<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ________
COMMISSION FILE NO. 0-9092
CHENIERE ENERGY, INC.
(Exact name as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
95-4352386
(I. R. S. Identification No.)
1200 SMITH STREET, SUITE 1740
HOUSTON, TEXAS
(Address or principal place of business)
77002-4312
(Zip Code)
(713) 659-1361
(Registrant's telephone number, including area code)
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 [ ].
As of April 8, 1998, there were 14,987,866 shares of Cheniere Energy, Inc.
Common Stock, $.003 par value, issued and outstanding.
================================================================================
<PAGE>
CHENIERE ENERGY, INC
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements................................ 3
Consolidated Balance Sheet.......................................... 3
Consolidated Statement of Operations................................ 4
Consolidated Statement of Stockholders' Equity...................... 5
Consolidated Statement of Cash Flows................................ 6
Notes to Consolidated Financial Statements.......................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................ 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds........................ 12
Item 5. Other Information................................................ 12
Item 6. Exhibits and Reports on Form 8-K................................. 12
SIGNATURES.................................................................... 12
</TABLE>
2
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
February 28, August 31,
1998 1997
----------------- -----------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 201,260 $ 234,764
Accounts receivable 287 -
Loan Costs 171,528 -
Prepaid Expenses and Other Current Assets 109,098 57,141
------------ ------------
TOTAL CURRENT ASSETS 482,173 291,905
OIL AND GAS PROPERTIES, full cost method
Unevaluated 17,425,406 13,500,000
FIXED AND OTHER ASSETS 90,854 49,807
------------ ------------
TOTAL ASSETS $17,998,433 $13,841,712
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities $ 882,467 $ 388,291
Notes Payable 4,000,000 -
Note Payable - Related Party - 500,000
------------ ------------
TOTAL LIABILITIES 4,882,467 888,291
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock- $.003 Par Value
Authorized 45,000,000 and 20,000,000 shares,
Issued and Outstanding 14,457,866 and 14,160,866
at February 28, 1998 and August 31, 1997, respectively 43,374 42,483
Preferred Stock- Authorized 5,000,000 and 1,000,000
shares at February 28, 1998 and August 31, 1997,
respectively; None Issued and Outstanding - -
Additional Paid-in-Capital 15,563,331 14,709,253
Deficit Accumulated During the Development Stage (2,490,738) (1,798,315)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 13,115,966 12,953,421
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $17,998,433 $13,841,712
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended February 28, Ended February 28, Cumulative
-------------------------- --------------------------- from the Date
1998 1997 1998 1997 of Inception
---------- ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Revenue $ - $ - $ - $ - $ -
--------- ---------- ---------- ---------- -----------
General and Administrative Expenses 280,411 165,765 584,386 311,693 2,401,661
Interest Expense 167,386 1,313 169,938 15,002 208,939
--------- ---------- ---------- ---------- -----------
447,797 167,078 754,324 326,695 2,610,600
--------- ---------- ---------- ---------- -----------
Loss from Operations Before Other Income
and Income Taxes (447,797) (167,078) (754,324) (326,695) (2,610,600)
Interest Income 10,756 20,495 61,900 21,996 119,861
--------- ---------- ---------- ---------- -----------
