UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended March 31, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 1-12396
THE BEARD COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma 73-0970298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 842-2333
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 [ ]
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of April 30, 2000.
Common Stock $.001 par value - 2,438,724
THE BEARD COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Balance Sheets - March 31, 2000 (Unaudited) and
December 31, 1999
Statements of Operations - Three Months
ended March 31, 2000 and 1999 (Unaudited)
Statements of Shareholders' Equity - Year ended December 31, 1999
and Three Months ended March 31, 2000 (Unaudited)
Statements of Cash Flows - Three Months ended
March 31, 2000 and 1999 (Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE BEARD COMPANY AND SUBSIDIARIES
Balance Sheets
March 31, 2000 (Unaudited) and December 31, 1999
March 31, December 31,
Assets 2000 1999
----------- ------------
Current assets:
Cash and cash equivalents $ 299,000 $ 767,000
Investments - 280,000
Accounts receivable, less allowance for doubtful
receivables of $13,000 in 2000 and 1999 314,000 480,000
Inventory 100,000 103,000
Prepaid expenses and other assets 62,000 98,000
Current portion of notes receivable 80,000 80,000
----------- -----------
Total current assets 855,000 1,808,000
----------- -----------
Notes receivable 817,000 756,000
Investments and other assets 1,206,000 1,324,000
Property, plant and equipment, at cost 7,022,000 6,879,000
Less accumulated depreciation, depletion and
amortization 4,013,000 3,987,000
----------- -----------
Net property, plant and equipment 3,009,000 2,892,000
----------- -----------
Intangible assets, at cost 35,000 25,000
Less accumulated amortization 1,000 1,000
----------- -----------
Net intangible assets 34,000 24,000
----------- -----------
$ 5,921,000 $ 6,804,000
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable $ 221,000 $ 262,000
Accrued expenses 778,000 869,000
Income taxes payable 74,000 88,000
Current maturities of long-term debt 17,000 17,000
Short-term debt 50,000 -
----------- -----------
Total current liabilities 1,140,000 1,236,000
----------- -----------
Long-term debt less current maturities 9,000 13,000
Minority interest in consolidated subsidiaries 10,000 -
Redeemable preferred stock of $100 stated value;
5,000,000 shares authorized; 27,838 shares
issued and outstanding (note 5) 889,000 889,000
Common shareholders' equity:
Common stock of $.001 par value per share;
10,000,000 shares authorized; 2,832,129
shares issued and outstanding in 2000 and 1999 3,000 3,000
Capital in excess of par value 37,723,000 37,723,000
Accumulated deficit (32,006,000) (31,218,000)
Accumulated other comprehensive income (loss) (1,000) 4,000
Treasury stock, 393,405 shares, at cost in 2000
and 1999 (1,846,000) (1,846,000)
----------- -----------
Total common shareholders' equity 3,873,000 4,666,000
----------- -----------
Commitments and contingencies (note 8)
$ 5,921,000 $ 6,804,000
=========== ===========
See accompanying notes to financial statements.
THE BEARD COMPANY AND SUBSIDIARIES
Statements of Operations
(Unaudited)
For the Three Months Ended
--------------------------
March 31, March 31,
2000 1999
----------- -----------
Revenues:
Coal reclamation $ 12,000 $ 684,000
Carbon dioxide 99,000 119,000
China - -
Environmental remediation - -
Natural gas well servicing 65,000 -
e-Commerce - -
Other 6,000 9,000
----------- -----------
182,000 812,000
----------- -----------
Expenses:
Coal reclamation 175,000 413,000
Carbon dioxide 21,000 28,000
China 83,000 83,000
Environmental remediation 40,000 56,000
Natural gas well servicing 43,000 -
Selling, general and administrative 455,000 446,000
Depreciation, depletion and amortization 26,000 181,000
Other 10,000 8,000
----------- -----------
853,000 1,215,000
----------- -----------
Operating profit (loss):
Coal reclamation (215,000) 27,000
Carbon dioxide 70,000 84,000
China (109,000) (83,000)
Environmental remediation (66,000) (77,000)
Natural gas well servicing (28,000) -
e-Commerce (75,000) (18,000)
Other, primarily corporate (248,000) (336,000)
----------- -----------
(671,000) (403,000)
Other income (expense):
Interest income 27,000 53,000
Interest expense (1,000) (156,000)
Equity in operations of unconsolidated affiliates (149,000) (45,000)
Gain on sale of assets - 2,000
Minority interest in operations of consolidated
subsidiary 6,000 -
Other 6,000 38,000
----------- -----------
Loss from continuing operations before income taxes (782,000) (511,000)
Income taxes (note 7) (6,000) -
----------- -----------
Loss from continuing operations (788,000) (511,000)
Loss from discontinued operations (note 4) - (40,000)
----------- -----------
Net loss $ (788,000) $ (551,000)
=========== ===========
Net loss per average common share outstanding:
Basic and diluted:
Loss from continuing operations $ (0.32) $ (0.21)
Loss from discontinued operations - (0.01)
----------- -----------
Net loss $ (0.32) $ (0.22)
=========== ===========
Weighted average common shares outstanding -
basic and diluted 2,439,000 2,468,000
=========== ===========
See accompanying notes to financial statements.
THE BEARD COMPANY AND SUBSIDIARIES
Statements of Shareholders' Equity
Accumulated Total
Capital in Other Common
Common Excess of Accumulated Comprehensive Treasury Shareholders'
Stock Par Value Deficit Income Stock Equity
-------- --------- ----------- ------------- -------- -------------
Balance, December 31, 1998 $ 3,000 $ 37,747,000 $(27,819,000) $ - $(1,544,000) $ 8,387,000
Net loss - - (3,399,000) - - (3,399,000)
Comprehensive income:
Foreign currency translation
adjustment - - - 4,000 - 4,000
-----------
Comprehensive loss (3,395,000)
-----------
Issuance of 3,760 shares of treasury stock
for stock option exercises - (24,000) - - 24,000 -
Purchase of 86,275 shares of common
stock - - - - (326,000) (326,000)
-------- ------------ ------------ --------- ----------- -----------
Balance, December 31, 1999 $ 3,000 $ 37,723,000 $(31,218,000) $ 4,000 $(1,846,000) $ 4,666,000
Net loss, three months ended March 31, 2000
(unaudited) - - (788,000) - - (788,000)
Comprehensive loss:
Foreign currency translation
adjustment (unaudited) - - - (5,000) - (5,000)
-----------
Comprehensive loss (unaudited) (793,000)
-----------
-------- ------------ ------------ --------- ----------- -----------
Balance, March 31, 2000
(unaudited) $ 3,000 $ 37,723,000 $(32,006,000) $ (1,000) $(1,846,000) $ 3,873,000
======== ============ ============ ========= =========== ===========
See accompanying notes to financial statements.
