations.
This Statement addresses financial accounting and reporting for business
combinations. It eliminates the pooling-of-interests method and requires that
all business combinations be accounted for using the purchase method. The
provisions of this Statement apply to all business combinations initiated after
June 30, 2001 and to all business combinations accounted for using the purchase
method for which the date of acquisition is July 1, 2001, or later. Adoption of
the new standard will have no initial effect on the Company's financial
statements.

         The FASB also recently issued SFAS 142, Goodwill and Other Intangible
Assets. This Statement establishes accounting and reporting standards for
acquired goodwill and other intangible assets. The Statement addresses how
intangible assets that are acquired individually or with a group of other assets
(but not those acquired in a business combination) should be accounted for in
financial statements upon their acquisition. It also addresses how goodwill and
other intangible assets should be accounted for after they have been initially
recognized in the financial statements. Under the new standard, amortization of
existing goodwill ceases upon adoption of SFAS 142 and is replaced by periodic
evaluation for impairment using specified methodology. SFAS 142 is effective for
fiscal years beginning after December 15, 2001. Early adoption is permitted for
entities with fiscal years beginning after March 15, 2001. The Company will
apply SFAS 142 beginning with the first quarter of its fiscal year ending June
30, 2003, on a prospective basis. The effects of adoption of SFAS 142 on the
Company's financial statements are not determinable currently.

Item 8.  Financial Statements and Supplementary Data.

         See the Consolidated Financial Statements included elsewhere herein.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure.

         None


                                       12
<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

         The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
                                                               Position Held with the Company
       Name                              Age                       and Principal Occupation
       ----                              ---                   ------------------------------
<S>                                    <C>            <C>
Paul S. Lindsey, Jr.                     56          Chairman of the Board, Chief Executive Officer, and President
                                                     since June 1994; previously Vice Chairman of the Board (1987 to
                                                     1994) and Chief Operating Officer (1988 to 1994); term as
                                                     director expires 2003
Kristin L. Lindsey                       53          Director/Executive Vice President since Oct. 1996; previously
                                                     Director/Vice President to June 1994; previously pursued
                                                     charitable and other personal interest; term as director
                                                     expires 2002
Bruce M. Withers, Jr.                    74          Director since June 1994; previously Chairman and Chief
                                                     Executive Officer of Trident NGL Holding, Inc. (since August
                                                     1991) and President of the Transmission and Processing Division
                                                     of Mitchell Energy Corporation (1979 to 1991); term as director
                                                     expires 2002
Jim J. Shoemake                          63          Director since June 1994; partner of Guilfoil, Petzall
                                                     & Shoemake (since 1970); term as director expires 2004
Valeria Schall                           47          Executive Vice President since October, 1996, Treasurer since
                                                     July, previously Vice President since 1992; Corporate Secretary
                                                     since 1985 and Assistant to the Chairman since 1987
Bradley L. Beneke                        47          Senior Vice President - Operations since April 2000; Vice
                                                     President since April 2000; previously Pricing Director since
                                                     June 1995; previously Regional Manager since September 1991.
Robert C. Heagerty                       54          Sr. Vice President since September 1997, previously Divisional
                                                     Vice President since June 1993; previously Regional Manager
                                                     since December 1986.
J. Greg House, Sr.                       44          Vice President - Management Information Systems since June,
                                                     1996; previously Director-MIS since September 1994 and
                                                     Manager-MIS Paul Mueller Co. since 1987.
Willis D. Green                          64          Vice President-Chief Financial Officer since July 2001;
                                                     previously Controller-Chief Financial Officer since 1994.
</TABLE>
         Each director will serve for a term of three years. Officers of the
Company are elected by the Board of Directors of the Company and will serve at
the discretion of the Board, except for Mr. Lindsey, Ms. Lindsey and Ms. Schall
who are employed pursuant to Employment Agreements that expire June 24, 2004,
September 24, 2004 and September 24, 2004, respectively.

                                       13
<PAGE>

Item 11.  Executive Compensation

         The following table provides compensation information for each of the
years ended June 30, 2001, 2000 and 1999, for (i) the Chief Executive Officer of
the Company, (ii) the four other executive officers of the Company who are most
highly compensated and whose total compensation exceeded $100,000 for the most
recent fiscal year (of which there were only two) and (iii) those persons who
are no longer executive officers of the Company but were among the four most
highly compensated and whose total compensation exceeded $100,000 for the most
recent year (of which there were none).

Summary Compensation Table

Annual Compensation
<TABLE>
<CAPTION>
Name and Principal
Position at End of Fiscal          Fiscal                                   Other Annual            All Other
  Year 2001                         Year        Salary        Bonus         Compensation            Compensation
-------------------------           ----        ------        -----         ------------            ------------
<S>                                 <C>         <C>           <C>           <C>                     <C>
Paul S. Lindsey, Jr.                2001        $400,000      -----         -----                   -----
Chief Executive Officer,            2000        $400,000      -----         -----                   -----
Chairman of the Board               1999        $400,000                    -----                   -----
And President


Valeria Schall                      2001        $100,000      $30,000       -----                   -----
Executive Vice President            2000        $100,000      $30,000       -----                   -----
                                    1999        $100,000      $30,000       -----                   -----

Kristin L. Lindsey                  2001        $100,000      $30,000       -----                   -----
Executive Vice President            2000        $100,000      $30,000       -----                   -----
And Director                        1999        $100,000      $30,000       -----                   -----
</TABLE>
Employment Agreement

         On June 24, 1999, the Company entered into an employment agreement with
Mr. Lindsey. The agreement has a five-year term and provides for the payment of
an annual salary of $400,000 and reimbursement for reasonable travel and
business expenses. The agreement requires Mr. Lindsey to devote substantially
all of his time to the Company's business. The agreement is for a term of five
years, but is automatically renewed for one year unless either party elects to
terminate the agreement at least four months prior to the end of the term or any
extension. The agreement may be terminated by Mr. Lindsey or the Company, but if
the agreement is terminated by the Company and without cause, the Company must
pay one year's salary as severance pay.

Incentive Stock Option Plan

         There were no options granted to the named officer nor exercised by him
during fiscal year 2001 and no unexercised options held by him as of the end of
the 2001 fiscal year.

Compensation Committee Interlocks and Insider Participation

         A compensation committee was formed in July 1994, consisting of Messrs.
Withers and Shoemake. Mr. Lindsey makes the initial recommendation concerning
executive compensation for the executive officers of the Company, other than
recommendations concerning his own and his wife's compensation, which are then
approved by the compensation committee. The compensation committee determines
the compensation of Mr. Lindsey's wife and, subject to the employment agreement
described above, Mr. Lindsey.

                                       14
<PAGE>
Director Compensation

         During the last completed fiscal year, the directors of All Star Gas
received an annual fee of $25,000, payable quarterly, for their services.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The table below sets forth information with respect to the beneficial
ownership of shares of Common Stock of the Company as of September 28, 2001, by
persons owning more than five percent of any class, by all directors of the
Company, by the individuals named in the Summary Compensation Table owning
shares, and by all directors and executive officers of the Company as a group.

                                        Number of Shares
Name of Beneficial Owner (1)            Beneficially Owned         Percent
----------------------------            ------------------         -------
Paul S. Lindsey, Jr. (2)                1,546,548                  97.5
Kristin L. Lindsey (2)                  762,125                    48.0
All directors and executive
  Officers as a group (5 persons)(3)    1,580,592                  99.6

-----------------

(1) The address of each of the beneficial owners is c/o All Star Gas
    Corporation, P.O. Box 303, 119 W. Commercial Street, Lebanon, Missouri
    65536.
(2) Mr. Lindsey's shares consist of 784,423 shares owned by the Paul S. Lindsey,
    Jr. Trust established January 24, 1992 and 762,125 shares owned by the
    Kristin L. Lindsey Trust established January 24, 1992. Mr. Lindsey has the
    power to vote and to dispose of the shares held in the Kristin L. Lindsey
    Trust. Mrs. Lindsey's shares consist of the shares owned by the Kristin L.
    Lindsey Trust. Mrs. Lindsey disclaims ownership of the shares held by her
    husband in the Paul S. Lindsey, Jr. Trust.
(3) The amounts shown include the shares beneficially owned by Mr. Lindsey and
    Mrs. Lindsey as set forth above, and 34,044 shares owned by other executive
    officers.

Item 13.  Certain Relationships and Related Transactions.

