U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-9800
LYRIC ENERGY, INC.
(Exact name of small business issuer as specified in its Charter)
Colorado 75-1711324
(State of Incorporation) (I.R.S. Employer Identification
Number)
1013 West 8th Ave., Amarillo, Texas 79101
(Address of principal executive offices)
(806) 376-5088
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act during the past 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.......
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 250,000,000 shares of common
stock as of August 31, 1997.
Transitional Small Business Disclosure Format (check one);
Yes....... No...X....
Index to Quarterly Report on Form 10Q-SB
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
(a) Financial Statements of Lyric Energy, Inc.
Report on Review by Independent Certified Public Accountants
Balance Sheets as of July 31, 1997 and April 30, 1997
Statements of Operations for the Three-Month Periods ended
July 31, 1997 and 1996 and Cumulative Period During the
Development Stage
Statements of Cash Flows for the Three-Month Periods ended
July 31, 1997 and 1996 and Cumulative Period During the
Development Stage
Selected Information for Consolidated Financial Statements,
including Pro Forma Combined Financial Information
(b) Consolidated Financial Statements of Natural Gas Technologies,
Inc.
Report on Review by Independent Certified Public Accountants
Balance Sheets as of July 31, 1997 and April 30, 1997
Statements of Operations for the Three-Month Periods ended
July 31, 1997 and 1996
Statements of Cash Flows for the Three-Month Periods ended
July 31, 1997 and 1996
Selected Information for Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Plan of Operation.
Plan of Operation of Lyric Energy, Inc
Management's Discussion and Analysis of Financial Condition and
Results of Operations of Natural Gas Technologies, Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission Of Matters To A Vote Of Security Holders.
Item 5. Other Information.
Item 6. Exhibits And Reports on Form 8-K.
SIGNATURES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
(a) Financial Statements of Lyric Energy, Inc.
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Lyric Energy, Inc.
Dallas, Texas
We have reviewed the accompanying consolidated balance sheet of Lyric Energy,
Inc. as of July 31, 1997, and the related statements of operations and cash
flows for the three months ended July 31, 1997 and 1996. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of April 30, 1997, and the
related consolidated statements of operations, retained earnings and cash
flows for the year then ended (not presented herein); and in our report dated
July 18, 1997, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of April 30, 1997 is fairly stated in
all material respects in relation to the consolidated balance sheet from which
it has been derived.
/S/ ROBERT EARLY & COMPANY, P.C.
Robert Early & Company, P.C.
Abilene, Texas
September 5, 1997
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Balance Sheets
July 31, April 30,
1997 1997
(Unaudited)
Assets
None None
Liabilities and Stockholders' Equity/(Deficiency)
Liabilities
None None
Stockholders' Equity/(Deficiency)
Common stock, $.01 stated value (250,000,000
shares authorized, 250,000,000 outstanding) 2,500,000 2,500,000
Additional paid-in capital 224,222 224,222
Retained (deficit) (2,724,222) (2,724,222)
____________ ____________
Total Stockholders' Equity/(Deficiency) - -
____________ ____________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
____________ ____________
____________ ____________
See accompanying selected information and accountant's report.
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Statements of Operations
For Three Months Ended July 31, 1997 and 1996
(Unaudited)
Cumulative
During the
Development
Stage 1997 1996
General and administrative expenses $ (35,536) $ - $ (593)
Interest expense to related parties (1,482) - (2,223)
____________ ____________ ____________
NET (LOSS) $ (37,018) $ - $ (2,816)
____________ ____________ ____________
____________ ____________ ____________
Net loss per weighted average
share $ (0.00) $ (0.00) $ (0.00)
____________ ____________ ____________
____________ ____________ ____________
Weighted average shares
outstanding 130,257,560 250,000,000 46,958,483
____________ ____________ ____________
____________ ____________ ____________
See accompanying selected information and accountant's report.
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Statements of Cash Flows
For Three Months Ended July 31, 1997 and 1996
(Unaudited)
Cumulative
During the
Development
Stage 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (37,018) $ - $ (2,816)
Adjustments to reconcile net income/
(loss) to net cash provided by
operations:
Increase/(decrease) in:
Accounts payable (64,487) - (837)
Accrued expenses 1,482 - 2,223
____________ ____________ ____________
NET CASH (USED) BY OPERATING
ACTIVITIES (100,023) - (1,430)
____________ ____________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable 100,000 - -
____________ ____________ ____________
Increase/(decrease) in cash for
period (23) - (1,430)
Cash, Beginning of period 23 - 1,453
____________ ____________ ____________
Cash, End of period $ - $ - $ 23
____________ ____________ ____________
____________ ____________ ____________
Supplemental Disclosures:
Cash payments for:
Interest $ - $ - $ -
Income taxes - - -
Cancellation of related party and
other indebtedness $ 458,166 $ - $ -
Stock issued for conversion of
note payable $ 100,000 $ - $ -
See accompanying selected information and accountant's report.
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
SELECTED INFORMATION FOR CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1997
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions of Regulation SB. They do not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements. However, except as disclosed
herein, there has been no material change in the information included in the
Company's Annual Report on Form 10-KSB for the year ended April 30, 1997. In
the opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The report of Robert Early & Company, P.C. commenting on their review
accompanies the condensed financial statements included in Item 1 of Part 1.
Operating results for the three month period ended July 31, 1997, are not
necessarily indicative of the results that may be expected for the year ending
April 30, 1998.
Development Stage Enterprise -- The Company returned to the development stage
in November 1996 with the transfer of its final operating responsibility to
others and thereby reducing its activities to the sole pursuit of identifying,
evaluating, structuring, and completing a merger with or acquisition of a
privately owned entity.
Going Concern Issues The Company has been relatively inactive during the
past three years due to a shortage of operating assets and working capital.
The Company has no assets (or credit) with which to initiate new business or
to acquire an existing business These factors raise substantial doubt about
the Company's ability to continue as a going concern. The Company reentered
the development stage in November 1996 when it transferred its last operations
to another operator and reinforced its search for a merger or acquisition
target in order to carry on the operations of the target Company. The Company
signed a Letter of Intent to merge with Natural Gas Technologies, Inc. (NGT)
in January 1997. In April 1997, NGT acquired an 81% ownership interest in the
Company in a first step toward a merger. The ability of the Company to
continue as a going concern is dependent on the completion of this
transaction. There are no adjustments of financial statement information
required should the Company be unable to continue as a going concern.
