<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the Quarterly Period Ended APRIL 30, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
- ----
For the transition period from to
--------- ---------
Commission File Number 1-7191
THOR ENERGY RESOURCES, INC.
(Exact name of small business issuer as specified in its charter)
----------------
DELAWARE 59-1232278
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
719 WEST FRONT STREET
P.O. BOX 307
TYLER, TX 75710
(Address of principal executive offices)
(903) 533-9111
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
----------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 6,464,676 shares of $0.01 par
value common stock as of June 12, 1995.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
Page 1 of 13
<PAGE> 2
THOR ENERGY RESOURCES, INC.
INDEX TO THE APRIL 30, 1995 FORM 10-QSB
<TABLE>
<CAPTION>
Page
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets.................................. 3
Consolidated Condensed Statements of Operations........................ 4
Consolidated Condensed Statements of Cash Flows........................ 5
Notes to Consolidated Condensed Financial Statements................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 7
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings..................................................... 9
Item 6. Exhibits and Reports on Form 8-K...................................... 10
SIGNATURE.......................................................................... 13
</TABLE>
Page 2 of 13
<PAGE> 3
THOR ENERGY RESOURCES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
------------------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and interest-bearing deposits $273 $265
Receivables, net 397 584
Other current assets 75 83
------ ------
Total current assets
745 932
------ ------
INVESTMENT IN DISCONTINUED OPERATIONS OF SUBSIDIARIES 38 38
------ ------
PROPERTY AND EQUIPMENT 7,438 7,440
LESS - Accumulated depreciation, depletion, amortization and impairment (5,934) (5,809)
------ ------
Property and equipment, net 1,504 1,631
------ ------
OTHER ASSETS 369 370
------ ------
TOTAL ASSETS $2,656 $2,971
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ - $ -
Accounts payable and accrued expenses 1,462 1,577
------ ------
Total current liabilities 1,462 1,577
------ ------
LONG-TERM DEBT 134 145
------ ------
STOCKHOLDERS' EQUITY 1,060 1,249
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,656 $2,971
====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
Page 3 of 13
<PAGE> 4
THOR ENERGY RESOURCES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
April 30
--------------------
1995 1994
----- ------
<S> <C> <C>
REVENUES:
Oil and gas sales $240 $342
Other 4 3
----- -----
Total revenues 244 345
----- -----
COSTS AND EXPENSES:
Lease operations and production taxes 26 99
General and administrative 275 270
Depreciation, depletion and amortization 125 145
Interest 7 4
----- -----
Total expenses 433 518
----- -----
NET LOSS $(189) $(173)
===== =====
NET LOSS PER COMMON SHARE $(.03) $(.03)
===== =====
</TABLE>
The accompanying notes are an integral part of these statements.
Page 4 of 13
<PAGE> 5
THOR ENERGY RESOURCES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
April 30
--------------------
1995 1994
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(189) $(178)
Adjustments to reconcile to net cash from operations: ----- -----
Depreciation, depletion and amortization 125 145
Change in receivables 187 138
Change in accounts payable and accrued expenses (115) (285)
Change in other current assets 8 10
----- -----
NET CASH PROVIDED BY (USED IN) OPERATIVE ACTIVITIES 16 (165)
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in investment in discontinued operations of subsidiaries - 4
Additions to (deletions from) property and equipment 2 (104)
Decrease in other assets 1 1
----- -----
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3 (99)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (11) -
----- -----
NET CASH USED IN FINANCING ACTIVITIES (11) -
----- -----
NET INCREASE (DECREASE) IN CASH 8 (264)
----- -----
CASH, beginning of year 265 548
----- -----
CASH, end of period $273 $284
===== =====
</TABLE>
The accompanying notes are an integral part of these statements.
