FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1999 Commission File No. 0-10286 General Energy Resources and Technology Corporation (Exact name of registrant as specified in its charter) Michigan 38-2266968 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 401 W. Front Street Traverse City, Michigan 49684 (Address of principal executive offices) 231-946-1473 (Registrant's telephone number, including area code) 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 a 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 ( ) No (X). 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. Common Stock, Par Value $.10 - 7,991,870 shares, as of June 30, 1999. GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION Index to Form 10-Q PART I - Financial Information Page Item 1 Balance Sheets. . . . . . . . . . . . . . . . . . .3 Statements of Operations. . . . . . . . . . . . . .5 Statement of Cash Flows . . . . . . . . . . . . . .7 Notes to Financial Statements . . . . . . . . . . .8 Item 2 Management's Discussion and Analysis of Financial Conditions and Results of Operations. . . . . . .9 PART II - Other Information Signatures. . . . . . . . . . . . . . . . . . . . .11 PART I - FINANCIAL INFORMATION General Energy Resources and Technology Corporation Balance Sheets Item 1 ASSETS June 30, December 31, 1999 1998 (Unaudited) (Unaudited) CURRENT ASSETS: Cash $ 5,227 $ 2,817 Accounts Receivable Trade 52,513 48,819 Less Allowance for Doubtful Accounts (13,526) (13,526) Prepaid Expenses 1,617 1,785 _________ _________ Total Current Assets 45,831 39,895 PROPERTY AND EQUIPMENT, AT COST: Proved Oil and Gas Properties, Successful Efforts Method of Accounting 2,358,252 2,358,252 _________ _________ Total Property and Equipment 2,358,252 2,358,252 Less Accumulated Depreciation, Depletion, and Amortization 2,231,069 2,227,650 _________ _________ Net Property and Equipment 127,183 130,602 OTHER ASSETS: Investments (net of unrealized loss of $288,950) 1,050 1,050 _________ _________ $ 174,064 $ 171,547 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current Installments of Long-Term Debt $ 0 $ 0 Accounts Payable Trade 420,435 408,416 Notes Payable 149,900 113,400 Salaries Payable 61,292 57,892 Accrued Interest 12,723 6,240 _________ _________ Total Current Liabilities 644,350 585,948 LONG-TERM DEBT 54,837 52,947 STOCKHOLDERS' EQUITY: Common Stock ($.10 Par Value, 18,000,000 Shares Authorized, 7,991,870 Shares Issued and Outstanding) 799,187 799,187 Additional Paid-in Capital 7,435,012 7,435,012 Deficit (8,759,322) (8,701,547) _________ _________ Total Stockholders' Equity (525,123) (467,348) $ 174,064 $ 171,547 ========= ========= See Accompanying Notes to Financial Statements General Energy Resources and Technology Corporation Statements of Operations Three Months Ended Six Months Ended June 30, June 30, 1999 1998 1999 1998 REVENUES: Oil and Gas Sales: Working Interest $ 22,153 $ 19,463 $ 38,302 $ 37,746 Royalty Interest 352 203 567 2,971 Expense Reimbursement 1,000 0 13,000 15,000 Gain/Loss on Sale of Assets 0 0 0 900 Administrative Overhead 4,200 4,200 8,400 8,400 Oilfield Revenue Distribution 0 0 0 420 _________ _________ _________ _________ Total Revenues 27,705 23,866 60,269 65,437 COSTS AND EXPENSES: Lease and Operating Expenses 15,589 12,439 27,594 29,791 Taxes Other Than on Income 1,514 1,183 2,508 2,119 Dry Holes and Abandonments 9 0 9 11 Depreciation, Depletion and Amortization 1,059 2,310 3,420 4,996 General and Administrative 42,895 40,370 77,048 75,752 Interest Expense 4,454 85 7,466 844 _________ _________ _________ _________ Total Costs/Expenses 65,520 56,387 118,045 113,513 _________ _________ _________ _________ NET INCOME (LOSS) $ (37,815) $ (32,521) $ (57,776) $ (48,076) ========= ========= ========= ========= NET INCOME (LOSS) PER WEIGHTED AVERAGE SHARE OF COMMON STOCK $ (.005) $ (.004) (.007) (.006) ========= ========= ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 7,991,870 7,991,870 7,991,870 7,991,870 ========= ========= ========= ========= See Accompanying Notes to Financial Statements General Energy Resources and Technology Corporation Statement of Cash Flows Six Months Ended June 30, (Unaudited) 1999 1998 ____ ____ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (57,776) $ (48,076) Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation, Depletion and Amortization 3,420 4,996 Abandonments, Expired and Surrendered Leases 0 0 (Gain)Loss on Sale of Oil and Gas Properties 0 0 (Increase)Decrease in Current Assets: Trade Accounts Receivable (3,694) (500) Prepaid Expenses 168 450 Increase(Decrease) in Current Liabilities: Trade Accounts Payable 15,419 10,631 Notes Payable 36,500 34,000 Accrued Interest 6,483 0 _________ _________ NET CASH FROM OPERATING ACTIVITIES 520 1,501 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of Property and Equipment 0 0 Proceeds From Sale of Oil and Gas Property 0 0 _________ _________ NET CASH FROM INVESTING ACTIVITIES 0 0 CASH FLOWS FROM FINANCING ACTIVITIES: Increase(Decrease) in Long-Term Debt 1,890 631 _________ _________ NET CASH FROM FINANCING ACTIVITIES 1,890 631 _________ _________ NET