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 January 31, 1998
[ ] 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 January 31, 1998.
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.
Report on Review by Independent Certified
Public Accountants
Balance Sheets as of January 31, 1998 and April
30, 1997
Statements of Operations for the Three-Month
and Nine-Month Periods ended January 31, 1998
and 1997 and Cumulative Period During the
Development Stage
Statements of Cash Flows for the Nine-Month
Periods ended October 31, 1998 and 1997 and
Cumulative Period During the Development Stage
Selected Information for Financial Statements
Item 2. Plan of Operation.
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.
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Lyric Energy, Inc.
Dallas, Texas
We have reviewed the accompanying balance sheet of Lyric Energy, Inc. as of
January 31, 1998, and the related statements of operations for three and nine
months and cash flows for nine months ended January 31, 1998 and 1997. 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 balance sheet as of April 30, 1997, and the related 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.
Abilene, Texas
March 11, 1998
<TABLE>
<CAPTION>
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Balance Sheets
January 31, April 30,
1998 1997
___________ ______________
(Unaudited)
<S> <C> <C>
Assets
None None
Liabilities and Stockholders' Equity/(Deficiency)
Liabilities
Payable to Natural
Gas Technologies, Inc. $12,089 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) (2,736,311) (2,724,222)
_____________ ____________
Total Stockholders'
Equity/(Deficiency) (12,089) -
_____________ ____________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ -
============= ============
</TABLE>
<TABLE>
<CAPTION>
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Statements of Operations
For Three and Nine Months Ended January 31, 1998 and 1997
(Unaudited)
Cumulative Three Months Nine Months
During the Ended Ended
Development January 31, January 31,
Stage 1998 1997 1998 1997
____________ ________________ _______________
<S> <C> <C> <C> <C> <C>
General and
administrative expenses $(47,625) $ $ (57) $(12,089) $(158)
Other income - - - - 44
Interest expense to
related parties (1,482) - (1,482) - (5,928)
_____ _____ _____ _____ _____
NET(LOSS) $(49,107) $ - $(1,539) $(12,089)$(6,042)
Net loss per weighted
average share $ (0.00) $(0.00) $(0.00) (0.00) $(0.00)
========= ===== ===== ====== ======
Weighted average
shares
outstanding 160,439,221 250,000,000 46,958,483 250,000,000 46,958,483
=========== =========== ========== =========== =========
</TABLE>
<TABLE>
<CAPTION>
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
Statements of Cash Flows
For Nine Months Ended January 31, 1998 and 1997
(Unaudited)
Cumulative
During the Nine Months Ended
Development January 31,
Stage 1998 1997
________________ ________ __________
<S> <C> <C> <C>
NET CASH (USED) BY
OPERATING ACTIVITIES $(100,023) - $ (1,453)
__________ __________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note
payable 100,000 - -
___________ ____________ ____________
Increase/(decrease)
in cash for period (23) - (1,453)
____________ _____________ ____________
Cash, Beginning of
period 23 - 1,453
____________ _____________ _____________
Cash, End of period $ - $ - $ -
============ ============== =============
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 $ - $ -
</TABLE>
LYRIC ENERGY, INC.
(A Development Stage Enterprise)
SELECTED INFORMATION FOR FINANCIAL STATEMENTS
January 31, 1998
(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 S-B. 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 nine month period ended January 31, 1998, 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
or a similar merger transaction. In February 1998, NGT entered into an merger
agreement with another entity and has terminated its plans to merge into the
Company 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
Technologies, 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.
In February 1998, NGT agreed to be acquired by another entity and has
terminated the plans to be merged in the Company. NGT continues to own
approximately 81% of the total issued and outstanding common shares of the
Company. NGT as a parent to the Company intends to utilize the Company in its
future business plans and/or to utilize the public nature of the Company in
some currently undetermined manner.
Item 2. Plan of Operation
Lyric Energy, Inc. ("Lyric" or the Company) is a development stage
company that is currently focusing 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.
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 Technologies, 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 (the 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.
In February 1998, NGT agreed to be acquired by another entity as a result
in part of a perceived strategic operational fit with such entity and has
terminated the previously disclosed plans to be merged in the Company. NGT
continues to own approximately 81% of the total issued and outstanding common
shares of the Company. NGT as a parent to the Company currently expects to
utilize the Company in its future business plans and/or to utilize the public
nature of the Company in some currently undetermined manner.
Liquidity and Capital Resources
As of January 31, 1998, Lyric had no assets. 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.
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
The exhibits included in the Company's Annual Report on Form
10-KSB/A for the fiscal year ended April 30, 1997 are incorporated
herein by reference.
27.1 Financial Data Schedule
(b) Reports On Form 8-K
None.
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: March 16, 1998 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
JANUARY 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> JAN-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 12,089
<BONDS> 0
0
0
<COMMON> 2,724,222
<OTHER-SE> (2,736,311)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,089
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,089)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,089)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,089)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
