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 June 30, 1998
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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 of (I.R.S. Employer
incorporation or organization) Identification No.)
495 East 4500 South Suite #102 Salt Lake City, UT 84107
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(Address of principal executive officers)
(801) 293-8101
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(Registrant's telephone number)
1102 Walker Center Salt Lake City, Utah 84111
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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 June 30, 1998, 1,260,997 shares of common stock were outstanding.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Balance Sheets
June 30,
1998 December 31,
Assets (unaudited) 1997
------ ----------- ------------
Current assets:
Cash and cash equivalents $ 923,286 935,431
Marketable securities held-for-sale 202,863 192,365
Accounts receivable 22,717 22,025
Interest and dividends receivable 1,276 1,276
Prepaid lease costs 2,016 2,649
Prepaid income taxes 140 --
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Total current assets 1,152,298 1,153,746
Investment in geothermal power unit, at
cost, less accumulated amortization of
$149,946 in 1998 and $134,951 in 1997 677,253 692,248
Marketable securities held-to-maturity 71,037 71,106
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$1,900,588 1,917,100
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Liabilities and Stockholders' Equity
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Current liabilities:
Accounts payable $ 9,620 7,751
Income taxes payable -- 18,374
Accrued liabilities 14,270 27,286
Deferred income taxes 14,797 11,009
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Total current liabilities 38,687 64,420
Deferred income taxes 90,803 95,803
Deferred revenue 958,660 979,885
Minority interest 11,152 11,152
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 24,872 18,506
Retained earnings 206,593 177,513
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801,286 765,840
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$1,900,588 1,917,100
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See accompanying notes to financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
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June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues - gross revenues from geothermal
power unit 42,807 41,716 85,367 83,124
------- ------- ------- -------
Expenses:
Operating expenses of geothermal
power unit 11,502 17,647 26,274 31,408
Amortization of geothermal power unit 7,497 7,498 14,995 14,995
Lease costs 1,142 1,161 2,303 2,322
General and administrative 11,730 6,304 24,071 9,224
------- ------- ------- -------
31,871 32,610 67,643 57,949
------- ------- ------- -------
Income from operations 10,936 9,106 17,724 25,175
Other income and expenses:
Interest income 7,599 9,729 16,293 19,236
Dividend income 1,694 2,229 2,593 3,657
Royalty income 131 387 218 766
------- ------- ------- -------
9,424 12,345 19,104 23,659
------- ------- ------- -------
Income before income taxes 20,360 21,451 36,828 48,834
Income tax expense 4,248 3,141 7,748 12,071
------- ------- ------- -------
Net income $16,112 18,310 29,080 36,763
======= ======= ======= =======
Net income per share $ .01 .01 .02 .03
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
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June 30, June 30,
1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 29,080 36,763
Adjustments to reconcile net income
to net cash provided by
operating activities:
Amortization of geothermal power unit 14,995 14,995
Accretion on marketable securities held to maturity 69 67
Change in operating assets and liabilities:
Accounts receivable (692) 2,665
Interest and dividends receivable -- --
Prepaid lease costs 633 653
Prepaid income taxes (140) --
Accounts payable 1,869 3,252
Income taxes payable (18,374) 9,478
Accrued liabilities (13,016) 3,095
Deferred income taxes (5,000 (5,109)
Deferred revenue (21,225) (21,226)
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Net cash provided by/(used in) operating activities (11,801) (44,633)
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Cash flows from investing activities:
Purchase of marketable securities (344) (333)
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Net cash used in investing activities (344) (333)
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Increase (decrease) in cash and cash equivalents (12,145) 44,300
Cash and cash equivalents at beginning of period 935,431 833,654
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Cash and cash equivalents at end of period $ 923,286 877,954
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes and Disclosures to Form 10-QSB
1. Presentation
------------
The financial statements as of June 30, 1998, and for the six 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, 1997 and 1996.
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.
<PAGE>
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
- -------------------------------------------
At June 30, 1998, AGE's financial condition is consistent with December 31,
1997. Income and expenses for the three months ended and the six months ended
June 30, 1998 and 1997 are consistent except for general and administrative
expenses that increased in 1998 due to accounting fees related to a prior year
tax audit.
Liquidity
- ---------
AGE's liquidity at June 30, 1998, is considered adequate with $1,113,611 in
working capital. AGE is committed to furnish its share of steam from its
investment in a geothermal power unit to Pacificorp under a 30-year agreement
that commenced in 1991. Additionally, AGE's future commitments consist of lease
payments and royalties on the land which lies within the participating area of
the geothermal power unit. 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
Pacificorp.
Other
- -----
A tax rate of 34.6 percent was used for income tax calculations for 1998.
Current estimates support 34.6 percent as the effective tax rate for the 1998
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)
August 14, 1998 Dominic Welch
- ----------------------------- -------------------------------------
Date DOMINIC WELCH, Treasurer
August 14, 1998 Peter W. G. Cayias
- ----------------------------- -------------------------------------
Date PETER W.G. CAYIAS, Secretary
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 923286
<SECURITIES> 273900
<RECEIVABLES> 22717
<ALLOWANCES> 0
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<CURRENT-ASSETS> 1152298
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0
<COMMON> 12610
<OTHER-SE> 788676
<TOTAL-LIABILITY-AND-EQUITY> 1900588
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<INCOME-PRETAX> 36828
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<NET-INCOME> 29080
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