NOTE 2: MERGER AGREEMENT WITH NATURAL GAS TECHNOLOGIES, INC.
On January 2, 1997, the Company entered into a Letter of Intent (LOI), amended
subsequently via a supplemental letter dated March 17,1997, with Natural Gas
TechnoIogies, Inc., a Texas corporation. In accordance with the LOI, NGT
loaned the Company $100,000 pursuant to a non-interest bearing, convertible
note dated February 4, 1997 (Note), and the loaned funds were placed in
escrow. The Note was converted on April 10, 1997 into 203,041,517 common
shares, which were all of the remaining authorized but unissued common shares
of the Company. Conversion occurred after the Company had filed all of the
required reports pursuant to the Securities Exchange Act of 1934, as amended,
and after the Company had obtained a waiver from a bank of the Company's
commitment in connection with a compromise and settlement agreement related to
a bank debt forgiveness in July 1991. This commitment was the maintenance of
the bank's ownership interest at a constant 8.9976% through issuance of
additional common stock as needed. Upon conversion, loaned funds were
released from escrow to the Company for use in satisfying all existing debts
and encumbrances and settling all claims against it.
The LOI further provides for a share exchange transaction whereby the
shareholders of NGT are to be issued additional shares in the Company such
that these shareholders will own a total of 95 percent of the total issued and
outstanding common shares of the Company and NGT would become a wholly owned
subsidiary of the Company. This ratio of ownership between NGT shareholders
and the previous shareholders is for NGT shareholders and for transactions
effective April 1, 1997 and prior. Subsequent transactions in NGT shares are
not included in this ratio and must be approved as to value by the Board of
Directors of the Company. The share exchange will occur after the Company
holds a shareholder meeting for the purpose of (1) approving a reverse split
of the Company's common stock which will result in additional common shares
being made available in order to issue shares in the shares exchange; (2)
authorizing 10,000,000 shares of no par value preferred stock (Approximately
25,000 of these will be designated for exchange with NGT preferred
shareholders in the share exchange and the remaining 9,975,000 will be
reserved for future issuance at the discretion of the Board of Directors.);
and (3) approving certain other amendments to the Company's Articles of
Incorporation. The Company has filed its information statement with the SEC
and is awaiting their acceptance of that document in order to hold its
shareholder meeting.
NOTE 3: PRO FORMA COMBINED FINANCIAL INFORMATION
The following tables set forth the pro forma combined balance sheet at July
31, 1997 and results of combined operations of the Company and NGT as though
the entities had been combined for the year ended April 30, 1997 and the three
months ended July 31, 1997. These combined statements presume that the
Company will acquire 100% of the outstanding common and preferred shares of
NGT in exchange for the issuance of previously unissued shares. This
issuance, coupled with the conversion of the note as described above into
Company shares will cause NGT shareholders as of April 2, 1997 to own 95% of
the Company. NGT is to return the shares it received in the note conversion
to the Company for distribution to NGT stockholders as part of the share
exchange. This transaction qualifies as a purchase for accounting purposes.
However, the transaction also is considered to be a reverse merger whereby NGT
will be considered to be the acquirer for accounting purposes. As such, there
are no adjustments to the carrying value of NGT assets and liabilities to
reflect current fair values and the Company has no assets and liabilities that
require adjustment.
As mentioned above, a portion of the transaction agreement calls for the
Company to reverse split its outstanding shares after the note conversion by a
factor of one share for 240.597 shares. Table I presents summarized audited
balance sheets for the two entities at July 31, 1997. Estimated adjustments
to the balance sheet required as a direct result of the acquisition plan and
the transactions contemplated therein consist solely of the adjustments
required due to the reverse stock split and the issuance of new shares by the
Company to the NGT shareholders. There are no balance sheet eliminations due
to consolidation because there are no intercompany balances.
Tables II and III present pro forma results of operations for the combined
entities. Table II is for the year ended April 30, 1997 and Table III is for
the quarter ended July 31, 1997. The adjustments in Table II consist of the
elimination of the non-recurring transactions of the Company during the year.
There are no adjustments required in Table III.
Table I
Pro Forma Combined Balance Sheet
As of July 31, 1997
Pro Forma
Lyric NGT Adjustments Combined
Assets
Current assets - 226,125 - 226,125
Fixed assets (net of
depreciation and
depletion - 10,802,013 - 10,802,013
Other assets - 522,154 - 522,154
___________ ___________ ___________ ___________
Total Assets $ - $11,550,292 $ - $11,550,292
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Liabilities and Equity
Liabilities:
Current liabilities - 1,386,009 - 1,386,009
Notes payable - 3,200,110 - 3,200,110
Redeemable Preferred A
stock - 38,388 - 38,388
Minority interest in
subsidiary - 28,427 (28,427) -
Stockholders' equity:
Preferred B stock - 265,440 - 265,440
Common stock 2,500,000 4,030 (2,463,728) 40,302
Additional paid in capital 224,222 8,073,843 (232,067) 8,065,998
Deferred services and
stock receivable - (212,500) - (212,500)
Retained (deficit) (2,724,222) (1,233,455) 2,724,222 (1,233,455)
___________ ___________ ___________ ___________
Total stockholders' equity - 6,897,358 28,427 6,925,785
___________ ___________ ___________ ___________
Total Liabilities and
Stockholders' Equity $ - $11,550,292 $ - $11,550,292
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Table II
Pro Forma Combined Results of Operations
For the Year Ended April 30, 1997
Adjust- Pro Forma
Lyric NGT ments Combined
Revenues $ - $ 100,987 $ - $ 100,987
___________ ___________ ___________ ___________
LOE and production taxes - 103,646 - 103,646
Depreciation, depletion
and amortization - 50,394 - 50,394
Management and consulting
costs 35,000 80,000 (35,000) 80,000
Legal and professional - 44,816 - 44,816
Other expenses 593 49,668 (593) 49,668
___________ ___________ ___________ ___________
Total operating expenses 35,593 328,524 (35,593) 328,524
___________ ___________ ___________ ___________
(Loss from Operations) (35,593) (227,537) 35,593 (227,537)
Interest income - 715 - 715
Interest expense (5,928) (43,648) 5,928 (43,648)
___________ ___________ ___________ ___________
Net (Loss) $ (41,521) $ (270,470) $ 41,521 $ (270,470)
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Net (Loss) per share $ (.07)
___________
___________
Table III
Pro Forma Combined Results of Operations
For the Quarter Ended July 31, 1997
Adjust- Pro Forma
Lyric NGT ments Combined
Revenues $ - $ 66,461 $ - $ 66,461
___________ ___________ ___________ ___________
LOE and production taxes - 122,510 - 122,510
Depreciation, depletion
and amortization - 46,584 - 46,584
Management and consulting
costs - 22,500 - 22,510
Legal and professional - 46,352 - 46,352
Personnel costs - 49,607 - 49,607
Other expenses - 38,185 - 38,185
___________ ___________ ___________ ___________
Total operating expenses - 325,738 - 325,738
___________ ___________ ___________ ___________
(Loss from Operations) - (259,277) - (259,277)
Interest income - 3,178 - 3,178
Interest expense - (64,663) - (64,663)
___________ ___________ ___________ ___________
Net (Loss) $ - $ (320,762) $ - $ (320,762)
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Net (Loss) per share $ (.08)
___________
___________
NOTE 4: CONTINGENCY
The Company has been contesting a suit to recover legal fees and court costs
pertaining to a previous action. This case was tried and on April 23, 1997,
the court awarded a judgment totaling approximately $59,905, including
interest. The Company was not the sole defendant in this case, although the
liability is joint and several, and the judgment is expected to be appealed.
