<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended November 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
COMMISSION FILE NUMBER 0-18656
PONDER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2268672
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
5005 RIVERWAY DRIVE, SUITE 550
HOUSTON, TEXAS 77056
(Address of principal executive offices, zip code)
(713) 965-0653
(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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT DECEMBER 31, 1997
----- --------------------------------
<S> <C>
Common Stock, $.01 par value 28,733,981
</TABLE>
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<PAGE> 2
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION (Unaudited)
Item 1: Condensed Consolidated Balance Sheets as of November 30,
1997, and August 31, 1997................................... 3
Condensed Consolidated Statements of Operations for the
Three Months Ended November 30, 1997 and 1996............... 4
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended November 30, 1997 and 1996............... 5
Notes to Condensed Consolidated Financial Statements........ 6
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8
PART II OTHER INFORMATION
Item 1: Legal Proceedings........................................... 10
Item 2: Changes in Securities....................................... 10
Item 3: Defaults Upon Senior Securities............................. 10
Item 4: Submission of Matters to a Vote of Security Holders......... 10
Item 5: Other Information........................................... 10
Item 6: Exhibits and Reports on Form 8-K............................ 10
</TABLE>
2
<PAGE> 3
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
ASSETS
<TABLE>
<CAPTION>
NOVEMBER 30, AUGUST 31,
1997 1997
------------ ----------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 3 $ 4
Receivables, net.......................................... 4,588 4,134
Parts and supplies........................................ 2,752 2,622
Available for sale securities............................. 800 800
Prepaid expenses and other................................ 546 46
-------- --------
Total current assets.............................. 8,689 7,606
-------- --------
PROPERTY AND EQUIPMENT...................................... 31,711 31,383
Less -- Accumulated depreciation and amortization......... (14,756) (14,278)
-------- --------
16,955 17,105
-------- --------
OTHER ASSETS................................................ 178 122
DEFERRED ASSETS, net 77 423
GOODWILL, net............................................... 1,341 1,361
-------- --------
1,596 1,906
-------- --------
TOTAL ASSETS...................................... $ 27,240 $ 26,617
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 1,878 $ 1,899
Accounts and notes payable, trade......................... 4,585 5,562
Accrued liabilities and other............................. 1,876 2,203
-------- --------
Total current liabilities......................... 8,339 9,664
-------- --------
LONG-TERM DEBT, less current maturities..................... 7,635 7,458
-------- --------
OTHER LONG-TERM LIABILITIES................................. 76 765
-------- --------
DEFERRED TAXES PAYABLE...................................... 830 881
-------- --------
CONVERTIBLE DEBENTURES...................................... -- 6,380
-------- --------
SENIOR CONVERTIBLE NOTES.................................... 2,266 --
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, authorized 50,000,000
shares, issued 28,681,620 shares and 17,571,021 shares
at November 30, 1997, and August 31, 1997,
respectively........................................... 287 176
Additional paid-in capital................................ 32,210 25,307
Cumulative foreign currency translation adjustment........ 83 49
Accumulated deficit....................................... (24,120) (23,696)
Note receivable for common stock (66) (66)
Deferred compensation..................................... -- (1)
Unrealized loss on available for sale securities.......... (300) (300)
-------- --------
Total stockholders' equity........................ 8,094 1,469
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $ 27,240 $ 26,617
======== ========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE> 4
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NOVEMBER 30
-------------------------
1997 1996
----------- ----------
<S> <C> <C>
TOOL RENTALS AND SALES...................................... $ 5,101 $ 5,141
COSTS OF SERVICE AND SALES.................................. 1,814 2,203
----------- ----------
Gross profit...................................... 3,287 2,938
----------- ----------
EXPENSES:
Operating................................................. 2,287 2,320
General and administrative................................ 947 1,157
----------- ----------
3,234 3,477
----------- ----------
Operating income (loss)........................... 53 (539)
OTHER INCOME (EXPENSE):
Interest, net............................................. (443) (354)
Gain (loss) on disposal of assets......................... (34) --
Other..................................................... -- 11
----------- ----------
NET INCOME (LOSS)........................................... $ (424) $ (882)
=========== ==========
EARNINGS (LOSS) PER SHARE................................... $ (.02) $ (.07)
=========== ==========
WEIGHTED AVERAGE COMMON SHARES AND COMMON SHARE EQUIVALENTS
OUTSTANDING............................................... 25,029,799 12,243,850
=========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NOVEMBER 30
------------------
1997 1996
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (424) $ (882)
Adjustments to reconcile net loss to net cash used in
operating activities --
Depreciation and amortization.......................... 549 692
Loss on disposal of assets............................. 34 --
Deferred compensation expense.......................... 1 13
Net change in operating assets and liabilities --
