SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(AMENDMENT NO. 1)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended MARCH 31, 2002
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: 0-9261
KESTREL ENERGY, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 84-0772451
--------------------------------- ------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
999 18TH STREET, SUITE 2490, DENVER, CO 80202
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(Address of principal executive offices) (Zip Code)
(303) 295-0344
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(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.
|X| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of common stock, as of March 31, 2002:
8,235,200
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A revises the first and fourth paragraphs of
Liquidity and Capital Resources of Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION in PART I FINANCIAL INFORMATION.
Other than this Amendment, Item 2. remains in the same form as initially filed.
This Amendment No. 1 on Form 10-Q/A also revises the third paragraph of Item
2. CHANGES IN SECURITIES in PART II OTHER INFORMATION. Other than this
Amendment, Item 2. remains in the same form as initially filed.
Other than the above referenced changes, the Form 10-Q, filed with the
Securities and Exchange Commission on May 15, 2002, remains the same. In order
to preserve the nature and character of the disclosures as of May 15, 2002, no
attempt has been made in this Amendment No. 1 to modify or update such
disclosures for events which occurred subsequent to the original filing.
KESTREL ENERGY, INC.
INDEX TO UNAUDITED FINANCIAL STATEMENTS
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets as of March 31, 2002 and June 30, 2001, unaudited 3
Statements of Operations for the Three Months and Nine Months Ended
March 31, 2002 and 2001, unaudited 4
Statements of Cash Flows for the Nine Months Ended
March 31, 2002 and 2001, unaudited 5
Notes to Financial Statements, unaudited 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6-9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 9
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 of Form 8-K 10
Signatures 11
3
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
KESTREL ENERGY, INC.
BALANCE SHEETS AS OF MARCH 31, 2002
AND JUNE 30, 2001
(Unaudited)
March 31, June 30,
ASSETS 2002 2001
------------------------------------------ --------------- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 60,424 $ 119,025
Accounts receivable 149,799 278,834
Due from related party 21,303 -
Other assets - 5,957
Investment in related party 570,953 2,130,178
--------------- --------------
Total current assets 802,479 2,533,994
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PROPERTY AND EQUIPMENT, AT COST:
Oil and gas properties, successful efforts
method of accounting:
Unproved 215,892 217,941
Proved 12,321,518 12,398,775
Pipeline and facilities 807,851 807,851
Furniture and equipment 147,855 143,724
--------------- --------------
13,493,116 13,568,291
Accumulated depreciation and depletion (3,216,643) (3,190,983)
--------------- --------------
Net property and equipment 10,276,473 10,377,308
--------------- --------------
$ 11,078,952 $ 12,911,302
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------
CURRENT LIABILITIES:
Accounts payable:
Trade $ 324,626 $ 121,464
Related party - 26,397
Accrued liabilities 96,058 124,808
Line of credit, bank 976,000 1,882,000
Advance from related party 97,940 -
Note Payable, Other 255,382 -
--------------- --------------
Total current liabilities 1,750,006 2,154,669
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STOCKHOLDERS' EQUITY:
Preferred Stock, $1 par value;
1,000,000 shares authorized, none issued - -
Common Stock, no par value; 20,000,000
shares authorized, 8,235,200 and
7,700,200 issued and outstanding at
March 31, 2002 and June 30, 2001,
respectively 19,452,023 19,073,023
Accumulated deficit (9,536,969) (8,342,821)
Accumulated other comprehensive (loss) income (586,108) 26,431
--------------- --------------
Total stockholders' equity 9,328,946 10,756,633
--------------- --------------
$ 11,078,952 $ 12,911,302
=============== ==============
See accompanying notes to financial statements.
4
KESTREL ENERGY, INC.
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED
MARCH, 2002 AND 2001
(Unaudited)
Three months ended Nine months ended
March 31, March 31,
2002 2001 2002 2001
----------- ----------- ----------- -----------
REVENUE:
Oil and gas sales $ 185,013 $ 871,761 $ 752,725 $ 1,665,031
Interest - 275 2,069 2,681
Other income 28,535 15,037 91,067 50,965
Gain on sale of property 2,258 7,972 2,258 7,972
Loss on sale of available-for-sale securities (183,417) - (403,947) -
TOTAL REVENUES 32,389 895,045 444,172 1,726,649
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Production and operating expenses 144,956 301,484 535,849 606,195
Exploration expenses 24,088 30,485 138,252 86,933
Dry holes, abandoned and impaired properties - - 29,209 -
Depreciation and depletion 59,312 37,658 177,087 104,959
General and administrative 209,147 196,599 659,452 694,611
Interest expense 34,678 27,533 98,471 66,436
----------- ----------- ----------- -----------
TOTAL COSTS AND EXPENSES 472,181 594,759 1,638,320 1,559,134
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (439,792) $ 301,286 $(1,194,148) $ 167,515
----------- ----------- ----------- -----------
Other comprehensive loss -
unrealized loss from available-for-sale
securities (20,369) (165,000) (586,108) (727,500)
----------- ----------- ----------- -----------
Comprehensive income (loss) (460,161) 136,286 (1,780,256) (559,985)
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (.06) $ .04 $ (.23) $ .02
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,718,034 7,680,000 7,705,879 7,680,000
=========== =========== =========== ===========
See accompanying notes to financial statements.
