FORM 10-KSB.-- ANNUAL REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Last amended by 34-32231, eff. 6-3-93)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1996
-----------------------------------------
or
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _______________ to ________________
Commission file Number 2-54020
-------------------------------------------------
American Geological Enterprises, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Utah 87-0273300
- ------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1102 Walker Center Salt Lake City, Utah 84111
- --------------------------------------------------------------------------------
(Address of principal executive officers)
Registrant's telephone number, including area code (801) 363-3283
-----------------------
Securities registered pursuant to Section 12(b) of the Act:
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 Par Value
- --------------------------------------------------------------------------------
(Title of class)
Check whether the registrant (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.
[X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is met contained in this form, and no disclosures will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
[X]
State issuer's revenues for its most recent fiscal year. $163,743
The market in which the common stock of the Registrant is traded is the
"over-the-counter" market. During the last year trading was limited and done
primarily on a negotiated basis.
<PAGE>
Table of Contents
Heading Page
- ------------ --------
Part I
Item 1 Description of Business I-1
Item 2 Description of Property I-1
Item 3 Legal Proceedings I-2
Item 4 Submission of Matters to a Vote of Securities Holders I-2
Part II
Item 5 Market for Common Equity and Related Stockholder Matters II-1
Item 6 Management's Discussion and Analysis II-1
Item 7 Consolidated Financial Statements II-3
Item 8 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure II-3
Part III
Item 9 Directors, Executive Officers, Promoters, and Control Persons;
Compliance with Section 16(a) of the Exchange Act III-1
Item 10 Executive Compensation III-3
Item 11 Security Ownership of Certain Beneficial Owners and Management III-3
Item 12 Certain Relationships and Related Transactions III-3
Item 13 Exhibits and Reports on Form 8-K III-3
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1996
Part I
Item 1. Description of Business
General: American Geological Enterprises, Inc. (AGE) is engaged
in activities designed to identify and acquire geothermal and oil
and gas leases.
Activities undertaken to identify such leases have consisted of
searches of pertinent geological literature, maps and aerial
photographs, construction of maps, and confirmatory fieldwork. In
connection with leasehold acquisitions, AGE's activities have
included examination of title documents, location and negotiation
with landowners, and preparation of leases.
These activities are performed, for the most part, by Dr. Paul T.
Walton, President, and other unsalaried officers and directors of
AGE. AGE proposes to continue these activities and to intensify
its promotional efforts with respect to possible joint ventures at
selected leasehold sites.
AGE holds a 5.49 percent working interest in the Roosevelt Hot
Springs, Corp. (Roosevelt) geothermal power unit (Unit). On July
22, 1993, AGE agreed to sell on a prepayment basis its steam from
the Unit for a 30-year period to Utah Power & Light Company
(UP&L), which has constructed the Blundell power plant to utilize
the steam. Certain leases have been committed to the Unit, of
which 188 acres are within the participating area.
Competition: Competition for energy leases is intense, and many
large oil and gas companies, with financial and technical
resources greater than those of AGE, are now engaged, or have
indicated an intention to engage, in the acquisition of energy
leases.
Regulations: AGE is not now engaged in energy exploration or
development. Should it later enter into such activities, it will
be subject to federal, state, and local regulations with respect
to environmental matters.
Item 2. Description of Property
AGE held all mineral (including geothermal) rights in leases,
covering approximately 17,284 acres of land, that expired in 1991.
However, certain leases were assigned to subsequent parties and
AGE retained an overriding interest in the royalties from
productive land. As of December 31, 1996, approximately 450 acres
of land in Central Utah continued to be productive (from oil
wells) and AGE continues to receive the related royalty payments
which aggregated $1,433 in 1996. AGE will continue to receive
these overriding interest royalty payments as long as the land
remains productive.
I-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Item 2. Description of Property (continued)
AGE holds all mineral (including geothermal) rights in leases
covering approximately 9,400 acres located in the valley on the
west side of the Mineral Mountains in Beaver and Millard counties
in Utah. These leases include land that has been made part of the
Unit. The original terms of these leases expired in 1991, but the
leases are automatically extended for 1-year periods as long as
the lands involved remain part of the active, producing Unit. The
annual commitment for lease payments on these leases amounts to
approximately $4,645, together with a royalty equal to five
percent of revenues from steam production on one lease.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Securities Holders
None.