Receivables............................................ (454) (498)
Parts and supplies..................................... (130) (98)
Prepaid expenses and other............................. (500) 57
Accounts and notes payable, trade...................... (977) 1,054
Accrued liabilities and other.......................... (460) (404)
------- -------
Net cash used in operating activities............. (2,361) (66)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (422) (1,210)
------- -------
Net cash used in investing activities............. (422) (1,210)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt...................... (4,198) (946)
Bank overdraft............................................ 133 86
Proceeds from long-term debt borrowings................... 4,347 1,807
Proceeds from Senior Convertible Notes.................... 2,500 --
------- -------
Net cash provided by financing activities......... 2,782 947
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH..................... -- 111
------- -------
CASH AND CASH EQUIVALENTS:
Increase (decrease)....................................... (1) (218)
Beginning of period....................................... 4 398
------- -------
End of period............................................. $ 3 $ 180
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for --
Interest............................................... $ 437 $ 91
======= =======
Income taxes........................................... $ -- --
======= =======
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Common stock issued in connection with debenture
conversions............................................ $ 6,713 $ --
======= =======
Common stock contributed to 401(k) plan................... $ 66 $ --
======= =======
Assets acquired in connection with acquisitions........... $ -- 812
======= =======
Liabilities assumed in connection with acquisitions....... $ -- 812
======= =======
Common stock issued in connection with acquisitions....... $ -- 19
======= =======
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE> 6
PONDER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
1. BASIS OF PRESENTATION:
The condensed consolidated financial statements included herein have been
prepared by Ponder Industries, Inc., and subsidiaries (collectively referred to
as the Company), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. However, all adjustments have been made to
the accompanying financial statements which are, in the opinion of the Company's
management, necessary for a fair presentation of the Company's financial
position, results of operations and cash flows for the periods covered. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented herein not misleading. These consolidated financial statements should
be read in conjunction with the consolidated financial statements and the notes
thereto included in the Company's latest Annual Report on Form 10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Certain reclassifications have been made to prior period balances to
conform with current period presentation.
2. LONG-TERM DEBT:
See Note 4 for a description of Senior Convertible Notes placed in October
1997.
At August 31, 1997, the Company had borrowed approximately $7,300 under a
$10,000 financing agreement with KBK Financial, Inc. ("KBK"). The financing
agreement requires compliance with various financial covenants. As a result of
continued losses, the Company was not in compliance with certain covenants at
August 31, 1997. In January 1998, the Company and KBK amended certain of the
covenants governing the financing agreement which has allowed the Company to
classify a substantial portion of the indebtedness due this financial
institution as long-term at November 30, 1997 and August 31, 1997. The amended
covenants provide that the Company must maintain a debt service coverage ratio,
as defined and amended, of not less than 1.0 to 1.0 as of the fiscal quarter
ending February 28, 1998, and 1.25 to 1.0 as of the end of each fiscal quarter
thereafter. The debt service coverage ratio requirement for the quarter ended
November 30, 1997, was waived. The Company must also maintain a tangible net
worth, as defined and amended, of not less than $8,500 as of the fiscal quarter
ended November 30, 1997, and $18,000 as of the end of each fiscal quarter
thereafter.
3. CONTINGENCIES:
In 1996, the Company sued its placement agent and its principal and related
entities (the "placement agent") in the Company's 1996 convertible debenture
offering and the debenture holders in the United States District Court for the
Western District of New York. In mid-1977, the Company settled with all of the
debenture holders, and the judge ordered the case against the placement agent
transferred to the United States District Court for the Northern District of
Georgia. In response, in September 1997, a case was filed against the Company in
Georgia State Court, which the Company removed to the United States District
Court for the Northern District of Georgia, Atlanta Division, by the placement
agent alleging that, in connection with such offering, the Company tortiously
interfered with its business relationships, breached a Proprietary Information,
6
<PAGE> 7
PONDER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Non-Circumvention and Indemnification Agreement between the Company and the
placement agent, defamed the placement agent and engaged in conduct giving rise
to an indemnification in favor of the placement agent. The Federal court has now
consolidated the two lawsuits. The Company is seeking unspecified millions of
dollars in actual and punitive damages from the placement agent and the
placement agent seeks actual damages in an amount not less than $1,000 per
breach, exemplary damages in an amount not less than $2,500, interest, costs and
attorney's fees. Although no assurance can be given, the Company believes it has
meritorious claims against the transfer agent which it intends to prosecute
vigorously and that it has meritorious defenses to the above action and intends
to defend itself vigorously.