Additionally, Lyric has obtained an indemnification agreement against loss
from Stahl Petroleum Company, another defendant in the suit and previously a
related party. Management anticipates that this action will have no effect on
the Company.
(b) Financial Statements of Natural Gas Technologies, Inc.
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Natural Gas Technologies, Inc.
Dallas, Texas
We have reviewed the accompanying consolidated balance sheet of Natural Gas
TechnoIogies, Inc. and Subsidiaries as of July 31, 1997, and the related
consolidated statements of operations and cash flows for the three months
ended July 31, 1997 and 1996. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of April 30, 1997, and the
related consolidated statements of operations, retained earnings and cash
flows for the year then ended (not presented herein); and in our report dated
July 18, 1997, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of April 30, 1997 is fairly stated in
all material respects in relation to the consolidated balance sheet from which
it has been derived.
/S/ ROBERT EARLY & COMPANY, P.C.
Robert Early & Company, P.C.
Abilene, Texas
September 5, 1997
NATURAL GAS TECHNOLOGIES, INC. & SUBSIDIARIES
Balance Sheets
July 31, April 30,
1997 1997
(Unaudited)
Assets
Current Assets:
Cash $ 197,455 $ 816,725
Accounts receivable 28,670 3,407
___________ ___________
Total Current Assets 226,125 820,132
___________ ___________
Fixed Assets:
Oil & gas properties (full cost method,
$637,496 has been excluded from
amortization as an unproved cost) 10,900,898 8,632,425
Furniture & equipment ($40,000 not in
service) 50,681 40,000
Accumulated depreciation & depletion (149,566) (114,077)
___________ ___________
Total fixed assets 10,802,013 8,558,348
___________ ___________
Other Assets:
Patent & process license (net of
amortization of $8,000 & $2,000) 352,000 358,000
Investment in Wagman Petroleum, Inc. stock 14,464 14,464
Deposits 62,039 3,049
Goodwill (net of amortization of $6,667 &
$1,667) 93,333 98,333
Organizational costs (net of amortization of
$1,592 & $1,496) 318 414
___________ ___________
Total Other Assets 522,154 474,260
___________ ___________
TOTAL ASSETS $11,550,292 $ 9,852,740
Liabilities and Stockholders' Equity
Accounts payable (primarily to related
party) $ 985,623 $ 291,031
Accrued interest 64,454 40,109
Advances and amounts due officers 201,136 1,136
Note payable and advance from related party 123,767 79,067
Current portion of notes payable 11,029 13,962
___________ ___________
Total Current Liabilities 1,386,009 425,305
Notes payable (net of current portion) 3,200,110 3,000,000
___________ ___________
TOTAL LIABILITIES 4,586,119 3,425,305
___________ ___________
Redeemable Preferred stock, Series 1994-A
$4.00 par value (500,000 shares authorized,
9,597 outstanding) 38,388 38,388
Minority interest in consolidated subsidiary 28,427 28,427
Stockholders's Equity
Preferred stock, Series 1994-B $4.00 par
value (500,000 shares authorized, 66,360
outstanding) 265,440 265,440
Common stock, $.001 par value (10,000,000
shares authorized, 4,030,247 and
4,014,390 outstanding) 4,030 4,014
Additional paid-in capital 8,073,843 7,322,860
Deferred services (net of amortization of
$17,500 & $0) (212,500) (160,000)
Receivable for stock issued to officers - (159,000)
Retained (deficit) (1,233,455) (912,694)
___________ ___________
Total Stockholders' Equity 6,897,358 6,360,620
___________ ___________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $11,550,292 $ 9,852,740
___________ ___________
___________ ___________
See accompanying selected information and accountant's report.
NATURAL GAS TECHNOLOGIES, INC. & SUBSIDIARIES
Statements of Operations
For Three Months Ended July 31, 1997 and 1996
(Unaudited)
1997 1996
Oil and gas revenues $ 66,258 $ 24,626
Other income 203 5
___________ ___________
Total Revenues 66,461 24,631
___________ ___________
Expenses:
Production taxes 2,656 1,274
Lease operating expenses 119,854 19,695
Depreciation, depletion and amortization 46,584 11,183
Professional fees 46,352 -
Consulting fees 22,500 -
Personnel costs 49,607 -
Rent 9,148 1,050
Business promotion 3,315 443
Director fees - 12,500
Taxes 1,898 -
Travel 7,228 550
Offering costs - 3,000
Other expenses 16,596 3
Minority interest in loss of consolidated
subsidiary - -
___________ ___________
Total Expenses 325,738 49,698
___________ ___________
(Loss) from Operations (259,277) (25,067)
Interest income 3,178 -
Interest expense (64,663) (1,133)
___________ ___________
NET (LOSS) (320,762) (26,200)
Less unpaid preferred stock dividend
claims for the year 2,401 2,401
___________ ___________
Net (loss) attributable to common
shareholders $ (323,163) $ (28,601)
___________ ___________
___________ ___________
(Loss) per share data:
Primary $ (0.08) $ (0.01)
___________ ___________
___________ ___________
Primary, attributable to common shares (0.08) (0.01)
___________ ___________
___________ ___________
Fully diluted $ (0.08) $ (0.01)
___________ ___________
___________ ___________
Fully diluted, attributable to common
shareholders (0.08) (0.01)
___________ ___________
___________ ___________
See accompanying selected information and accountant's report.