I-2
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1996
Part II
Item 5. Market For the Common Equity and Related Stockholder Matters
a) The market in which the common stock of the Registrant is
traded is the "over-the-counter" market. During the last three
years, there were no established "bid" or "asked" prices and
trading was done primarily on a negotiated basis.
b) The approximate number of holders of common stock of AGE at
December 31, 1996 is 791.
Item 6. Management's Discussion and Analysis
AGE is engaged in the acquisition of geothermal and oil and gas
leases. Revenue consists of royalties and interest. AGE's
financial condition and results of operations fluctuate from year
to year, depending upon the production from current leases, the
availability of leases to be acquired, and the opportunity to sell
lease rights. AGE's ability to obtain future leases or to generate
revenues from the sale of lease rights is not determinable; hence,
its financial condition and operations may fluctuate widely in the
future.
Results of Operations - Years ended December 31, 1996 and 1995:
Gross revenues from the Unit represent sales of steam production
and fluctuate based on the activity and production of the Unit.
Gross revenues for 1996 are fairly consistent with the previous
year's revenues, however, income from operations increased to
$32,976 in 1996 from $19,499 in 1995. The majority of the increase
in income from operations resulted from a decrease in general and
administrative expenses ($31,968 in 1996 compared to $40,552 in
1995). General and administrative expenses were higher in 1995 due
to legal fees related to a proposed merger with Natural Gas
Vehicle (NGV). This proposed merger with NGV was terminated during
fiscal year 1996.
Royalty Income:
AGE owns seven oil and gas leases, all of which have been assigned
to either Pennzoil, Medallion Exploration, or Flying J Oil and
Gas. Pursuant to these assignments, AGE retained an overriding
interest in royalties from productive land; and for the year ended
December 31, 1996, AGE received $1,433 in override interest
royalty payments.
II-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Item 6. Management's Discussion and Analysis (continued)
Liquidity:
AGE's liquidity at December 31, 1996, is considered adequate with
$1,025,598 in working capital. AGE believes that it has sufficient
resources to cover its cash needs during the fiscal year 1996.
Commitments:
AGE's future commitments consist of lease payments on land. There
are no other commitments or anticipated expenditures of a capital
nature, other than the commitment related to the agreement for the
sale of steam discussed above.
External Factors:
AGE's economic future will be dependent, in major part, upon the
value of its undeveloped interests in the Unit. The value of such
undeveloped interests will, in turn, be dependent upon, among
other matters, (i) the current price of energy, (ii) governmental
incentives to develop renewable resources, (iii) regulatory
incentives, and (iv) the load needs of UP&L.
Item 7. Consolidated Financial Statements
Index to Consolidated Financial Statements Page
Independent Auditors' Report II-3
Consolidated Balance Sheets - December 31, 1996 and 1995 II-4
Consolidated Statements of Operations -
Years ended December 31, 1996 and 1995 II-5
Consolidated Statements of Stockholders' Equity -
Years ended December 31, 1996 and 1995 II-6
Consolidated Statements of Cash Flows -
Years ended December 31, 1996 and 1995 II-7
Notes to Consolidated Financial Statements II-8
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
II-2
<PAGE>
Independent Auditors' Report
The Board of Directors
American Geological Enterprises, Inc.:
We have audited the accompanying consolidated balance sheets of American
Geological Enterprises, Inc. and subsidiaries (AGE) as of December 31, 1996 and
1995, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of AGE's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of AGE as of December
31, 1996 and 1995, and the results of their operations and their cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Salt Lake City, Utah
February 21, 1997
II-3
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Balance Sheets
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Assets 1996 1995
------
------------ -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 833,654 869,129
Marketable securities (note 2) 193,217 184,308
Accounts receivable 24,414 20,988
Interest and dividends receivable 1,276 1,297
Prepaid lease costs 2,649 2,649
------------ -----------
Total current assets 1,055,210 1,078,371
Investment in geothermal power unit, at cost, less accumulated amortization of
$104,962 and $74,973 at December 31, 1996 and 1995 722,237 752,226
Marketable securities (note 2) 71,239 74,348
------------ -----------
Total assets $ 1,848,686 1,904,945
============ ===========
<CAPTION>
Liabilities and Stockholders' Equity
Current liabilities:
<S> <C> <C>
Accounts payable $ 6,793 18,858
Income taxes payable 2,089 68,269
Accrued liabilities 20,730 14,668
------------ -----------
Total current liabilities 29,612 101,795