Loss From Operations Before Income Taxes (437,041) (146,583) (692,424) (304,699) (2,490,738)
Provision for Income Taxes - - - - -
---------- ---------- ---------- ---------- -----------
Net Loss ($437,041) ($146,583) ($692,424) ($304,699) $(2,490,738)
=========== ========== ========== ========== ===========
Net Loss Per Share ($0.03) ($0.01) ($0.05) ($0.03) ($0.21)
========== ========== ========== ========== ===========
Weighted Average Number of Shares
Outstanding 14,442,310 11,757,696 14,383,899 11,036,471 11,918,227
========== ========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------------- Paid-In Retained Stockholders'
Per Share Shares Amount Capital Deficit Equity
--------- ---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of Shares on April 9, 1996 $0.012 6,242,422 $18,727 $ 56,276 $ - $ 75,003
Sale of Shares on May 5, 1996 1.50 2,000,000 6,000 2,994,000 - 3,000,000
Issuance of Shares to an Employee
on July 1, 1996 1.00 30,000 90 29,910 - 30,000
Issuance of Shares in Reorganization to
Former Bexy Shareholders - 600,945 1,803 (1,803) - -
Sale of Shares on July 30, 1996 2.00 50,000 150 99,850 - 100,000
Sale of Shares on August 1, 1996 2.00 508,400 1,525 1,015,275 - 1,016,800
Sale of Shares on August 30, 1996 2.00 500,000 1,500 998,500 - 1,000,000
Expenses Related to Offering - - - (686,251) - (686,251)
Issuance of Warrants - - - 12,750 - 12,750
Net Loss - - - - (121,847) (121,847)
---------- ------- ----------- ------------- -----------
Balance - August 31, 1996 9,931,767 29,795 4,518,507 (121,847) 4,426,455
Sale of Shares on September 12, 1996 2.00 50,000 150 99,850 - 100,000
Sale of Shares on September 16, 1996 2.00 80,250 241 160,259 - 160,500
Conversion of Debt 2.00 105,000 315 209,685 - 210,000
Sale of Shares on October 30, 1996 2.25 457,777 1,373 1,028,627 - 1,030,000
Issuance of Warrants - - - 6,450 - 6,450
Sale of Shares on December 6, 1996 2.25 475,499 1,426 1,068,448 - 1,069,874
Sale of Shares on December 9, 1996 2.50 400,000 1,200 998,800 - 1,000,000
Sale of Shares on December 11, 1996 2.25 22,222 67 49,933 - 50,000
Sale of Shares on December 19, 1996 2.50 200,000 600 499,400 - 500,000
Sale of Shares on December 20, 1996 2.50 220,000 660 549,340 - 550,000
Sale of Shares on February 28, 1997 4.25* 352,947 1,059 1,498,967 - 1,500,026
Sale of Shares on March 4, 1997 4.25* 352,947 1,059 1,498,966 - 1,500,025
Sale of Shares on May 22, 1997 3.00 535,000 1,605 1,603,395 - 1,605,000
Issuance of Shares to Adjust Prices of
Shares Sold on February 28 and March 4 -* 294,124 883 (883) - -
Sale of Shares on June 26, 1997 3.00 33,333 100 99,900 - 100,000
Sale of Shares on July 24, 1997 3.00 250,000 750 749,250 - 750,000
Issuance of Shares in Connection with
Financial Advisory Services 3.125 200,000 600 624,400 - 625,000
Sale of Shares on July 30, 1997 3.00 100,000 300 299,700 - 300,000
Sale of Shares on August 19, 1997 3.00 100,000 300 299,700 - 300,000
Expenses Related to Offering - - - (1,153,441) - (1,153,441)
Net Loss - - - - (1,676,468) (1,676,468)
---------- ------- ----------- -------------- ------------
Balance - August 31, 1997 14,160,866 42,483 14,709,253 (1,798,315) 12,953,421
Sale of Shares on September 15, 1997 3.00 67,000 201 200,799 - 201,000
Sale of Shares on September 16, 1997 3.00 130,000 390 389,610 - 390,000
Expenses related to offerings (74,531) (74,531)
Issuance of Warrants and Shares re
Bridge Notes on December 15, 1997 2.375 100,000 300 338,200 338,500
Net Loss - - - (692,423) (692,423)
---------- ------- ----------- ----------- -----------
Balance - February 28, 1998 14,457,866 $43,374 $15,563,331 $(2,490,738) $13,115,966
========== ======= =========== =========== ===========
</TABLE>
* Additional shares were issued to the purchasers of shares sold on February
28, 1997 and March 4, 1997 pursuant to the terms of those sales.