NATURAL GAS TECHNOLOGIES, INC. & SUBSIDIARIES
Statements of Cash Flows
For Three Months Ended July 31, 1997 and 1996
(Unaudited)
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (320,762) $ (26,200)
Adjustments to reconcile net income/(loss) to
net cash provided by operations:
Depreciation, depletion and amortization 46,584 11,183
Amortization of directors fees - 12,500
Amortization of deferred services 17,500 -
(Increase)/decrease in:
Accounts receivable (25,263) (6,553)
Security deposit (58,990) -
Increase/(decrease) in:
Accounts payable 694,592 6,035
Accrued expenses 24,345 -
___________ ___________
NET CASH (USED) BY OPERATING ACTIVITIES 378,006 (3,035)
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for drilling costs and oil &
gas leases (1,178,473) (1,000)
Purchase of lease and well equipment (10,681) -
___________ ___________
NET CASH (USED) BY INVESTING ACTIVITIES (1,189,154) (1,000)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock 200,000 -
Advances from related parties 44,700 7,198
Note payments (52,822) (3,744)
___________ ___________
NET CASH PROVIDED BY FINANCING ACTIVITIES 191,878 3,454
___________ ___________
Increase/(decrease) in cash for period (619,270) (581)
Cash, Beginning of period 816,725 506
___________ ___________
Cash, End of period $ 197,455 $ (75)
___________ ___________
___________ ___________
Supplemental Disclosures:
Cash payments for:
Interest $ 40,429 $ 1,133
Income taxes - -
Stock issued for prepaid professional
services 70,000 -
Acquisition of oil and gas assets for
note payable 250,000 -
Acquisition of oil and gas assets from
related party for note payable and
options:
Note payable 200,000 -
Contributed capital 640,000 -
See accompanying selected information and accountant's report.
NATURAL GAS TECHNOLOGIES, INC. & SUBSIDIARIES
SELECTED INFORMATION FOR CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
July 31, 1997
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions of Regulation SB. They do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. However, except as disclosed herein, there
has been no material change in the information included in Lyric Energy,
Inc.'s Annual Report on Form 10-KSB for the year ended April 30, 1997. In the
opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The report of Robert Early & Company, P.C. commenting on their review
accompanies the condensed financial statements included in Item 1 of Part 1.
Operating results for the three month period ended July 31, 1997, are not
necessarily indicative of the results that may be expected for the year ending
April 30, 1998.
NOTE 2: ACQUISITION OF OIL AND GAS ASSETS
During the quarter ended July 31, 1997, the Company acquired four additional
interests and drilled on five properties. The Touchstone lease was acquired
for a note payable of $250,000 and $100,000 cash. This lease had two
producing wells. The Hutton lease was purchased for $33,900 cash and
reworked, including new equipment, for approximately $14,000. The Company's
president transferred his 50% interest in the Norton prospect in exchange for
a note of $200,000 and options to purchase 100,000 shares of common stock at
$7 per share over the next two years. The Company had purchased its original
50% from a third party for stock valued at $840,000 in April 1997. The
Company's directors had approved its president's investment in this prospect
in December 1996 when the Company did not have any cash to invest. The Miller
Ranch lease cost $164,868 and calls for initial drilling within three years.
Other properties with significant activity included drilling five wells on the
Norton prospect and approximately $242,000 spent on the East Milham Sand Unit
as work continues toward revitalizing the production on that property.
In another venture, the Company paid $100,000 for an option to purchase of an
interest in a significant reworking project in Central West Texas. After
results from initial work had been evaluated, management determined that this
project was not economically feasible at the total cost of the interest. As a
result of this decision, the Company abandoned its investment. Also, the
Company spent $24,000 on a well that turned out to be a dry hole.
NOTE 3: NOTES PAYABLE
As mentioned above, the Company added two notes payable in its acquisitions of
assets during the first quarter. The first is a note to EXP, Inc. for
$250,000, bearing interest at 8%, due in December 1998. The second is a note
to Brent Wagman for $200,000, bearing interest at 5%, due in May 1999.
NOTE 4: DEPOSITS
During the quarter ended July 31, 1997, the Company made an escrow deposit of
$50,000 to secure negotiation of a contract to purchase a tank farm in Mobile,
Alabama. This facility would be instrumental in the development of the
Company's planned gasoline blending business. This purchase contract is still
subject negotiations and has not been accepted by either party as of August
31, 1997. Should negotiations fail to result in mutually acceptable terms for
this purchase, the deposit will be returned. Additionally, $8,990 was
deposited with an attorney as a retainer for possible legal services. At
August 31, 1997, this arrangement had been canceled and the deposit is to be
returned.
NOTE 5: DEFERRED SERVICES
During the quarter ended July 31, 1997, the Company issued 10,000 shares of
stock as an employment bonus to Terry Huston. These shares were issued
pursuant to an employment contract with an eight month initial term. Mr.
Huston is expected to be significantly involved in initiating the gasoline
blending operation and was employed to work out the details of this operation
and to promote sales and interest among gasoline vendors. The value of these
shares, $70,000, is being amortized over the eight months of the contract.
NOTE 6: RELATED PARTY PAYABLES AND PLANNED FUNDING
The accounts payable balance has significantly increased during the quarter
ended July 31, 1997. This is primarily due to drilling activities. The total
accounts payable includes $914,187 payable to Wagman Petroleum, Inc. for
drilling and lease operating expenses incurred since February 1997. At this
time, Wagman, a related party due to common management, is content to wait for
the Company to be able repay these costs. The Company plans to have a public
offering in order to fund its planned activities and to repay Wagman for the
work already done. Timing for this offering is dependent on several factors
including clearance of filed documents by the Securities and Exchange
Commission. There is no assurance that this method of funding will be
successful in raising the capital necessary to repay past costs as well as to
fund activities planned for the future. Should the Company fail to raise the
necessary capital to fund its planned activities, cash flows are not expected
to be sufficient to fund them and portions of the assets would, in all
likelihood, not be realizable. No adjustments have been made to reflect this
outcome, which is not anticipated.
