<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
-----------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to _______________________
Commission File Number 0-21926
---------------------------------------------------------
AER ENERGY RESOURCES, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 34-1621925
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 Highlands Parkway, Suite G, Smyrna, Georgia 30082
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 433-2127
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
Yes X No
-------- -------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
There were 24,850,263 shares of Common Stock outstanding as of August 9, 1999.
<PAGE> 2
AER ENERGY RESOURCES, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Balance Sheets - June 30, 1999 and December 31, 1998. 3
Condensed Statements of Operations - Three Months Ended June 30, 4
1999 and 1998, Six Months Ended June 30, 1999 and 1998, and Period
From July 17, 1989 (Date of Inception) to June 30, 1999.
Condensed Statements of Cash Flows - Six Months Ended June 30, 5
1999 and 1998 and Period From July 17, 1989 (Date of Inception)
to June 30, 1999.
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 7
RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 11
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AER Energy Resources, Inc.
(a Development Stage Company)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
--------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,073,226 $ 4,249,868
Short-term investments 2,187,581 --
Trade accounts receivable 15,735 --
Inventories, net 47,891 52,729
Prepaid expenses and other current assets 89,612 51,414
------------ ------------
Total current assets 3,414,045 4,354,011
Equipment and improvements 4,005,744 3,970,689
Less accumulated depreciation (3,231,775) (3,006,211)
------------ ------------
773,969 964,478
Other assets 16,841 16,841
------------ ------------
TOTAL ASSETS $ 4,204,855 $ 5,335,330
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 53,099 $ 79,089
Accrued royalties - related party 40,000 30,000
Deferred revenue 431,250 50,000
Other accrued expenses 162,951 125,901
------------ ------------
Total current liabilities 687,300 284,990
Long-term liabilities - Deferred revenue 503,125 --
Stockholders' equity:
Preferred stock, no par value:
Authorized - 10,000,000 shares; no shares issued and outstanding -- --
Common stock, no par value:
Authorized - 100,000,000 shares; issued and outstanding - 24,850,263 shares
at June 30, 1999 and 24,862,263 shares at December 31, 1998 66,580,384 66,593,140
Unearned stock compensation (84,282) (115,840)
Deficit accumulated during the development stage (63,481,672) (61,426,960)
------------ ------------
Total stockholders' equity 3,014,430 5,050,340
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,204,855 $ 5,335,330
============ ============
</TABLE>
See notes to condensed financial statements.
3
<PAGE> 4
AER Energy Resources, Inc.
(a Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17,1989
(DATE OF
THREE MONTHS ENDED SIX MONTHS ENDED INCEPTION) TO
JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1998 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
License fees and research and development revenues $ 496,562 $ -- $ 979,375 $ -- $ 1,329,375
Product sales 338,174
Cost of product sales (6,758,985)
------------ ------------ ------------ ------------ ------------
Gross margin on product sales -- -- -- -- (6,420,811)
------------ ------------ ------------ ------------ ------------
496,562 -- 979,375 -- (5,091,436)
------------ ------------ ------------ ------------ ------------
Costs and expenses:
Research and development
- related party -- -- -- -- 1,145,913
- other 979,752 1,156,053 1,989,255 2,659,967 36,306,679
Marketing, general and administrative
- related party 25,000 24,933 50,000 49,933 1,388,695
- other 449,308 492,106 1,093,618 1,198,588 22,934,870
------------ ------------ ------------ ------------ ------------
Total costs and expenses 1,454,060 1,673,092 3,132,873 3,908,488 61,776,157
------------ ------------ ------------ ------------ ------------
Operating loss (957,498) (1,673,092) (2,153,498) (3,908,488) (66,867,593)
Interest income 43,347 110,192 98,786 238,056 3,986,924
Interest expense
- related parties -- -- -- -- (264,445)
------------ ------------ ------------ ------------ ------------
Net loss $ (914,151) $ (1,562,900) $ (2,054,712) $ (3,670,432) $(63,145,114)
============ ============ ============ ============ ============
Net loss per share (basic and diluted) $ (0.04) $ (0.06) $ (0.08) $ (0.15) $ (4.02)
============ ============ ============ ============ ============
Weighted average shares outstanding (basic and diluted) 24,851,186 24,833,252 24,855,862 24,816,165 15,717,987
</TABLE>
See notes to condensed financial statements.