All of the sales of shares indicated above were made pursuant to private
placement transactions.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended February 28, Cumulative
---------------------------------- from the Date
1998 1997 of Inception
-------------- ----------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (692,423) $ (304,699) $(2,490,738)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Depreciation and Amortization 77,438 4,043 89,309
Compensation Paid in Common Stock - - 654,400
(Increase) in Accounts Receivable (287) - (287)
(Increase) in Loan Costs (237,500) - (237,500)
(Increase) in Prepaid Expenses and Other Current Assets (51,958) (148,521) (109,099)
Increase (Decrease) in Accounts Payable and Accrued Liabilities 494,176 (96,118) 882,467
(Decrease) in Advance from Officers - (961) -
------------ ----------- ------------
NET CASH USED BY OPERATING ACTIVITIES (410,554) (546,256) (1,211,447)
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increases in Fixed and Other Assets (52,513) (6,180) (114,191)
Proceeds from Sale of Oil and Gas Seismic Data 46,000 - 46,000
Investment in 3-D Exploration Program (3,971,406) (3,141,745) (17,471,406)
------------- ----------- -------------
NET CASH USED BY INVESTING ACTIVITIES (3,977,919) (3,147,925) (17,539,597)
------------- ----------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Notes 4,000,000 - 4,925,000
Repayment of Notes Payable (500,000) (215,000) (715,000)
Sale of Common Stock 828,500 5,960,400 16,536,328
Issuance of Warrants 101,000 6,450 120,200
Offering Costs (74,531) (807,786) (1,914,223)
Advances for Issuance of Common Stock - 1,500,025 -
------------ ---------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,354,969 6,444,089 18,952,305
------------ ---------- ------------
NET (DECREASE) INCREASE IN CASH (33,504) 2,749,908 201,260
CASH - BEGINNING OF PERIOD 234,764 1,093,180 -
------------ ---------- ------------
CASH - END OF PERIOD $ 201,260 $3,843,088 $ 201,260
------------ ---------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest $ 85,771 $ 15,635 $ 101,406
============ ========== ============
Cash Paid for Income Taxes $ - $ - $ -
============ ========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Cheniere Energy, Inc.
("Cheniere" or the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation, have been included.
For further information, refer to the financial statements and footnotes
included in the Company's Annual Report on Form 10-K, as amended, for the year
ended August 31, 1997. Interim results are not necessarily indicative of
results to be expected for the full fiscal year ended August 31, 1998.
The Company is currently a development stage enterprise and reports as such
under the provisions of SFAS No. 7. The Company's future business will be in
the field of oil and gas exploration and exploitation.
NOTE 2 - NOTE PAYABLE - RELATED PARTY
On July 31, 1997, Cheniere borrowed $500,000 from a related party,
evidenced by a promissory note bearing interest at 10% per annum and due on
August 29, 1997. On August 28, 1997, the maturity date was extended to
September 29, 1997. On September 19, 1997, the note was repaid in full with
interest. All collateral securing the note has been released.
NOTE 3 - NOTES PAYABLE
In December 1997, Cheniere completed the private placement of a $4,000,000
bridge financing. The senior term notes issued by Cheniere had an initial
maturity date of March 15, 1998 and have been extended at the option of the
Company to September 15, 1998. Proceeds from the bridge financing are being
used to fund the Company's ongoing activities related to its 3-D seismic
exploration project in Cameron Parish, Louisiana and for general corporate
purposes.
In connection with the bridge financing, Cheniere issued 100,000 shares of
Common Stock and 4-year warrants to purchase 1,333,333 shares of Common Stock at
$2-3/8 per share. Annual interest on the senior term notes will accrue at LIBOR
plus 4%. Additional warrants to purchase 266,667 shares of Cheniere Common Stock
will be issued for each month the notes remain outstanding beyond March 15,
1998. The Common Stock was recorded as a loan cost at the then current market
price for the shares. The warrants have been valued at the differential rate
between the rate charged (9.9%) and the then estimated market rate (20%),
applied to the principal balance outstanding for the initial term of the senior
term notes. This value ($101,000) has been credited to additional paid-in
capital and $84,000 of this amount has been recorded as interest expense in the
current period.