THE BEARD COMPANY AND SUBSIDIARIES
Statements of Cash Flows
(Unaudited)
For the Three Months Ended
--------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Operating activities:
Cash received from customers $ 873,000 $ 3,131,000
Cash paid to suppliers and employees (1,392,000) (3,118,000)
Interest received 12,000 62,000
Interest paid (1,000) (165,000)
Taxes paid (20,000) (49,000)
------------ ------------
Net cash used in operating activities (528,000) (139,000)
------------ ------------
Investing activities:
Acquisition of property, plant and equipment (176,000) (34,000)
Proceeds from sale of assets - 3,000
Proceeds from redemptions of certificates
of deposit 280,000 -
Investment in and advances to fifty percent-
owned subsidiary (125,000) (355,000)
Advances for notes receivable (128,000) (196,000)
Payments on notes receivable 67,000 15,000
Other 96,000 89,000
------------ ------------
Net cash provided by (used in) investing
activities 14,000 (478,000)
------------ ------------
Financing activities:
Payments on line of credit and term notes (4,000) (167,000)
Proceeds from short term notes 50,000 -
Purchase of treasury stock - (236,000)
------------ ------------
Net cash provided by (used in)
financing activities 46,000 (403,000)
------------ ------------
Net decrease in cash and cash equivalents (468,000) (1,020,000)
Cash and cash equivalents at beginning of period 767,000 5,190,000
------------ ------------
Cash and cash equivalents at end of period $ 299,000 $ 4,170,000
============ ============
Continued
THE BEARD COMPANY AND SUBSIDIARIES
Statements of Cash Flows
(Unaudited)
Reconciliation of Net loss to Net Cash Used in Operating Activities
For the Three Months Ended
--------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Net loss $ (788,000) $ (551,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 26,000 181,000
Gain on sale of assets - (2,000)
Equity in operations of unconsolidated affiliates 149,000 85,000
Net cash used by discontinued operations
offsetting accrued impairment loss (112,000) (171,000)
Minority interest in operations of consolidated
subsidiary (6,000) -
Noncash compensation expense 6,000 -
Other - 3,000
Decrease in accounts receivable, prepaid expenses
and other current assets 172,000 861,000
(Increase) decrease in inventories 3,000 (37,000)
Increase (decrease) in accounts payable, accrued
expenses and other liabilities 22,000 (508,000)
----------- -----------
Net cash used in operating activities $ (528,000) $ (139,000)
=========== ===========
Supplemental Schedule of Noncash Investing and Financing Activities:
Issuance of subsidiary common stock in exchange
for ownership in applied-for patents $ 10,000 $ -
=========== ===========
Exchange of coal extraction and beneficiation
equipment for release of debt obligation $ - $23,053,000
=========== ===========
See accompanying notes to financial statements.
THE BEARD COMPANY AND SUBSIDIARIES
Notes to Financial Statements
March 31, 2000 and 1999
(Unaudited)
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements and notes thereto have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain
disclosures normally prepared in accordance with generally
accepted accounting principles have been omitted. The
accompanying financial statements and notes thereto should be
read in conjunction with the audited consolidated financial
statements and notes thereto included in The Beard Company's
1999 annual report on Form 10-K.
The accompanying financial statements include the accounts of
The Beard Company and its wholly and majority-owned
subsidiaries in which The Beard Company has a controlling
financial interest ("Beard or the Company"). Subdidiaries and
investees in which Beard does not exercise control are
accounted for using the equity method. All significant
intercompany transactions have been eliminated in the
accompanying financial statements.
The financial information included herein is unaudited;
however, such information reflects solely normal recurring
adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods
presented.
The results of operations for the three-month period ended
March 31, 2000, are not necessarily indicative of the results
to be expected for the full year.
The Company's current significant operations are within the
following segments: (1) the Coal Reclamation ("Coal")
Segment, (2) the Carbon Dioxide ("CO2") Segment, (3) the China
("China") Segment, (4) the Environmental Remediation ("ER")
Segment, (5) the Natural Gas Well Servicing ("WS") Segment,
and (6) the e-Commerce ("e-Commerce") Segment.
The Coal Segment is in the business of operating coal fines
reclamation and/or briquetting facilities in the U.S. and is
pursuing the development of advanced fine coal preparation
processes. The China Segment is pursuing (i) the sale of coal
equipment, (ii) environmental opportunities, (iii) the sale of
technical services, and (iv) the operation of coal fines
reclamation facilities in China. The CO2 Segment consists of
the production of CO2 gas. The ER Segment consists of
services to remediate creosote and polycyclic aromatic
hydrocarbon contamination. The WS Segment is conducted by two
companies operating in northeastern Mexico and consists of (i)
a 50%-owned company (accounted for as an equity investment)
involved in natural gas well testing operations, and (ii) a
wholly-owned company that has designed a sand separator for
use on natural gas wells and has had five of them custom
fabricated for use on a trial basis. The e-Commerce Segment
consists of a 78%-owned subsidiary in the process of
developing and executing an Internet payment system.
As discussed in note 4, in April 1999, the Company's Board of
Directors adopted a formal plan to discontinue its interstate
travel facilities business (the "ITF" Segment). As discussed
in note 4, in December 1999 the Management Committee of NABR
adopted a plan to discontinue its brine extraction/iodine
manufacturing business which comprised the Company's ("BE/IM")
Segment.
(2) Liquidity and Ability to Fund Operations
In January 1999, the Company's primary source of revenues and
cash flows was eliminated by the termination of the Operating
Agreements with MCNIC (see note 3). As a result of the
termination of the plant operating agreements, the requirement
to fund operating losses, and the decision to pursue other
investment opportunities, including the repurchase of Company
common stock, the Company's working capital and cash and cash
equivalents decreased significantly at March 31, 2000 compared
to March 31, 1999. To mitigate potential liquidity problems,
the Company obtained stand-by financing of $1.3 million in
April 2000, $1 million of which was from an affiliate of the
Company's chairman. The Company also expects to generate cash
from the disposition of assets of discontinued operations.