The Company is also a party to additional claims and legal proceedings
arising in the ordinary course of business. The Company believes it is unlikely
that the final outcome of any of the claims or proceedings to which the Company
is a party, including those described above, would have a material adverse
effect on the Company's financial statements; however, due to the inherent
uncertainty of litigation, the range of possible loss, if any, cannot be
estimated with a reasonable degree of precision and there can be no assurance
that the resolution of any particular claim or proceeding would not have an
adverse effect on the Company's results of operations for the interim period in
which such resolution occurred.
4. EQUITY TRANSACTIONS:
In September 1997, the Company reached a settlement with those convertible
debenture holders who had not previously converted their debentures. During the
three months ended November 30, 1997, approximately $7,060 of convertible
debentures, including accrued interest, were converted into 10,633,333 shares of
the Company's common stock. The Company also issued to such debenture holders
five-year warrants to purchase 957,000 shares of the Company's common stock at
$1 per share.
In October 1997, the Company completed a private placement of $2,500 Senior
Convertible Notes (Senior Notes) and warrants to purchase 4 million shares of
the Company's common stock at a purchase price of $.625 per share. The warrants
expire on January 1, 2001. The Senior Notes mature on January 1, 1999, are
interest free until June 30, 1998, and then bear interest at the prime rate, as
defined, plus 2 percent. The Senior Notes are convertible at the option of the
holder, at any time prior to the maturity date, into an aggregate of 4 million
shares of the Company's common stock.
5. SUBSEQUENT EVENTS:
In January 1998, the Company acquired all of the outstanding stock of
Fishing Tools, Inc., for $6,500 cash and the issuance of approximately 645,000
shares of the Company's common stock valued at $1,000. The cash consideration
was provided through an equity placement with affiliates of the purchasers of
the Senior Notes described above. The equity placement consisted of the sale of
11 million shares of the Company's common stock at $1 per share. Concurrent with
this equity placement, the Senior Notes were converted into 4 million shares of
the Company's common stock.
7
<PAGE> 8
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains certain "forward-looking"
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to Ponder Industries, Inc. (the Company),
and its subsidiaries that are based on the beliefs of the Company's management
as well as assumptions made by and information currently available to the
Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect" and "intend" and words or phrases of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current risks, uncertainties and assumptions related to certain factors
including, without limitations, competitive factors, general economic
conditions, customer relations, relationships with vendors, the interest rate
environment, governmental regulation and supervision, seasonality, distribution
networks, product introductions and acceptance, technological change, changes in
industry practices, one-time events and other factors described herein. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.
The following discussion is included to describe the Company's financial
position and results of operations for the three-month periods ended November
30, 1997 and 1996. The condensed consolidated financial statements and notes
thereto contain detailed information that should be referred to in conjunction
with this discussion.
BUSINESS REVIEW
Ponder is an international oil field service and rental tool company that
specializes in the use of fishing tools for the recovery of unwanted
obstructions in oil and gas wells. The Company also rents specialized oil field
equipment such as pressure control equipment, tools, pipe, tubing and whipstocks
used in the drilling, completion and workover of wells. Ponder currently has 18
locations domestically and 2 international locations serving the North Sea area.
Demand for the Company's services and rentals depends primarily on the
number of oil and gas wells being drilled, the depth and drilling conditions of
such wells and the level of workover activity. Drilling and workover activity is
largely dependent on the prices for oil and natural gas. Demand for oil and
natural gas allowed for higher prices in 1997 and 1996 than the average prices
for the past several years. However, oil prices, and to a lesser extent, natural
gas prices, have recently declined. The Company is unable to predict the
duration of such price declines or the impact that such declines may have on the
Company's future results of operations.
