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, 2000
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or
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
For the transition period from
--------------------- to -----------------------
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)
N/A
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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 November 10, 2000, 1,380,997 shares of common stock were outstanding.
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<PAGE>
AMERICAN GEOLOGICAL ENTERPRISES, INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30,
2000 December 31,
Assets (unaudited) 1999
-------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,043,222 981,316
Marketable securities held-for-sale 213,919 204,738
Accounts receivable 20,227 19,479
Interest and dividends receivable 1,723 1,276
Prepaid lease costs 97 73
Prepaid income taxes - 17,954
-------------- -------------
Total current assets 1,279,188 1,224,836
Investment in geothermal power unit, at cost, less accumulated
amortization of $217,421 in 2000 and $187,432 in 1999 609,778 632,270
Marketable securities held-to-maturity 70,732 70,833
============== =============
Total assets $ 1,959,698 1,927,939
============== =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,468 10,275
Income taxes payable 16,371 -
Accrued liabilities 916 976
Deferred income taxes 8,452 5,233
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Total current liabilities 33,207 16,484
Deferred income taxes 71,164 77,810
Deferred revenue 863,147 894,985
Minority interest 12,001 12,001
Stockholders' equity:
Common stock, $.01 par value; authorized 2,500,000 shares; issued and
outstanding 1,380,997 shares at September 30, 2000 and December 31, 1999 13,810 13,810
Additional paid-in capital 600,411 600,411
Unrealized gain on marketable securities, net of tax 14,207 8,797
Retained earnings 351,751 303,641
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Total stockholders' equity 980,179 926,659
============== =============
Total liabilities and stockholders' equity $ 1,959,698 1,927,939
============== =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
--------------------------- ---------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues - geothermal power unit 43,007 43,792 128,860 131,911
------------ ------------ ------------ ------------
Expenses:
Operating amd maintenance of geothermal
power unit 14,081 14,362 42,113 43,376
Amortization of geothermal power unit 7,497 7,497 22,492 22,492
General and administrative 8,601 2,343 27,078 27,191
Lease costs 25 744 73 2,649
------------ ------------ ------------ ------------
Total expenses 30,204 24,946 91,756 95,708
------------ ------------ ------------ ------------
Operating income 12,803 18,846 37,104 36,203
Other income:
Interest income 6,548 7,314 21,772 21,438
Dividend income 3,222 1,810 6,078 4,356
Royalties - 115 96 207
------------ ------------ ------------ ------------
Total other income 9,770 9,239 27,946 26,001
------------ ------------ ------------ ------------
Income before income taxes 22,573 28,085 65,050 62,204
Income tax expense 5,731 7,671 16,940 15,264
------------ ------------ ------------ ------------
Net income $ 16,842 20,414 48,110 46,940
============ ============ ============ ============
Basic net income per common share $ .01 .02 .03 .04
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
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Sept. 30, Sept. 30,
2000 1999
----------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 48,110 46,940
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of geothermal power unit 22,492 22,492
Amortization on investments 101 100
Change in operating assets and liabilities:
Accounts receivable (1,195) (770)
Prepaid lease costs (24) 2,552
Prepaid income taxes 10,034 (2,511)
Accounts payable and accrued liabilities (2,867) 106
Income taxes payable 24,291 (7,636)
Deferred income taxes (6,646) (6,629)
Deferred revenue (31,838) (31,838)
----------------- ----------------
Net cash provided by operating activities 62,458 22,806
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Cash flows from investing activities -
purchase of marketable securities available-for-sale (552) (996)
----------------- ----------------
Net cash used in investing activities (552) (996)
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Increase in cash and cash equivalents 61,906 21,810
Cash and cash equivalents, beginning of period 981,316 945,212
----------------- ----------------
Cash and cash equivalents, end of period $ 1,043,222 967,022
================= ================
Supplemental disclosure of cash flow information -
cash paid during the period for income taxes $ 7,920 32,043
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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AMERICAN GEOLOGICAL ENTERPRISES, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The financial statements as of September 30, 2000, 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, 1999
and 1998. 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.
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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, 2000, AGE's financial condition is consistent with December 31,
1999. Income and expenses are consistent for both the three months ended and the
nine months ended September 30, 2000 and 1999 except for the 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 and lease costs have
decreased accordingly.
Liquidity & Commitments
-----------------------
AGE's liquidity at September 30, 2000, is considered adequate with $1,245,981 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.
Merger Negotiations
-------------------
AGE has entered into preliminary negotiations with Emtech Inc. to explore the
possibility of a merger between the two companies. No agreements have yet been
reached.
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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 13, 2000 /s/ Dominic Welch
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Date DOMINIC WELCH, President/Treasurer
November 13, 2000 /s/ Peter W. G. Cayias
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Date PETER W.G. CAYIAS, Secretary