The Company is focusing on replacing its Coal Segment's
revenues. In November 1999 the Company signed letters of
intent with a large coal company and a Section 29 operator
which call for the Company to build and operate two fine coal
preparation plants to recover clean coal from two ponds to
provide the feed stock for two briquetting plants (the "LOI
Projects"). The Company is still attempting to finalize the
definitive agreements for these projects. However, some
recent developments concerning the availability of qualified
Section 29 briquetters could have a substantial economic
effect on the projects as contemplated in the original letters
of intent, and the Section 29 operator involved in the
arrangement is currently attempting to renegotiate certain of
the terms. As a result, there is no assurance that the LOI
Projects will be finalized. There is also the possibility
that the Company will proceed on these projects without the
Section 29 operator and produce washed coal fines if a
satisfactory market can be found.
The Company's project financing plans for the Coal Segment are
on hold until the status of the LOI Projects has been
determined. Meanwhile, the Company's new $300,000 bank line
of credit together with the $1 million line of credit provided
by a related party are expected to be sufficient to meet the
Company's working capital requirements through 2000.
(3) Termination of MCNIC Agreements
In June of 1998 the Company, through its wholly-owned
subsidiary, Beard Technologies, Inc. ("BTI"), entered into
agreements with affiliates of MCNIC Pipeline & Processing
Company ("MCNIC") pursuant to which BTI acquired coal fines
extraction and beneficiation equipment located at six coal
slurry impoundment sites for $24,000,000. BTI financed the
purchase with a $24,000,000 loan from MCNIC. BTI operated and
maintained such equipment and six briquetting plants for
affiliates of MCNIC under a cost-plus arrangement pursuant to
which it received a minimum profit of $100,000 per month.
Effective January 31, 1999, MCNIC terminated the operating
agreements and assumed ownership of the equipment, relieving
BTI of its debt obligation to MCNIC.
(4) Discontinued Operations
BE/IM Segment
In December 1999, the Management Committee of North American
Brine Resources ("NABR") adopted a formal plan to discontinue
the business and dispose of its assets. Beard has a 40%
ownership in NABR, which is accounted for under the equity
method. As a result of NABR's planned discontinuation,
Beard's share of NABR's operating results have been reported
as discontinued for all periods presented in the accompanying
statements of operations. Beard's share of NABR's operating
results was a $40,000 loss for the three months ended March
31, 1999. As of March 31, 2000, Beard's investment in NABR
was $225,000.
In December 1999, Beard recorded a $540,000 loss, which
represents its share of NABR's $1,350,000 estimated loss
expected from the discontinuation of operations. $778,000 of
NABR's loss represents the difference in the estimated amounts
expected to be received from the assets' disposition and the
assets' recorded values as of December 31, 1999. $572,000 of
NABR's loss represents anticipated operating losses through
April 2000 (the date operations ceased) and costs of ceasing
operations. NABR's actual loss for the three months ended
March 31, 2000 was $56,000 which was charged against the loss
accrual recorded in 1999.
The Management Committee of NABR is actively pursuing
opportunities to sell its assets and expects the disposition
to be completed by December 31, 2000.
ITF Segment
On April 9, 1999, the Company's Board of Directors adopted a
formal plan to discontinue its interstate travel facilities
("ITF") Segment and recorded a $1,603,000 estimated loss for
the discontinuance in 1998. In April 1999, Beard entered into
an agreement with ITF and its minority shareholders which
failed to close. In September 1999 Beard, ITF and the
minority shareholders entered into new agreements which were
completed on November 18, 1999. As a result of the
transaction, ITF disposed of a majority of its assets, and was
relieved of its outstanding debt of $2,149,000 and accounts
payable of $126,000, retained two convenience stores ("C-
stores"), including their equipment and inventory, and Beard
became 100% owner of ITF.
In the fourth quarter of 1999, Beard recorded an additional
$214,000 loss related to the discontinued ITF Segment.
$180,000 of the loss represented additional expected operating
losses of ITF through the disposal date of the remaining
assets; and $34,000 of the loss represented a further
reduction in the estimated realizable value of the remaining C-
stores as of December 31, 1999. ITF's revenues and actual
operating losses were $538,000 and $112,000, respectively, for
the three months ended March 31, 2000. The actual losses for
the three months ended March 31, 2000 were charged against the
loss accrual recorded in the fourth quarter of 1999.
As of March 31, 2000, the significant assets related to the
ITF Segment consist of cash, inventory and the two remaining C-
stores with a total recorded value of $844,000. The
significant liabilities of the segment consist of trade
accounts payable and accrued expenses totaling $119,000.
Beard is actively seeking opportunities to sell the remaining
C-stores and expects the C-stores to be sold by year-end 2000.
(5) Redeemable Preferred Stock
The Company's preferred stock is mandatorily redeemable
through December 31, 2002, from one-third of Beard's
"consolidated net income" as defined. Accordingly, one-third
of future "consolidated net income" will accrete directly to
preferred stockholders and reduce earnings per common share.
The Company's 2000 operations through March 31 were not
sufficient to begin the sharing of the consolidated net
income. To the extent that the preferred stock is not
redeemed by December 31, 2002, the shares of preferred stock
can be converted into shares of the Company's common stock.
(6) Loss Per Share
Basic loss per share data is computed by dividing loss
attributable to common shareholders by the weighted average
number of common shares outstanding for the period.
Diluted loss per share in the statements of operations exclude
potential common shares issuable upon conversion of redeemable
preferred stock or exercise of stock options as a result of
losses from continuing operations for all periods presented.
(7) Income Taxes
In accordance with the provisions of the Statement of
Financial Accounting Standard No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"), the Company's net deferred tax asset
is being carried at zero book value, which reflects the
uncertainties of the Company's utilization of the future net
deductible amounts. The $6,000 provision for income taxes for
the three months ended March 31, 2000 relates to federal
alternative minimum taxes. There was no provision for taxes
for the three months ended March 31, 1999.
At March 31, 2000, the Company estimates that it had the
following income tax carryforwards available for both income
tax and financial reporting purposes (in thousands):
Expiration
Date Amount
---------- ------
Federal regular tax operating 2004-2009 $52,068
loss carryforwards
Investment tax credit carryforward 2000 $ 104
Tax depletion carryforward Indefinite $ 5,500
(8) Commitments and Contingencies
In the normal course of business various actions and claims
have been brought or asserted against the Company. Management
does not consider them to be material to the Company's
financial position, liquidity or results of operations.
The Company is a guarantor of a 9.5%, $600,000 promissory note
to a bank. The note is an obligation of ITS-Testco, the
Company's 50%-owned equity investment engaged in well testing
operations in northeastern Mexico. The note becomes due in
June 2000 and is separately guaranteed in full by the other
50% corporate owner of the joint venture and the owners of
that company, as individuals.