         Mrs. Kristin L. Lindsey, who beneficially owns approximately 36.9% of
the Company's outstanding Common Stock and is a Director of the Company, is the
majority stockholder in a company that supplies paint and labels to the Company.
The Company's purchases of paint and labels from this company totaled $172,500
in fiscal year 2001 and $225,000 in fiscal year 2000.

         The Company has entered into an agreement with each shareholder (all of
whom are directors or employees of the Company) providing the Company with a
right of first refusal with respect to the sale of any shares by such
shareholders. In addition, the Company has the right to purchase from such
shareholders all shares they hold at the time of their termination of employment
with the Company at the then current fair market value of the shares. The fair
market value is determined in the first instance by the Board of Directors and
by an independent appraisal (the cost of which is split between the Company and
the departing shareholder) if the departing shareholder disputes the board's
determination.

                                       15
<PAGE>

         Over the past fiscal year, the Company received advances bearing
interest at a rate of 12% from its Chief Executive Officer in the amount of $2.5
million which have a remaining balance at August 31, 2001, of $656,362.



                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

                  (a)(1)   Financial Statements
                           Report of Independent Accountants
                           Consolidated Balance Sheets as of June 30, 2001 and
                              2000
                           Consolidated Statement of Operations for the
                              Years Ended June 30, 2001, 2000, and 1999
                           Consolidated Statements of the Stockholders' Equity
                              (Deficit) for the Years Ended June 30, 2001, 2000,
                              and 1999
                           Consolidated Statements of Cash Flows for the Years
                              Ended June 30, 2001, 2000, and 1999


                  (a)(2)   Financial Statement Schedules

                           Schedule II Valuation and qualifying accounts

                  (a)(3)   Exhibits


Exhibit
No.               Description
-------           -----------

3.1 Articles of Incorporation of the Company (incorporated herein by reference
to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (No.
33-53343)

3.2 Certificate of Amendment of the Certificate of Incorporation of the Company,
dated April 26, 1994, relating to the change of name (incorporated herein by
reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1
(No. 33-53343)

3.3 By-laws of the Company (incorporated herein by reference to Exhibit 3.3 to
the Company's Registration Statement on Form S-1 (No. 33-53343)

4.1 Indenture between All Star Gas Corporation and J. Henry Schroder Bank &
Trust company, Trustee, relating to the 9% Subordinated Debentures due December
31, 2007, and the form of 9% Subordinated Debentures due December 31, 2007,
(incorporated herein by reference to Exhibit 4(a) to the All Star Incorporated
and Exco Acquisition Corp. (Commission File No. 2-83683) Registration Statement
on Form S-14 with the Commission on May 11, 1983); and First Supplemental
Indenture thereto between All Star Gas Corporation (now known as EGOC) and IBJ
Schroder Bank & Trust Co., dated as of December 13, 1989, (incorporated herein
by reference to Exhibit 4(c) to All Star Gas Corporation (now known as EGOC)
Registration Statement on Form 8-B filed with the Commission on February 1,
1990)

                                       16
<PAGE>

4.2 Indenture between the Company and Shawmut Bank Connecticut, National
Association, Trustee, relating to the 12-7/8% Senior Secured Notes due 2004,
including the 12-7/8% Senior Secured Notes due 2004, the Guarantee and the
Pledge Agreement (incorporated herein by reference to Exhibit 4.2 to the
Registrant's Annual Report on Form 10-K for the year ended June 30, 1994)

4.3 Warrant Agreement (incorporated herein by reference to Exhibit 4.3 to the
Registrant's Annual Report on Form 10-K for the year ended June 30, 1994)

10.1 Shareholder Agreement, dated as of October 28, 1988, by and among All Star
Gas Acquisition Corporation and Robert W. Plaster Trust, Robert W. Plaster,
Trustee; Paul S. Lindsey, Jr.; Stephen R. Plaster Trust, Lynn C. Hoover,
Trustee; Cheryl Plaster Schaefer Trust, Lynn C. Hoover, Trustee; Robert L.
Wooldridge; Gwendolyn B. VanDerhoef; Dwight Gilpin; Luther Henry Gill; Valeria
Schall; Floyd J. Waterman; Larry W. Bisig; Larry Weis; Robert Heagerty; Murl J.
Waterman; Earl L. Noe; Thomas Flak; Michael Kent St. John; James E. Acreman;
Carolyn Rein; Dan Weatherly; Nina Irene Craighead; Joyce Sue Kinnett; Edwin H.
McMahon; Paul Stahlman; Ralph Wilson; Alan Simer; Ferrell Stamper; and All Star
Gas Corporation Employee Stock Ownership Plan, Robert W. Plaster, Trustee
(incorporated herein by reference to Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (No. 33-53343)

10.2 1995 Stock Option Plan of All Star Gas Company (incorporated herein by
reference to Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the
year ended June 30, 1995)

10.3 Employment Agreement between the Company and Paul S. Lindsey, Jr.
(incorporated herein by reference to Exhibit 10.7 to the Company's Registration
Statement on Form S-1 (No. 33-53343)

10.4 Tax Indemnification Agreement between the Company and Energy (incorporated
herein by reference to Exhibit 10.10 to the Company's Registration Statement on
Form S-1 (No. 33-53343)

10.5 Management Agreement between All Star Gas Company, Northwestern Growth
Corporation and SYN, Inc. dated May 17, 1995 (incorporated herein by reference
to Exhibit 10.13 to the Registrant's Annual Report on Form 10(k) for the year
ended June 30, 1995)

10.6 Agreement Among Initial Stockholders and SYN, Inc. dated May 17, 1995
(incorporated herein by reference to Exhibit 10.14 to the Registrant's Annual
Report on Form 10(k) for the year ended June 30, 1995).

10.7 Waiver Agreement dated April 29, 1995 by and among All Star Gas
Corporation, SYN, Inc., Paul S. Lindsey, Jr. Northwestern Growth Corporation,
All Star Energy Corporation, Robert W. Plaster, and Stephen R. Plaster
(incorporated herein by reference to Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the year ended June 30, 1995).

10.8 7/1/96 Agreement Amending Amended and Restated Agreement Among Initial
Stockholders and Syn Inc. (incorporated herein by reference to Exhibit 10.22 to
the Registrant's Annual Report on Form 10(k) for the year ended June 30, 1997).

10.9 11/3/95 Agreement Among Initial Stockholders and Mac Inc. (incorporated
herein by reference to Exhibit 10.25 to the Registrant's Annual Report on Form
10(k) for the year ended June 30, 1996).

10.10 11/3/95 Management Agreement between NWPS, Myers Acquisition Company and
Empire (incorporated herein by reference to Exhibit 10.26 to the Registrant's
Annual Report on Form 10(k) for the year ended June 30, 1996)

                                       17
<PAGE>

10.11 7/31/95 Agreement Amending Management Agreement (incorporated herein by
reference to Exhibit 10.28 to the Registrant's Annual Report on Form 10(k) for
the year ended June 30, 1996).

10.12 7/31/95 Agreement Amending and Reinstating Agreement Among Initial
Stockholders and Syn Inc. (incorporated herein by reference to Exhibit 10.29 to
the Registrant's Annual Report on Form 10(k) for the year ended June 30, 1996).

10.13 2/16/01 Indenture between the Company and State Street Bank and Trust
Company relating to the 11% Senior Secured Notes due 2003

21.1 Subsidiaries of the Company

+ Confidential treatment has been requested. The copy filed as an exhibit omits
the information subject to the confidentiality request.

        (b)  Reports on Form 8-K
                 July 31, 2000         August 31, 2000       September 29, 2000
                 November 30, 2000     December 4, 2000      December 15, 2000
                 December 28, 2000     January 3, 2001       January 17, 2001
                 January 31, 2001      February 2, 2001      February 20, 2001
                 February 28, 2001     March 30, 2001

        (c)  Exhibits
                 See (a)(3) above.

        (d)  Financial Statements
                See (a)(1) above.


                                       18
<PAGE>

SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                 All Star Gas Corporation


                                                 By: /s/  Paul S. Lindsey, Jr.
                                                     -------------------------
                                                     Paul S. Lindsey, Jr.

Dated:  September 26, 2001

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature                                     Capacity in which Signed
---------                                     ------------------------

/s/ Paul S. Lindsey, Jr.                      Chief Executive Officer and
---------------------------------             Chairman of the Board
Paul S. Lindsey, Jr.


/s/ Willis D. Green                           Vice President, Principal
---------------------------------             Financial Accounting Officer
Willis D. Green


/s/ Kristin L. Lindsey                        Director
---------------------------------
Kristin L. Lindsey


/s/ Bruce M. Withers, Jr.                     Director
---------------------------------
Bruce M. Withers, Jr.