Deferred income taxes (note 5) 109,976 117,437
Deferred revenue (note 6) 1,022,335 1,064,784
Minority interest 10,086 9,674
Stockholders' equity:
Common stock, $.01 par value; authorized 2,500,000 shares; issued
and outstanding 1,260,997 shares 12,610 12,610
Additional paid-in capital 557,211 557,211
Unrealized gain on marketable securities, net of tax 9,383 9,731
Retained earnings 97,473 31,703
------------ -----------
676,677 611,255
Commitments (note 4)
------------ -----------
Total liabilities and stockholders' equity $ 1,848,686 1,904,945
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
II-4
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Operations
Years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Revenues - gross revenues from geothermal power unit (note 6) $ 163,743 160,619
----------- -----------
Expenses
Operating and maintenance of geothermal power unit (note 6) 64,165 65,934
Amortization of geothermal power unit 29,989 29,989
General and administrative 31,968 40,552
Lease costs 4,645 4,645
----------- -----------
130,767 141,120
----------- -----------
Income from continuing operations 32,976 19,499
Other income:
Interest income 38,451 37,690
Dividend income 16,904 16,035
Gain on redemption of marketable securities - 73
Royalties 1,433 3,063
----------- -----------
56,788 56,861
----------- -----------
Income before income taxes 89,764 76,360
Income tax expense (note 5) 23,994 17,668
----------- -----------
Net income $ 65,770 58,692
=========== ===========
Income per share: $ .05 .05
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
II-5
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Unreal-ized Total
Common stock Additional gain Retained stock-
--------------------------- paid-in (loss), net earnings holders'
Shares Amount capital of tax (deficit) equity
------------ ------------ --------------- ------------ ------------- ----------
Balance,
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 1,260,997 $ 12,610 557,211 (1,291) (26,989) 541,541
Unrealized gain on
marketable securities,
net of tax - - - 11,022 - 11,022
Net income - - - - 58,692 58,692
------------ ------------ --------------- ------------ ------------- ----------
Balance,
December 31, 1995 1,260,997 12,610 557,211 9,731 31,703 611,255
Unrealized loss on
marketable securities,
net of tax - - - (348) - (348)
Net income - - - - 65,770 65,770
------------ ------------ --------------- ------------ ------------- ----------
Balance,
December 31, 1996 1,260,997 $ 12,610 557,211 9,383 97,473 676,677
============ ============ =============== ============ ============= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
II-6
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Cash Flows
Years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 65,770 58,692
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Amortization of geothermal power unit 29,989 29,989
Gain on redemption of marketable securities - (73)
Change in operating assets and liabilities:
Receivables (3,404) (528)
Accounts payable and accrued liabilities (6,003) 14,919
Income taxes payable (66,180) 51,477
Minority interest 412 472
Deferred income taxes (7,255) (46,867)
Deferred revenue (42,450) (42,450)
------------ ------------
Net cash provided by (used in) operating activities (29,121) 65,631
------------ ------------
Cash flows from investing activities:
Redemption of marketable securities 3,000 7,000
Acquisition of marketable securities (9,354) (8,414)
------------ ------------
Net cash used in investing activities (6,354) (1,414)
------------ ------------
Increase (decrease) in cash and cash equivalents (35,475) 64,217
Cash and cash equivalents, beginning of year 869,129 804,912
============ ============
Cash and cash equivalents, end of year $ 833,654 869,129
============ ============
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for income taxes $ 28,680 21,800
</TABLE>
See accompanying notes to consolidated financial statements.
II-7
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
(1) Summary of Significant Accounting Policies
(a) Description of Business
American Geological Enterprises, Inc. and subsidiary (AGE) are
engaged in activities designed to identify and acquire geothermal
and oil and gas leases in the Western United States. AGE's revenue
is primarily derived from royalty payments of these leases.
(b) Marketable Securities
Marketable investment securities at December 31, 1996 consist of
corporate debt, and mortgage backed and equity securities. AGE
classifies its debt securities as "held-to-maturity" and all other
securities as "available-for-sale".
Available-for-sale securities are recorded at fair value.
Held-to-maturity securities are recorded at cost adjusted for the
accretion of premiums and discounts. Unrealized holding gains and
losses, net of the related tax effect, on available-for-sale
securities are excluded from earnings and are reported as a separate
component of stockholders' equity until realized.
(c) Investment in Geothermal Power Unit
The investment in the Unit is being amortized using the
straight-line method over the term (30 years) of the steam sale
agreement with UP&L (note 6).