7
<PAGE>
CHENIERE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The bridge financing included two tranches, one domestic, one European. In
conjunction with the European tranche, BSR Investments, Ltd., a major
shareholder of the company, purchased $2 million of the notes and pledged a
portion of its Cheniere Common Stock to fund its participation.
NOTE 4 - COMMON STOCK ISSUANCE
During September 1997, pursuant to Regulation S promulgated under the
Securities Act of 1933 (the "Act"), the Company sold an aggregate of 197,000
shares of Common Stock to two offshore investors for gross proceeds of $591,000
and net proceeds of $531,900.
In December 1997, pursuant to Regulation D under the Act, the Company
issued 100,000 shares of Common Stock in conjunction with the $4,000,000 bridge
financing discussed in Note 3.
NOTE 5 - STOCK OPTIONS
On September 29, 1997, the Company's Board of Directors elected a new
outside director. This director was granted options to purchase 25,000 shares
of the Company's Common Stock at an exercise price of $3.00 per share, the
quoted market price on the date of grant. These options vest 12,500 on
September 29, 1998, and 12,500 on September 29, 1999, and will expire on
September 29, 2002. Also on September 29, 1997, the Company granted to each of
two outside directors options to acquire 10,000 shares of the Company's Common
Stock at an exercise price of $3.00 per share, the quoted market price on the
date of grant. These options will vest one year from the date of grant and will
expire five years from the date of grant. All of the options described in this
Note 5 were issued pursuant to an exemption from the securities registration
provisions of the Securities Act of 1933 contained in Section 4(2).
In December 1997 and January 1998, the Company granted options to its
employees under the Cheniere Energy, Inc. 1997 Stock Option Plan. Options
covering a total of 275,000 shares of Common Stock were granted, exercisable at
$3.00 per share, vesting 25% at each of the first four anniversaries of the
dates of grant and expiring on the fifth anniversary dates of the grants.
NOTE 6 - SUBSEQUENT EVENTS
In April 1998, the Company completed the private placement pursuant to
Regulation D under the Act of 530,000 shares of Common Stock, with gross
proceeds of $1,060,000 and net proceeds of $1,018,000. Proceeds are being used
to fund the Company's continuing exploration activities and for general
corporate purposes.
Also in April 1998, the Company or its partner was the successful bidder on
four offshore tracts offered in the State of Louisiana Mineral Board lease sale.
The Company expended approximately $472,000 in the sale. Election by the
Company's partner to participate to the full extent provided under the
exploration program would result in a reimbursement to Cheniere of approximately
$200,000 of these costs.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General - Cheniere Energy, Inc. is currently a development stage company,
which has not yet begun generating revenues, and reports as such under the
provisions of SFAS No. 7. The Company's unaudited consolidated financial
statements and notes thereto relate to the three-month and six-month periods
ended February 28, 1998 and 1997. These statements, the notes thereto and the
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the period ended August 31, 1997 contain detailed information that
should be referred to in conjunction with the following discussion.
September Regulation S Private Placement of Common Shares - In September
1997, pursuant to Regulation S promulgated under the Securities Act of 1933, the
Company sold an aggregate of 197,000 shares of Common Stock to two offshore
investors and received proceeds of $531,900 net of placement fees from such
sales. Information regarding each sale is set forth in the table below.
<TABLE>
<CAPTION>
Date Shares Price Proceeds Fee/Commission Net Proceeds
- ----- ------ ----- -------- -------------- ------------
<S> <C> <C> <C> <C> <C>
9/15 67,000 $3.00 $201,000 $20,100 $180,900
9/16 130,000 $3.00 $390,000 $39,000 $251,000
</TABLE>
Proceeds from the sales of Common Stock made in September 1997, were used
to fund the repayment of the Company's short-term note payable which matured
September 29, 1997.