NOTE 7: CONTINGENCY
Lyric Energy, one of the Company's subsidiaries, has been contesting a suit to
recover legal fees and court costs pertaining to a previous action. This case
was tried and on April 23, 1997, the court awarded a judgment totaling
approximately $59,905, including interest. The Company was not the sole
defendant in this case, although the liability is joint and several, and the
judgment is expected to be appealed. Additionally, Lyric has obtained an
indemnification agreement against loss from Stahl Petroleum Company, another
defendant in the suit and previously a related party. Management anticipates
that this action will have no effect on the Company.
Item 2. Plan of Operation of Lyric Energy, Inc.
Lyric Energy, Inc. ("Lyric") is a development stage company that is
currently focusing on a proposed transaction with Natural Gas Technologies,
Inc. ("NGT"), a Texas corporation engaged in the exploration, development and
production of oil and gas properties, which proposed transaction is discussed
below under "Acquisition of Control and Share Exchange Transaction." In the
event that transaction is not completed, Lyric will focus on the
identification and evaluation of other prospective merger or acquisition
"target" entities including private companies, partnerships or sole
proprietorships.
Lyric has no capital with which to provide merger or acquisition
candidates with cash or other assets and in the absence of being able to
complete a merger or acquisition or borrow money from related parties or some
other source, it is unlikely that Lyric will be able to continue as a going
concern. However, management believes that Lyric offers potential merger or
acquisition candidates the opportunity to acquire a controlling ownership
interest in a public company at substantially less cost than is required to
conduct an initial public offering.
Acquisition of Control and Share Exchange Transaction
Lyric has entered into a letter of intent dated January 2, 1997 and
modified March 17, 1997 (the "Letter of Intent") with NGT for a share exchange
transaction ("Share Exchange"). The Letter of Intent become binding by the
March 17, 1997 amendment. The reason for the Share Exchange is to carry out
Lyric's Plan of Operation to acquire an operating company. Prior to entering
into the Letter of Intent, Lyric and NGT were unrelated and NGT held no shares
of Lyric.
Pursuant to the Letter of Intent, NGT loaned Lyric $100,000 pursuant to a
non-interest bearing Convertible Promissory Note (the "Note"). The Note had a
maturity date of December 31, 1997 and automatically converted into
203,041,517 shares of Lyric's Common Stock upon (i) Lyric coming into current
compliance with the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and (ii) Lyric obtaining a waiver from the Bank of certain non-dilution
rights in favor of the Bank. The Note converted by its terms on April 10,
1997, which resulted in NGT obtaining a controlling interest in Lyric.
Previously, no single person or voting group controlled Lyric. G.E. Stahl was
the sole Director and approved the transaction in that capacity. The source
of the $100,000 was loans to NGT from Brent Wagman and Warren Donohue, both
officers and directors of NGT.
The Share Exchange will commence after the approval of the matters on the
agenda at a special meeting (the "Special Meeting") to be called for the
purpose of approving (i) a one share for 240.597 share (1 for 240.597) reverse
stock split of Lyric's Common Stock; (ii) an amendment to Lyric's Articles of
Incorporation to authorize 10,000,000 shares of no par value preferred stock,
9,597 of which will be designed as Series 1994-A Preferred Stock, 66,360 of
which will be designated as Series 1994-B Preferred Stock and the remainder to
be reserved for future issuance in the discretion of the Board of Directors;
(iii) a change of the name of Lyric to Natural Gas Technologies, Inc.; (iv) an
amendment to Lyric's Articles of Incorporation to eliminate the liability of
Directors and Officers in certain circumstances; and (v) an amendment to
Lyric's Articles of Incorporation to reduce the voting requirement for certain
fundamental corporate actions. Each of these actions is being taken in
connection with the Share Exchange. By virtue of the shares acquired by NGT
upon conversion of the Note, NGT holds sufficient votes to assure shareholder
approval of all of the matters on the agenda. The Special Meeting will be
called shortly after the Securities and Exchange Commission approves the
Information Statement to be sent to shareholders in connection with the
Special Meeting, which Information Statement has been filed with the
Commission.
The Share Exchange will take place in two stages. The first stage will
occur immediately after the Special Meeting and will consist of the exchange
of approximately 2,691,000 shares of the authorized but unissued post-reverse
split shares of Lyric's Common Stock for 3,405,900 shares of NGT common stock,
which constitutes approximately 85 percent of the equity interests in NGT.
The NGT shares to be exchanged in the first stage are held by certain
officers, directors, affiliates and sophisticated investors. Lyric will
control NGT upon completion of the first stage.
The second stage will occur upon the approval by NGT shareholders of the
exchange of the remaining NGT shares pursuant to an S-4 Registration Statement
and Proxy Statement which registers the exchange of all of the remaining
equity interests in NGT into shares of the authorized but unissued
post-reverse split Common Stock of Lyric and further provides for the
distribution of the 843,908 post-reverse split shares of Common Stock issued
to NGT upon conversion of the Note to the shareholders of NGT immediately
prior to the Share Exchange. It is also contemplated that the shares issued
in the first stage of the Share Exchange will be registered for resale by such
registration statement. NGT has outstanding 9,597 shares of Series 1994-A
Preferred Stock and 66,360 shares of Series 1994-B Preferred Stock. These
preferred shares are non-voting and will be converted upon the second stage of
the Share Exchange into the same number of Series 1994-A and Series 1994-B
preferred shares of Lyric. These shares are to be authorized and designated
at the Special Meeting. As of the date hereof, the Series 1994-A shares of
NGT have accrued an aggregate of $9,175 in dividends and the Series 1994-B
shares of NGT have accrued an aggregate of $17,150 in dividends. These
amounts will become accumulated but unpaid dividends of the respective series
of preferred stock of Lyric to be issued in the exchange. Lyric intends to
surrender the NGT preferred shares it acquires in the Share Exchange. Upon
completion of the Share Exchange, the current shareholders of Lyric will hold
approximately five percent of the total outstanding shares of Lyric and the
shareholders of NGT will hold the remaining 95 percent, assuming conversion of
the preferred shares to be issued in the Share Exchange to common shares.