5
KESTREL ENERGY, INC.
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2002 AND 2001
(Unaudited)
2002 2001
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,194,148) $ 167,515
Adjustments to reconcile net loss to net
cash used in operating activities:
Dry holes, abandoned and impaired properties 2,050 -
Loss on sale of available-for-sale securities 403,947 -
Depreciation and depletion 177,087 104,959
Non cash compensation expense - 3,338
Gain on sale of property and equipment, net (2,258) (7,972)
(Increase) decrease in accounts receivable 129,035 (158,955)
(Increase) decrease in due from related party (21,303) 524
(Increase) decrease in other current assets 5,957 6,904
Increase (decrease) in accounts payable, trade 203,162 (931,256)
Increase (decrease) in accounts payable,
related party (26,397) 11,216
Increase (decrease) in accrued liabilities (28,750) 31,926
----------- -----------
Net cash used in operating activities (351,618) (771,801)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures/acquisition of properties (78,302) (1,200,854)
Proceeds from sale of securities 544,997 7,972
----------- -----------
Net cash provided by (used in)
investing activities 466,695 (1,192,882)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 379,000 -
Advance from related party 97,940 -
Net borrowings (payments) on line of credit (906,000) 1,859,500
Proceeds from issuance of short-term debt 255,382 -
----------- -----------
Net cash provided by (used in)
financing activities (173,678) 1,859,500
----------- -----------
Net decrease in cash and cash equivalents (58,601) (105,183)
Cash and cash equivalents at the beginning
of the period 119,025 502,033
----------- -----------
Cash and cash equivalents at the end of
the period $ 60,424 $ 396,851
=========== ===========
Cash paid for interest $ 107,356 $ 77,618
=========== ===========
See accompanying notes to financial statements.
6
KESTREL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation
These condensed financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2001.
In the opinion of management, the accompanying interim unaudited financial
statements contain all the adjustments necessary to present fairly the
financial position of the Company as of March 31, 2002, the results of
operations for the periods shown in the statements of operations, and the
cash flows for the periods shown in the statements of cash flows. All
adjustments made are of a normal recurring nature.
2. Investment in Related Party
The investment in Victoria Petroleum, NL ("VP") Common Stock is classified
as available-for-sale. Net unrealized gains and losses on the investment
are recorded to Other Comprehensive Income or Loss. At March 31, 2002, the
unrealized loss on the investment was $586,108. As of June 30, 2001, there
was an unrealized gain on the investment of $26,431. The Company has sold
32,400,000 shares since June 30, 2001, which resulted in cash proceeds of
$542,739 and a loss on sale of $403,947. As of March 31, 2002, the Company
owns 39,600,000 shares of VP.
3. Line of Credit
On February 21, 2000, the Company entered into a Line of Credit agreement
with Wells Fargo Bank West N.A., which provided the Company a borrowing
base of $600,000 with interest at Wells Fargo prime rate plus 2.5%. On
September 27, 2000, the Company and Wells Fargo amended the Line of Credit
Agreement to provide the Company a borrowing base of $2,000,000 and
reduced the interest rate to 1.5% over prime. On May 31, 2001, Wells Fargo
reduced the borrowing base to $1,400,000. As a result of the reduction to
the borrowing base, the Company was required to make scheduled principal
payments to reduce the amount outstanding to $1,400,000 by October 31,
2001, the maturity date of the line of credit. The line of credit is
secured by Deeds of Trust on various oil and gas producing properties held
by the Company. The Company reduced the outstanding balance to $1,396,000
by October 31, 2001. The Company finalized the restructuring of the line
of credit with Wells Fargo in November 2001, which calls for principal
payments of $1,340,000 by October 31, 2002. As of March 31, 2002, $976,000
was outstanding on the line of credit.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002, the Company had a working capital deficit of $947,527. This
compares to the Company's working capital of $379,325 as of June 30, 2001. The
decrease in working capital of $1,326,852 was a result of the loss from
operations offset by proceeds from the sale of securities, collection of
accounts receivable and an increase in trade accounts payable. The Company was
required to pay Wells Fargo Bank $906,000 in principal payments on the line of
credit during the period, which the Company funded in part by borrowing $97,940
from Victoria Petroleum, NL, an affiliated company ("VP"), and $255,382 a
non-affiliated party. In March 2002 the Company issued 515,000 shares of stock a
related party in exchange for previously recorded advances, plus accrued
interest of $360,500. In order for the Company to fund its working capital
deficit, possible steps could include the sale of securities, sale of non-core
oil and gas properties, sale of shares of the Company's common stock, and a
reduction of general and administrative expenses.