December - Regulation D Private Placement of $4,000,000 Bridge Financing
with Common Shares and Warrants - In December 1997, Cheniere completed the
private placement of a $4,000,000 bridge financing. The senior term notes issued
by Cheniere had an initial maturity date of March 15, 1998 and have been
extended at the option of the Company to September 15, 1998. Proceeds from the
bridge financing are being used to fund the Company's ongoing activities related
to its 3-D seismic exploration project in Cameron Parish, Louisiana, including
the December 31 payment which secured its 50% ownership in the Cameron Parish
exploration project.
In connection with the bridge financing, Cheniere issued 100,000 shares of
common stock and 4-year warrants to purchase 1,333,333 shares of Common Stock at
$2-3/8 per share. Annual interest on the senior term notes will accrue at LIBOR
plus 4%. Additional warrants to purchase 266,667 shares of Cheniere Common
Stock will be issued for each month the notes remain outstanding beyond March
15, 1998
April - Regulation D Private Placement of Common Shares - In early April
1998, the Company completed the private placement of 530,000 shares of Common
Stock, with gross proceeds of $1,060,000 and net proceeds of $1,018,000.
Proceeds were used to fund the Company's continuing exploration activities,
including participation in the April 8, 1998 Louisiana State of Louisiana
Mineral Board lease sale. The Company expended approximately $472,000 in the
sale. Election by the Company's partner to participate to the full extent
provided under the exploration program would result in a reimbursement to
Cheniere of approximately $200,000 of these costs.
9
<PAGE>
Results of Operations
Comparison of Three-Month Periods Ended February 28, 1998 and 1997 - The
Company's operating results for the three months ended February 28, 1998 reflect
a loss of $437,041, or $0.03 per share, compared to a loss of $146,583 or $0.01
per share a year earlier. The Company is in the development stage; accordingly,
there continue to be no operating revenues. General and administrative expenses
of $280,411 in the three months ended February 28, 1998 were higher than the
$165,765 reported for the comparable period a year earlier. The increased
expenses result from additional personnel who have been hired as the operational
activity of the Company has increased. Interest expense of $167,386 was
considerably higher than the $1,313 reported a year ago due to the Company's
$4,000,000 bridge financing which closed in December 1997. Cheniere reported
interest income of $10,756 in the current-year's quarter compared to $20,495 a
year ago, varying as a function of funds available for the Company to invest.
Comparison of Six-Month Periods Ended February 28, 1998 and 1997 - The
Company's operating results for the six months ended February 28, 1998 reflect a
loss of $692,424, or $0.05 per share, compared to a loss of $304,699 or $0.03
per share a year earlier. General and administrative expenses of $584,386 in the
six months ended February 28, 1998 were higher than the $311,693 reported for
the comparable period a year earlier. The increased expenses result from
additional personnel who have been hired as the operational activity of the
Company has increased. Interest expense of $169,938 was considerably higher than
the $15,002 reported a year ago due to the Company's $4,000,000 bridge financing
which closed in December 1997 Cheniere reported interest income of $61,900 in
the current year to date compared to $21,996 a year ago. The increase in income
relates to an adjustment resulting from an agreement that interest earned from
inception to date on funds advanced by the Company to its exploration joint
venture inures to the benefit of Cheniere.
Liquidity and Capital Resources
Historically, the Company has funded its capital expenditures and working
capital requirements through private placements of equity securities and short-
term debt issuances. Since its inception in February 1996 through February 28,
1998, Cheniere has raised $16.5 million through the sale of its Common Stock and
another $4.9 million in private debt placements. These amounts are supplemented
by the Company's April 1998 private placement of an additional $1.0 million.
The Company expects drilling operations to commence on more than one
prospect in the 3-D Exploration Program during 1998. The related capital needs
of the Company will depend upon the level of participation it chooses to retain
in the drilling projects. The Company expects to finance such activities
through the additional placement of its equity securities, short-term debt
issuances or the partial sale of its interest in the exploration projects.