(9) Business Segment Information
The Company manages its business by products and services and
by geographic location (by country). The Company evaluates
its operating segments' performance based on earnings or loss
from operations before income taxes. The Company had five
reportable segments in the first quarter of 2000 and 1999:
Coal, China, Carbon Dioxide, Natural Gas Well Servicing, and
Environmental Remediation.
The Coal Segment is in the business of operating coal fines
reclamation and/or briquetting facilities in the U.S. and is
pursuing the development of advanced fine coal preparation
processes. The China Segment is pursuing (i) the sale of coal
equipment, (ii) environmental opportunities, (iii) the sale of
technical services, and (iv) the operation of coal fines
reclamation facilities in China. The Carbon Dioxide Segment
consists of the production of CO2 gas. The Natural Gas Well
Servicing Segment is conducted by two companies operating in
northeastern Mexico and consists of (i) a 50%-owned company
(accounted for as an equity investment) involved in natural
gas well testing operations and (ii) a wholly-owned company
that has designed a sand separator for use on natural gas
wells and has had five custom fabricated for use on a trial
basis. The Environmental Remediation Segment consists of
services to remediate creosote and polycyclic aromatic
hydrocarbon contamination.
The following is certain financial information regarding the
Company's reportable segments (presented in thousands of
dollars). The information contained in "Other" relates to the
Company's e-Commerce Segment and consists of start-up costs.
General corporate assets and expenses are not allocated to any
of the Company's operating segments; therefore, they are
included as a reconciling item to consolidated total assets
and loss from continuing operations before income taxes
reported in the Company's accompanying financial statements.
Natural
Environ- Gas
Carbon mental Well
Coal China Dioxide Remediation Servicing Other Totals
---- ----- ------- ----------- --------- ----- ------
Three months ended
- ------------------
March 31, 2000
- --------------
Revenues from
external customers $ 12 $ - $ 99 $ - $ 235 $ - $ 346
Segment profit (loss) (216) (109) 70 (66) (518) (75) (914)
Segment assets 1,395 - 462 9 2,453 23 4,342
Three months ended
- ------------------
March 31, 1999
- --------------
Revenues from
external customers $ 684 $ - $119 $ - $ 87 $ - $ 890
Segment profit (loss) (124) (83) 84 (84) (229) (18) (454)
Segment assets 1,500 - 531 53 1,015 - 3,099
Reconciliation of total reportable segment loss to
consolidated loss from continuing operations before income
taxes is as follows for the three months ended March 31, 2000
and 1999 (in thousands):
2000 1999
---- ----
Total loss for reportable segments $(914) $(454)
Eliminate loss from Natural Gas Well
Servicing operations accounted for as an
equity investment 490 229
Equity in loss from Natural Gas Well
Servicing operations accounted for
as an equity investment (245) (114)
Net corporate costs not allocated to
segments (119) (212)
----- -----
Total consolidated loss for
continuing operations $(788) $(551)
===== =====
THE BEARD COMPANY AND SUBSIDIARIES
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS REPORT INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL
FACTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS REPORT,
INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S
FUTURE FINANCIAL POSITION, BUSINESS STRATEGY, BUDGETS, PROJECTED
COSTS AND PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE
OPERATIONS, ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, FORWARD-
LOOKING STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT,"
"INTEND," "PROJECT," "ESTIMATE," "ANTICIPATE," "BELIEVE," OR
"CONTINUE" OR THE NEGATIVE THEREOF OR VARIATIONS THEREON OR
SIMILAR TERMINOLOGY. ALTHOUGH THE COMPANY BELIEVES THAT THE
EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL
PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S
EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED UNDER "ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT. ALL
SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO THE COMPANY, OR PERSONS ACTING ON ITS BEHALF, ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY
STATEMENTS. THE COMPANY ASSUMES NO DUTY TO UPDATE OR REVISE ITS
FORWARD-LOOKING STATEMENTS BASED ON CHANGES IN INTERNAL ESTIMATES
OR EXPECTATIONS OR OTHERWISE.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion focuses on material changes in the
Company's financial condition since December 31, 1999 and results
of operations for the quarter ended March 31, 2000 compared to
the prior year first quarter. Such discussion should be read in
conjunction with the Company's financial statements including the
related footnotes.
In preparing the discussion and analysis, the Company has
presumed readers have read or have access to the discussion and
analysis of the prior year's results of operations, liquidity and
capital resources as contained in the Company's 1999 Form 10-K.
The Company's current significant operations are within the
following segments: (1) the coal reclamation ("Coal") Segment,
which is in the business of operating coal fines reclamation
and/or briquetting facilities in the U.S. and is pursuing the
development of advanced fine coal preparation processes; (2) the
carbon dioxide ("CO2") Segment, comprised of the production of
CO2 gas; (3) the natural gas well servicing ("WS") Segment,
conducted by two companies operating in northeastern Mexico,
comprised of: (i) a 50%-owned company (accounted for as an
equity investment) involved in natural gas well testing
operations, and (ii) a 100%-owned company that has designed a
sand separator for use on gas wells; (4) the environmental
remediation ("ER") Segment, consisting of the remediation of
polycyclic aromatic hydrocarbon ("PAH") contamination; (5) the
China ("China") Segment, which is pursuing (i) the sale of coal
equipment, (ii) environmental opportunities, (iii) the sale of
technical services, and (iv) the operation of coal fines
reclamation facilities in China; and (6) the e-Commerce ("e-
Commerce") Segment, consisting of the development and
implementation of systems and technologies related to Internet
commerce.
In April 1999 the Company adopted a plan to discontinue its
"ITF" Segment, and those operations were reflected as
discontinued operations in 1998. The majority of the assets of
the ITF Segment were disposed of in November 1999 and the Company
is pursuing the sale of the remaining assets. In December 1999
the Company adopted a plan to discontinue its "BE/IM" Segment,
and those operations were reflected as discontinued operations in
1999. The Company is now in the process of liquidating those
assets.
Material changes in financial condition - March 31, 2000 as
compared with December 31, 1999.
The following table reflects changes in the Company's
financial condition during the periods indicated:
March 31, December 31, Increase
2000 1999 (Decrease)
--------- ------------ ----------
Cash and cash equivalents $ 299,000 $ 767,000 $ (468,000)
Working capital $ (285,000) $ 572,000 $ (857,000)
Current ratio .75 to 1 1.46 to 1
During the first quarter of 2000, the Company reduced its
working capital by $857,000 from $572,000 as of December 31,
1999. $95,000 of the decrease was attributable to purchases of
equipment by the Coal Segment. $42,000 of working capital was
used to pay for equipment utilized by the Company's subsidiary
which rents sand separators in northeastern Mexico. There were
net advances of $125,000 to the Company's joint venture involved
in natural gas well testing in northeastern Mexico. $66,000,
$109,000 and $75,000, respectively, were used to fund the startup
activities of the E/R, China and e-Commerce Segments. The
remainder of the working capital was utilized to fund other
operations.