Page 5 of 13
<PAGE> 6
THOR ENERGY RESOURCES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) GENERAL
In Management's opinion, the accompanying unaudited, consolidated, condensed
financial statements include all adjustments (which include only normal
recurring adjustments) necessary to present fairly Thor Energy Resources, Inc.'s
("Thor's" or the "Company's") consolidated financial position as of April 30,
1995, and January 31, 1995, the consolidated results of operations for the three
months ended April 30, 1995 and 1994, and the consolidated statements of cash
flows for the three months ended April 30, 1995 and 1994.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated condensed financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in Thor's January 31, 1995, annual report
on Form 10-KSB, as amended. The results of operations for the three months
ended April 30, 1995, are not necessarily indicative of the operating results
for the full year.
The accompanying notes are an integral part of these statements.
Page 6 of 13
<PAGE> 7
THOR ENERGY RESOURCES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations - Three Months Ended April 30, 1995
On October 21, 1994, Thor filed for protection under Chapter 11 of the
federal Bankruptcy Code. Further discussion of this matter is set forth under
"Liquidity and Capital Resources" in this item.
Revenues decreased $101,000, or 29%, to $244,000 during the three months
ended April 30, 1995, compared with the same period of the prior year. Oil and
gas sales decreased $102,000, or 30%, to $240,000 in the three months ended
April 30, 1995. The decrease in revenues was primarily a result of lower gas
prices for the three months ended April 30, 1995, as compared with the same
period of the prior year.
The cost of lease operations and production taxes decreased $73,000, or 74%,
to $26,000 in the first quarter of fiscal 1996 due to production tax refunds
received on the Carter #1 well. As a result of the foregoing factors, oil and
gas sales, net of lease operations and production taxes, decreased $29,000, or
12%, to $214,000 in the first quarter of fiscal 1996 as compared to the first
quarter of fiscal 1995.
General and administrative expenses increased $5,000, or 2%, to $275,000 in
the current quarter. Decreases in personnel and other general and
administrative expenses were partially offset by higher legal fees. Legal and
other professional fees resulting from the litigation referred to in "Legal
Proceedings" in Item 1 of Part II this report are anticipated to continue at
high levels until such litigation is resolved.
Depreciation, depletion and amortization decreased $20,000, or 14%, to
$125,000 in the current quarter. This was a result of a decrease in the
depletion and amortization rate per equivalent Mcf from $.84 to $.75 resulting
from the addition of reserves in fiscal 1995 attributable to the Breedlove
Rogers #2 well.
Interest expense increased $3,000 from the comparable quarter last year to
$7,000 in the current quarter as a result of higher debt levels as compared to
the quarter ended April 30, 1994.
No income tax benefit is reflected in the current or the prior year's
quarter as a result of the limitation of available loss carryback.
As a result of the foregoing factors, the Company's net loss in the first
quarter of fiscal 1996 increased $16,000 to $189,000, or $.03 per share,
compared to a net loss of $173,000, or $.03 per share, for the prior year.
The accompanying notes are an integral part of these statements.
Page 7 of 13
<PAGE> 8
THOR ENERGY RESOURCES, INC.
Liquidity and Capital Resources
On October 21, 1994, the Company filed for protection under Chapter 11 of the
federal Bankruptcy Code in the Bankruptcy Court. The action was taken in
response to continuing and mounting litigation costs resulting from a wrongful
termination suit filed against the Company by Lindsay Sneed, the Company's
former Chief Financial Officer, that has continued for the last three years. The
Company filed a plan of reorganization with the Bankruptcy Court on April 18,
1995. The bankruptcy filing and the fact that the Common Stock is no longer
listed on the American Stock Exchange or any other stock exchange may have an
adverse effect on the ability of the Company to continue to obtain financing for
its projects. However, Thor Exploration, Inc. and Thor Operating Company,
Thor's main operating subsidiaries, have not filed for bankruptcy and intend to
conduct business as usual and are looking into future drilling programs with
current working interest partners.