(d) Lease Costs
Annual lease payments are expensed over the period of the lease.
Direct costs of acquisition of new leases are capitalized and
amortized over the initial life of the lease.
(e) Cash and Cash Equivalents
Cash and cash equivalents include all cash and investments with
original maturities to AGE of three months or less.
(f) Income Per Share
Income per share computations have been based upon 1,260,977 shares
outstanding for the years ended December 31, 1996 and 1995,
respectively.
II-8
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
(g) Consolidation Policy
AGE owns 83.8 percent interest in Overthrust Exploration Corporation
(Overthrust), a Nevada corporation that was incorporated to explore
for and develop oil and gas properties. Accordingly, Overthrust has
been included in the consolidated financial statements. All
directors of Overthrust are also directors of AGE. All intercompany
accounts have been eliminated in consolidation.
(h) Reclassifications
Certain prior year amounts have been reclassified to conform to the
current years' presentation.
(i) Use of Estimates
Management of AGE has made estimates and assumptions relating to the
reporting of assets and liabilities to prepare these consolidated
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(2) Marketable Securities
Marketable investment securities at December 31, 1996 and 1995, consist
of:
1996 1995
----------- -----------
Available-for-sale, at fair value $ 193,217 184,308
Held-to-maturity, at amortized cost 71,239 74,348
=========== ===========
$ 264,456 258,656
=========== ===========
The amortized cost, gross unrealized holding gains and fair market value
for available-for-sale securities by major security type at December 31,
1996, were as follows:
<TABLE>
<CAPTION>
Gross
unrealized
Amortized holding
cost gains Fair value
------------ ------------ -------------
Year ended December 31, 1996:
Available-for-sale:
<S> <C> <C> <C>
Mortgage-backed securities $ 25,000 250 25,250
Equity securities 153,252 14,715 167,967
------------ ------------ -------------
$ 178,252 14,965 193,217
============ ============ =============
Held-to-maturity - corporate debt securities $ 71,239 2,899 74,138
============ ============ =============
II-9
<PAGE>
<CAPTION>
(2) Marketable Securities (continued)
Gross
unrealized
Amortized holding
cost gains Fair value
------------ ------------ ------------
Year ended December 31, 1995:
Available-for-sale:
<S> <C> <C> <C>
Mortgage-backed securities $ 25,000 875 25,875
Equity securities 143,790 14,643 158,433
------------ ------------ ------------
$ 168,790 15,518 184,308
============ ============ ============
Held-to-maturity - corporate debt securities
$ 74,348 6,059 80,407
============ ============ ============
<CAPTION>
Maturities of debt securities classified as held-to-maturity were as
follows at December 31, 1996:
Amortized Fair
cost value
------------ ------------
<S> <C> <C>
Due after five years through ten years $ 50,487 51,094
Due after ten years 20,752 23,044
============ ============
$ 71,239 74,138
============ ============
</TABLE>
(3) Fair Value of Financial Instruments
The carrying value for certain short-term financial instruments that
mature frequently approximate fair value. Such financial instruments
include: cash and cash equivalents, accounts receivable, and accounts
payable. The fair values of debt securities and equity investments are
based on quoted market prices at the reporting date for those or similar
investments. See note 2.
(4) Land Leases
AGE held geothermal or all mineral (including geothermal) rights in
leases, covering approximately 17,284 acres of land, that expired in
1991. However, certain leases were assigned to subsequent parties and AGE
retained an overriding interest in the royalties from productive land. As
of December 31, 1996, approximately 450 acres of land in Central Utah
continued to be productive and AGE continued to receive the related
royalty payments which aggregated $1,433 in 1996 and $3,063 in 1995. AGE
will continue to receive these overriding interest royalty payments as
long as the land remains productive.
II-10
<PAGE>
(4) Land Leases (continued)
AGE also holds geothermal or all mineral (including geothermal) rights in
leases covering approximately 9,400 acres located in the valley on the
west side of the Mineral Mountains in Beaver and Millard counties in
Utah. These leases include land that has been made part of the Roosevelt
Hot Springs Corp. geothermal power unit (the Unit). The original terms of
these leases expired in 1991, but the leases are automatically extended
for 1-year periods as long as the lands involved remain part of the
active, producing Unit. The annual commitment for lease payments on these
leases amounts to approximately $4,645, together with a royalty of five
percent of net revenues from the sale of steam with respect to one lease.