Termination of the agreements to operate the MCNIC coal
fines projects effective January 31, 1999 (see Note 3 to the
accompanying financial statements) had a material detrimental
effect upon the Company's profitability during the first quarter
of 1999 as well as the subsequent periods. In November 1999 the
Company signed letters of intent with a large coal company and a
Section 29 operator which call for us to build and operate two
fine coal preparation plants to recover clean coal from two ponds
to provide the feed stock for two briquetting plants (the "LOI
Projects"). We are still attempting to finalize the definitive
agreements for these projects. However, some recent developments
concerning the availability of qualified Section 29 briquetters
could have a substantial economic effect on the projects as
contemplated in the original letters of intent, and the Section
29 operator involved in the arrangement is currently attempting
to renegotiate certain of the terms. As a result, there is no
assurance that the LOI Projects will be finalized. There is also
the possibility that we will proceed on these projects without
the Section 29 operator and produce coal fines that will be sold
in the spot market or some other mutually agreeable basis.
The Coal Segment is also working on several other projects
which have the potential for good prospective return on
investment. On one of these projects we are discussing the
possibility of forming a joint venture or entering into a leasing
arrangement on some mutually beneficial basis with a company that
has a beneficiation plant and an available pond.
The Company's project financing plans for the Coal Segment are
on hold until the status of the LOI Projects has been determined.
Meanwhile, the Company's new $300,000 bank line of credit
together with the $1 million line of credit provided by a related
party are expected to be sufficient to meet the Company's working
capital requirements through 2000. In addition, the Company is
attempting to dispose of the remaining assets of the discontinued
ITF Segment while at the same time liquidating the assets of the
discontinued BE/IM Segment. The discontinuance of the ITF and
BE/IM Segments will benefit liquidity by generating cash from the
liquidation of the assets of the two segments and by eliminating
the funding of losses generated by the operations of the ITF
Segment. We will also be selling certain other assets to
generate cash if necessary.
The Company's future cash flows and availability of credit are
subject to a number of variables, including demand for the
Company's coal reclamation services and technology, continuing
demand for CO2 gas and the services provided by the Company's WS
Segment, private and governmental demand for environmental
remediation services, demand for the services and technology
being offered in China, and the degree to which the Company is
successful in bringing its Internet technology to a favorable
conclusion. The Company anticipates that its current resources
and available credit lines are sufficient to enable it to fund
its operations through 2000.
Through the period ending December 31, 2002, the Company's
liquidity will be reduced to the extent it is required to redeem
any of the Beard preferred stock pursuant to the mandatory
redemption provisions. See Note 5 to the accompanying financial
statements.
Material changes in results of operations - Quarter ended March
31, 2000 as compared with the Quarter ended March 31, 1999.
The loss for the first quarter of 2000 was $788,000 compared
to $551,000 for the 1999 first quarter. The operating loss in
the Coal Segment increased by $242,000. The operating profit in
the CO2 Segment decreased $14,000. The operating loss in the
China Segment increased $26,000 to $109,000 for the first quarter
of 2000 compared to 1999. There was an $11,000 reduction in the
operating losses of the ER Segment for the first quarter of 2000
compared to the first quarter of 1999. The new e-Commerce
Segment incurred operating losses of $75,000 for the first
quarter of 2000 compared to $18,000 in the first quarter of 1999.
The operating loss in Other activities for the first quarter of
2000 decreased $88,000 compared to the same period in 1999. As a
result, the operating loss for the current quarter increased
$268,000 to $671,000 versus $403,000 in the corresponding quarter
of the prior year.
Operating results of the Company's primary operating Segments
are reflected below:
2000 1999
---- ----
Operating profit (loss):
Coal reclamation $(215,000) $ 27,000
Carbon dioxide 70,000 84,000
China (109,000) (83,000)
Environmental remediation (66,000) (77,000)
Natural gas well servicing (28,000) -
e-Commerce (75,000) (18,000)
--------- ---------
Subtotal (423,000) (67,000)
Other (248,000) (336,000)
--------- ---------
$(671,000) $(403,000)
========= =========
The "Other" in the above table reflects primarily general and
corporate activities, as well as other activities of the Company.
Coal reclamation
As discussed in Note 3 to the accompanying financial
statements, since April 1998, the Company had been operating six
coal slurry impoundment sites for a subsidiary of a large
midwestern utility company under a cost-plus arrangement which
guaranteed the Company a minimum profit of $100,000 per month.
The arrangement was terminated on January 31, 1999. The
operating loss of $215,000 for the first quarter of 2000 compared
to a profit of $27,000 for the same period in 1999 reflects the
effects of the termination of this contract.
Carbon dioxide
First quarter 2000 operations reflected an operating profit of
$70,000 compared to $84,000 for the 1999 first quarter. The sole
component of revenues for this segment is the sale of CO2 gas
from the working and overriding royalty interests of the
Company's two carbon dioxide producing units in Colorado and New
Mexico. Operating revenues in this segment decreased $20,000 or
17% to $99,000 for the first three months of 2000 compared to
$119,000 for the same period in 1999. CO2 gas is often used as
an injectant in secondary and tertiary recovery processes in the
oil and gas industry. The decline in oil prices in late 1998-
early 1999 caused a sharp decline in the demand for CO2 gas.
Demand began increasing in late 1999 as oil prices improved, but
has not totally recovered to the preceding year's level. As a
result, the Company's share of production from the above
interests declined to 365,000 MCF for the first quarter of 2000
compared to 425,000 MCF for the same period in 1999.
Environmental remediation
The subsidiary in this segment utilizes a chemical for which
it is the sole U.S. licensee of a process for the remediation of
creosote and PAH contamination. This remains a startup operation
which generated no revenues in either the first quarter of 2000
or 1999. The segment produced an operating loss of $66,000 in
2000 versus $77,000 in 1999, reflecting a decrease in operating
expenses due to a reduced level of corporate staffing during the
first quarter of 2000 compared to the same period in 1999.
Natural gas well servicing
The operations of both of the companies comprising the WS
Segment, which conduct natural gas well servicing operations in
northeastern Mexico, were suspended in late January after
contracts with Petroleos Mexicanos ("Pemex") were allowed to
expire by Pemex rather than being "rolled over" as has been the
practice in the past. The two companies are bidding on new
contracts which are expected to be let in late May and June.