At April 30, 1995, Thor had a working capital deficit of $717,000 resulting
from decreased payables and increased receivable collections. Net cash provided
by operations during the three months ended April 30, 1995, was $16,000. The
primary use of cash during the three months ended April 30, 1995, was $115,000
in the reduction of current liabilities as compared with the same period of the
prior year.
The Company continues to experience substantial costs relating to its defense
of the litigation referred to in "Legal Proceedings" in Part II of this report.
Such litigation continues to place a serious financial strain on the Company.
At May 17, 1995, the Company had outstanding balances of $125,000 and
$176,827 on two lines of credit from an affiliate of the Company.
The Company is currently pursuing several oil and gas projects. The Company
is attempting to fund such drilling activities through farm-outs, carried
interests, non-recourse financing or other arrangements which would result in a
substantial reduction in the Company's cash requirements related thereto, no
assurances can be made as to the Company's success therein.
The sufficiency of the Company's financial resources for fiscal 1996 is a
function of the success of the Company's planned oil and gas projects as well as
the Company's ability to obtain adequate sources of debt or equity capital. As
such, the Company is unable to accurately predict the adequacy of its working
capital or its liquidity. Additionally, the Company cannot anticipate whether it
will have available lines of credit.
The accompanying notes are an integral part of these statements.
Page 8 of 13
<PAGE> 9
THOR ENERGY RESOURCES, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company knows of no pending or threatened legal proceedings except as set
forth in the Company's Annual Report on Form 10- KSB, as amended, for the year
ended January 31, 1995 (the "1995 10-KSB"). There have been no material
developments in the litigation described in the 1995 10-KSB since the date of
filing the 1995 10-KSB except for the Bankruptcy Court's ruling on certain
motions described below.
On May 30, 1995 the Bankruptcy Court issued a ruling (i) referring the case
to mediation to be held prior to July 3, 1995, (ii) denying Lindsay Sneed's
motion to have an independent trustee appointed to administer the Company during
the bankruptcy proceeding, (iii) denying Sneed's motion for authority to pursue
claims on behalf of the estate and (iv) granting the Company's motion to have an
independent examiner appointed to review the Company's previous practices,
although the examiner will not be appointed prior to July 3, 1995 pending the
results of the mediation described in subpart (i).
The accompanying notes are an integral part of these statements.
Page 9 of 13
<PAGE> 10
THOR ENERGY RESOURCES, INC.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
2.1 Notice of Commencement of Case under Chapter 11 of the
Bankruptcy Code, Meeting of Creditors and Fixing of Dates
in Re Thor Energy Resources, Inc., Case Number
94-61047.(1)
2.2 Press Release dated October 24, 1994.(1)
2.3 Proposed Plan of Reorganization.(2)
3.1 Restated Certificate of Incorporation.(3)
3.2 Bylaws and all amendments to date.(3)
10.1 Amended and Restated 1986 Stock Option Plan.(4)
10.2 Form of Indemnity Agreement between the Company and each
of its directors.(3)
10.3 Agreement for sale of property between the Company and
Neomar Resources, Inc.(2)
10.4 Agreement for sale of property between Thor Exploration,
Inc. and an unrelated party executed March 3, 1993 [dated
February 25, 1993].(5)
10.5 Securities Purchase Agreement between the Company,
Bio-Hazard Managment, Inc. and Morris & Co. dated March
31, 1993.(6)
10.6 Shareholders' Agreement between the Company and Morris &
Co. dated March 31, 1993.(6)
10.7 Pledge Agreement by Morris & Co. in favor of the Company
dated March 31, 1993.(6)
</TABLE>
The accompanying notes are an integral part of these statements.
Page 10 of 13
<PAGE> 11
THOR ENERGY RESOURCES, INC.
