FORM 10-QSB.-- QUARTERLY 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-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1997
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or
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
For the transition period from to
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Commission file number 2-54020
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American Geological Enterprises, Inc.
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(Exact name of registrant as specified in its charter)
Utah 87-0273300
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1102 Walker Center Salt Lake City, Utah 84111
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(Address of principal executive officers)
(801) 363-3283
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(Registrant's telephone number)
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(Former name, former address, and former fiscal year, if changed since last
report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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
As of September 30, 1997, 1,260,997 shares of common stock were outstanding.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Balance Sheets
<CAPTION>
September 30,
1997 December 31,
Assets (unaudited) 1996
------ ------------- -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 912,169 833,654
Marketable securities held-for-sale 188,942 193,217
Accounts receivable 21,922 24,414
Interest and dividends receivable 1,723 1,276
Prepaid lease costs 3,810 2,649
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Total current assets 1,128,566 1,055,210
Investment in geothermal power unit, at cost,
less accumulated amortization of $127,454
in 1997 and $104,962 in 1996 699,745 722,237
Marketable securities held-to-maturity 71,138 71,239
---------- ----------
$1,899,449 1,848,686
========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 9,402 6,793
Income taxes payable 12,576 2,089
Accrued liabilities 25,395 20,730
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Total current liabilities 47,373 29,612
Deferred income taxes 111,523 109,976
Deferred revenue 990,497 1,022,335
Minority interest 10,086 10,086
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 22,728 9,383
Retained earnings 147,421 97,473
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739,970 676,677
---------- ----------
$1,899,449 1,848,686
========== ==========
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended Nine months ended
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Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues - gross revenues from geothermal
power unit 42,008 40,929 125,132 122,514
------- ------- ------- -------
Expenses:
Operating expenses of geothermal
power unit 13,544 15,658 44,952 47,746
Amortization of geothermal power unit 7,497 7,497 22,492 22,492
Lease costs 1,161 1,161 3,483 3,483
General and administrative 11,778 2,676 21,002 25,765
------- ------- ------- -------
33,980 26,992 91,929 99,486
------- ------- ------- -------
Income from operations 8,028 13,937 33,203 23,028
Other income and expenses:
Interest income 10,252 8,517 29,488 27,831
Dividend income 1,747 2,212 5,404 5,685
Royalty income 259 394 1,025 1,146
------- ------- ------- -------
12,258 11,123 35,917 34,662
------- ------- ------- -------
Income before income taxes 20,286 25,060 69,120 57,690
Income tax expense 7,100 10,499 19,171 17,054
------- ------- ------- -------
Net income $13,186 14,561 49,949 40,636
======= ======= ======= =======
Net income per share $ .01 .01 .04 .03
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Cash Flows
(Unaudited)
<CAPTION>
Nine months ended
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Sept. 30, Sept. 30,
1996 1996
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Cash flows from operating activities:
<S> <C> <C>
Net income $ 49,949 40,636
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of geothermal power unit 22,492 22,492
Accretion on marketable securities held to maturity 100 78
Change in operating assets and liabilities:
Accounts receivable 2,492 (255)
Interest and dividends receivable (447) (509)
Prepaid lease costs (1,161) (1,161)
Accounts payable 2,609 (13,595)
Accrued liabilities 4,665 4,534
Income taxes payable 10,487 (68,947)
Deferred income taxes (5,110) (4,464)
Deferred revenue (31,837) (31,837)
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Net cash provided by/(used in) operating activities 54,239 (53,028)
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Cash flows from investing activities:
Purchase of marketable securities (724) (608)
Redemption of marketable securities 25,000 --
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Net cash provided by/(used in) investing activities 24,276 (608)
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Increase (decrease) in cash and cash equivalents 78,515 (53,636)
Cash and cash equivalents at beginning of period 833,654 869,129
---------- ---------
Cash and cash equivalents at end of period $ 912,169 815,493
========== =========
</TABLE>
See accompanying notes to financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes and Disclosures to Form 10-QSB
1. Presentation
------------
The financial statements as of September 30, 1997, and for the nine months
then ended were prepared by American Geological Enterprises, Inc. (AGE)
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
necessary adjustments to the financial statements have been made to present
fairly the financial position and results of operations and cash flows. The
results of operations for the periods presented are not necessarily
indicative of the results for the respective complete years. AGE has
previously filed with the SEC a Form 10-KSB, which included audited
financial statements for the two years ending December 31, 1996 and 1995.
It is suggested that the financial statements contained in this filing be
read in conjunction with the statements and notes thereto contained in
AGE's Form 10-KSB filing.
2. Net Income Per Share
--------------------
Net income per share is computed by dividing net income by the weighted
average number of shares outstanding during each period.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
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.
Financial Condition & Results of Operations
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At September 30, 1997, AGE's financial condition is consistent with December 31,
1996. Income and expenses are consistent for both the three months and the nine
months ended September 30, 1997 and 1996.
Liquidity
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AGE's liquidity at September 30, 1997, is considered adequate with $1,081,193 in
working capital. AGE's future commitments consist of lease payments on land
which lies within the participating area of the geothermal power unit.
Additionally, AGE is committed to furnish its share of steam from its investment
in the geothermal power unit to Utah Power & Light (UP&L) under a 30-year
agreement that commenced in 1991. There are no other commitments or anticipated
expenditures of a capital nature.
AGE's economic future will be dependent, in major part, upon the value of its
undeveloped interests in the geothermal power unit. The value of such
undeveloped interests will, in turn, be dependent upon, among other matters (a)
the then current price of energy; (b) governmental incentives to develop
renewable resources; (c) regulatory incentives; and (d) the load needs of UP&L.
Other
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A tax rate of 35 percent was used for income tax calculations for 1997. Current
estimates support 35 percent as the effective tax rate for the 1997 year.
<PAGE>
Part II
Other Information
There is no information to be submitted under Part II, and no reports were
required to be filed under Form 8-K during the period.
S I G N A T U R E S
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.
AMERICAN GEOLOGICAL ENTERPRISES, INC.
(Registrant)
November 6, 1997 Dominic Welch
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Date DOMINIC WELCH, Treasurer
November 6, 1997 Peter W. G. Cayias
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Date PETER W.G. CAYIAS, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 912169
<SECURITIES> 188942
<RECEIVABLES> 23645
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1128566
<PP&E> 699745
<DEPRECIATION> 0
<TOTAL-ASSETS> 1899449
<CURRENT-LIABILITIES> 47373
<BONDS> 0
0
0
<COMMON> 12610
<OTHER-SE> 579939
<TOTAL-LIABILITY-AND-EQUITY> 1899449
<SALES> 0
<TOTAL-REVENUES> 161049
<CGS> 0
<TOTAL-COSTS> 91929
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 69120
<INCOME-TAX> 19171
<INCOME-CONTINUING> 49949
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49949
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