4
<PAGE> 5
AER Energy Resources, Inc.
(a Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 17,1989
(DATE OF
SIX MONTHS ENDED INCEPTION) TO
JUNE 30, JUNE 30,
1999 1998 1999
----------- ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $(2,054,712) $ (3,670,432) $(63,145,114)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 225,564 235,793 3,641,366
Amortization of unearned stock compensation 18,802 53,753 719,634
Grant of compensatory stock options -- -- 14,063
Forgiveness of promissory notes -- -- 69,875
Loss on disposal of equipment -- -- 67,270
Deferred rental expense -- 330 --
Accretion of discount on short-term investments
and marketable securities (46,918) -- (234,325)
Net changes in operating assets and liabilities 856,340 (64,819) 1,195,811
----------- ------------ ------------
Net cash used in operating activities (1,000,924) (3,445,375) (57,671,420)
INVESTING ACTIVITIES:
Purchases of equipment and improvements (35,055) (23,689) (4,108,932)
Purchases of short-term investments and marketable securities (3,224,148) -- (14,736,444)
Purchase of license agreement -- -- (250,000)
Proceeds from sales/maturities of short-term investments and
marketable securities 1,083,485 -- 12,783,485
Changes in other assets -- -- (140,501)
----------- ------------ ------------
Net cash used in investing activities (2,175,718) (23,689) (6,452,392)
FINANCING ACTIVITIES:
Proceeds from revolving credit note to related parties -- -- 5,430,000
Issuance of convertible debentures, net of issuance costs -- -- 9,834,500
Payments on notes payable to related parties -- -- (1,150,000)
Payments received on promissory notes -- 2,000 59,425
Issuance of common stock upon exercise of stock options -- 10,012 143,558
Issuance of common stock, net of issuance costs -- -- 50,879,555
----------- ------------ ------------
Net cash provided by financing activities -- 12,012 65,197,038
----------- ------------ ------------
(Decrease) increase in cash and cash equivalents (3,176,642) (3,457,052) 1,073,226
Cash and cash equivalents at beginning of period 4,249,868 10,206,870 --
----------- ------------ ------------
Cash and cash equivalents at end of period $ 1,073,226 $ 6,749,818 $ 1,073,226
=========== ============ ============
Supplemental disclosure of non-cash financing activities:
Upon the resignation of one member of the Company's Board
of Directors, 12,000 non-vested shares of common stock,
issued under the 1993 Non-Employee Directors' Restricted
Stock Award Plan, were forfeited and returned to authorized
and unissued shares $ 12,756 $ -- $ 12,756
=========== ============ ============
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 6
AER Energy Resources, Inc.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of AER
Energy Resources, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
These financial statements should be read in conjunction with the Company's
audited financial statements included in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission for the year ended
December 31, 1998. Operating results for the three and six month periods ended
June 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999 or any interim period.
2. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents consist of cash, bank deposits and highly
liquid investments with maturities of three months or less when purchased and
are stated at cost, which approximates market.
Short-term Investments
The Company's short-term investments consist of highly liquid
commercial paper with initial maturities of less than one year and are stated
at amortized cost, which approximates market.
Inventories
The Company's inventories are valued at the lower of cost or market,
using the first in, first out (FIFO) method. The inventory balances at June 30,
1999 and December 31, 1998 of $47,891 and $52,729, respectively, consist
entirely of raw materials.
6
<PAGE> 7
Reclassifications
Certain amounts in the prior period financial statements have been
reclassified to conform with the current period presentation.
Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
In accordance with FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
the Company records impairment losses on long-lived assets used in operations
when events and circumstances indicate that the assets might be impaired and
the undiscounted cash flows estimated to be generated by those assets are less
than the carrying amounts of those assets. Based on the Company's estimate of
future undiscounted cash flows, the Company expects to recover the carrying
amounts of its remaining fixed assets. The Company's estimates of future
undiscounted cash flows have taken into consideration its change in focus
during 1998. Such estimates contemplate the Company entering into agreements,
similar to its 1998 agreement with Duracell Inc., throughout the remaining life
of the Company's fixed assets. If the Company is unable to enter into such
agreements or if it is unable to perform as anticipated, a writedown of such
assets to fair value may be required. No write-offs of obsolete equipment were
recorded in either of the six-month periods ended June 30, 1999 or 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company was incorporated in 1989 and has been engaged in the
development and commercialization of high energy density zinc-air batteries.
The Company's operations, until 1998, were focused primarily on developing and
improving its technology, setting up the manufacturing process, testing and
selling zinc-air batteries, recruiting personnel, and similar activities. The
Company began selling its first product in August 1994, but sales from products
have been minimal.
In 1998, the Company changed its focus to research and product
development of zinc-air technology in primary (disposable) rather than
rechargeable batteries with plans to commercialize the technology through
alliances with large established battery and original equipment manufacturers
("OEMs"). This change allows AER Energy to capitalize on the capability of its
patented Diffusion Air Manager technology and opportunities in hand-held
electronic products
7
<PAGE> 8
like camcorders, cellular telephones, cordless telephones, digital cameras, and
hand-held computers. The Diffusion Air Manager is a simplified method of
isolating the cells in zinc-air batteries from exposure to air during periods
when the battery is in storage or not in use. The Company has ceased marketing
its rechargeable battery products.
In September 1998, the Company announced its Technology Licenses and
Services ("TLAS") Agreement with Duracell Inc., a subsidiary of The Gillette
Company, making Duracell the first licensee of the Company's zinc-air
technology. Under the TLAS Agreement, Duracell agrees to license the rights to
the Company's currently existing patents. In addition, Duracell is funding
certain joint product development projects with the Company. Duracell will own
technology developed under the projects it funds, and the Company will have
rights to utilize the technology. Duracell also has options to obtain certain
other license rights.
Throughout 1999, the Company plans to work with Duracell under the
TLAS Agreement, seek additional license agreements for its patented zinc-air
technology with other companies, and focus on the development of prototype
primary zinc-air batteries that utilize Diffusion Air Manager technology.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1999 and 1998
The Company generated $0.50 million of license fees and research and
development revenues primarily related to the TLAS Agreement with Duracell
during the three months ended June 30, 1999.
Research and development expenses decreased 16% to $0.98 million for
the three months ended June 30, 1999 from $1.16 million for the same period in
1998. This decrease resulted primarily from reduced personnel-related expenses
due to approximately 23% fewer employees than the same period in 1998.
Marketing, general and administrative expenses decreased 10% to $0.47
million for the three months ended June 30, 1999 from $0.52 million for the
same period in 1998. This decrease resulted from lower personnel-related
expenses due to employee reductions and a decrease in investor relations
activities from the same period in 1998.
Six Months Ended June 30, 1999 and 1998
The Company generated $0.98 million of license fees and research and
development revenues primarily related to the TLAS Agreement with Duracell
during the six months ended June 30, 1999.
8
<PAGE> 9
Research and development expenses decreased 25% to $1.99 million for
the six months ended June 30, 1999 from $2.66 million for the same period in
1998. This decrease resulted primarily from reduced personnel-related expenses
due to fewer employees than the same period in 1998. These employee reductions
are associated with the Company's change in focus during 1998.
Marketing, general and administrative expenses decreased 9% to $1.14
million for the six months ended June 30, 1999 from $1.25 million for the same
period in 1998. This decrease resulted from lower personnel-related expenses
due to employee reductions and decreases in trade show activities from the same
period in 1998.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
As of June 30, 1999, the Company had cash and cash equivalents of
$1.07 million and short-term investments of $2.19 million. The Company
anticipates using these funds as needed to fund capital equipment purchases,
research and product development efforts, marketing and licensing activities,
production of prototype zinc-air battery products, development of alliances
with battery manufacturers and OEMs, working capital and general corporate
purposes as determined by management.
