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, 1999
-------------------------------------------------------
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.)
1730 South 1100 East, Salt Lake City, UT 84105
- -------------------------------------------------------------------------------
(Address of principal executive officers)
Registrant's telephone number, including area code (801) 983-7002
---------------------------
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. $172,034
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 II-1
Stockholder Matters
Item 6 Management's Discussion and Analysis II-1
Item 7 Consolidated Financial Statements II-2
Item 8 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure II-2
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-2
Item 11 Security Ownership of Certain Beneficial III-2
Owners and Management
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, 1999
Part I
Item 1. Description of Business
General American Geological Enterprises, Inc. (AGE) is engaged in
activities designed to identify and acquire geotherma 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 by 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 geothermal power unit (the Unit). On July 22, 1993, AGE
agreed to sell on a prepayment basis its steam from the Unit for a
30-year period to PacifiCorp, 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 currently 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
The primary asset AGE holds representing its 5.49 percent working
interest in the Unit is a patented mining claim on 188 acres that is
within the current participating area of the Unit. AGE pays royalties
on this claim equal to 5 percent of its net operating and maintenance
revenue and is reimbursed for these royalties by PacifiCorp.
AGE held all mineral (including geothermal) rights in leases 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, 1999, approximately 450 acres of
land in Central Utah continued to be productive and AGE continues to
receive the related royalty payments which aggregated $404 in 1999.
AGE will continue to receive these overriding interest royalty
payments as long as the land remains productive.
In addition, AGE holds mineral rights in two leases that are directly
adjacent to the current participating area of the Unit. AGE makes
annual lease payments for these two leases totaling $97 per year.
I-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1999
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, 1999
Part II
Item 5. Market For 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 two 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, 1999 is 702.
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, 1999 and 1998
--------------------------------------------------------------
Revenues from the Unit represent sales of steam production that
fluctuate based on the activity and production of the Unit. Revenues
for fiscal year 1999 are fairly consistent with the previous year's
revenues. Net income decreased to $43,909 in 1999 from $82,219 in
1998. This was due to an increase in operating and maintenance
expenses, a decrease in dividend income, and a decrease in general
and administrative expense due to stock issued to officers and
directors in-lieu of cash for their past services rendered to AGE.
These were considered normal fluctuations in investment and operating
activity.
Royalty Income
--------------
AGE owns seven oil and gas leases, all of which have been assigned to
Barrett Resources. Pursuant to these assignments, AGE retained an
overriding interest in royalties from productive land; and for the
year ended December 31, 1999, AGE received $404 in override interest
royalty payments.
Liquidity
---------
AGE's liquidity at December 31, 1999, is considered adequate with
$1,208,352 in working capital. AGE believes that it has sufficient
resources to cover its cash needs during fiscal year 2000.
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.
II-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1999
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 PacifiCorp.
Item 7. Consolidated Financial Statements
Index to Consolidated Financial Statements Page
------------------------------------------ ----
Independent Auditors' Report II-3
Consolidated Balance Sheets - December 31, 1999 and 1998 II-4
Consolidated Statements of Income -
Years ended December 31, 1999 and 1998 II-5
Consolidated Statements of Stockholders' Equity and
Comprehensive Income -
Years ended December 31, 1999 and 1998 II-6
Consolidated Statements of Cash Flows -
Years ended December 31, 1999 and 1998 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 subsidiary (AGE) as of December 31, 1999 and
1998, and the related consolidated statements of income, stockholders' equity
and comprehensive income, 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 audits 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, 1999 and 1998, and the results of their operations and their cash flows for
the years then ended in conformity with generally accepted accounting
principles.