LIQUIDITY AND CAPITAL RESOURCES
A $2,500,000 bridge loan was obtained in October 1997 from White Owl
Capital Partners ("White Owl") and certain others with the intention of
providing additional capital for acquisitions and expansion of the Company's
business. The Company, in October 1997, signed a letter of intent to purchase
Fishing Tools, Inc. (FTI), for $6,500,000 cash and $1,000,000 in stock. In
January 1998, the Company acquired all of the outstanding stock of FTI under the
same terms as the letter of intent. The cash consideration for the purchase of
FTI was provided through an equity placement with the affiliates of White Owl.
The equity placement consisted of the sale of 11 million shares of the Company's
common stock at $1 per share. Concurrent with this equity placement, the notes
representing the bridge loan were converted into 4 million shares of the
Company's common stock. See Note 5 of notes to condensed consolidated financial
statements.
In April 1996, the Company raised approximately $10 million, net of fees,
by issuing 8 percent convertible debentures. In September 1997, the Company
reached a settlement whereby those convertible
8
<PAGE> 9
debenture holders who had not previously converted their debentures with the
Company agreed to convert the then outstanding debenture debt of approximately
$7,060,000, including accrued interest, into 10,633,333 shares of the Company's
common stock. The conversion of the debentures increased the Company's equity by
approximately $6.7 million.
At November 30, 1997, and August 31, 1997, the Company had working capital
(deficit) of approximately $.3 million and $(2.1) million, respectively. The
current ratio was approximately 1.04 to 1.0 at November 30, 1997, compared to
.79 to 1.0 at August 31, 1997.
In November 1996, the Company completed a $10 million financing agreement
with KBK Financial, Inc. ("KBK"). The agreement includes a $4 million Revolving
Receivable Facility, a $2.5 million Revolving Credit Note and a $3.5 million
Term Note (the Notes). The Receivable Facility is a two-year facility that is
based on accounts receivable and will be utilized for short-term liquidity
needs. The $2.5 million Revolving Credit Note is a five-year facility, based on
inventory and equipment, and these funds were used to acquire capital assets to
expand the Company's business. The $3.5 million Term Note is a five and one-half
year note, interest only through May 1997 and amortizes over the remaining five
years, collateralized by equipment. The funds were used to pay off existing bank
debt of approximately $3 million with the balance being used to fund operations
and acquire capital equipment. At November 30, 1997, and August 31, 1997, the
Company had borrowed approximately $7.4 million and $7.3 million, respectively,
under the Notes. The Notes require compliance with various covenants, including
the maintenance of a defined debt service coverage ratio and a defined tangible
net worth. As a result of continued losses primarily relating to the Company's
expansion program, the Company was in technical default of the Notes. The
Company and KBK have amended the Notes and the Company is no longer in technical
default thereunder.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended November 30, 1997, and November 30, 1996
A net loss of $424,000, or $.02 per share, was recorded for the three
months ended November 30, 1997, compared to a net loss of $882,000, or $.07 per
share, for the same period of the prior year.
Revenues were approximately $5.1 million for each of the three months ended
November 30, 1997 and 1996. Costs of service and sales decreased $389,000, or 18
percent, to $1,814,000 for the three months ended November 30, 1997, from
$2,203,000 for the same period of the prior year and operating expenses
decreased $33,000, or 1 percent, to $2,287,000 from $2,320,000. The decrease in
costs of service and sales relates primarily to the Company's decision to
utilize salaried fishing tool operators rather than commissioned operators.
Commissions are reflected as a component of costs of service and sales while
salaries are reflected as operating expenses. Operating expenses remained
stable, however, reflecting an increase in salaried fishing tool operators
offset by a reduction in other operating personnel and expenses and the closing
of two of the Company's unsuccessful operating locations. The Company's gross
profit margin was 64 percent for the three months ended November 30, 1997, as
compared to 57 percent for the same period of the prior year. Operating
expenses, as a percentage of sales, were 45 percent for each of the three months
ended November 30, 1997 and 1996.
General and administrative expenses decreased $210,000, or 18 percent, to
$947,000 for the three months ended November 30, 1997, as compared to $1,157,000
for the same period of the prior year. In April 1997, the Company commenced a
major cost reduction program which included a reduction in administrative
personnel and related expenses, the sale of certain nonproductive equipment to
reduce debt, resolving the litigation involving its convertible debentureholders
and substantially reducing general and administrative expenses.