AGE may terminate its leases by not making the annual lease or royalty
payments.
(5) Income Taxes
Income tax expense (benefit) attributable to income from operations
consists of:
<TABLE>
<CAPTION>
Current Deferred Total
----------- ------------- ---------
Year ended December 31, 1996:
<S> <C> <C> <C>
U.S. federal $ 26,601 (6,505) 20,096
State and local 4,855 (957) 3,898
=========== ============= =========
$ 31,456 (7,462) 23,994
=========== ============= =========
Year ended December 31, 1995:
U.S. federal $ 47,023 (32,712) 14,311
State and local 11,030 (7,673) 3,357
----------- ------------- ---------
$ 58,053 (40,385) 17,668
=========== ============= =========
</TABLE>
Income tax expense attributable to income from operations for the years
ended December 31, 1996 and 1995, differed from the amounts computed by
applying the U.S. federal income tax rate of 34 percent to pretax income
from continuing operations as a result of the following:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Computed "expected" tax expense $ 30,519 25,962
Increase (reduction) in income taxes resulting from:
State and local income taxes, net of federal income
tax benefit 2,573 2,216
Effect of surtax exemption
and other, net (9,098) (10,510)
========== ==========
$ 23,994 17,668
========== ==========
</TABLE>
II-11
<PAGE>
(5) Income Taxes (continued)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax liabilities at December 31, 1996 and 1995,
are presented below:
<TABLE>
<CAPTION>
1996 1995
---------- -----------
Deferred tax liabilities:
<S> <C> <C>
Valuation of marketable securities $ 5,582 5,788
Investment in geothermal power unit, principally due to
amortization 104,394 111,649
========== ===========
Total deferred tax liabilities $ 109,976 117,437
========== ===========
</TABLE>
(6) Revenues and Expenses of Geothermal Power Unit
AGE entered into an agreement on July 22, 1993 to sell its share of steam
from the Unit for a 30-year period on a prepayment basis commencing
January 22, 1991 to Utah Power & Light (UP&L), which has constructed the
Blundell power plant to utilize the steam. The advance received is being
recognized as revenue over the remaining term of the agreement. Revenue
of approximately $42,000 was amortized and recognized in each of 1996 and
1995. Additionally, UP&L pays royalties on the lease AGE holds relating
to the Unit. Royalties due are equal to five percent of AGE's share of
revenues from the sale of steam. UP&L paid AGE approximately $121,000 and
$118,000 in 1996 and 1995, respectively, for these royalties.
AGE is required to pay its proportionate share of operating and
maintenance expenses to the operator of the Unit. AGE paid operating and
maintenance expenses of approximately $64,000 and $66,000 in 1996 and
1995, respectively.
(7) Officer Remuneration
There was no compensation paid to officers and directors during 1996 or
1995.
The stockholders adopted an Employee Qualified Stock Option Plan (Plan)
under which a maximum of 25,000 shares of AGE's $.01 par value common
stock are reserved for issuance to key employees of AGE at market value
on the date of grant. Options expire five years from the date of grant.
No options are outstanding under the Plan.
II-12
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1996
Part III
Item 9. Directors, Executive Officers, Promoters, and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The following directors and executive officers will serve until
the next annual stockholders' meeting and until their successors
are duly qualified and elected.
Name Office
Milton Fisher Chairman of the Board and Director
Paul T. Walton President and Director
M. Walker Wallace Vice President and Director
Peter W. G. Cayias Secretary and Director
Dominic Welch Treasurer and Director
Katie L. Dixon Director
Mr. Fisher, 76, President of A. D. Gilhart & Co., Inc. (investment
bankers since 1959), has been a Director of AGE since its
organization in 1969 and now serves as Chairman of the Board. He
holds a doctor of law, is a member of the Bar of the State of New
York, and presently serves as a director of several public
companies. He has written and lectured in the field of business
finance and interpersonal relationships.
Dr. Walton, 83, who became President of AGE upon its organization
in 1969, has also been a Director since 1969, and has been engaged
for over 40 years as an independent geologist in connection with
the exploration and development of oil and gas and other mineral
properties. He is a member of a number of geological associations
and has published numerous articles in this field. He holds a
bachelor of science in geological engineering, a master of science
in geology from the University of Utah, and a doctor of philosophy
in geology from the Massachusetts Institute of Technology.