The sand separator company, formed late in the third quarter of
1999, incurred an operating loss of $28,000 for the first quarter
of 2000. The Company's share of the loss for its 50%-owned
natural gas well testing investee was $246,000 for the first
three months of 2000 versus a loss of $114,000 for the same
period in 1999, with the suspension of operations accounting for
the increase.
e-Commerce
The Company's startup company involved in the development of a
secure Internet purchasing system incurred an operating loss of
$75,000 for the first quarter of 2000 versus an operating loss of
$18,000 in the prior year quarter. Segment personnel are
pursuing funding for the programming and testing of the software,
the purchase of necessary hardware, the hiring of the necessary
staff and are also pursuing strategic alliances to facilitate the
launching of the technology.
Other activities
Other operations, consisting primarily of general and
corporate activities, generated a $88,000 smaller operating loss
for the first quarter of 2000 as compared to the same period last
year primarily as the result of the allocation of related
expenses to the Company's new e-Commerce subsidiary.
Selling, general and administrative expenses
The Company's selling, general and administrative expenses
("SG&A") in the current quarter increased to $455,000 from
$446,000 in the 1999 first quarter. The primary reasons for this
were a $55,000 decrease in SG&A expenses incurred by the Coal
Segment as the segment was downsized while its personnel sought
new opportunities for its technology during the first three
months of 2000 compared to the same period in 1999 and a $58,000
decrease in SG&A expenses for Other operations - principally
corporate for the same period. The China Segment incurred an
additional $25,000 in SG&A expenses as the personnel involved
expanded the scope of services offered to the various markets in
China. The new e-Commerce Segment incurred $75,000 in SG&A for
the first quarter of 2000 compared to $18,000 for the same period
in 1999. The WS Segment incurred an additional $25,000 in SG&A
expenses for the first quarter of 2000 compared to the same
period in 1999 as the segment expanded its market in the fourth
quarter of 1999 to include the rental of the sand separators.
Depreciation, depletion and amortization expenses
DD&A expense decreased $155,000 from $181,000 to $26,000 from
the first quarter of 1999 to the same period in 2000. $150,000
of the decrease relates to depreciation on the coal fines
extraction and beneficiation equipment in the Coal Segment for
the month of January, 1999. On March 19, 1999, effective January
31, 1999, the Company assigned all its interest in the company
owning the equipment to the noteholder in exchange for a release
on the debt for which the property was security.
Other income and expenses
The other income and expenses for the first quarter of 2000
netted to a $111,000 loss compared to a $108,000 loss for the
same period in 1999. Interest income was down $26,000 for the
first quarter of 2000 compared to the same period in 1999
reflecting the Company's use of cash and sales of investments.
Interest expense was down $155,000 as a result of the release of
the debt, effective January 31, 1999, incurred to purchase the
coal fines and beneficiation equipment.
The Company's equity in the loss of unconsolidated affiliates
was up $104,000 for the first quarter of 2000 compared to 1999.
The Company recorded a loss of $246,000 for the first three
months of 2000 compared to a loss of $114,000 for the same period
in 1999 on its investment in an entity engaged in natural gas
well testing operations in northeastern Mexico. This entity
generated its initial revenues in the first quarter of 1999 which
were not sufficient to cover the overhead costs of the
operations. The operations of this entity were severely
curtailed in the first quarter of 2000 as Pemex allowed the
contracts for its subcontractors providing services to expire
rather than have them automatically renew. See the discussion
regarding the WS Segment above. The Company's equity in the
earnings of Cibola increased $32,000 from $65,000 for the first
quarter of 1999 to $97,000 for the same period in 2000 reflecting
Cibola's improved operating results.
Income taxes
The Company provided $6,000 in federal alternative minimum tax
in the first quarter of 2000. The Company has not recorded any
financial benefit attributable to its various tax carryforwards
due to uncertainty regarding their utilization and realization.
Discontinued operations
In December 1999, the Management Committee of North American
Brine Resources ("NABR") adopted a formal plan to discontinue the
business and dispose of its assets. Beard has a 40% ownership in
NABR, which is accounted for under the equity method. As a
result of NABR's planned discontinuation, Beard's share of NABR's
operating results have been reported as discontinued for all
periods presented in the accompanying statements of operations.
Beard's share of NABR's operating results was a $40,000 loss for
the three months ended March 31, 1999. As of March 31, 2000,
Beard's investment in NABR was $225,000.
In December 1999, Beard recorded a $540,000 loss, which
represents its share of NABR's $1,350,000 estimated loss expected
from the discontinuation of operations. $778,000 of NABR's loss
represents the difference in the estimated amounts expected to be
received from the assets' disposition and the assets' recorded
values as of December 31, 1999. $572,000 of NABR's loss
represents anticipated operating losses through April 2000 (the
date operations ceased) and costs of ceasing operations. NABR's
actual loss for the three months ended March 31, 2000 was $56,000
which was charged against the loss accrual it recorded in 1999.
See Note 4 to the accompanying financial statements.
Impact of Recently Issued Accounting Standards Not Yet Adopted
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities."
SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It
requires an entity to recognize all derivatives as either assets
or liabilities in the statement of financial position and measure
those instruments at fair value. If certain conditions are met,
a derivative may be specifically designated a hedge. The
accounting for changes in the fair value of a derivative (that
is, gains and losses) depends on the intended use of the
derivative and whether it qualifies as a hedge. A subsequent
pronouncement, SFAS 137, was issued in July, 1999, that delayed
the effective date of SFAS 133 until fiscal years after June 15,
2000. The Company plans to adopt the provisions of SFAS 133 in
the first quarter of the year ending December 31, 2001, and such
adoption is not expected to have a material impact on the
Company's financial position or future results of operations.
In March 2000, the FASB issued Interpretation No. 44,
"Accounting for Certain Transactions Involving Stock Compensation
- - an interpretation of APB Opinion No. 25, Accounting for Stock
Issued to Employees" ("FIN 44"). Among other issues, this
interpretation clarifies the definition of employee for purposes
of applying APB Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"), the criteria for determining whether a plan
qualifies as a noncompensatory plan, the accounting consequence
of various modifications to the terms of previously fixed stock
options or awards, and the accounting for an exchange of stock
compensation awards in a business combination. This
interpretation is effective July 1, 2000, but certain conclusions
in this interpretation cover specific events that occur after
either December 15, 1998, or January 12, 2000. Management
believes that FIN 44 will not have a material effect on the
financial position or results of operations of the Company.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk.