The material terms of the Note and the Share Exchange were negotiated and
agreed to by Lyric and NGT prior to NGT obtaining control of Lyric. The terms
were the result of arms' length negotiations between Lyric and NGT. In light
of the independence of the companies at the time of the negotiations and
Lyric's lack of assets and operations, the Board of Directors determined that
an independent valuation or fairness opinion would offer very little support
to the valuation of the transaction. Factors considered in determining the
amount of the Note and the percentage of shares held by either party
subsequent to all conversions were (i) funds necessary to pay off Lyric's
debts, (ii) expenses to bring Lyric's reports current, (iii) the amount of
debt to be forgiven, (iv) the market for Lyric's shares, (v) the inability of
NGT to utilize Lyric's loss carryforward, and (vi) the relative value of the
two businesses as determined by each company's Board of Directors.
The Share Exchange is expected to be accounted for as a purchase. The
Share Exchange is structured as a tax-free reorganization and should not have
any tax consequences for the shareholders of Lyric or NGT.
Under Colorado law, the Share Exchange may be effected by resolution of
the Board of Directors of Lyric. Approval of the shareholders of Lyric is not
required and Colorado law does not grant dissenter's rights to the
shareholders of Lyric.
The Share Exchange remains conditional upon the completion of final
documentation therefor, but management currently expects that the Share
Exchange will be completed.
Liquidity and Capital Resources
On July 31, 1997, Lyric had no assets. Should the Share Exchange not be
completed and in the absence of being able to borrow money from related
parties or some other source, it is unlikely that Lyric will be able to
continue as a going concern.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of NGT
Overview
NGT was incorporated in April 1993 and commenced operations in June 1993.
NGT acquired interests in various oil and gas properties in February 1994 and
June 1994 and has been active in the oil and gas industry since that time.
NGT uses the full cost method of accounting for its oil and gas producing
activities and, accordingly, capitalized all costs incurred in the
acquisition, exploration and development of proved oil and gas properties,
including the costs of abandoned properties, dry holes, geophysical costs and
annual lease rentals. In general, sales or other dispositions of oil and gas
properties are accounted for as adjustments to capitalized costs, with no gain
or loss recorded.
NGT entered into a letter of intent dated January 2, 1997, as modified on
March 17, 1997, whereby NGT obtained on April 10, 1997 a controlling interest
in Lyric, and pursuant to which Lyric will acquire NGT in a share exchange
transaction whereby the shareholders of NGT will upon completion of the
transaction hold approximately 95 percent of the total outstanding shares of
Lyric. See "Acquisition of Control and Share Exchange Transaction" discussed
in the Plan of Operation of Lyric above.
Results of Operations
Comparison of Three-Month Periods Ended July 31, 1997 and 1996
Oil and gas revenues. Oil and gas revenues increased by $41,632 to
$66,268 for the three months ended July 31, 1997 compared with $24,626 for the
1996 period. This increase was primarily attributable to new wells drilled
and/or purchased.
Lease operating expenses. Lease operating expenses increased by $100,159
to $119,854 for the three months ended July 31, 1997 compared with $19,685 for
the 1996 period. This increase was primarily attributable to the
implementation of a polymer flood on the Waggoner Ranch properties.
Depreciation, depletion and amortization. Depreciation, depletion and
amortization increased by $35,401 to $46,584 for the three months ended July
31, 1997 compared with $11,183 for the 1996 period. This increase was
primarily attributable to increased production levels.
Professional fees. Professional fees of $46,352 for the three months
ended July 31, 1997 were primarily due to legal and accounting services with
respect to NGT's loan and pending share exchange with Lyric and costs
associated with the Information Statement for the Special Meeting to be held
for Lyric shareholders to approve certain matters in connection with the Share
Exchange.
Consulting fees. Consulting fees of $22,500 for the three months ended
July 31, 1997 were attributable to financial advisory services rendered in
connection with an employment contract with an officer of a subsidiary, which
officer's employment with such subsidiary was terminated in September 1997, at
which time the remaining unamortized portion of such fees was charged to
expense.
Personnel costs. Personnel costs of $49,607 for the three months ended
July 31, 1997 were attributable to the addition of approximately five
employees in connection with the establishment of new office headquarters in
Dallas, Texas in April 1997.
Rent. Rent increased $8,098 to $9,148 for the three months ended July
31, 1997 compared to $1,050 for the 1996 period due to NGT's relocation to
larger offices in April 1997.
Director Fees. Director fees of $12,500 for the three months ended July
31, 1996 were attributable to the amortization expense associated with the
issuance of stock in October 1993 to a Director as compensation for his
services for three years. Such fees were fully amortized prior to the
inception of the three months ended July 31, 1997.
Travel. Travel expenses for the three months ended July 31, 1997 of
$7,728 were attributable to management's meetings with business partners and
professionals.
Other expenses. Other expenses of $16,596 for the three months ended
July 31, 1997 were primarily attributable to the relocation to larger offices
and public relations expenses.
Interest expense. Interest expense of $64,663 for the three months ended
July 31, 1997 was primarily attributable to the assumption in April 1997 of
the $3 million note in connection with NGT's acquisition of Interior Energy,
Inc.
Net loss. Net loss for the three months ended July 31, 1997 increased
$294,562 to $320,762 compared to $26,200 for the 1996 period primarily due to
increased lease operating expenses, depreciation, depletion and amortization,
professional fees, consulting fees, personnel costs, and interest expense
partially offset by increased oil and gas revenues and decreased director
fees.
Liquidity and Capital Resources
On July 31, 1997, NGT had $197,455 in cash on hand. NGT's primary
sources of liquidity are proceeds from stock issuances, advances from related
parties and borrowings. NGT's principal cash needs are for the acquisition,
exploration and development of oil and gas properties.
Cash flow. NGT's net cash provided by operating activities increased
$381,041 to $378,006 for the three months ended July 31, 1997 compared with
cash used by operating activities of $3,035 in the 1996 period primarily due
to a much larger accounts payable financing during the 1997 period, partially
offset by the larger net loss for the 1997 period. Net cash used in investing
activities increased $1,188,154 to $1,189,154 for the three months ended July
31, 1997 compared to $1,000 in the 1996 period due to increased lease and
drilling costs and purchases of lease and well equipment during the 1997
period.