Net cash used in operating activities decreased to $1.00 million for
the six months ended June 30, 1999 from $3.45 million for the same period in
1998 due primarily to the $1.62 million decrease in net loss from 1998 and the
$1.15 million of deferred license fees revenue received from Duracell under the
TLAS Agreement.
For the six months ended June 30, 1999, net cash used in investing
activities increased to $2.18 million from $0.02 million for the same period in
1998. This increase is due to investment activities in high-grade, short-term
commercial paper.
No cash was provided by financing activities during the six months
ended June 30, 1999. Financing activities provided $0.01 million to the Company
for the six months ended June 30, 1998 due primarily to the proceeds received
from the exercise of stock options.
The Company currently anticipates that its existing cash and
short-term investment balances, along with cash to be received during the
remainder of 1999 under the TLAS Agreement, will fund operations and continue
technology development at the current level of activity through the end of 1999
and into early 2000. However, it may be necessary for the Company to increase
its research and product development expenses as it continues to work to
improve its primary zinc-air technology and to explore markets for that
technology. It may also be necessary for the Company to expend greater than
expected funds on its facilities to produce prototypes of its primary zinc-air
battery products. The Company will eventually need cash beyond its current
level, and depending on the Company's results of operations, the Company may
find it necessary to obtain additional equity on an accelerated basis or in
amounts greater than currently anticipated. There can be no assurance that
additional equity or debt financing will be available when needed or on terms
acceptable to the Company. To date, both costs and
9
<PAGE> 10
development times have substantially exceeded the Company's forecasts. The
Company has also encountered greater difficulty in commercializing its
technology than originally expected. In addition, the battery business is a
chemical processing business, and, as such, the Company will require specialized
equipment to develop its zinc-air batteries. Future equipment additions could
exceed current Company estimates.
The market price of the Company's common stock has fluctuated
significantly since it began to be publicly traded in July 1993 and may
continue to be highly volatile. Factors such as the ability of the Company to
achieve development goals, ability of the Company to commercialize its battery
technology, ability of the Company to license its technology, development of
competing battery technologies, ability of the Company to protect its
proprietary rights to its technology, improvements in conventional battery
technologies, demand for and acceptance of the Company's products in the
marketplace, ability to obtain commitments from battery companies and OEMs,
impact of any future governmental regulations, impact of pricing or material
costs, ability of the Company to raise additional funds, general market
conditions and other factors affecting the Company's business that are beyond
the Company's control may cause significant fluctuations in the market price of
the Company's common stock. The market prices of the stock of many high
technology companies have fluctuated substantially, often unrelated to the
operating or research and development performance of the specific companies.
Such market fluctuations could adversely affect the market price for the
Company's common stock.
On March 30, 1999, the common stock of the Company ceased trading on
the Nasdaq SmallCap Market, moving to over-the-counter stock trading on the OTC
Bulletin Board.
YEAR 2000 DISCLOSURE
The "Year 2000" issue is the result of some computer programs being
written using two digits instead of four digits to define an applicable year.
Time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000 which could potentially result in miscalculations or system
failure. The Year 2000 issue is believed to affect all companies and
organizations, including the Company. The Company has been assessing its
exposure to the Year 2000 issue by reviewing all internal business, network and
testing systems and by identifying key areas of exposure related to outside
third parties.
The Company has determined that its major operational and accounting
programs that control its purchasing, inventory, billing, accounts payable and
general accounting systems are designed to be Year 2000 compliant, and the
Company has received outside certification of this compliance. In addition to
its operational programs, the Company has several software programs that test
product performance and quality. These programs have been tested internally as
Year 2000 compliant, and the Company does not anticipate any material
modifications. The Company has completed the upgrades to its network server and
all user workstations, which are now Year 2000 compliant.
10
<PAGE> 11
Currently, the Company has no critical interfacing systems to third
parties. It is very difficult to predict the Year 2000 impact on third parties
with which the Company has business transactions, and while the Company does
not anticipate any significant problems, there can be no assurance that
problems will not occur or not have a material adverse effect on the Company.