Net cash used by operating activities was $351,618 for the nine months ended
March 31, 2002, a decrease of $420,183 over cash used by operations of $771,801
for the same period in 2001. A year ago, the Company used its available cash
resources to pay existing accounts payable which accounts for the decrease in
cash
7
used for the nine month period ended March 31, 2001. Accounts receivable
decreased $129,035, or 46.3%, to $149,799 during the period as compared to an
increase of $158,955 a year ago. The decrease in accounts receivable was
attributable to lower oil and gas revenues as a result of lower oil and gas
prices received during the period. Accounts payable increased $203,162, or 167%,
to $324,626 during the period versus a decrease of $931,256, or 65%, during the
same period a year ago. The increase in payables reflects the Company's
liquidity problems during this period of lower oil and gas prices. Accrued
liabilities decreased $28,750, or 23%, to $96,058 versus an increase of $31,926
in 2001. Accounts payable related party decreased $26,397, or 100%, as the
Company, through overhead charges, repaid the advances from an affiliated
Company. The Company, as a result of the overhead charges, now has a receivable
of $21,303. The Company billed $15,300 this quarter for overhead and personnel
and approximately $16,000 per quarter for the previous two quarters.
Net cash provided from investing activities was $466,695 for the nine months
ended March 31, 2002, versus cash used of $1,192,882 for the same period in
2001. The increase of $1,659,577 resulted primarily from the sale of 32,400,000
shares of VP Common Stock during the period, which generated $542,739 in
proceeds from which the Company recognized a loss of $403,947 on the sales. The
Company also realized proceeds of $2,258 on the sale of the Oklahoma Land and
Cattle well in Oklahoma. Capital expenditures for the period ended March 31,
2002 of $78,302 included $4,100 for office equipment, $3,900 for equipment on
the Greens Canyon 29-2 well in Wyoming, approximately $47,800 for continued
development of various coalbed methane wells in Wyoming, and $22,500 for well
equipment on the Pierce Unit in Wyoming.
Cash used by financing activities totaled $173,678 for the nine months ended
March 31, 2002 versus cash provided of $1,859,500 a year ago. The Company made
$906,000 in principal payments to Wells Fargo Bank pursuant to the line of
credit agreement of May 2001. During the fiscal third quarter the Company issued
515,000 shares of stock to a related party in exchange for previously recorded
advances and accrued interest of $360,500 by Victoria Petroleum, N.L., an
affiliated company ("VP"), which had transferred the debt to the related party.
The Company also issued 20,000 shares of stock to an office for $14,000 and was
advanced another $97,940 from VP. The Company also borrowed $255,382 from a
non-affiliated party for working capital, which is scheduled to be repaid with
interest on May 15, 2002.
RESULTS OF OPERATIONS
THREE MONTH PERIOD ENDED MARCH 31, 2002 AND MARCH 31, 2001
The Company reported a loss of $439,792 or 6 cents per share, for the three
month period ended March 31, 2002. This compares with income of $301,286, or 4
cents per share, for the same period a year ago. The loss in the current period
is the result of the loss on the sale of available securities incurred during
the quarter which accounted for $183,417 of the Company's loss and significantly
lower oil and gas revenues from year ago levels.
The Company's revenues for the three months ended March 31, 2002 were $32,389
compared to $895,045 during the same period of 2001, a decrease of $862,656.
Excluding the gain on sale of property and loss on sale of securities, total
revenues were $213,548 as compared to $887,073 a year ago. The decrease in
revenues was a result of lower oil and gas revenues. Revenues from oil and gas
sales were $185,013 for the three months ended March 31, 2002, a decrease of
$686,748, or 79%, as compared to $871,761 for the same period in 2001. The
decrease in oil and gas revenues is attributable to lower oil and gas prices as
compared to a year ago and lower volumes from the Turner 3-14 and 1-23 wells
which were completed in November and December 2000. Other income for the three
months ended March 31, 2002 increased $13,498, or 90%, to $28,535 from $15,037
in the same period a year ago. Other income represents overhead charged to a
related party for use of the Company's office space and personnel. Also included
in this figure for the three months ended March 31, 2002 is a $10,000 Joint
Interest Billing refund on workover expenses. The Company recorded a loss of
$183,417 on sale of securities as a result of the sale of 12,500,00 shares of VP
Common Stock during the quarter. See Note 2 to the financial statements.