/s/ Jim J. Shoemake                           Director
---------------------------------
Jim J. Shoemake


                                       19
<PAGE>




                            All Star Gas Corporation

            Accountants' Report and Consolidated Financial Statements

                          June 30, 2001, 2000 and 1999



<PAGE>


                            ALL STAR GAS CORPORATION


                          JUNE 30, 2001, 2000 AND 1999


                                TABLE OF CONTENTS

                                                                     Page
                                                                     ----
INDEPENDENT ACCOUNTANTS' REPORT.......................................1

CONSOLIDATED FINANCIAL STATEMENTS
   Balance Sheets.....................................................3
   Statements of Operations ..........................................4
   Statements of Stockholders' Equity (Deficit).......................6
   Statements of Cash Flows...........................................7
   Notes to Financial Statements......................................8

INDEPENDENT ACCOUNTANTS' REPORT ON
   SUPPLEMENTARY INFORMATION.........................................28

SUPPLEMENTARY INFORMATION
   Consolidated Schedules of Sales and Gross Profit..................29
   Consolidated Schedules of General and
    Administrative Expenses..........................................30



<PAGE>
                         Independent Accountants' Report



Board of Directors and Stockholders
All Star Gas Corporation
Lebanon, Missouri


    We have audited the accompanying consolidated balance sheets of ALL STAR GAS
CORPORATION as of June 30, 2001 and 2000, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three years in the period ended June 30, 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 audit 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ALL STAR GAS
CORPORATION as of June 30, 2001 and 2000, and the results of its operations and
its cash flows for each of the three years in the period ended June 30, 2001, in
conformity with accounting principles generally accepted in the United States of
America.


<PAGE>
Board of Directors and Stockholders
All Star Gas Corporation
Page 2



    The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2, the Company
has previously suffered recurring losses from operations and has net working
capital and stockholders' equity deficiencies at June 30, 2001. As also
discussed in Note 2, the Company is in default with respect to its 9%
Subordinated Debentures due 2007 and has incurred a significant federal tax
liability as a result of retail service center dispositions in fiscal 2000 that
it was unable to pay when due. These matters raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

    As discussed in Note 13, the Company changed its method of accounting for
derivative instruments in 2001.


                                   /s/BKD, LLP

Springfield, Missouri
August 10, 2001, except for Note 5 as to which the date is August 24, 2001




<PAGE>
                            ALL STAR GAS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                             JUNE 30, 2001 AND 2000
                      (In Thousands, Except Share Amounts)

                                     ASSETS
<TABLE>
<CAPTION>
                                                                2001           2000
                                                                ----           ----
<S>                                                           <C>             <C>
CURRENT ASSETS
   Cash                                                        $    509      $     432
   Trade receivables, less allowance
     for doubtful accounts; 2001 - $250, 2000 - $300              2,549          2,226
   Current maturities of note receivable                             --             45
   Inventories                                                    2,783          4,121
   Forward sales contracts                                          115             --
   Prepaid expenses                                                 198             91
   Deferred income taxes                                            200            150
                                                               --------       --------
         Total Current Assets                                     6,354          7,065
                                                               --------       --------




PROPERTY AND EQUIPMENT, At Cost
   Land and buildings                                             4,496          4,568
   Storage and consumer service facilities                       35,716         37,134
   Transportation, office and other equipment                    16,381         16,393
                                                               --------       --------
                                                                 56,593         58,095
   Less accumulated depreciation                                 25,742         24,777
                                                               --------       --------
                                                                 30,851         33,318
                                                               --------       --------




OTHER ASSETS
   Debt acquisition costs, net of accumulated amortization        1,174            823
   Excess of cost over fair value of net assets
     acquired, at amortized cost                                  5,016          6,176
   Note receivable                                                  942            927
   Other                                                          1,628          1,186
                                                               --------       --------
                                                                  8,760          9,112
                                                               --------       --------

                                                               $ 45,965       $ 49,495
                                                               ========       ========
</TABLE>
See Notes to Consolidated Financial Statements.

                                      -3-
<PAGE>
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                 2001           2000
                                                                 ----           ----
<S>                                                           <C>            <C>
CURRENT LIABILITIES
   Checks in process of collection                            $   1,243       $  1,028
   Notes payable to banks                                         3,979             --
   Current maturities of long-term debt                          14,493         57,897
   Accounts payable                                               1,551          3,460
   Accrued salaries                                                 712            723
   Accrued interest                                               1,339          8,034
   Accrued expenses                                                 832          1,480
   Customer prepayments                                          10,208          5,008
   Due to related parties                                           394             --
   Income taxes payable                                           3,705          9,948
   Forward purchase contracts                                       200             --
                                                               --------       --------
         Total Current Liabilities                               38,656         87,578
                                                               --------       --------

LONG-TERM DEBT                                                   56,726          3,177
                                                               --------       --------

DEFERRED INCOME TAXES                                             5,738          2,788
                                                               --------       --------

ACCRUED SELF-INSURANCE LIABILITY                                    529          1,871
                                                               --------       --------

STOCKHOLDERS' EQUITY (DEFICIT)
   Common; $.001 par value; authorized 20,000,000
     shares; issued June 30, 2001 and 2000,
     14,291,020 shares                                               14             14
   Common stock purchase warrants                                 1,227          1,227
   Additional paid-in capital                                    28,574         28,574
   Retained earnings                                              2,415         12,180
                                                               --------       --------
                                                                 32,230         41,995

   Treasury stock, at cost; 2001 - 12,704,129 shares,
     2000 - 12,704,105 shares                                   (87,914)       (87,914)
                                                               --------       --------
                                                                (55,684)       (45,919)
                                                               --------       --------

                                                               $ 45,965       $ 49,495
                                                               ========       ========
</TABLE>
See Notes to Consolidated Financial Statements.

                                      -4-
<PAGE>
                            ALL STAR GAS CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
                    (In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
                                                                     2001           2000             1999
                                                                     ----           ----             ----
<S>                                                               <C>            <C>               <C>
OPERATING REVENUE                                                  $ 57,052       $  80,617        $  83,563

COST OF PRODUCT SOLD                                                 40,134          46,425           37,971
                                                                   --------       ---------        ---------

GROSS PROFIT                                                         16,918          34,192           45,592
                                                                   --------       ---------        ---------

Loss on forward and futures contracts                                   506              --               --
                                                                   --------       ---------        ---------

OPERATING COSTS AND EXPENSES
   Provision for doubtful accounts                                      341             464              227
   General and administrative                                        16,369          33,082           32,377
   Depreciation and amortization                                      4,090           8,169            9,776
   Gain on sale of assets                                              (422)        (44,940)            (547)
                                                                   --------       ---------        ---------
                                                                     20,378          (3,225)          41,833
                                                                   --------       ---------        ---------

OPERATING INCOME (LOSS)                                              (3,966)         37,417            3,759
                                                                   --------       ---------        ---------

OTHER EXPENSE
   Interest expense                                                   5,489          18,062           11,965
   Amortization of debt discount                                      1,563           2,042            7,762
                                                                   --------       ---------        ---------
                                                                      7,052          20,104           19,727
                                                                   --------       ---------        ---------

INCOME (LOSS) BEFORE INCOME TAXES                                   (11,018)         17,313          (15,968)

PROVISION (CREDIT) FOR INCOME TAXES                                    (313)          7,892           (5,197)
                                                                   --------       ---------        ---------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM
   AND CUMULATIVE EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE                                             (10,705)          9,421          (10,771)

EXTRAORDINARY ITEM
   Gain on extinguishment of debt, net of income taxes
     of $4,630                                                           --           7,969               --

CHANGE IN ACCOUNTING PRINCIPLE
   Cumulative effect of change in accounting principle,
     net of income taxes of $546                                        940              --               --
                                                                   --------       ---------        ---------

NET INCOME (LOSS)                                                  $ (9,765)      $  17,390        $ (10,771)
                                                                   ========       =========        =========
</TABLE>
See Notes to Consolidated Financial Statements.