Net cash provided by financing activities was $191,878 for the three
months ended July 31, 1997, consisting of proceeds from the issuance of stock
and advances from related parties, partially offset by note payments, compared
with net cash provided of $3,454 in the 1996 period attributable to advances
from related parties less note payments.
During the quarter ended July 31, 1997, NGT acquired four additional
interests and drilled on five properties. The Touchstone lease, which had two
producing wells, was acquired for a note payable of $250,000 and $100,000
cash. The Hutton lease was purchased for $33,900 cash and reworked, including
new equipment, for approximately $14,000. An officer of NGT transferred his
50% interest in the Norton prospect in exchange for a note of $200,000 and
options to purchase 100,000 shares of common stock at $7 per share over the
next two years. NGT had purchased its original 50% from a third party for
stock valued at $840,000 in April 1997. The Miller Ranch lease cost $164,868
and calls for initial drilling within three years. Other properties with
significant activity included drilling five wells on the Norton prospect and
approximately $242,000 spent on the East Milham Sand Unit as work continues
toward revitalizing the production on that property.
In another venture, NGT paid $100,000 for an option to purchase of an
interest in a significant reworking project in Central West Texas. After
results from initial work had been evaluated, management determined that this
project was not economically feasible at the total cost of the interest. As a
result of this decision, NGT abandoned its investment. Also, NGT spent
$24,000 on a well that turned out to be a dry hole.
As mentioned above, NGT added two notes payable in its acquisitions of
assets during the three months ended July 31 1997. The first is a note to
EXP, Inc. for $250,000, bearing interest at 8%, due in December 1998. The
second is a note to an officer of NGT for $200,000, bearing interest at 5%,
due in May 1999.
During the quarter ended July 31, 1997, NGT made an escrow deposit of
$50,000 to secure negotiation of a contract to purchase a tank farm in Mobile,
Alabama. This facility would be instrumental in the development of the
Company's planned gasoline blending business. This purchase contract is still
subject negotiations and has not been accepted by either party as of August
31, 1997. Should negotiations fail to result in mutually acceptable terms for
this purchase, the deposit will be returned. Additionally, $8,990 was
deposited with an attorney as a retainer for possible legal services. At
August 31, 1997, this arrangement had been canceled and the deposit is to be
returned.
During the three months ended July 31, 1997, NGT issued 10,000 shares of
stock as an employment bonus to an officer of a subsidiary of NGT. These
shares were issued pursuant to an employment contract with an eight month
initial term. The officer was is expected to be significantly involved in
initiating the gasoline blending operation and was employed to work out the
details of this operation and to promote sales and interest among gasoline
vendors. The value of these shares, $70,000, was being amortized over the
eight months of the contract. However, the officer's employment was
terminated in September 1997, at which time the remaining unamortized portion
was charged to expense.
NGT's accounts payable balance significantly increased during the three
months ended July 31, 1997. This is primarily due to drilling activities.
The total accounts payable includes $914,187 payable to Wagman Petroleum, Inc.
("WPI") for drilling and lease operating expenses incurred since February
1997. At this time, WPI, a related party due to common management, is content
to wait for NGT to be able repay these costs. NGT plans to have a public
offering in order to fund its planned activities and to repay WPI for the work
already done. Timing for this offering is dependent on several factors.
There is no assurance that this method of funding will be successful in
raising the capital necessary to repay past costs as well as to fund
activities planned for the future. Should NGT fail to raise the necessary
capital to fund its planned activities, cash flows are not expected to be
sufficient to fund them and portions of the assets would, in all likelihood,
not be realizable. No accounting adjustments have been made to reflect this
outcome, which is not anticipated.
Capital expenditures. NGT's expenditures for the purchase of fixed
assets and oil and gas properties are the primary use of its capital
resources. NGT has no current commitments for capital expenditures, but its
current business plan anticipates material capital expenditures during the
fiscal year ended April 30, 1998, subject to the availability of capital. NGT
anticipates raising capital for additional capital expenditures through the
above-mentioned contemplated public or private sale of securities and/or
through bank loans. The amount of future capital expenditures will depend
upon a number of factors including the impact of oil and gas prices on
investment opportunities, the availability of capital and the success of its
development activity which could lead to funding requirements for further
development.
Effects of Inflation and Changing Prices
NGT's results of operations and cash flows are affected by changing oil
and gas prices. At present, NGT does not expect that changes in the rates of
overall economic growth or inflation will significantly impact product prices
in the short-term. While gas prices seem most dependent on weather in North
America and corresponding usage, oil prices are more subject to global
economic forces and supply. NGT cannot predict the extent of any such effect.
If oil and gas prices increase, there could be a corresponding increase in the
cost to NGT for drilling and related services as well as an increase in
revenues.
Cautionary Statement with Regard to Forward Looking Information
The matters discussed in the above Plan of Operation of Lyric and
Management's Discussion of Analysis of Financial Condition and Results of
Operations of NGT, when not historical matters, are forward looking statements
which involve a number of risks and uncertainties which could cause actual
events and results to differ materially from projected or anticipated events
or results. Such factors include, among other things, the speculative nature
of oil and gas exploration, the volatile markets for oil and gas,
uncertainties in production and reserve estimates, environmental and
governmental regulations, the availability of financing, particularly equity
financing, the ability of Lyric to establish a trading market for its stock,
force majeure events and other risk factors as described from time to time in
reports filed by Lyric with the Securities and Exchange Commission.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See the Company's Annual Report on Form 10-KSB/A for the fiscal year
ended April 30, 1997.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits
Exhibit No. Description
3.1 Articles of Incorporation of Lyric Energy, Inc.
(Incorporated by reference to Exhibit 3 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1996).
3.2 Articles of Amendment of Lyric Energy, Inc.
(Incorporated by reference to Exhibit 3 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1996).
3.3 Articles of Correction to the Articles of
Incorporation of Lyric Energy, Inc. (Incorporated by
reference to Exhibit 3.3 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
3.4 Bylaws of Lyric Energy, Inc. (Incorporated by
reference to Exhibit 3 of Registrant's Annual Report
on Form 10-KSB for the fiscal year ended April 30,
1996).
3.5 Articles of Incorporation of Natural Gas
Technologies, Inc. (Incorporated by reference to
Exhibit 3.5 of Registrant's Annual Report on Form
10-KSB/A for the fiscal year ended April 30, 1997).