Mr. Wallace, 73, has been an officer and director of AGE and has
devoted a portion of his time to its affairs since 1969. He is
also, and has been for over 35 years, a consultant in the
development and management of real property investments and a
private investor. Mr. Wallace presently serves as a Director and a
member of the executive committee of the First Interstate Bank of
Utah, as a Director and President of Arizona Ranch & Metals
Company, and as Chairman of Wallace Associates, Inc., a real
estate investment and management firm. He holds a bachelor of arts
from Stanford University and a master's degree in city planning
from the Massachusetts Institute of Technology.
III-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Item 9. Directors, Executive Officers, Promoters, and Control Persons,
Compliance with Section 16(a) of the Exchange Act (continued)
Mr. Cayias, 61, has been a licensed insurance agent since 1960. He
has been an officer and director of AGE since 1969 and is also an
officer and director of several other corporations engaged in the
real estate business and natural resource investment business. Mr.
Cayias holds a bachelor of science in business administration from
the University of Utah.
Mr. Welch, 64, is a certified public accountant and is the
President and a Director of Kearns-Tribune Corporation, where he
has been employed for over 20 years. He became a Director and
Treasurer of AGE in 1970. Mr. Welch holds a bachelor of arts in
accounting from Utah State University.
Mrs. Dixon, 71, was Recorder of Salt Lake County from January 1975
through December 1994, and a Director of AGE since 1972. For more
than 14 years prior to 1975, she was involved in community
affairs. Mrs. Dixon holds a bachelor of science from Utah State
University.
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act of 1934 requires AGE's officers,
directors, and persons who own more than ten percent of a
registered class of AGE's equity securities, to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission (SEC) and the New York Stock Exchange.
Officers, directors, and greater than ten percent stockholders are
required by SEC regulation to furnish AGE with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, AGE believes that
during AGE's last fiscal year all filing requirements applicable
to its officers, directors, and greater than ten percent
beneficial owners were complied with.
III-2
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Item 10. Executive Compensation
There was no compensation paid to officers or directors during the
year ended December 31, 1996 and 1995.
On December 15, 1970, the stockholders adopted an Employee
Qualified Stock Option Plan (Plan) under which a maximum of 25,000
shares of AGE's common stock are reserved for issuance to key
employees of AGE at market value on the date of grant. Options
expire five years from the date of grant. No options are
outstanding under the Plan.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as to the ownership of
AGE's $.01 par value common stock by all officers and directors of
AGE as a group and by owners of more than five percent of AGE's
common stock as of December 31, 1996:
<TABLE>
<CAPTION>
Type of Amount Percent of
Name ownership owned class
--------------- ------------ ----------
<S> <C> <C> <C>
All directors and officers (6) as a group Record 395,747 31%
Milton Fisher Record 75,646 6
Katie L. Dixon Record 104,428 8
Paul T. Walton Record 76,665 6
M. Walker Wallace Record 107,667 9
</TABLE>
Item 12. Certain Relationships and Related Transactions
None.
Item 13. Exhibits and Reports on Form 8-K
Report on Form 8-K:
No reports on Form 8-K have been filed.
III-3
<PAGE>
S I G N A T U R E
Pursuant to the requirements of Sections 13 or 15(d) 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.
AMERICAN GEOLOGICAL ENTERPRISES, INC.
(Registrant)
By /S/ Paul T. Walton
------------------------------------
Paul T. Walton, President and
Principal Executive Officer
Date March 27, 1997 By /S/ Peter W. G. Cayias
---------------------------- ------------------------------------
Peter W. G. Cayias, Secretary and
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in behalf of the Registrant and
in the capacities and on the dates indicated.
/S/ Paul T. Walton /S/ M. Walker Wallace
- ------------------------------------ ---------------------------------
Paul T. Walton, Director M. Walker Wallace, Director
/S/ Peter W. G. Cayias /S/ Dominic Welch
- ------------------------------------ ---------------------------------
Peter W. G. Cayias, Director Dominic Welch, Director
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 833654
<SECURITIES> 193217
<RECEIVABLES> 25690
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1055210
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1848686
<CURRENT-LIABILITIES> 29612
<BONDS> 0
0
0
<COMMON> 12610
<OTHER-SE> 664067
<TOTAL-LIABILITY-AND-EQUITY> 1848686
<SALES> 163743
<TOTAL-REVENUES> 220531
<CGS> 64165
<TOTAL-COSTS> 130767
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89764
<INCOME-TAX> 23994
<INCOME-CONTINUING> 65770
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65770
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