                                      -4-



<PAGE>
                            ALL STAR GAS CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Continued)

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
                    (In Thousands, Except Per Share Amounts)


                                               2001          2000         1999
                                               ----          ----         ----

BASIC AND DILUTED INCOME (LOSS)
   PER COMMON SHARE BEFORE
   EXTRAORDINARY ITEM AND CUMULATIVE
   EFFECT OF CHANGE IN ACCOUNTING
   PRINCIPLE                                 $  (6.74)      $  5.94     $ (6.79)

BASIC AND DILUTED INCOME PER COMMON
   SHARE ON EXTRAORDINARY ITEM                     --          5.02          --

BASIC AND DILUTED INCOME PER COMMON
   SHARE ON CUMULATIVE EFFECT OF CHANGE
   IN ACCOUNTING PRINCIPLE                        .59            --          --
                                             --------       -------     -------

BASIC AND DILUTED INCOME (LOSS) PER
   COMMON SHARE                              $  (6.15)      $ 10.96     $ (6.79)
                                             ========       =======     =======

See Notes to Consolidated Financial Statements.

                                      -5-

<PAGE>
                            ALL STAR GAS CORPORATION

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                           Common                                                          Total
                                                           Stock        Additional       Retained                      Stockholders'
                                           Common         Purchase        Paid-In        Earnings        Treasury         Equity
                                           Stock          Warrants        Capital       (Deficit)         Stock          (Deficit)
                                         ---------        --------      -----------    -----------      ---------      ------------
<S>                                      <C>            <C>             <C>            <C>             <C>              <C>
BALANCE, JULY 1, 1998                     $    14         $  1,227       $  27,149      $   5,561       $ (87,914)       $ (53,963)

CAPITAL CONTRIBUTED
   TO TRES HOMBRES,
   INC.                                        --               --           1,425             --              --            1,425

NET LOSS                                       --               --              --        (10,771)             --          (10,771)
                                          -------         --------       ---------      ---------       ---------        ---------

BALANCE, JUNE 30, 1999                         14            1,227          28,574         (5,210)        (87,914)         (63,309)

NET INCOME                                     --               --              --         17,390              --           17,390
                                          -------         --------       ---------      ---------       ---------        ---------

BALANCE, JUNE 30, 2000                         14            1,227          28,574         12,180         (87,914)         (45,919)

NET LOSS                                       --               --              --         (9,765)             --           (9,765)
                                          -------         --------       ---------      ---------       ---------        ---------

BALANCE, JUNE 30, 2001                    $    14         $  1,227       $  28,574      $   2,415       $ (87,914)       $ (55,684)
                                          =======         ========       =========      =========       =========        =========
</TABLE>
See Notes to Consolidated Financial Statements.

                                      -6-
<PAGE>

                            ALL STAR GAS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                               2001            2000            1999
                                                                               ----            ----            ----
<S>                                                                          <C>            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                                         $ (9,765)       $  17,390       $ (10,771)
   Items not requiring (providing) cash:
     Depreciation                                                               3,107            6,406           7,643
     Amortization                                                               2,546            3,423           9,895
     Gain on sale of assets                                                      (422)         (44,940)           (547)
     Extraordinary gain on extinguishment of debt                                  --           (7,969)             --
     Cumulative effect of change in accounting principle                         (940)              --              --
     Loss on forward and futures contracts                                        506               --              --
     Deferred income taxes                                                      2,354            2,144          (4,099)
   Changes in:
     Trade receivables                                                              8             (563)            583
     Inventories                                                                1,256           (2,085)          2,099
     Prepaid expenses and other                                                   330            1,228          (1,541)
     Accounts payable and customer prepayments                                  3,341           (4,265)            352
     Accrued expenses and self-insurance                                       (3,339)          11,151             355
                                                                             --------        ---------       ---------
         Net cash provided by (used in) operating activities                   (1,018)         (18,080)          3,969
                                                                             --------        ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from sales of retail service centers and other assets               2,929           91,646           3,131
   Acquisition of retail service centers                                         (110)            (601)           (601)
   Purchases of property and equipment                                         (2,148)          (4,120)         (3,655)
   Advances from (to) related parties                                             394           (1,430)            770
   Purchase of interest in limited liability company                             (261)              --              --
                                                                             --------        ---------       ---------
         Net cash provided by (used in) investing activities                      804           85,495            (355)
                                                                             --------        ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Decrease in working capital facility                                            --           (4,756)           (294)
   Proceeds from issuance of notes payable to banks                             6,184               --              --
   Principal payments on notes payable to banks                                (2,853)              --              --
   Principal payments on purchase obligations                                  (3,505)          (2,812)         (3,810)
   Proceeds from issuance of long-term debt obligations                           250              118             695
   Increase (decrease) in checks in process of collection                         215             (856)            202
   Principal payment on subordinated debentures                                    --               --             (13)
   Principal payment on senior secured notes                                       --          (60,000)             --
                                                                             --------        ---------       ---------
         Net cash provided by (used in) financing activities                      291          (68,306)         (3,220)
                                                                             --------        ---------       ---------

INCREASE (DECREASE) IN CASH                                                        77             (891)            394

CASH, BEGINNING OF YEAR                                                           432            1,323             929
                                                                             --------        ---------       ---------

CASH, END OF YEAR                                                            $    509        $     432       $   1,323
                                                                             ========        =========       =========
</TABLE>
See Notes to Consolidated Financial Statements.

                                      -7-


<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

    The Company's principal operation is the sale of liquefied propane (LP) gas
to residential, agricultural and commercial customers. Such customers are
located throughout the United States with the larger number concentrated in the
central states.

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.

Principles of Consolidation

    The consolidated financial statements include the accounts of All Star Gas
Corporation and its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.

Revenue Recognition Policy

    Sales and related cost of product sold are recognized upon delivery of the
product or service.

Inventories

    Inventories are valued at the lower of cost or market. Cost is determined by
the first-in, first-out method for retail operations and specific identification
method for wholesale operations. At June 30 the inventories were:


                                      -8-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)

Inventories (Continued)

                                                          2001          2000
                                                          ----          ----
                                                             (In Thousands)

     Gas and other petroleum products                    $ 1,529       $ 2,832
     Gas distribution parts, appliances and equipment      1,254         1,289
                                                         -------       -------

                                                         $ 2,783       $ 4,121
                                                         =======       =======

Property and Equipment

    Depreciation is provided on property and equipment on the straight-line
method over estimated useful lives of 3 to 33 years.

Income Taxes

    Deferred tax liabilities and assets are recognized for the tax effects of
differences between the financial statement and tax bases of assets and
liabilities. A valuation allowance is established to reduce deferred tax assets
if it is more likely than not that a deferred tax asset will not be realized.

Amortization

    Debt acquisition costs are being amortized on a straight-line basis over the
terms of the debt to which the costs are related as follows: the 1994 senior
secured note costs (originally $5,143,000) were amortized over ten years; the
costs of the 1999 revolving credit facility (originally $1,279,000) were
amortized over three years; and the 2001 senior secured note costs (originally
$1,369,000) are amortized over 28 months.

    Amortization of discounts on debentures and notes (Note 5) is on the
effective interest, bonds outstanding method.

    The majority of the excess of cost over fair value of net assets acquired
relates to a transaction originating prior to July 1, 1994, and is being
amortized on the straight-line basis over 25 years. Excess of cost over fair
value of net assets on subsequent acquisitions is amortized on the straight-line
basis over five years.


                                      -9-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)

Income (Loss) Per Common Share

    Income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common shares and, except where anti-dilutive,
common share equivalents outstanding, if any. The weighted average number of
common shares outstanding used in the computation of earnings per share was
1,586,915 for each of the periods ended June 30, 2001, 2000 and 1999. Common
stock warrants and options outstanding were excluded from the June 30, 2001,
2000 and 1999, calculations of the weighted average number of common shares
outstanding used in the computation of earnings per share as they were
anti-dilutive.

Impact of Recent Accounting Pronouncements

    The Financial Accounting Standard Board (FASB) recently issued Statement of
Financial Accounting Standards (SFAS) 141, Business Combinations. This Statement
addresses financial accounting and reporting for business combinations. It
eliminates the pooling-of-interests method and requires that all business
combinations be accounted for using the purchase method. The provisions of this
Statement apply to all business combinations initiated after June 30, 2001, and
to all business combinations accounted for using the purchase method for which
the date of acquisition is July 1, 2001, or later. Adoption of the new standard
will have no initial effect on the Company's financial statements.

