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 30,1999
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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.)
1730 South 1100 East, Salt Lake City, UT 84105
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(Address of principal executive officers)
(801) 983-7002
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Registrant's telephone number)
(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, 1999, 1,260,997 shares of common stock were outstanding.
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<TABLE>
<CAPTION>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Balance Sheets
September 30,
1999 December 31,
Assets (unaudited) 1998
------ ----------- -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 967,022 945,212
Marketable securities held-for-sale 204,921 209,049
Accounts receivable 20,197 19,874
Interest and dividends receivable 1,723 1,276
Prepaid lease costs 97 2,649
Prepaid income taxes 2,511 --
--------- ---------
Total current assets 1,196,471 1,178,060
Investment in geothermal power unit, at cost, less accumulated
amortization of $187,432 in 1999 and $149,946 in 1998 639,767 662,259
Marketable securities held-to-maturity 70,868 70,968
--------- ---------
$1,907,106 1,911,287
========== =========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 11,864 12,238
Income taxes payable -- 7,636
Accrued liabilities 896 416
Deferred income taxes 7,747 9,658
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Total current liabilities 20,507 29,948
Deferred income taxes 80,026 86,657
Deferred revenue 905,597 937,435
Minority interest 11,460 11,460
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 13,023 16,234
Retained earnings 306,672 259,732
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889,516 845,787
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1,907,106 1,911,287
========= =========
</TABLE>
See accompanying notes to financial statements.
2
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<TABLE>
<CAPTION>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Operations
(Unaudited)
Three months ended Nine months ended
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Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
------ ------ ------ ------
Revenues - gross revenues from geothermal
<S> <C> <C> <C> <C>
power unit 43,792 42,757 131,911 128,124
Expenses:
Operating expenses of geothermal
power unit 14,362 11,746 43,376 38,020
Amortization of geothermal power unit 7,497 7,497 22,492 22,492
Lease costs 744 1,181 2,649 3,484
General and administrative 2,343 2,613 27,191 26,684
------ ------ ------ ------
24,946 23,037 95,708 90,680
------ ------ ------ ------
Income from operations 18,846 19,720 36,203 37,444
Other income and expenses:
Interest income 7,314 8,194 21,438 24,487
Dividend income 1,810 1,889 4,356 4,482
Royalty income 115 112 207 330
------ ------ ------ ------
9,239 10,195 26,001 29,299
------ ------ ------ ------
Income before income taxes 28,085 29,915 62,204 66,743
Income tax expense 7,671 8,742 15,264 16,490
------ ------ ------ ------
Net income $20,414 21,173 46,940 50,253
======= ====== ====== ======
Net income per share $ .02 .02 .04 .04
======= ====== ====== ======
</TABLE>
See accompanying notes to financial statements.
3
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<TABLE>
<CAPTION>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Statements of Cash Flows
(Unaudited)
Nine months ended
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Sept. 30, Sept. 30,
1999 1998
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Cash flows from operating activities:
<S> <C> <C>
Net income $ 46,940 50,253
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 100 103
Change in operating assets and liabilities:
Accounts receivable (323) (365)
Interest and dividends receivable (447) (1,239)
Prepaid lease costs 2,552 (1,161)
Prepaid income taxes (2,511) --
Accounts payable (374) 2,216
Income taxes payable (7,636) (17,453)
Accrued liabilities 480 (24,373)
Deferred income taxes (6,629) (6,953)
Deferred revenue (31,838) (31,838)
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Net cash provided by/ (used in) operating activities 22,806 (8,318)
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Cash flows from investing activities:
Purchase of marketable securities (996) (573)
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Net cash used in investing activities (996) (573)
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Increase (decrease) in cash and cash equivalents 21,810 (8,891)
Cash and cash equivalents at beginning of period 945,212 935,431
--------- --------
Cash and cash equivalents at end of period $ 967,022 926,540
========= =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES,
INC.
Notes and Disclosures to Form 10-QSB
1. Presentation
------------
The financial statements as of September 30, 1999, 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
(SEQ. 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, 1998
and 1997. 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.
5
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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
- -------------------------------------------
At September 30, 1999, AGE's financial condition is consistent with December 31,
1998. Income and expenses are consistent for both the three months ended and the
nine months ended September 30, 1999 and 1998 except for a decrease in lease
costs. The participating area of the geothermal power unit in which AGE has an
interest has been reduced by the operator of the unit. Consequently, it was not
necessary for AGE to renew certain leases this year.
Liquidity & Commitments
- -----------------------
AGE's liquidity at September 30, 1999, is considered adequate with $1,175,964 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 at 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.
6
<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.
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.
AMERICAN GEOLOGICAL ENTERPRISES, INC.
(Registrant)
November 12,1999 /s/ Dominic Welch
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Date DOMINIC WELCH, President/Treasurer
November 12,1999 /s/ Peter W. G. Cayias
- ---------------- ----------------------
Date PETER W.G. CAYIAS, Secretary
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 967022
<SECURITIES> 275789
<RECEIVABLES> 21920
<ALLOWANCES> 0
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<CURRENT-ASSETS> 1196471
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0
0
<COMMON> 12610
<OTHER-SE> 570234
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<INCOME-TAX> 15264
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<NET-INCOME> 46940
<EPS-BASIC> .04
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</TABLE>