The Company's total expenses for the third quarter ended March 31, 2002
decreased $122,578, or 21%, to $472,181 as compared to $594,759 a year ago. The
decrease in overall expenses is primarily due to lower production and operating
expenses incurred during the quarter versus a year ago, offset by interest
charges on the Company's line of credit.
8
Production and operating expenses for the three month period decreased $156,528,
or 52%, to $144,956 versus $301,484 for the same period a year ago. The decrease
in operating expenses for the period was due to lack of workover costs
experienced on the Pierce and Burditt properties which approximated $100,000 in
the third quarter of 2001.
Exploration expenses for the quarter ended March 31, 2002 decreased $6,397, or
21%, to $24,088 from $30,485 a year ago. The decrease in costs incurred for the
quarter is a result of lower engineering and geological and geophysical costs.
No expense for dry holes, abandoned or impaired properties was recorded for the
three months ended March 31, 2002.
Depletion expense for the three months ended March 31, 2002 was $59,312 versus
$37,658 a year ago.
General and administrative costs for the three months ended March 31, 2002
increased $12,548, or 6%, to $209,147 as compared to $196,599 for the same
period a year ago. The increase in expenses was attributable to higher contract
service, accounting and travel expenses.
Interest expense for the three month period ended March 31, 2002 increased
$7,145, or 26%, to $34,678 from $27,533 a year ago. The increase is attributable
to payment of $15,000 in interest expense to Victoria Petroleum, NL (VP), offset
by a significantly lower loan balance at Wells Fargo Bank.
NINE MONTH PERIODS ENDED MARCH 31, 2002 AND MARCH 31, 2001
The Company's total revenues for the nine month period ended March 31, 2002 were
$444,172 as compared to $1,726,649 during the same period in 2001, a decrease of
$1,282,477, or 74%. Excluding the gain on sale of property and loss on sale of
securities of $401,689, total revenues decreased $872,816 to $845,861 from year
ago levels. Revenue from oil and gas sales was $752,725 for the nine months
ended March 31, 2002, a decrease of $912,306, or 55%, as compared to sales of
$1,665,031 a year ago. The decrease in oil and gas sales was attributable to
significantly lower oil and gas prices and volumes. Other income increased
$40,102, or 79%, to $91,067 versus $50,965 a year ago. This increase was
attributable to the sale of tubing on the McEntire lease in Kansas for $24,900,
and $10,000 from a joint interest billing refund. As noted above, the Company
also recorded a loss on the sale of available securities of $403,947, which
resulted from the sale of 32,400,00 shares of VP Common Stock during the period.
Total expenses for the nine months ended March 31, 2002 increased $79,186, or
5%, to $1,638,320 versus $1,559,134 a year ago. The increase in overall expenses
is a result of higher exploration and interest expense as well as much higher
depreciation and depletion despite lower general and administrative expenses.
For the nine months ended March 31, 2002, production and operating expenses
decreased $70,346, or 12%, to $535,849 as compared to $606,195 a year ago. The
decrease in production and operating expenses was primarily due to lower
production taxes and workover expenses.
For the nine months ended March 31, 2002, exploration expenses increased
$51,319, or 59%, to $138,252 versus $86,933 a year ago. The increase in
exploration expenses reflect delay rentals paid to maintain leasehold interests
and higher engineering costs.
Dry holes, abandoned and impaired properties expense for the nine months ended
March 31, 2002 was $29,209, which reflects the abandonment costs incurred on the
McEntire lease in Kansas of $27,717. These costs were largely offset by the sale
of tubing on the lease of $24,900 as noted above. Depletion expense for the nine
months ended March 31, 2002 was $177,087 versus $104,959 a year ago. The
increase in depletion for both the three and nine month periods ending March 31,
2002 is attributable to higher capitalized costs on the Greens Canyon and Turner
wells.
9
The Company's general and administrative expenses for the nine months ended
March 31, 2002 decreased $35,159, or 5%, to $659,452 from $694,611. The decrease
in expenses was not attributable to any particular expense category, but
reflects the Company's commitment to reduce expenses during this period of lower
oil and gas revenues.