    The FASB also recently issued SFAS 142, Goodwill and Other Intangible
Assets. This Statement establishes accounting and reporting standards for
acquired goodwill and other intangible assets. The Statement addresses how
intangible assets that are acquired individually or with a group of other assets
(but not those acquired in a business combination) should be accounted for in
financial statements upon their acquisition. It also addresses how goodwill and
other intangible assets should be accounted for after they have been initially
recognized in the financial statements. Under the new standard, amortization of
existing goodwill ceases upon adoption of SFAS 142 and is replaced by periodic
evaluation for impairment using specified methodology. SFAS 142 is effective for
fiscal years beginning after December 15, 2001. Early adoption is permitted for
entities with fiscal years beginning after March 15, 2001. The Company will
apply SFAS 142 beginning with the first quarter of its fiscal year ending June
30, 2003, on a prospective basis. The effects of adoption of SFAS 142 on the
Company's financial statements are not determinable currently.


                                      -10-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)

Segment Information

    The principal business of the Company is the sale of LP gas. During the
first half of 2000, the Company also operated a restaurant chain (Note 17). The
Company has no significant assets other than those used in its principal
business. The LP gas operation is the Company's only reportable segment.
Selected information is not presented separately for the Company's reportable
segment, as there is no material difference between that information and the
corresponding information in the consolidated financial statements.

Delivery Costs

    The costs related to the delivery of the product to the customer is included
in operating expenses.


NOTE 2: MANAGEMENT'S CONSIDERATION OF GOING CONCERN MATTERS

    The Company reported income from operations during fiscal 2000 primarily due
to the gains recognized on the sale of certain retail service centers (Note 16).
The Company has otherwise suffered recurring losses from operations, continues
to have net working capital and net stockholders' equity deficiencies, which
have existed since June 30, 1994, and is in default with respect to its 9%
Subordinated Debentures due 2007 (Note 5).

    Also, as a result of the Company's significant disposition of retail service
centers during fiscal 2000, the Company has incurred a $7.7 million federal tax
liability that was due September 15, 2000. The Company was unable to pay the
obligation when due. The Internal Revenue Service (the "IRS") has placed liens
on Company assets. The Company has entered into a workout plan with the IRS for
payment of the tax obligation.

    The financial statements have been prepared assuming the Company will
continue as a going concern, realizing assets and liquidating liabilities in the
ordinary course of business. Management is exploring several strategies
involving additional debt and equity restructurings for mitigating these
conditions during the coming year. Although not currently planned, realization
of assets in other than the ordinary course of business to meet liquidity needs
could incur losses not reflected in these financial statements.


                                      -11-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 3: RELATED PARTY TRANSACTIONS

    During 2001, 2000 and 1999, the Company has purchased $172,500, $225,000 and
$250,000, respectively, of paint from a corporation owned by the spouse of the
Company's principal stockholder.

    In December 1996, the Company acquired a 10% ownership interest in Propane
Resources Transportation, Inc. (PRT). PRT provides transport services for a
portion of the Company's propane delivery needs resulting in freight charges
paid to PRT during 2001, 2000 and 1999 of $856,000, $1,157,000 and $773,000,
respectively.

    During the year ended June 30, 1997, the Company acquired a 39% interest in
Propane Resources Supply and Marketing, LLC (PRSM) for $263,000. The Company's
investment is stated at amortized cost plus equity in the affiliate's
undistributed net income since acquisition. The Company enters into purchase and
sale commitments under supply contracts with PRSM. In 2001, the Company
completed forward purchase and sale contracts with PRSM which resulted in buying
and selling $4.3 million and $4.8 million, respectively, of LP gas inventory.
This information was not determinable until the Company's adoption of SFAS No.'s
133 and 138 in 2001 (Note 13). The Company paid consulting fees of $0, $250,000
and $150,000 to PRSM during 2001, 2000 and 1999, respectively.

    At June 30, 2001 and 2000, the Company has invested $1,265,000 and $134,000,
respectively, along with certain key employees in real estate partnerships as
special limited partners for tax credit allocation purposes.

    In 1998, the Company entered into an operating lease with the principal
stockholder for an aircraft. The lease required $95,000 in annual payments for a
term of three years that began in January 1998. In April 2000, the lease
agreement was terminated. The lease agreement required the Company to maintain
the aircraft in its condition at lease inception with normal wear and tear
excepted. The Company incurred expenses of $225,000 at the termination of the
lease to comply with this requirement.

    In 2001 and 2000, the principal stockholder loaned the Company amounts
totaling $2.5 million and $3.8 million, respectively, bearing interest at a rate
of 12%, with terms ranging from seven days to six months. At June 30, 2001 and
2000, the balance of these obligations was $394,000 and $0, respectively.

    In 2001, the Company's principal stockholder pledged as collateral his stock
in the Company to the Senior Secured Notes, due 2003 (Note 5) and guaranteed
various notes payable (Note 6).


                                      -12-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 3: RELATED PARTY TRANSACTIONS (Continued)

    In February 2001, the principal stockholder assumed a note payable to the
Company with a balance of $942,000 (Note 4). The note principal is due in August
2012 and interest is payable monthly.


NOTE 4: NOTE RECEIVABLE

    The note receivable is secured primarily by three deeds of trust on real
property located in the counties of Laclede, Camden and Crawford in the state of
Missouri. In 2000, the note was due in monthly installments of $11,000,
including interest at 9.3745%, until August 2012. In February 2001, the note
receivable was assumed by the principal shareholder (Note 3). The note principal
is now due in August 2012 and interest is payable monthly.


NOTE 5: LONG-TERM DEBT

    Long-term debt at June 30 consisted of (in thousands):

                                                              2001       2000
                                                              ----       ----

    11% Senior Secured Notes, due 2003 (A)                  $ 66,197   $     --
    12 7/8% Senior Secured Notes, due 2004 (B)                    --     50,880
    9% Subordinated Debentures, due 2007 (C)                   9,729      9,729
    Purchase contract obligations and capital leases (D)       4,589      4,643
                                                            --------   --------
                                                              80,515     65,252
    Less unamortized discounts                                 9,296      4,178
                                                            --------   --------
                                                              71,219     61,074
    Less current maturities                                   14,493     57,897
                                                            --------   --------

                                                            $ 56,726   $  3,177
                                                            ========   ========

(A)   The notes were issued in conjunction with an exchange offer for the
      Company's Senior Secured notes, due 2004 (see item (B)). The notes were
      issued February 2001 at a discount and require interest payments at 11%.
      The notes are due June 30, 2003, and are redeemable at the Company's
      option, in whole or from time to time in part, until maturity, upon not
      less than 30 nor more than 60 days' notice, at a reduced redemption price
      of the principal amount of the notes being redeemed equal to a
      predetermined percentage at specific future dates, plus accrued and unpaid
      interest thereon to the redemption date:


                                      -13-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999

NOTE 5: LONG-TERM DEBT (Continued)

               On or prior to                 Redemption Percentage
               --------------                 ---------------------

               December 31, 2001                       90.38%
               June 30, 2002                           93.59%
               December 31, 2002                       96.79%
               June 30, 2003                          100.00%

      The balance outstanding of the Senior Notes includes the original
      principal amount of the notes issued ($53,064,000) plus the amount of
      interest accrued from August 1, 2000, to November 30, 2000, on the
      remaining 40% of the Senior Secured Notes, due 2004 (see item (B)). The
      original principal amount was adjusted to give effect for the original
      issue discount and accrued interest at February 23, 2001, on the Senior
      Secured Notes, due 2004 (effective interest rate of 4.42%). The discount
      on these notes is being amortized over the remaining life of the notes
      using the effective interest method.

      The balance outstanding of the notes as of June 30, 2001, is as follows:

            11% Senior Secured Notes, due 2003             $ 53,064,000
            Accrued interest capitalized prior to
               debt restructuring                             7,395,000
                                                           ------------

                                                           $ 60,459,000
                                                           ============

      The notes are guaranteed by the restricted subsidiaries of the Company and
      secured by the common stock of the restricted subsidiaries and the
      Company's principal stockholder's common stock in the Company. Separate
      financial statements of the guarantor subsidiaries are not included
      because such subsidiaries have jointly and severally guaranteed the notes
      on a full and unconditional basis; the aggregate assets and liabilities of
      the guarantor subsidiaries are substantially equivalent to the assets and
      liabilities of the parent on a consolidated basis; and the separate
      financial statements and other disclosures concerning the subsidiary
      guarantors are not deemed to be material.

(B)   The notes were issued June 1994 at a discount and required interest
      payments at 7% through July 15, 1999, and at 127/8% thereafter. The notes
      were redeemable at the Company's option. The original principal issued may
      have been redeemed, as a whole or in part, at 106.438% of the principal
      amount through July 15, 2000, and at declining percentages thereafter.