At March 31, 2000, the Company had notes receivable of
$897,000 and long-term debt of $26,000. The notes receivable and
long-term debt have fixed interest rates and therefore, the
Company's interest income and expense and operating results would
not be affected by an increase in market interest rates. At
March 31, 2000, a 10% increase in market interest rates would
have reduced the fair value of the Company's notes receivable by
$5,000 and reduced the fair value of its long-term debt by less
than $1,000.
The Company has no other market risk sensitive instruments.
PART II. OTHER INFORMATION.
Item 2. Changes in Securities.
The Company's preferred stock is mandatorily redeemable through
December 31, 2002 from one-third of Beard's "consolidated net
income" as defined in the Stock Purchase Agreement. Accordingly,
one-third of future "consolidated net income" will accrete
directly to preferred stockholders and reduce earnings per common
share. As a result of these redemption requirements, the payment
of any dividends to the common stockholders in the near future is
very unlikely. See Note 5 to the accompanying financial statements.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are filed with this Form 10-Q and are
identified by the numbers indicated:
2 Plan of acquisition, reorganization, arrangement,
liquidation or succession:
2(a) Agreement and Plan of Reorganization by and among
Registrant, Beard Oil Company ("Beard Oil") and New Beard,
Inc., dated as of July 12, 1993 (see Addendum A to Part I,
which is incorporated herein by reference; schedules to the
Agreement have been omitted). (This Exhibit has been
previously filed as Exhibit 3(b), filed on July 27, 1993 to
Registrant's Registration Statement on Form S-4, File No.
33-66598, and same is incorporated by reference).
2(b) Agreement and Plan of Merger by and between The Beard
Company and The New Beard Company, dated as of September
16, 1997. (This Exhibit has been previously filed as
Exhibit B to Registrant's Proxy Statement filed on
September 12, 1997, and same is incorporated by reference).
2(c) Certificate of Merger merging The Beard Company into The
New Beard Company as filed with the Secretary of State of
Oklahoma on November 26, 1997. (This Exhibit has been
previously filed as Exhibit 2.1 to Registrant's Form 8-K,
filed on December 8, 1997, and same is incorporated by
reference).
3(i) Certificate of Incorporation of The New Beard Company as
filed with the Secretary of State of Oklahoma on September
11, 1997. (This Exhibit has been previously filed as
Exhibit C to Registrant's Proxy Statement filed on
September 12, 1997, and same is incorporated by reference).
3(ii) Registrant's By-Laws as currently in effect. (This Exhibit
has been previously filed as Exhibit 3(ii) to Registrant's
Form 10-K for the period ended December 31, 1997, filed on
March 31, 1998, and same is incorporated herein by
reference).
4 Instruments defining the rights of security holders:
4(a) Certificate of Designations, Powers, Preferences and
Relative, Participating, Option and Other Special Rights,
and the Qualifications, Limitations or Restrictions Thereof
of the Series A Convertible Voting Preferred Stock of the
Registrant. (This Exhibit has been previously filed as
Exhibit 3(c) to Amendment No. 2, filed on September 17,
1993 to Registrant's Registration Statement on Form S-4,
File No. 33-66598, and same is incorporated by reference).
4(b) Settlement Agreement, with Certificate of Amendment
attached thereto, by and among Registrant, Beard Oil, New
York Life Insurance Company, New York Life Insurance and
Annuity Company, John Hancock Mutual Life Insurance
Company, Memorial Drive Trust and Sensor, dated as of April
13, 1995. (This Exhibit has been previously filed as
Exhibit 4(g) to Registrant's Form 10-K for the period ended
December 31, 1994 and same is incorporated by reference).
10 Material contracts:
10(a) Amendment No. One to The Beard Company 1993 Stock Option
Plan dated August 27, 1993, as amended June 4, 1998. (The
Amended Plan supersedes the original Plan adopted on August
27, 1993. This Exhibit has previously been filed as
Exhibit A, filed on April 30, 1998 to Registrant's Proxy
Statement dated April 30, 1998, and same is incorporated by
reference).*
10(b) The Beard Company 1994 Phantom Stock Units Plan as amended
effective October 23, 1997. (This Exhibit has been
previously filed as Exhibit 10(b) to Registrant's Form 10-K
for the period ended December 31, 1999, filed on April 14,
2000, and same is incorporated by reference).*
10(c) Amendment No. One to The Beard Company Deferred Stock
Compensation Plan dated November 1, 1995, as amended July
21, 1999. (The Amended Plan supersedes the original Plan
adopted on June 3, 1996. This Exhibit has previously been
filed as Exhibit A, filed on May 11, 1999 to Registrant's
Proxy Statement dated May 11, 1999, and same is
incorporated by reference).*
10(d) Form of Change in Control Compensation Agreement dated as
of January 24, 1997, by and between Carbonics and three
employees. (This Exhibit has been previously filed as
Exhibit 10(l) to Registrant's Form 10-Q for the period
ended March 31, 1997, filed on May 14, 1997, and same is
incorporated by reference).*
10(e) Amended and Restated Nonqualified Stock Option Agreement by
and between Richard D. Neely and ISITOP, Inc. ("ISITOP"),
dated November 12, 1998. (This Exhibit has been
previously filed as Exhibit 10(g) to Registrant's Form 10-K
for the period ended December 31, 1998, filed on April 15,
1999, and same is incorporated by reference).*
10(f) Amended and Restated Nonqualified Stock Option Agreement by
and between Jerry S. Neely and ISITOP, dated November 12,
1998. (This Exhibit has been previously filed as Exhibit
10(h) to Registrant's Form 10-K for the period ended
December 31, 1998, filed on April 15, 1999, and same is
incorporated by reference).*
10(g) Nonqualified Stock Option Agreement by and between Robert
A. McDonald and ISITOP, dated November 12, 1998. (This
Exhibit has been previously filed as Exhibit 10(i) to
Registrant's Form 10-K for the period ended December 31,
1998, filed on April 15, 1999, and same is incorporated by
reference).*
10(h) Incentive Stock Option Agreement by and between Philip R.
Jamison and Beard Technologies, Inc. ("BTI"), dated May 18,
1998. (This Exhibit has been previously filed as Exhibit
10(k) to Registrant's Form 10-K for the period ended
December 31, 1998, filed on April 15, 1999, and same is
incorporated by reference).*
10(i) Subscription Agreement by and between Cibola Corporation
("Cibola") and Registrant, dated April 10, 1996. (This
Exhibit has been previously filed as Exhibit 10.1 to
Registrant's Form 10-Q for the period ended June 30, 1996,
filed on August 14, 1996, and same is incorporated by
reference).