By:/s/KPMG,LLP
--------------
KPMG,LLP
Salt Lake City, Utah
February 21, 2000
II-3
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Balance Sheets
December 31, 1999 and 1998
Assets
1999 1998
---- ----
Current assets:
Cash and cash equivalents $ 981,316 945,212
Marketable securities (note 2) 204,738 209,049
Accounts receivable 19,479 19,874
Interest and dividends receivable 1,276 1,276
Prepaid lease costs 73 2,649
Prepaid income taxes 17,954 --
---------- ----------
Total current assets 1,224,836 1,178,060
---------- ----------
Investment in geothermal power unit, at cost, less
accumulated amortization of $194,929 and $164,940
at December 31, 1999 and 1998, respectively 632,270 662,259
Marketable securities (note 2) 70,833 70,968
---------- ----------
Total assets $1,927,939 1,911,287
========== ==========
II-4
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Balance Sheets
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Liabilities and Stockholders' Equity
1999 1998
---- ----
<S> <C> <C>
Current liabilities:
Accounts payable $ 10,275 12,238
Accrued liabilities 976 416
Income taxes payable -- 7,636
Income taxes (note 5) 5,233 9,658
---------- ----------
Total current liabilities 16,484 29,948
---------- ----------
Deferred income taxes (note 5) 77,810 86,657
Deferred revenue (note 6) 894,985 937,435
Minority interest 12,001 11,460
Stockholders' equity:
Common stock, $.01 par value; authorized
2,500,000 shares; issued and outstanding
1,380,997 and 1,260,997 shares
in 1999 and 1998, respectively 13,810 12,610
Additional paid-in capital 600,411 557,211
Accumulated other comprehensive income 8,797 16,234
Retained earnings 303,641 259,732
---------- ----------
Total stockholders' equity 926,659 845,787
Commitments (note 4)
---------- ----------
Total liabilities and stockholders' equity $1,927,939 1,911,287
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
II-5
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Income
Years ended December 31, 1999 and 1998
1999 1998
-------- --------
Revenues - geothermal power unit (note 6) $172,034 171,398
-------- --------
Expenses:
Operating and maintenance of geothermal
power unit (note 6) 56,069 49,996
Amortization of geothermal power unit 29,989 29,989
General and administrative 76,887 33,400
Lease costs 2,673 4,645
-------- --------
Total expenses 165,618 118,030
-------- --------
Operating income 6,416 53,368
-------- --------
Other income:
Interest income 31,838 32,656
Dividend income 12,756 25,721
Royalties 404 432
-------- --------
44,998 58,809
-------- --------
Income before income taxes 51,414 112,177
Income tax expense (note 5) 7,505 29,958
-------- --------
Net income $ 43,909 82,219
======== ========
Basic net income per common share $ 0.03 0.07
======== ========
See accompanying notes to consolidated financial statements.
II-6
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Stockholders' Equity and Comprehensive Income
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
Accum-
ulated
other Net
Additional Compre- compre- stock-
Common stock paid-in hensive hensive Retained holders'
Shares Amount capital income income earnings equity
--------- --------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1997 1,260,997 $ 12,610 557,211 -- 18,506 177,513 765,840
Comprehensive income:
Net income -- -- -- $ 82,219 -- 82,219 82,219
Other comprehensive income -
unrealized loss on
marketable securities, net
of tax benefits of $1,352 -- -- -- (2,272) (2,272) -- (2,272)
Comprehensive income -- -- -- $ 79,947 -- -- --
--------- --------- ---------- ========= ---------- ---------- ---------
Balances, December 31, 1998 1,260,997 12,610 557,211 16,234 259,732 845,787
Comprehensive income:
Net income -- -- -- $ 43,909 -- 43,909 43,909
Issuance of common stock
in-lieu of cash for
services rendered 120,000 1,200 43,200 -- -- -- 44,400
Other comprehensive income -
unrealized loss on
marketable securities, net
of tax benefits of $4,425 -- -- -- (7,437) (7,437) -- (7,437)
Comprehensive income -- -- -- $ 36,472 -- -- --
--------- --------- ---------- ========= ---------- ---------- ---------
Balances, December 31, 1999 1,380,997 $ 13,810 600,411 8,797 303,641 926,659
========= ========= ========== ========== ========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
II-7
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Consolidated Statements of Cash Flows
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 43,909 82,219
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of geothermal power unit 29,989 29,989
Amortization on investments 135 138
Issuance of common stock for services rendered 44,400 --
Changes in operating assets and liabilities:
Interest and dividends receivable 395 2,151
Prepaid lease costs 2,576 --
Prepaid income taxes (17,954) --
Accounts payable and accrued liabilities (1,403) (22,383)
Income taxes payable (7,636) (10,738)
Deferred income taxes (8,847) (9,146)
Deferred revenue (42,450) (42,450)
Minority interest 541 308
--------- ---------
Net cash provided by operating activities 43,655 30,088
--------- ---------
Cash flows from investing activities -
purchase of marketable securities available-for-sale (7,551) (20,307)
--------- ---------
Increase in cash and cash equivalents 36,104 9,781
Cash and cash equivalents, beginning of year 945,212 935,431
--------- ---------
Cash and cash equivalents, end of year $ 981,316 945,212
========= =========
Supplemental disclosure of cash flow information -
cash paid during the year for income taxes $ 41,943 37,160
</TABLE>
See accompanying notes to consolidated financial statements.