3.6 Articles of Amendment of Natural Gas Technologies,
Inc. (Incorporated by reference to Exhibit 3.6 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
3.7 Articles of Second Amendment of Natural Gas
Technologies, Inc. (Incorporated by reference to
Exhibit 3.7 of Registrant's Annual Report on Form
10-KSB/A for the fiscal year ended April 30, 1997).
3.8 Bylaws of Natural Gas Technologies, Inc.
(Incorporated by reference to Exhibit 3.8 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
3.9 Statement of Designation of Rights and Preferences of
Natural Gas Technologies, Inc. (Incorporated by
reference to Exhibit 3.9 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
10.1 Compromise and Settlement Agreement dated July 31,
1991 between the Registrant and Amarillo National
Bank (Incorporated by reference to Exhibit 10.1 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1996).
10.2 Letter of Intent dated January 2, 1997 with Natural
Gas Technologies, Inc., as amended by letter dated
March 17, 1997 (Incorporated by reference to Exhibit
10.2 of Registrant's Annual Report on Form 10-KSB for
the fiscal year ended April 30, 1996).
10.3 Restated Convertible Promissory Note dated February
4, 1997 (Incorporated by reference to Exhibit 10.3 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1996).
10.4 Release of Judgment dated December 31, 1996
(Incorporated by reference to Exhibit 10.4 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1996).
10.5 Termination of Agreement and Cancellation of Loan
dated January 2, 1997 (Incorporated by reference to
Exhibit 10.5 of Registrant's Annual Report on Form
10-KSB for the fiscal year ended April 30, 1996).
10.6 Agreement between the Registrant and Amarillo
National Bank dated March 3, 1997 (Incorporated by
reference to Exhibit 10.6 of Registrant's Annual
Report on Form 10-KSB for the fiscal year ended April
30, 1997).
10.7 Indemnification Agreement between the Registrant and
Stahl Petroleum Company dated March 17, 1997
(Incorporated by reference to Exhibit 10.7 of
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended April 30, 1997).
10.8 Operating Agreement between Natural Gas Technologies
and Wagman Petroleum, Inc. dated February 1, 1994.
(Incorporated by reference to Exhibit 10.8 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.9 Purchase Agreement between Natural Gas Technologies
and Mobile Americlean dated effective October 11,
1996. (Incorporated by reference to Exhibit 10.9 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.10 Assignment from Mobile Americlean to Natural Gas
Technologies dated October 11, 1996. (Incorporated by
reference to Exhibit 10.10 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
10.11 Office Lease Agreement between Natural Gas
Technologies, Inc. and Brookdale Investors, L.P.
dated March 12, 1997. (Incorporated by reference to
Exhibit 10.11 of Registrant's Annual Report on Form
10-KSB/A for the fiscal year ended April 30, 1997).
10.12 Purchase Agreement between Natural Gas Technologies,
Inc. and Interior Energy, Inc. (Incorporated by
reference to Exhibit 10.12 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
10.13 Assignment Agreement between Ray L., Inc. and Natural
Gas Technologies, Inc. (Incorporated by reference to
Exhibit 10.13 of Registrant's Annual Report on Form
10-KSB/A for the fiscal year ended April 30, 1997).
10.14 Purchase Agreement between Ray L., Inc. and Natural
Gas Technologies, Inc. dated April 1, 1997.
(Incorporated by reference to Exhibit 10.14 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.15 Purchase Agreement between Brent A. Wagman and
Natural Gas Technologies, Inc. dated May 30, 1997 and
Assignment Agreement dated May 30, 1997.
(Incorporated by reference to Exhibit 10.15 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.16 Assignment Agreement between J.B., Ethel, and Robert
Miller and Natural Gas Technologies, Inc. dated July
23, 1997. (Incorporated by reference to Exhibit
10.16 of Registrant's Annual Report on Form 10-KSB/A
for the fiscal year ended April 30, 1997).
10.17 Agent Agreement between Natural Gas Technologies,
Inc. and Continental Capital & Equity Corporation,
Inc. dated February 1, 1996. (Incorporated by
reference to Exhibit 10.17 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
10.18 Employment Agreement between Terry Huston and Natural
Gas Technologies, Inc. dated January 16, 1997.
(Incorporated by reference to Exhibit 10.18 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.19 Wagman Petroleum, Inc. letter dated April 15, 1996.
(Incorporated by reference to Exhibit 10.19 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.20 Brent A. Wagman letter dated July 17, 1996.
(Incorporated by reference to Exhibit 10.20 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.21 Natural Gas Technologies, Inc. Promissory Note to
Wagman Petroleum, Inc. dated April 30, 1997.
(Incorporated by reference to Exhibit 10.21 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
10.22 Natural Gas Technologies, Inc. Promissory Note to
Warren Donohue dated February 15, 1997. (Incorporated
by reference to Exhibit 10.22 of Registrant's Annual
Report on Form 10-KSB/A for the fiscal year ended
April 30, 1997).
10.23 Natural Gas Technologies, Inc. Promissory Note to
Brent A. Wagman dated February 15, 1997.
(Incorporated by reference to Exhibit 10.23 of
Registrant's Annual Report on Form 10-KSB/A for the
fiscal year ended April 30, 1997).
27.1 Financial Data Schedule
(b) Reports On Form 8-K
During the quarter for which this report is filed, the Company filed
the following reports on Form 8-K:
Current Report on Form 8-K/A dated April 10, 1997 filed on June
24, 1997 relating to the financial statements of Natural Gas
Technologies, Inc. ("NGT"), a business to be acquired by the
Company
Current Report on Form 8-K/A dated April 10, 1997 filed on July
3, 1997 relating to pro forma financial statements and
financial statements of NGT
Current Report on Form 8-K dated July 9, 1997 related to a
change in the Company's Certifying Accountant
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
LYRIC ENERGY, INC.
Date: September 12, 1997 By: /S/ BRENT WAGMAN
Brent Wagman, Chairman of the Board
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LYRIC
ENERGY, INC. FINANCIAL STATEMENTS FOR THE INTERIM YEAR TO DATE PERIOD ENDED JULY
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUL-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 0
<SECURITIES> 0
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<CURRENT-ASSETS> 0
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<BONDS> 0
0
0
<COMMON> 2,724,222
<OTHER-SE> (2,724,222)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
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<EXTRAORDINARY> 0
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