10
<PAGE>
At February 28, 1998, total assets were $17,998,433 compared to $13,841,712
at August 31, 1997. The increase in assets is due primarily to Cheniere's
completing its December 31, 1997 payment obligation of $2.9 million to earn a
50% interest in the 3-D seismic exploration program in Cameron Parish,
Louisiana. This expenditure was funded through the $4,000,000 bridge financing
completed in December.
The Company's balance sheet at February 28, 1998 reflected current assets
of $482,173 and current liabilities of $4,882,467. The Company expects to be
able to continue to meet its capital requirements through the additional
placement of its equity securities, short-term debt issuances or the partial
sale of its interest in exploration projects. The Company has no long term
liabilities.
In November 1997, the Company initiated a $10,000,000 offering of 100,000
units each comprised of one share of the Company's Preferred Stock and warrants
to purchase 20 shares of Cheniere Common Stock. Due to market conditions at the
time, Cheniere chose to withdraw the offering and to satisfy its immediate
capital requirements though the bridge financing completed in December.
Other
This document includes "forward looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended. Although the Company believes that the
expectations reflected in such forward looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Certain risks and uncertainties inherent in the Company's business
are set forth in the filings of the Company with the Securities and Exchange
Commission.
11
<PAGE>
PART II. Other Information
Item 2. Changes in Securities and Use of Proceeds
The information contained in Notes 3, 4 and 5 to the Consolidated Financial
Statements is incorporated herein by reference.
Item 5. Other Information
At a meeting held on April 7, 1998 the Board of Directors of the Company voted
to change the fiscal year-end of the Company from August 31 to December 31. The
change is being adopted so that as the Company enters into the drilling phase of
its exploration program, the financial results of its operations might be
presented on a basis deemed to be more comparable to others in its industry.
The Company's current fiscal year-end was originated when it merged with a
communications company in 1996. The Company will file a report on Form 10-K
covering the transition period from September 1, 1997 through December 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Each of the following exhibits is incorporated by reference or filed
herewith:
Exhibit No. Description
----------- -----------
3.1(a) Amended and Restated Certificate of Incorporation
(Incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement under the Securities Act of 1933 on
Form S-1 filed on August 27, 1996 (File No. 333-10905))
3.1(b) Amendment to Amended and Restated Certificate of
Incorporation (Incorporated by reference to Exhibit 3.3 of
the Company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1997 (File No. 0-9092))
3.2 By-laws (Incorporated by reference to Exhibit 3.2 of the
Company's Amendment No. 1 on Form S-1 filed on
August 27, 1996 (File No. 333-10905))
4.1 Specimen Common Stock Certificate (Incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement under the Securities Act of 1933 on Form S-1
filed on August 27, 1996 (File No. 333-10905))
27.1 Financial Data Schedule
(b) The following reports on Form 8-K were filed for the three months ended
February 28, 1998:
Current Report on Form 8-K, filed on December 18, 1997 under Item 5
reporting the private placement by the Company of $4,000,000 in bridge
financing, Common Stock and warrants and the offering (since withdrawn) by the
Company of $10,000,000 in convertible preferred stock units.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHENIERE ENERGY, INC.
/s/ Don A. Turkleson
--------------------------------
Don A. Turkleson
Chief Financial Officer
(on behalf of the registrant and as
principal accounting officer)
Date: April 14, 1998
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> AUG-31-1998 AUG-31-1997
<PERIOD-START> DEC-01-1997 DEC-01-1996
<PERIOD-END> FEB-28-1998 FEB-28-1997
<CASH> 201,260 234,764
<SECURITIES> 0 0
<RECEIVABLES> 287 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 482,173 291,905
<PP&E> 17,425,406 13,500,000
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 17,998,433 13,841,712
<CURRENT-LIABILITIES> 4,882,467 888,291
<BONDS> 0 0
0 0
0 0
<COMMON> 43,374 42,483
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 17,998,433 13,841,712
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 280,411 165,765
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 167,386 1,313
<INCOME-PRETAX> 437,041 146,583
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 437,041 146,583
<EPS-PRIMARY> 0.03 0.01
<EPS-DILUTED> 0.03 0.01
</TABLE>