                                      -14-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 5: LONG-TERM DEBT (Continued)

      The original principal amount of the notes issued ($127,200,000) was
      adjusted to give effect for the original issue discount and the common
      stock purchase warrants (effective interest rate of 13.0%). The discount
      on these notes was being amortized over the remaining life of the notes
      using the effective interest method.

      The notes were guaranteed by the restricted subsidiaries of the Company
      and were secured by the common stock of the restricted subsidiaries of the
      Company. Separate financial statements of the guarantor subsidiaries were
      not included because such subsidiaries had jointly and severally
      guaranteed the notes on a full and unconditional basis; the aggregate
      assets and liabilities of the guarantor subsidiaries were substantially
      equivalent to the assets and liabilities of the parent on a consolidated
      basis; and the separate financial statements and other disclosures
      concerning the subsidiary guarantors were not deemed to be material.

      In May 2000, the Company received consent from the outstanding note
      holders to amend the indenture and the notes. Pursuant to the amendments,
      the Company redeemed 60% of the principal balance of the notes in the
      ratio of $786 per $1,000 principal. The aggregate amount paid was $60
      million and was generated through the proceeds from the sales of various
      retail service centers. The redemption resulted in the Company recording
      an extraordinary gain of approximately $12.6 million, less income taxes of
      $4.6 million.

      The remaining balance was to have been paid at the same discounted ratio
      at July 31, 2000, without any further accrual of interest since the last
      interest period that ended January 15, 2000. Proceeds from additional
      sales of service centers were to be used to generate the funds for the
      payment.

      On July 31, 2000, the Company defaulted with respect to the balance of the
      notes which, consequently, also caused the Company to be in default with
      respect to its 9% Subordinated Debentures, due 2007 (see item (C)). On
      February 23, 2001, the Company completed an exchange offer to restructure
      the notes and new senior notes were issued (see item (A)).

(C)   The debentures, issued June 1983, are redeemable at the Company's option,
      as a whole or in part, at par value.

      The original principal amount of debentures issued was adjusted to market
      at issuance (effective interest rate of 16.5%). The remaining discount on
      these debentures is being amortized over the remaining life of the
      debentures using the effective interest method.

                                      -15-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 5: LONG-TERM DEBT (Continued)

      Due to the nonpayment of interest due since June 30, 2000, the Company is
      in default with respect to the debentures. As a result of the default, the
      debenture holders have the right to accelerate the balance due and require
      immediate payment in full. Accordingly, the entire balance of the
      obligation is included in current liabilities at June 30, 2001 and 2000.
      The debenture holders have not accelerated the balance due under the notes
      as of August 24, 2001.

(D)   Purchase contract obligations arise from the purchase of operating
      businesses and are collateralized by the equipment and real estate
      acquired in the respective acquisitions. Capital leases include leases
      covering trucks and data processing equipment. At June 30, 2001 and 2000,
      these obligations carried interest rates from 7% to 11% and are due
      periodically through 2008.

    Aggregate annual maturities (in thousands) of the long-term debt outstanding
    at June 30, 2001, are:

              2002                        $ 14,493
              2003                          54,014
              2004                             696
              2005                             659
              2006                             967
           Thereafter                          390
                                          --------

                                          $ 71,219
                                          ========

NOTE 6: NOTES PAYABLE TO BANKS

    Notes payable to banks aggregating $3,979,000 at June 30, 2001, are
comprised of short-term borrowings secured by accounts receivable, inventory and
property and equipment. The borrowings bear interest at a weighted average
interest rate of approximately 9.6% and are due periodically in 2002.


                                      -16-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 7: INCOME TAXES

    The provision (credit) for income taxes on income before extraordinary item
and cumulative effect of change in accounting principle includes these
components:

                                            2001          2000           1999
                                            ----          ----           ----
                                                      (In Thousands)

   Taxes currently payable (refundable)   $ (2,667)      $ 5,748       $ (1,098)
   Deferred income taxes                     2,354         2,144         (4,099)
                                          --------       -------       --------

                                          $   (313)      $ 7,892       $ (5,197)
                                          ========       =======       ========

    The tax effects of temporary differences at June 30, 2001 and 2000, related
to deferred taxes were:

                                                             2001         2000
                                                             ----         ----
                                                               (In Thousands)
   Deferred Tax Assets

     Allowance for doubtful accounts                       $     92     $   110
     Self-insurance liabilities and contingencies               866       1,472
     Original issue discount                                  4,058       4,041
     Unrealized loss on derivative financial instruments         31          --
                                                           --------     -------
                                                              5,047       5,623
   Deferred Tax Liability

     Accumulated depreciation and tax cost differences      (10,585)     (8,261)
                                                           --------    --------

         Net deferred tax liability                        $ (5,538)   $ (2,638)
                                                           ========    ========


                                      -17-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 7:        INCOME TAXES (Continued)

    The above net deferred tax liability is presented on the June 30 balance
sheets as follows:

                                                     2001           2000
                                                     ----           ----
                                                        (In Thousands)

   Deferred Tax Assets (Liabilities)

     Deferred tax asset - current                  $    200       $    150
     Deferred tax liability - long-term              (5,738)        (2,788)
                                                   --------       --------

         Net deferred tax liability                $ (5,538)      $ (2,638)
                                                   ========       ========

    A reconciliation of income tax expense (credit) at the statutory rate to the
Company's actual income tax expense (credit) is shown below:
<TABLE>
<CAPTION>
                                                            2001            2000          1999
                                                            ----            ----          ----
                                                                       (In Thousands)
<S>                                                       <C>            <C>           <C>
Computed at the statutory rate (34%)                      $ (3,746)       $ 5,886       $ (5,429)
Increase (decrease) resulting from:
   Amortization of excess of cost over
     fair value of net assets acquired                         173            210            389
   State income taxes - net of federal tax benefit            (333)         1,323           (280)
   Nondeductible goodwill amortization on sold
     retail service centers                                    101            895             --
   Interest and penalties on tax obligations                 1,311             --             --
   Reduction of tax basis on retail service centers          2,584             --             --
   Other                                                      (403)          (422)           123
                                                          --------        -------       --------

         Actual tax provision (credit)                    $   (313)       $ 7,892       $ (5,197)
                                                          ========        =======       ========
</TABLE>

                                      -18-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 8: SELF-INSURANCE AND CONTINGENCIES

    Under the Company's current insurance program, the Company's comprehensive
general, auto and employer's liability coverage and excess liability policy
provides for losses of up to $75.0 million. The general liability coverage has a
$250,000 self-insured retention with a $1 million cap on total claims. The
Company's combined auto and workers' compensation coverage is insured through
participation in a captive insurance program. The Company obtains excess
coverage on occurrence basis policies. Provisions for self-insured losses are
recorded based upon the Company's estimates of the aggregate self-insured
liability for claims incurred, resulting in a retention for a portion of these
expected losses.

    The ending accrued liability includes $150,000 for incurred but not reported
claims at June 30, 2001 and 2000. The current portion of the ending liability of
$400,000 at June 30, 2001 and 2000, is included in accrued expenses in the
consolidated balance sheets. The noncurrent portion at the end of each period is
included in accrued self-insurance liability.

    The Company and its subsidiaries are also defendants in various lawsuits
related to the self-insurance program, which are not expected to have a material
adverse effect on the Company's financial position or results of operations.

    The Company currently self-insures health benefits provided to the employees
of the Company and its subsidiaries subject to a $75,000 cap per claim.
Provisions for losses expected under this program are recorded based upon the
Company's estimate of the aggregate liability for claims incurred. The aggregate
cost of providing the health benefits was $770,000, $1,079,000 and $816,000 for
the years ended June 30, 2001, 2000 and 1999, respectively.

    In conjunction with a restructuring transaction involving the Company and
Empire Energy Corporation, the parties agreed to share on a percentage basis the
self-insured liabilities and other business related lawsuits incurred prior to
June 30, 1994, including both reported and unreported claims. The self-insured
liabilities included under this agreement include general, vehicle, workers'
compensation and health insurance liabilities. Under the agreement, the Company
assumed 52.3% of the liability with Empire Energy Corporation assuming the
remaining 47.7%.

    The Company and its subsidiaries are presently involved in other various
federal and state tax audits, which are not expected to have a material adverse
effect on the Company's financial position or results of operations.

                                      -19-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 9: STOCK OPTIONS AND WARRANTS

Stock Options

    The Company has established a Stock Option Plan for the benefit of its
employees and directors. Stock options may be either incentive stock options or
nonqualified stock options, with an option price no less than the fair value of
the Company's common stock on the date of the grant. Options are granted for no
more than a 10-year term and are exercisable based on a written agreement
between the administrator and optionee.