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
10.8 Severance Agreement dated July 16, 1990 between David M.
Fender and the Company.(2)
10.9 Letter dated November 21, 1990 from the Company to David
W. Sipperly.(3)
10.10 Letter dated August 30, 1991 from the Company to David W.
Sipperly.(3)
10.11 Letter dated September 3, 1991 from David W. Sipperly to
the Company.(3)
10.12 Letter dated October 7, 1991, from the Company to David W.
Sipperly.(3)
10.13 $135,000 Promissory Note, dated March 16, 1995, executed
by the Company and payable to the LaVelle D. Fender
Trust.(2)
10.14 Deed of Trust, dated March 16, 1992, executed by the
Company in favor of LaVelle D. Fender.(3)
10.15 Real Estate Lien Note, dated August 23, 1994, executed by
the Company and Thor Exploration, Inc. and payable to the
LaVelle D. Fender Trust.(2)
10.16 Deed of trust, dated August 23, 1994, executed by the
Company and Thor Exploration, Inc. in favor of the LaVelle
D. Fender Trust.(2)
10.17 Office lease between the Company and Lucy Corporation
commencing October 1, 1993.(4)
27.1 Financial Data Schedule.(7)
99.1 Order on Motion to Approve Compromise and Settlement of
Advisory Proceeding.(8)
</TABLE>
The accompanying notes are an integral part of these statements.
Page 11 of 13
<PAGE> 12
THOR ENERGY RESOURCES, INC.
________________________________________________________________________________
(1) Filed as an exhibit to the Company's Current Report on Form 8-K, as
amended, regarding the Company's filing for bankruptcy on October
21, 1994.
(2) Filed as an exhibit to the Company's Annual Report on Form 10-KSB,
as amended, for the fiscal year ended January 31, 1995, and
incorporated herein by reference.
(3) Filed as an exhibit to the Company's Annual Report on Form 10-KSB
for the fiscal year ended January 31, 1993, as amended, and
incorporated herein by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-KSB
for the fiscal year ended January 31, 1994, and incorporated herein
by reference.
(5) Filed as an exhibit to the Company's Current Report on Form 8-K,
regarding the sale of certain oil and gas properties, on March 5,
1993 and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Current Report on Form 8-K,
regarding the issuance of Bio-Hazard Management, Inc. stock to
Morris & Co., on April 15, 1993, and incorporated herein by
reference.
(7) Filed herewith.
(8) Filed as an exhibit to the Company's Current Report on Form 8-K, as
amended, regarding the change in the Company's accountants on March
13, 1995.
(B) Reports on Form 8-K.
A Current Report on Form 8-K was filed on March 13, 1995, and was sub-
sequently amended on March 31, 1995. The Current Report addressed, in Item 4 -
Changes in Registrant's Certifying Accountant, the dismissal of Hein +
Associates ("Hein") as the Company's principal independent accountants and the
engagement of Weaver and Tidwell to replace Hein as the Company's principal
independent accountants. The Current Report also updated certain litigation
matters involving the Company in Item 5 - Other Information.
The accompanying notes are an integral part of these statements.
Page 12 of 13
<PAGE> 13
THOR ENERGY RESOURCES, INC.
SIGNATURE
Pursuant to the requirements of the Exchange Acts, the Registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THOR ENERGY RESOURCES, INC.
(Registrant)
Date: June 13, 1995 By: /s/ Lashley A. Bell
------------------------------------------
Lashley A. Bell
Treasurer, Principal Accounting
Officer and Chief Financial Officer
The accompanying notes are an integral part of these statements.