II-8
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(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
revenues are primarily derived from royalty payments from these
leases as well as the applicable portion of steam revenues sold to
PacifiCorp on a prepayment basis (see note 6).
(b) Marketable Securities
Marketable investment securities consist of corporate debt 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
amortization or accretion of premiums and discounts. Unrealized
holding gains and losses, net of the related tax effect, on
available-for-sale securities are excluded from income and are
reported as accumulated other comprehensive income in
stockholders' equity until realized.
A decline in the market value of any available-for-sale security
below cost that is deemed to be other than temporary results in a
reduction in carrying amount to fair value. The impairment is
charged to income and a new cost basis for the security is
established. Dividend and interest income are recognized when
earned.
(c) Investment in Geothermal Power Unit
AGE holds a 5.49 percent working interest in the Roosevelt Hot
Springs geothermal power unit (the 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 PacifiCorp (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 Equivalents
Cash equivalents include all investments with original maturities
to AGE of three months or less.
II-9
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(f) Net Income Per Share
Basic net income per common share is the amount of net income for
the period available to each share of common stock outstanding
during the reporting period. Diluted net income per common share,
if applicable, is the amount of net income for the period
available to each share of common stock outstanding during the
reporting period and to each share that would have been
outstanding assuming the issuance of common shares for all
dilutive potential common shares outstanding during the period.
For fiscal years 1999 and 1998, only the basic income per share is
applicable, as AGE had no potentially dilutive common shares
outstanding. Basic net income per share computations are based
upon 1,380,997 and 1,260,977 shares outstanding for the years
ended December 31, 1999 and 1998, respectively.
(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) Comprehensive Income
Effective January 1, 1998, AGE adopted Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
No. 130). This statement establishes rules for the reporting of
comprehensive income and its components. Comprehensive income
consists of net income and unrealized losses on AGE's
available-for-sale securities and is presented in the consolidated
statement of stockholders' equity and comprehensive income. The
adoption of SFAS No. 130 had no impact on total stockholders'
equity.
(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.
II-10
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(2) Marketable Investment Securities
Marketable investment securities at December 31, 1999 and 1998,
consist of:
1999 1998
------------ -------------
Available-for-sale, at fair value $ 204,738 209,049
Held-to-maturity, at amortized cost 70,833 70,968
-------------
------------ -------------
$ 275,571 280,017
============ =============
The amortized cost, gross unrealized holding gains, and fair market value
for marketable investment securities by major security type at December
31, 1999 and 1998, were as follows:
<TABLE>
<CAPTION>
Gross
unrealized
Amortized holding
cost gains Fair value
------------ ------------- -------------
<S> <C> <C> <C>
Year ended December 31, 1999:
Available-for-sale - equity securities $ 190,708 14,030 204,738
============ ============= =============
Held-to-maturity - corporate debt securities $ 70,833 1,456 72,289
============ ============= =============
Year ended December 31, 1998:
Available-for-sale - equity securities $ 183,157 25,892 209,049
============ ============= =============
Held-to-maturity - corporate debt securities $ 70,968 7,786 78,754
============ ============= =============
</TABLE>
Maturities of debt securities classified as held-to-maturity were as
follows at December 31, 1999:
<TABLE>
<CAPTION>
Amortized Fair
cost value
------------ ------------
<S> <C> <C>
Due within five years $ 50,229 50,338
Due after ten years 20,604 21,951
------------ ------------
$ 70,833 72,289
============ ============
</TABLE>
(3) Fair Value of Financial Instruments
The carrying value for certain short-term financial instruments that
mature frequently approximates 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).
II-11
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(4) Land Leases
The primary asset AGE holds representing its 5.49 percent working
interest in the Unit is a patented mining claim on 188 acres that is
within the current participating area of the Unit. AGE pays royalties on
this claim equal to 5 percent of its net operating and maintenance
revenue and is reimbursed for these royalties by PacifiCorp.
In addition, AGE holds mineral rights in two leases that are directly
adjacent to the current participating area of the Unit. AGE now makes
annual lease payments on these two leases totaling $97 per year.