    The table below summarizes transactions under the Company's stock option
plan:

                                              Number of Shares
                                              ----------------

   Balance, June 30, 1998                          584,026
     Granted ($1.00 per share)                     154,404
     Forfeited                                    (237,730)
                                                 ---------
   Balance, June 30, 1999                          500,700
     Granted ($1.00 per share)                      10,000
     Forfeited                                     (75,000)
                                                 ---------
   Balance, June 30, 2000                          435,700
     Granted ($1.00 per share)                      74,000
     Forfeited                                     (35,000)
                                                 ---------

   Balance, June 30, 2001                          474,700
                                                 =========

    Options outstanding at June 30, 2001, have a weighted-average remaining
contractual life of approximately seven years with 336,920 options currently
exercisable. The exercise price was $7.00 per share until May 2000 when it was
reduced to $1.00 per share.

    The Company applies Accounting Principles Board Opinion 25 and related
Interpretations in accounting for the plan, and no compensation cost has been
recognized. No fair value disclosures with respect to stock options are
presented because, in the opinion of management, such values do not have a
material effect.


                                      -20-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 9: STOCK OPTIONS AND WARRANTS (Continued)

Common Stock Purchase Warrants

    The Company issued detachable warrants to purchase common stock in
connection with the issuance of 127/8% Senior Secured Notes in 1994. Each
warrant represents the right to purchase one share of the Company's common stock
for $.01 per warrant. The warrants are exercisable currently and will expire on
July 15, 2004. No warrants were issued or exercised in 2001, 2000 and 1999.
Warrants to purchase 175,536 shares were outstanding at June 30, 2001 and 2000.


NOTE 10: ADDITIONAL CASH FLOW INFORMATION

                                                       2001      2000      1999
                                                       ----      ----      ----
                                                           (In Thousands)

Noncash Investing and Financing Activities

   Notes receivable from sale of retail service
     centers and Tres Hombres, Inc.                       --    $1,350      $207
   Purchase contract obligations incurred for
     business acquisitions                              $591      $389       $75
   Capital lease obligations incurred for property
     and equipment                                      $326      $332      $232
   Long-term obligations incurred for investment
     in Missouri Investment Partner I, LLC, a
     purchaser of Missouri low-income housing
     tax credits                                        $870        --        --

Additional Cash Payment Information

   Interest paid                                      $2,529   $14,199   $11,762
   Income taxes paid                                  $3,633      $552        --
   Income taxes refunded                                $417      $869    $1,486


                                      -21-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 11: EMPLOYEE BENEFIT PLAN

    The Company has a defined contribution retirement plan covering
substantially all employees. Employees who elect to participate may contribute a
percentage of their salaries to the plan. The Company may make contributions to
the plan at the discretion of its Board of Directors. No contributions to the
plan were made by the Company during the years ended June 30, 2001, 2000 or
1999.


NOTE 12: OPERATING LEASES

    Noncancelable operating leases, which cover office space and various
equipment, expire in various years through 2012. These leases generally contain
renewal options for periods ranging from one to five years and require the
Company to pay all executory costs (property taxes, maintenance and insurance).

    Future minimum lease payments (in thousands) at June 30, 2001, were:

           2002                                  $   531
           2003                                      468
           2004                                      453
           2005                                      452
           2006                                      429
           Thereafter                              2,284
                                                 -------

           Future minimum lease payments         $ 4,617
                                                 =======


NOTE 13: FUTURES AND FORWARD CONTRACTS AND CHANGE IN ACCOUNTING PRINCIPLE

    The Company enters into purchase and sale commitments under supply contracts
and similar agreements with other parties that typically have a term of less
than one year. As of June 30, 2001 and 2000, the Company had approximately $5.5
million and $11.9 million, respectively, in outstanding commitments to purchase
LP gas for inventory. The Company also had outstanding commitments to sell
approximately 2.1 million gallons and 31.5 million gallons of LP gas at June 30,
2001 and 2000, respectively.


                                      -22-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 13: FUTURES AND FORWARD CONTRACTS AND CHANGE IN ACCOUNTING PRINCIPLE
         (Continued)

    The Company also uses commodity futures contracts to reduce the risk of
price fluctuations for liquefied propane (LP) gas purchase and sale commitments.
As of June 30, 2001 and 2000, the Company's open positions on commodity futures
contracts for LP gas consisted of 0 gallons and 210,000 gallons, respectively,
and had a fair value of approximately $0 and $13,000, respectively. Net
unrealized gains and losses on open positions in commodity futures contracts
were immaterial at June 30, 2001 and 2000.

    On July 1, 2000, the Company adopted the provisions of Financial Accounting
Standards Board Statements (SFAS) Nos. 133 and 138, which establish accounting
and reporting standards for derivative instruments. SFAS 133 and 138 require
most derivative instruments to be reflected as assets or liabilities in the
balance sheet at their fair values with changes in fair values reflected in net
income (or accumulated other comprehensive income if the criteria for cash flow
hedge accounting are met). An exception to application of the requirements is
provided for derivative instruments that meet the criteria of normal
purchases/normal sales set forth in the new standards and are, therefore, not
recognized.

    Derivative financial instruments held by the Company consist of the forward
purchase and sales contracts and the commodity futures contracts discussed
above. Certain of the forward purchase and sales contracts meet the normal
purchases/normal sales criteria and are not recognized in the financial
statements. The remainder of the forward purchase and sales contracts and all of
the commodity futures contracts are recognized in the financial statements as
the Company has elected not to apply the hedge accounting provisions of the new
standards to those instruments.

    At July 1, 2000, initial adoption of the new standards resulted in
recognition of derivative financial instruments as assets and liabilities in the
amounts of $3.1 million and $1.6 million, respectively, and a cumulative effect
adjustment of $940,000, net of applicable income taxes. No disclosure of the pro
forma effects as if the new standards had been applied retroactively to prior
periods is made as such effects are immaterial. Application of the new standards
resulted in recognition of a loss on forward and futures contracts of $506,000
during the year ended June 30, 2001.


                                      -23-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 14: SIGNIFICANT ESTIMATES AND CONCENTRATIONS

    Generally accepted accounting principles require disclosure of certain
significant estimates and current vulnerabilities due to certain concentrations.
Those matters include the following:

Estimates

    Significant estimates related to self-insurance, goodwill amortization,
litigation, collectibility of receivables and income tax assessments are
discussed in Notes 1 and 8. Actual losses related to these items could vary
materially in the near term from amounts reflected in the financial statements.


NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

    The following methods were used to estimate the fair value of financial
instruments:

Note Receivable

    Fair value is estimated by discounting the future cash flows using the rates
at which similar notes would be written for the same remaining maturities.

Forward Purchase and Forward Sale Contracts

    Fair value is based on quoted market prices.

Notes Payable to Banks and Long-Term Debt

    Fair value of the Senior Secured Notes is estimated based on the trading
prices of this debt issuance. The fair value of the Subordinated Debentures is
estimated by discounting the future cash flows using the rates at which similar
notes would be written for the same remaining maturities. The fair value of
notes payable to banks and other debt approximates carrying value as other debt
consists of obligations with interest rates approximating rates currently
available to the Company.