For the nine months ended March 31, 2002, interest expense rose $32,035 to
$98,471 from $66,436 a year ago. The increase reflects a higher loan balance
during this nine month period versus a year ago notwithstanding the impact of
generally lower interest rates.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Until fiscal 2000, the Company did not invest in or hold market risk sensitive
or interest rate sensitive instruments and the only currency exchange rate risk
borne by the Company stemmed from the Company's obligations to fund its
international drilling in Australian dollars. As of March 31, 2002, the Company
owns 39,600,000 shares of Victoria Petroleum, N.L. ("VP") Common Stock. The
investment in VP Common Stock is classified as available-for-sale. Net
unrealized gains and losses on the investment are recorded to other
comprehensive income or loss. The VP shares are traded publicly on the
Australian stock exchange and the price for which the Company could sell its VP
shares, which are quoted in prices denominated in Australian dollars, could be
higher or lower than the Company's cost. The Company no longer has currency
exchange risk relating to its own operations, as it no longer participates in
international drilling.
FORWARD LOOKING STATEMENTS
This report includes one or more statements, which state or otherwise indicate
the Company's present belief or expectation concerning future events. Such
statements are forward looking statements on which investors should not rely
because they are subject to a wide variety of contingencies and based on a
number of assumptions, which may not prove to be true. In particular, the
Company's future success is highly dependent on the success of its exploratory
drilling efforts, which cannot be safely predicted. In addition, the Company is
highly dependent upon prevailing prices for petroleum products, its ability to
attract and retain qualified personnel, as well as other risk factors affecting
business generally, such as overall economic conditions, changes in tax and
other laws and the effect of actions taken by competitors and regulatory
authorities.
INFLATION AND CHANGING PRICES
Inflation has not had a significant effect on the Company's results of
operations. However, the constantly fluctuating price of crude oil and natural
gas materially affects the Company's cash flow, either positively or negatively.
10
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
The Board of Directors of the Company previously declared a dividend
distribution of 10 Warrants for every 100 issued and outstanding shares
of the Company's Common Stock owned by each shareholder of record at
the close of business on February 4, 2000, each Warrant representing
the right to purchase one share of Common Stock at $3.125 per share
until February 4, 2001 (the "Public Warrant"). January 4, 2001, the
Board agreed to extend the Public Warrant exercise period from February
4, 2001 to February 4, 2002 and to reduce the exercise price to $2.50.
On January 24, 2002, the Board again agreed to extend the Public
Warrant exercise period from February 4, 2002 to March 10, 2003 and to
reduce the exercise price from to $1.25.
The Company filed a registration statement on Form S-3, which was
declared effective by the Securities and Exchange Commission on March
10, 2000. The Form S-3 registered the subsequent resale of the Public
Warrants and the sale of the shares of Common Stock underlying the
Public Warrants. The Public Warrants will now expire on March 10, 2003,
unless earlier redeemed by the Company.
On January 10, 2002, the Company began a private placement offering
(the "Offering") of up to 2,000,000 units consisting of one share of
the Company's no par value Common Stock and one warrant (the "Private
Warrant") to purchase one share of Common Stock exercisable at $1.25
per share (the "Unit"). As part of the Offering, on March 28, 2002, the
Company issued 515,000 Units to a related party in exchange for
previously recorded advances and accrued interest of $360,500 by
Victoria Petroleum, N.L., an affiliated company, which had transferred
the debt to the related party. 20,000 Units were also sold to an
officer of the Company for $14,000. The Offering closed on April 26,
2002, with a total of 1,409,000 Units sold for aggregate gross proceeds
of $986,300 to ten persons, including the two affiliates. An aggregate
of $7,590 was paid in commissions to two non-affiliated persons. The
offer and sale of the Units were exempt from registration under
Sections 4(2) and 4(6) of the Securities Act of 1933 and Rules 505 and
506 of Regulation D adopted under the Act, as well as exemptions under
various state securities laws, for sales to accredited U.S. purchasers,
and under Regulation S of the Act for the sales to qualified non-U.S.
purchasers. None of the shares of Common Stock, Private Warrants or the
shares of Common Stock underlying the Private Warrants have been
registered.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Stock Option Plan as of December 6, 2001
10.2 Wells Fargo Term Loan Agreement
(b) Reports on Form 8-K
A report on Form 8-K dated December 6, 2001 under
Item 9 was filed with the Commission on December 7,
2001.
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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.
KESTREL ENERGY, INC.
------------------------------------
(Registrant)
Date: AUGUST 22, 2002 /S/BARRY D. LASKER
--------------------------- ------------------------------------
Barry D. Lasker
President, Chief Executive Officer,
Principal Financial Officer and
Director
12