AGE held all mineral (including geothermal) rights in leases 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, 1999, approximately 450 acres of land in Central
Utah continues to be productive and AGE continues to receive the related
royalty payments which aggregated $404 in 1999 and $432 in 1998. AGE will
continue to receive these overriding interest royalty payments as long as
the land remains productive.
(5) Income Taxes
Income tax expense (benefit) attributable to income from operations
consists of:
<TABLE>
<CAPTION>
Current Deferred Total
---------- ----------- ----------
<S> <C> <C> <C>
Year ended December 31, 1999:
U.S. Federal $ 13,355 (7,233) 6,122
State and local 3,864 (2,481) 1,383
---------- ----------- ----------
---------- ----------- ----------
$ 17,219 (9,714) 7,505
========== =========== ==========
========== =========== ==========
Year ended December 31, 1998:
U.S. Federal $ 33,653 (9,090) 24,563
State and local 6,802 (1,407) 5,395
---------- ----------- ----------
$ 40,455 (10,497) 29,958
========== =========== ==========
</TABLE>
II-12
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
Income tax expense attributable to income from operations for the years
ended December 31, 1999 and 1998, 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>
1999 1998
---------- ----------
<S> <C> <C>
Computed "expected" tax expense $ 17,481 38,120
Increase (reduction) in income taxes resulting from:
State and local income taxes, net of federal income
tax benefit 913 3,561
Effect of surtax exemption and other, net (10,889) (11,723)
---------- ----------
$ 7,505 29,958
========== ==========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax liabilities at December 31, 1999 and 1998,
are presented below:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Valuation of marketable investment securities $ 5,233 9,658
Investment in geothermal power unit, principally due to
amortization 77,810 86,657
---------- ----------
Total deferred tax liabilities $ 83,043 96,315
========== ==========
</TABLE>
(6) Geothermal Power Unit and Concentration of Credit
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
PacifiCorp, 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 for both 1999 and 1998.
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 $56,000 and $50,000 in 1999 and
1998, respectively.
Additionally, PacifiCorp pays AGE for operating and maintenance services
and a reimbursement of royalties for one lease AGE holds that is included
in the Unit. PacifiCorp paid AGE approximately $129,000 for both 1999 and
1998, for operating and maintenance services that is reported as revenue
from the Unit. Royalties due are equal to five percent of AGE's net
operating and maintenance revenue. PacifiCorp paid AGE approximately
$3,700 and $3,900 in 1999 and 1998, respectively, for these royalties
which AGE, in turn, paid to its lessors.
II-13
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(7) Officer Remuneration
During the year ended December 31, 1999, AGE recorded compensation
expense of $44,400 relating to issuance of common stock for services
rendered by members of its officers and directors. There was no other
compensation paid to officers and directors during the fiscal years ended
December 31, 1999 and 1998, respectively
II-14
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1999
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
Dominic Welch President, Treasurer and Director
M. Walker Wallace Vice President and Director
Peter W. G. Cayias Secretary and Director
Katie L. Dixon Director
Mr. Fisher, 79, 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.
Mr. Welch, 67, 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 and President in 1998. Mr. Welch holds a Bachelor of Arts in
Accounting from Utah State University.
Mr. Wallace, 76, 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 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.
Mr. Cayias, 64, 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.
Mrs. Dixon, 74, 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.
III-1
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1999
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.
Item 10. Executive Compensation
During the year ended December 31, 1999, AGE recorded compensation
expense of $44,400 relating to issuance of common stock for services
rendered by members of its officers and directors. There was no other
compensation paid to officers and directors during the fiscal years
ended December 31, 1999 and 1998, respectively.
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, 1999:
<TABLE>
<CAPTION>
Type of Amount Percent
Name ownership owned of class
---- --------------- ------------ ----------
<S> <C> <C> <C>
All directors and officers (5) as a group Record 419,082 30%
M. Walker Wallace Record 127,667 9
Katie L. Dixon Record 124,428 9
Paul T. Walton Estate Record 96,665 7
Milton Fisher Record 95,646 7
</TABLE>
III-2
<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Form 10-KSB Annual Report
Year ended December 31, 1999
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>
SIGNATURE
---------
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/Dominic Welch
-------------------
Dominic Welch
President and Principal Executive Officer
Date 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.
By:/s/Dominic Welch By:/s/M. Walker Wallace
----------------------- ------------------------------
Dominic Welch M. Walker Wallace
Director Director
By:/s/Peter W. G. Cayias
----------------------------
Peter W. G. Cayias
Director