                                      -24-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Notes Payable to Banks and Long-Term Debt (Continued)

    The following table presents estimated fair values of the Company's
financial instruments. The fair values of certain of these instruments were
calculated by discounting expected cash flows, which method involves significant
judgments by management and uncertainties. Fair value is the estimated amount at
which financial assets or liabilities could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Because no market exists for certain of these financial instruments and because
management does not intend to sell these financial instruments, the Company does
not know whether the fair values shown below represent values at which the
respective financial instruments could be acquired or sold individually or in
the aggregate.
<TABLE>
<CAPTION>
                                                                    June 30
                                         -------------------------------------------------------------
                                                    2001                               2000
                                         --------------------------          -------------------------
                                         Carrying            Fair            Carrying           Fair
                                          Amount            Value             Amount            Value
                                          ------            -----             ------            -----
<S>                                      <C>              <C>                <C>               <C>
Financial Assets:
   Cash                                      $509             $509              $432              $432
   Note receivable                           $942             $942              $972              $972
   Forward sales contracts                   $115             $115                --                --

Financial Liabilities:
   Notes payable to banks                  $3,979           $3,979                --                --
   Senior Secured Notes, due 2003         $60,459          $28,620                --                --
   Senior Secured Notes, due 2004              --               --           $50,535           $40,000
   Subordinated Debentures, due 2007       $6,171           $2,919            $5,896            $5,843
   Other long-term debt                    $4,589           $4,589            $4,643            $4,643
   Forward purchase contracts                $200             $200                --                --
</TABLE>

NOTE 16: ACQUISITIONS AND DISPOSITIONS OF RETAIL SERVICE CENTERS

    During the year ended June 30, 2001, the Company acquired one LP gas
operation through an asset purchase transaction for a total of $600,000, of
which $110,000 was paid in cash with the remainder in mortgage obligations and
the assumption of certain liabilities. During the year ended June 30, 2000, the
Company acquired one LP gas operation through an asset


                                      -25-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 16: ACQUISITIONS AND DISPOSITIONS OF RETAIL SERVICE CENTERS (Continued)

purchase transaction for a total of $545,000, of which $5,500 was paid in cash
with the remainder in mortgage obligations and the assumption of certain
liabilities. Each of these acquisitions has been accounted for as a purchase by
recording the assets acquired and the liabilities assumed at their estimated
fair values at the acquisition date. Amounts paid above these fair values are
recorded as excess of cost over fair value of net assets acquired. The
consolidated operations of the Company include the operations of the acquirees
from the acquisition dates. The pro forma effects of the acquisitions as if they
had been completed at the beginning of the year would not be materially
different from actual results.

    During the year ended June 30, 2001, the Company sold three retail service
centers. The Company received $929,000 in cash from the sale. The pro forma
effects of the disposition as if it had been completed at the beginning of the
year would not be materially different from actual results.

    During the year ended June 30, 2000, the Company sold 66 retail service
centers. The Company received $91.1 million in cash from these sales. Unaudited
pro forma consolidated operations, assuming the dispositions were made at the
beginning of the current and previous years, are shown below:

                                                     2001               2000
                                                     ----               ----
                                                          (In Millions)

   Operating revenue                                $57.1               $55.7
   Net income (loss)                                $(9.8)              $14.9

    The pro forma results are not necessarily indicative of what would have
occurred had the retail service center dispositions been on those dates, nor are
they necessarily indicative of future operations.


NOTE 17: BUSINESS ACQUISITION AND DISPOSITION

    On July 2, 1999, the Company acquired Tres Hombres, Inc., a restaurant chain
controlled by the Company's principal stockholder, in a transaction that was
accounted for in a manner similar to a pooling of interests. The Company issued
22,865 shares of stock previously held in treasury in exchange for all of the
outstanding common stock of Tres Hombres, Inc.

                                      -26-
<PAGE>
                            ALL STAR GAS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2001, 2000 AND 1999


NOTE 17: BUSINESS ACQUISITION AND DISPOSITION (Continued)

    Due to covenant requirements established by its then working capital lender,
the Company sold Tres Hombres, Inc. in December 1999, recognizing a loss of
approximately $363,000. The sale was consummated through receipt of a promissory
note and assumption of certain liabilities by the buyer. Unaudited pro forma
consolidated operations, assuming the disposition was made at the beginning of
the current and previous years, are shown below:

                                                     2001               2000
                                                     ----               ----
                                                           (In Millions)

   Operating revenue                                $57.1               $78.7
   Net income (loss)                                $(9.8)              $18.3


NOTE 18: SUBSEQUENT EVENT - DISPOSITION OF RETAIL SERVICE CENTER

    In August 2001, the Company sold for cash and notes three retail service
centers in Missouri at a gain. The retail service centers disposed of accounted
for approximately 7%, 4% and 4% of sales volume for the years ended June 30,
2001, 2000 and 1999, respectively. At June 30, 2001, the carrying value of the
retail service center disposed of was approximately 9% of total assets.



                                      -27-
<PAGE>


                       Independent Accountants' Report on
                            Supplementary Information






Board of Directors and Stockholders
All Star Gas Corporation
Lebanon, Missouri


    Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The nature of our audit
procedures is more fully described in our report on the basic consolidated
financial statements. Our report on the basic consolidated financial statements
includes an emphasis paragraph discussing substantial doubt about the Company's
ability to continue as a going concern. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic consolidated financial statements. Such information
has been subjected to the procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic consolidated financial statements
taken as a whole.


                                    BKD, LLP


Springfield, Missouri
August 10, 2001




                                      -28-
<PAGE>
                            ALL STAR GAS CORPORATION

                CONSOLIDATED SCHEDULES OF SALES AND GROSS PROFIT

                       YEARS ENDED JUNE 30, 2001 AND 2000
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                2001                                       2000
                                 -------------------------------------     -------------------------------------
                                                   Gross Profit                             Gross Profit
                                               -----------------------                  ------------------------
                                                            Percentage                                Percentage
                                   Sales        Amount      of Revenue      Sales         Amount      of Revenue
                                   -----        ------      ----------      -----         ------      ----------
<S>                              <C>          <C>           <C>           <C>           <C>          <C>
Gas Sales
   Bulk - retail                 $ 51,952      $ 13,376         25.7%      $ 64,529      $ 26,696         41.4%
   Bulk - industrial
     accounts                          --            --           --          5,529           910         16.5
   Bottle - retail and
     wholesale                        968           565         58.4          1,593           975         61.2
                                 --------      --------                    --------      --------
                                   52,920        13,941         26.3         71,651        28,581         39.9

Gas Systems
   and Appliances                   1,639           578         35.3          3,424           677         19.8

Fuel Oil & Gas                        148            54         36.5             --            --           --
                                 --------      --------                    --------      --------
                                   54,707        14,573                      75,075        29,258
Other Revenue
   Food, liquor and other              --            --                       1,860         1,252
   Rental, storage
     and leases                       777           777                       1,607         1,607
   Service labor                      860           860                       1,453         1,453
   Service charges                    227           227                         280           280
   Miscellaneous                      481           481                         342           342
                                 --------      --------                    --------      --------

                                 $ 57,052      $ 16,918         29.7       $ 80,617      $ 34,192         42.4
                                 ========      ========                    ========      ========
</TABLE>



                                      -29-
<PAGE>

                            ALL STAR GAS CORPORATION

          CONSOLIDATED SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES

                       YEARS ENDED JUNE 30, 2001 AND 2000
                                 (In Thousands)


                                                        2001           2000
                                                        ----           ----

Salaries and commissions                              $  8,520       $ 14,692
Transportation                                           1,372          2,593

Office, telephone and utilities                            813          1,930
Taxes and licenses other than payroll and income           444          1,010

Rent and maintenance of building and equipment           1,456          2,657
Payroll taxes and employee benefits                      1,539          2,604

Insurance and liability claims                             901          3,773
Travel and entertainment                                   372            525

Professional fees                                          366          1,600
Advertising                                                269            369
Miscellaneous                                              317          1,329
                                                      --------       --------

                                                      $ 16,369       $ 33,082
                                                      ========       ========


                                      -30-
<PAGE>


         Independent Accountants' Report on Financial Statement Schedule



Board of Directors and Stockholders
All Star Gas Corporation
Lebanon, Missouri


    In connection with our audit of the consolidated financial statements of ALL
STAR GAS CORPORATION for each of the three years in the period ended June 30,
2001, we have also audited the accompanying financial statement schedule of
valuation and qualifying accounts. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits of the basic
consolidated financial statements. The schedule is presented for purposes of
complying with the Securities and Exchange Commission's rules and regulations
and is not a required part of the consolidated financial statements.

    In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.


                                   /s/BKD, LLP


Springfield, Missouri
August 10, 2001



<PAGE>
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999
                                 (In Thousands)
<TABLE>
<CAPTION>
                            Balance at         Charges to          Amount                      Balance at
                            Beginning           Costs and         Written                        End of
         Description         of Year            Expenses            Off          Other            Year
         -----------       -----------         ----------        ---------       -----          --------
<S>                       <C>                 <C>               <C>             <C>            <C>
Valuation accounts
  deducted from
  assets to which
  they apply - for
  doubtful accounts
  receivable:
     June 30, 2001             $300                $341             $391            $1(A)          $250
                                                                                  $(1)(B)
     June 30, 2000             $526                $464             $369            $1(A)          $300
                                                                                $(322)(B)
     June 30, 1999             $844                $227             $545            $3(A)          $526
                                                                                  $(3)(B)
</TABLE>
(A) Allowance for doubtful accounts receivable established with respect to the
    acquisition of retail service centers.

(B) Related to accounts receivable which were sold in conjunction with the
    disposition of retail service centers.