Management is continuing to examine the Year 2000 issues as they
potentially impact the Company and is developing contingency plans as
necessary. While the Company believes that the cost of completing the
assessment and contingency plans will not be material and the risks to the
Company with respect to Year 2000 issues are manageable, the Company cannot at
this time fully assess the potential impact.
FORWARD LOOKING STATEMENTS
This report contains statements which, to the extent that they are not
recitations of historical fact, may constitute "forward looking statements"
within the meaning of applicable federal securities laws and are based on the
Company's current expectations and assumptions. These expectations and
assumptions are subject to a number of risks and uncertainties which could
cause actual results to differ materially from those anticipated, which include
but are not limited to the following: ability of the Company to achieve
development goals, ability of the Company to commercialize its battery
technology, ability of the Company to license its technology, ability of the
Company to implement its new strategy, development of competing battery
technologies, ability of the Company to protect its proprietary rights to its
technology, improvements in conventional battery technologies, demand for and
acceptance of the Company's products in the marketplace, ability to obtain
commitments from battery manufacturers and OEMs, impact of any future
governmental regulations, impact of pricing or material costs, ability of the
Company to raise additional funds and other factors affecting the Company's
business that are beyond the Company's control. All forward looking statements
contained in this report are intended to be subject to the safe harbor
protection provided by applicable federal securities laws.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has invested a portion of its cash and cash equivalents
and all of its short-term investments in highly liquid financial instruments.
The Company has historically held, and plans in the future to hold, all such
instruments until maturity. If the instruments were, for some reason not
anticipated, redeemed earlier than their maturity, there might be a gain or
loss on the transaction. The Company has no transactions that qualify for
treatment under SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities".
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's 1999 Annual Meeting of Shareholders was held on April 7,
1999. The Company's shareholders voted to elect all six nominees to the
Company's Board of Directors. The following table shows the number of votes
cast for each nominee and the number of votes withheld as to each nominee.
There were no abstentions or broker non-votes as to any nominee, and there were
no nominees other than those named in the Company's proxy statement (who are
set forth below).
<TABLE>
<CAPTION>
Name of Nominee Affirmative Votes Votes Withheld
- -------------------------------- --------------------------- ---------------------------
<S> <C> <C>
David G. Brown 21,511,771 260,709
- -------------------------------- --------------------------- ---------------------------
James W. Dixon 21,511,771 260,709
- -------------------------------- --------------------------- ---------------------------
David W. Dorheim 21,508,368 264,112
- -------------------------------- --------------------------- ---------------------------
William L. Jackson 21,514,471 258,009
- -------------------------------- --------------------------- ---------------------------
Jon A. Lindseth 21,516,821 255,659
- -------------------------------- --------------------------- ---------------------------
John L. Wilkes 21,509,171 263,309
- -------------------------------- --------------------------- ---------------------------
</TABLE>
AER Energy is a trademark of AER Energy Resources, Inc.
12
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C>
27 Financial Data Schedule (for SEC use only).
</TABLE>
(B) REPORTS ON FORM 8-K:
The registrant did not file any reports on Form 8-K during the three
months ended June 30, 1999.
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.
AER ENERGY RESOURCES, INC.
Date: August 9, 1999 By: /s/ David W. Dorheim
-------------------------------
David W. Dorheim, President and
Chief Executive Officer
Date: August 9, 1999 By: /s/ J.T. Moore
-------------------------------
J.T. Moore, Vice President,
Chief Financial Officer, Secretary
and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AER ENERGY
RESOURCES, INC.'S CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,073,226
<SECURITIES> 2,187,581
<RECEIVABLES> 15,735
<ALLOWANCES> 0
<INVENTORY> 47,891
<CURRENT-ASSETS> 3,414,045
<PP&E> 4,005,744
<DEPRECIATION> 3,231,775
<TOTAL-ASSETS> 4,204,855
<CURRENT-LIABILITIES> 687,300
<BONDS> 0
0
0
<COMMON> 66,580,384
<OTHER-SE> (63,565,954)
<TOTAL-LIABILITY-AND-EQUITY> 4,204,855
<SALES> 0
<TOTAL-REVENUES> 979,375
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,132,873
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,054,712)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,054,712)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,054,712)
<EPS-BASIC> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