Page 13 of 13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------- ---------------------- ----
<S> <C> <C>
2.1 Notice of Commencement of Case under Chapter 11 of the
Bankruptcy Code, Meeting of Creditors and Fixing of
Dates in Re Thor Energy Resources, Inc., Case Number
94-61047.(1)
2.2 Press Release dated October 24, 1994.(1)
2.3 Proposed Plan of Reorganization.(2)
3.1 Restated Certificate of Incorporation.(3)
3.2 Bylaws and all amendments to date.(3)
10.1 Amended and Restated 1986 Stock Option Plan.(4)
10.2 Form of Indemnity Agreement between the Company and each
of its directors.(3)
10.3 Agreement for sale of property between the Company and
Neomar Resources, Inc.(2)
10.4 Agreement for sale of property between Thor Exploration,
Inc. and an unrelated party executed March 3, 1993
[dated February 25, 1993].(5)
10.5 Securities Purchase Agreement between the Company,
Bio-Hazard Managment, Inc. and Morris & Co. dated March
31, 1993.(6)
10.6 Shareholders' Agreement between the Company and Morris &
Co. dated March 31, 1993.(6)
10.7 Pledge Agreement by Morris & Co. in favor of the Company
dated March 31, 1993.(6)
10.8 Severance Agreement dated July 16, 1990 between David
M. Fender and the Company.(2)
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------- ---------------------- ----
<S> <C> <C>
10.9 Letter dated November 21, 1990 from the Company to David
W. Sipperly.(3)
10.10 Letter dated August 30, 1991 from the Company to David W.
Sipperly.(3)
10.11 Letter dated September 3, 1991 from David W. Sipperly to
the Company.(3)
10.12 Letter dated October 7, 1991, from the Company to David
W. Sipperly.(3)
10.13 $135,000 Promissory Note, dated March 16, 1995, executed
by the Company and payable to the LaVelle D. Fender
Trust.(2)
10.14 Deed of Trust, dated March 16, 1992, executed by the
Company in favor of LaVelle D. Fender.(3)
10.15 Real Estate Lien Note, dated August 23, 1994, executed by
the Company and Thor Exploration, Inc. and payable to
the LaVelle D. Fender Trust.(2)
10.16 Deed of trust, dated August 23, 1994, executed by the
Company and Thor Exploration, Inc. in favor of the
LaVelle D. Fender Trust.(2)
10.17 Office lease between the Company and Lucy Corporation
commencing October 1, 1993.(4)
27.1 Financial Data Schedule.(7)
99.1 Order on Motion to Approve Compromise and Settlement of
Advisory Proceeding.(8)
</TABLE>
<PAGE> 16
THOR ENERGY RESOURCES, INC.
- --------------------------------------------------------------------------------
(1) Filed as an exhibit to the Company's Current Report on Form 8-K, as
amended, regarding the Company's filing for bankruptcy on October 21,
1994.
(2) Filed as an exhibit to the Company's Annual Report on Form 10-KSB, as
amended, for the fiscal year ended January 31, 1995, and incorporated
herein by reference.
(3) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for
the fiscal year ended January 31, 1993, as amended, and incorporated
herein by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for
the fiscal year ended January 31, 1994, and incorporated herein by
reference.
(5) Filed as an exhibit to the Company's Current Report on Form 8-K,
regarding the sale of certain oil and gas properties, on March 5, 1993
and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Current Report on Form 8-K,
regarding the issuance of Bio-Hazard Management, Inc. stock to Morris &
Co., on April 15, 1993, and incorporated herein by reference.
(7) Filed herewith.
(8) Filed as an exhibit to the Company's Current Report on Form 8-K, as
amended, regarding the change in the Company's accountants on March 13,
1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF THOR ENERGY RESOURCES, INC. AND SUBSIDIARIES AS OF
APRIL 30, 1995 AND THE RELATED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
THREE MONTHS ENDED APRIL 30, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 273
<SECURITIES> 0
<RECEIVABLES> 397
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 745
<PP&E> 7,438
<DEPRECIATION> 5,934
<TOTAL-ASSETS> 2,656
<CURRENT-LIABILITIES> 1,462
<BONDS> 65
<COMMON> 0
0
322
<OTHER-SE> 1,184
<TOTAL-LIABILITY-AND-EQUITY> 2,656
<SALES> 240
<TOTAL-REVENUES> 244
<CGS> 26
<TOTAL-COSTS> 626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> (189)
<INCOME-TAX> 0
<INCOME-CONTINUING> (189)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (189)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