10(j) Nonrecourse Secured Promissory Note from Registrant to
Cibola, dated April 10, 1966. (This Exhibit has been
previously filed as Exhibit 10.2 to Registrant's Form 10-Q
for the period ended June 30, 1996, filed on August 14,
1996, and same is incorporated by reference).
10(k) Security Agreement by and among Registrant, Cibola and the
Cibola shareholders, dated April 10, 1996. (This Exhibit
has been previously filed as Exhibit 10.3 to Registrant's
Form 10-Q for the period ended June 30, 1996, filed on
August 14, 1996, and same is incorporated by reference).
10(l) Tax Sharing Agreement by and among Registrant, Cibola and
the Cibola shareholders, dated April 10, 1996. (This
Exhibit has been previously filed as Exhibit 10.4 to
Registrant's Form 10-Q for the period ended June 30, 1996,
filed on August 14, 1996, and same is incorporated by
reference).
10(m) Guaranty Agreement between Registrant and Oklahoma Bank and
Trust Company, dated as of June 7, 1999. (This Exhibit has
been previously filed as Exhibit 10(bb) to Registrant's
Form 10-Q for the period ended June 30, 1999, filed on
August 20, 1999, and same is incorporated herein by
reference).
10(n) Letter Loan Agreement by and between Registrant and The
William M. Beard and Lu Beard 1988 Charitable Unitrust (the
"Unitrust") dated April 3, 2000. (This Exhibit has been
previously filed as Exhibit 10(cc) to Registrant's Form 10-
K for the period ended December 31, 1999, filed on April
14, 2000, and same is incorporated by reference).
10(o) Promissory Note from Registrant to the Trustees of the
Unitrust dated April 3, 2000. (This Exhibit has been
previously filed as Exhibit 10(dd) to Registrant's Form 10-
K for the period ended December 31, 1999, filed on April
14, 2000, and same is incorporated by reference).
27 Financial Data Schedule
- ----------------
*Compensatory plan or arrangement.
The Company will furnish to any shareholder a copy of any of the
above exhibits upon the payment of $.25 per page. Any request
should be sent to The Beard Company, Enterprise Plaza, Suite 320,
5600 North May Avenue, Oklahoma City, Oklahoma 73112.
(b) No reports on Form 8-K were filed during the period covered
by this report.
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.
(Registrant) THE BEARD COMPANY
(Date) May 22, 2000 HERB MEE, JR.
Herb Mee, Jr., President and
Chief Financial Officer
(Date) May 22, 2000 JACK A. MARTINE
Jack A. Martine, Controller and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit
No. Description Method of Filing
- --- ----------- ----------------
2(a) Agreement and Plan of Reorganization Incorporated herein by reference
by and among Registrant, Beard Oil
Company ("Beard Oil") and New Beard,
Inc., dated as of July 12, 1993
(see Addendum A to Part I, which is
incorporated herein by reference;
schedules to the Agreement have
been omitted).
2(b) Agreement and Plan of Merger by and Incorporated herein by reference
between The Beard Company and The
New Beard Company, dated as of
September 16, 1997.
2(c) Certificate of Merger merging The Incorporated herein by reference
Beard Company into The New Beard
Company as filed with the Secretary
of State of Oklahoma on November
26, 1997.
3(i) Certificate of Incorporation of Incorporated herein by reference
The New Beard Company as
filed with the Secretary of State
of Oklahoma on September 11, 1997.
3(ii) Registrant's By-Laws as currently Incorporated herein by reference
in effect.
4(a) Certificate of Designations, Powers, Incorporated herein by reference
Preferences and Relative, Partici-
pating, Option and Other Special
Rights, and the Qualifications,
Limitations or Restrictions Thereof
of the Series A Convertible Voting
Preferred Stock of the Registrant.
4(b) Settlement Agreement, with Certifi- Incorporated herein by reference
cate of Amendment attached thereto,
by and among Registrant, Beard Oil,
New York Life Insurance Company,
New York Life Insurance and
Annuity Company, John Hancock Mutual
Life Insurance Company, Memorial
Drive Trust and Sensor, dated as of
April 13, 1995.
10(a) Amendment No. One to The Beard Incorporated herein by reference
Company 1993 Stock Option Plan dated
August 27, 1993, as amended June 4,
1998.
10(b) The Beard Company 1994 Phantom Stock Incorporated herein by reference
Units Plan as amended effective
October 23, 1997.
10(c) Amendment No. One to The Beard Incorporated herein by reference
Company Deferred Stock Compensation
Plan dated November 1, 1995, as
amended July 21, 1999.
10(d) Form of Change in Control Compensa- Incorporated herein by reference
tion Agreement dated as of January
24, 1997, by and between Carbonics
and three employees.
10(e) Amended and Restated Nonqualified Incorporated herein by reference
Stock Option Agreement by and
between Richard D. Neely and ISITOP,
Inc. ("ISITOP"), dated November 12,
1998.
10(f) Amended and Restated Nonqualified Incorporated herein by reference
Stock Option Agreement by and
between Jerry S. Neely and ISITOP,
dated November 12, 1998.
10(g) Nonqualified Stock Option Agreement Incorporated herein by reference
by and between Robert A. McDonald
and ISITOP, dated November 12, 1998.
10(h) Incentive Stock Option Agreement by Incorporated herein by reference
and between Philip R. Jamison and
Beard Technologies, Inc. ("BTI"),
dated May 18, 1998.
10(i) Subscription Agreement by and be- Incorporated herein by reference
tween Cibola Corporation ("Cibola")
and Registrant, dated April 10, 1996.
10(j) Nonrecourse Secured Promissory Note Incorporated herein by reference
from Registrant to Cibola, dated
April 10, 1966.
10(k) Security Agreement by and among Incorporated herein by reference
Registrant, Cibola and the Cibola
shareholders, dated April 10, 1996.
10(l) Tax Sharing Agreement by and among Incorporated herein by reference
Registrant, Cibola and the Cibola
shareholders, dated April 10, 1996.
10(m) Guaranty Agreement between Incorporated herein by reference
Registrant and Oklahoma Bank and
Trust Company, dated as of June 7,
1999.
10(n) Letter Loan Agreement by and between Incorporated herein by reference
Registrant and The William M. Beard
and Lu Beard 1988 Charitable Unitrust
(the "Unitrust") dated April 3, 2000.
10(o) Promissory Note from Registrant to Incorporated herein by reference
the Trustees of the Unitrust dated
April 3, 2000.
27 Financial Data Schedule Filed herewith electronically