Interest expense, net, increased $89,000 to $443,000 for the three months
ended November 30, 1997, as compared to $354,000 for the same period of the
prior year. The increase is due primarily to an approximate $4.8 million
increase in average indebtedness outstanding during the three months ended
November 30, 1997, as compared to the three months ended November 30, 1996, and
a higher interest rate on such indebtedness. This increase was partially offset
by a savings of noncash interest expense of approximately $183,000 related to
the Company's convertible debentures outstanding during the three months ended
November 30, 1996, which were converted into shares of the Company's common
stock in September 1997 as discussed above.
9
<PAGE> 10
PONDER INDUSTRIES, INC., AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS -- FOR A DESCRIPTION OF LEGAL PROCEEDINGS AGAINST THE
COMPANY, SEE NOTE 3 OF THE NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS INCLUDED HEREIN.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
(c) Pursuant to a Settlement Agreement and Release (the Settlement
Agreement) among the Company, Larry Armstrong, Eugene L. Butler and certain
debentureholders (the Debentureholders) of the Company dated September 26, 1997,
the Company granted warrants to purchase an aggregate of 957,000 shares of
common stock, $.01 par value (Common Stock), of the Company. The Common Stock
underlying the warrants was not registered under the Securities Act of 1933, as
amended (the Securities Act), pursuant to the exemptions of such registration
provided under Section 4(2) of the Securities Act. The Company granted such
warrants as part of a settlement of claims underlying a lawsuit involving the
parties to the Settlement Agreement.
Pursuant to a Securities Purchase Agreement (the Purchase Agreement) among
the Company, White Owl Capital Partners, Arvid Sanger, Antony T. F. Lundy and
Karl Bandtel dated October 15, 1997, the Company sold an aggregate of 100 Units
for an aggregate purchase price of $2,500,000. The 100 Units consist of an
aggregate of $2,500,000 in Convertible Notes, which are convertible in the
aggregate into 4 million shares of Common Stock, and detachable warrants for the
purchase of an aggregate of 4 million shares of Common Stock at an exercise
price of $.625 per share. The Common Stock underlying the Units was not
registered under the Securities Act pursuant to the exemptions of such
registration provided under Section 4(2) of the Securities Act. The Company
relied upon certain representations and warranties of the Purchasers (as that
term is defined in the Purchase Agreement), including, among others, that the
Purchasers are each accredited investors (as that term is defined in Rule 501(a)
of Regulation D promulgated under the Securities Act), and that the Common Stock
was acquired solely for each Purchaser's own account for investment and not with
a view to distribution.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*4.1 -- Registration Rights Agreement among the Company, White
Owl Capital Partners, Arvid Sanger, Antony T. F. Lundy
and Karl Bandtel dated October 15, 1997.
*10.1 -- Settlement Agreement and Release among the Company,
Eugene L. Butler, Larry Armstrong and certain
Debentureholders dated September 26, 1997.
*10.2 -- Securities Purchase Agreement among the Company, White
Owl Capital Partners, Arvid Sanger, Antony T. F. Lundy
and Karl Bandtel dated October 15, 1997.
*11 -- Computation of Earnings (Loss) Per Share.
*27 -- Financial Data Schedule.
</TABLE>
- - ---------------
* Filed herewith
(b) Reports on Form 8-K
None
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PONDER INDUSTRIES, INC.
By /s/ EUGENE L. BUTLER
-----------------------------------
Eugene L. Butler
President, Chief Executive Officer
and
Chairman of the Board of Directors
By /s/ GERALD A. SLAUGHTER
-----------------------------------
Gerald A. Slaughter
Senior Vice President and
Chief Financial Officer
Dated: January 14, 1998
11
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- - ------- -----------
<S> <C>
4.1 - Registration Rights Agreement among the Company, White Owl
Capital Partners, Arvid Sanger, Antony T. F. Lundy and Karl
Bandtel dated October 15, 1997.
10.1 - Settlement Agreement and Release among the Company, Eugene L.
Butler, Larry Armstrong and certain Debentureholders dated
September 26, 1997.
10.2 - Securities Purchase Agreement among the Company, White Owl
Capital Partners, Arvid Sanger, Antony T. F. Lundy and Karl
Bandtel dated October 15, 1997.
11 - Computation of Earnings (Loss) Per Share.
27 - Financial Data Schedule.
</TABLE>