INCREASE(DECREASE) IN CASH 2,410 2,132 CASH AT BEGINNING OF PERIOD 2,817 294 _________ _________ CASH AT END OF PERIOD $ 5,227 $ 2,426 ========= ========= General Energy Resources and Technology Corporation Notes to Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Property and Equipment The Company utilizes the successful efforts method of accounting for it's oil and gas exploration and development program. Under this method of accounting, costs of drilling and completing successful wells are capitalized, while costs of dry holes are charged to expense when incurred. Depletion and amortization of producing leasehold and mineral interests and related intangible development costs are provided by the unit-of-production method based on estimates of recoverable oil and gas reserves prepared by independent petroleum engineers. Lease and well equipment is depreciated over its estimated useful life (seven years) by the straight-line method. Costs of nonproducing leasehold and mineral interests are not amortized but are charged to operations when such properties are abandoned, surrendered, determined to be worthless or transferred to producing properties and depleted when successfully developed. Maintenance and repairs are charged to expense when incurred. Renewals and betterments are capitalized. When assets are sold, retired or otherwise disposed of, applicable costs and accumulated depreciation and depletion are removed from the accounts and the resulting gain or loss is recognized. Interest Capitalization Interest costs applicable to the drilling and equipment of in- progress and shut-in oil and gas wells are capitalized until such time as the wells begin producing. There were no entries for interest capitalization during 1999 and 1998. Earnings Per Share Earnings per share is based on the weighted average number of shares outstanding. NOTE 2 NON CASH TRANSACTIONS The Company had the following non June 30, Dec. 31, cash transactions during the 1999 1998 periods ending June 30, 1999 and December 31, 1998 Write-off of Accounts Payable -0- 12,019 NOTE 3 LONG-TERM DEBT On June 1, 1990, the Company signed a $292,814 promissory note with Mosbacher Energy Company (MEC) for the amount owed MEC by General Energy Corporation for well operations as of May 7, 1990. The note is secured by the Company's interest in eleven producing properties operated by MEC and bears interest at 7 1/4 percent per annum. Additional terms of the agreement call for monthly payments of the lesser of $20,000 or the month's production to MEC. Based on current production estimates, management does not expect to reduce this loan within the current year. NOTE 4 INTERIM STATEMENTS The Company believes that the accompanying unaudited financial statements contain all adjustments (including appropriate provision for depreciation, depletion and amortization normally determined at year end) necessary to present fairly the financial position as of June 30, 1999 and December 31, 1998, and the results of operations for the six months ended June 30, 1999 and 1998. All adjustments are of a normal recurring nature. Interim financials should not necessarily be considered to be indicative of the results of operations for the entire year. NOTE 5 CONTINGENCIES The prices of the Company's natural gas production are subject to the regulations of the Federal Energy Regulatory Commission (FERC). The Company believes it has substantially complied with regulations as issued. Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operations Results of Operations The Company's total earned revenue for the six months ended June 30, 1999 totaled $60,269. This represents a decrease of ($5,168) from the same period in 1998 and is largely the result of a reduction in oil and gas income. Total expenses increased $4,532 from $113,513 at June 30, 1998 to $118,045 at June 30, 1999. The Company's net loss for the six months ended June 30, 1999 increased $9,700 from ($48,076) at June 30, 1998 to ($57,776) at June 30, 1999. Liquidity/Capital Resources Net cash from operating activities decreased $981 to $520 at June 30, 1999 compared to $1,501 at June 30, 1998. Management has developed plans to provide services in an Antrim gas project located in the State of Michigan and anticipates consulting fees. As part of this project, the Company anticipates purchasing new computer hardware and software which will be Year 2000 compliant. In view of it's currently limited activity, the Company has determined that the potential consequences of Year 2000 issues would not have a material effect on business, results of operations, or financial conditions. Management feels that cash flows generated in 1999 from consulting fees and from additional loan advances will be sufficient to pay current operating liabilities. PART II - OTHER INFORMATION General Energy Resources and Technology Corporation Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on the 12th day of August, 1999. GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION By: H. TERRY SNOWDAY, JR. _______________________________ H. Terry Snowday, Jr. President and Director (Principal Executive Officer)