ý
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
The Fiscal Year Ended December 31, 2009
OR
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
The Transition Period from ___________ to ________
|
Delaware
(State
or other jurisdiction of incorporation or organization)
|
75-1256622
(I.R.S.
Employer
Identification
No.)
|
7752
FM 418
P.
O. Box 1636
Silsbee,
Texas
(Address
of principal executive offices)
|
77656
(Zip
code)
|
PART
I
|
||
ITEM
1. BUSINESS
|
||
General
|
1
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|
United
States Operations
|
1
|
|
European
Operations
|
1
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Saudi
Arabia Operations
|
1
|
|
Investment
In AMAK
|
2
|
|
Environmental
|
12
|
|
Personnel
|
13
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|
Competition
|
13
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|
Available
Information
|
13
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|
ITEM
1A. RISK FACTORS
|
13
|
|
ITEM
1B. UNRESOLVED STAFF COMMENTS
|
21
|
|
ITEM
2. PROPERTIES
|
||
United
States Specialty Products Facility
|
22
|
|
United
States Mineral Interests
|
24
|
|
Offices
|
25
|
|
ITEM
3. LEGAL PROCEEDINGS
|
26
|
|
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
26
|
|
PART
II
|
||
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER
MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
|
28
|
|
ITEM
6. SELECTED FINANCIAL DATA
|
28
|
|
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS
OF OPERATION
|
||
Overview
|
29
|
|
Business
Environment & Risk Assessment
|
30
|
|
Liquidity
and Capital Resources
|
31
|
|
Results
of Operations
|
33
|
|
New
Accounting Standards
|
39
|
|
Critical
Accounting Policies
|
41
|
|
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
43
|
|
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
|
44
|
|
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING
AND
FINANCIAL DISCLOSURE
|
44
|
|
ITEM
9A. CONTROLS AND PROCEDURES
|
44
|
|
ITEM
9B. OTHER INFORMATION
|
45
|
|
PART
III
|
||
ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
|
46
|
|
ITEM
11. EXECUTIVE COMPENSATION
|
48
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
57
|
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
|
59
|
|
ITEM
14. PRINCIPAL ACCOUNTING FEES AND
SERVICES
|
60
|
|
PART
IV
|
||
ITEM
15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES
|
62
|
•
|
EPC,
commissioning and handover of the ore-treatment
plant,
|
•
|
EPC,
commissioning and handover of the related infrastructure
facilities,
|
•
|
EPC,
commissioning and handover of the concentrate storage and handling
facilities at the port of Jizan, which is approximately 460km from the
mine.
|
•
|
Primary
crushing,
|
•
|
Ore
storage,
|
•
|
SAG
milling and pebble crushing,
|
•
|
Secondary
ball milling,
|
•
|
Pre-flotation,
|
•
|
Copper
and zinc flotation,
|
•
|
Concentrate
thickening,
|
•
|
Tailings
filtration,
|
•
|
Cyanide
leaching,
|
•
|
Reagent
handling, make-up and distribution,
|
•
|
Tailings-dam
constructions, and
|
•
|
Utilities
and related infrastructure.
|
•
|
Unloading
facilities,
|
•
|
Concentrate
storage, and
|
•
|
Reclamation
and ship-loading facilities.
|
Average
Price
|
Spot
Price as of
|
Percentage
|
||||
For 2007-2009
|
12/31/09
|
Increase
|
||||
Gold
|
$846.00
per ounce
|
$1,087.00
per ounce
|
28.49 | % | ||
Silver
|
$
14.34 per ounce
|
$
16.90 per ounce
|
17.85 | % | ||
Copper
|
$ 2.91
per pound
|
$ 3.33 per
pound
|
14.43 | % | ||
Zinc
|
$ 1.02
per pound
|
$ 1.17 per
pound
|
14.71 | % |
Zone
|
Proven
Reserves
(Tonnes)
(000’s)
|
Copper
(%)
|
Zinc
(%)
|
Gold
(g/t)
|
Silver
(g/t)
|
Saadah
|
448
|
1.5
|
3.7
|
0.8
|
21.0
|
Al
Houra
|
29
|
0.8
|
3.8
|
0.7
|
21.0
|
Moyeath
|
-
|
-
|
-
|
-
|
-
|
Total
|
477
|
1.4
|
3.7
|
.8
|
21.0
|
•
|
Speculation
in the press or investment community about, or actual changes in, our
executive team, strategic position, business, organizational structure,
operations, financial condition, financial reporting and results,
effectiveness of cost cutting efforts, prospects or extraordinary
transactions;
|
•
|
Announcements
of new products, services, technological innovations or acquisitions by
the Company or competitors; and
|
•
|
Quarterly
increases or decreases in revenue, gross margin or earnings, changes in
estimates by the investment community or guidance provided by the Company,
and variations between actual and estimated financial
results.
|
•
|
Combining
product offerings and entering into new markets in which we are not
experienced;
|
•
|
Convincing
customers and distributors that the transaction will not diminish client
service standards or business focus, preventing customers and distributors
from deferring purchasing decisions or switching to other suppliers (which
could result in our incurring additional obligations in order to address
customer uncertainty), and coordinating sales, marketing and distribution
efforts;
|
•
|
Minimizing
the diversion of management attention from ongoing business
concerns;
|
•
|
Persuading
employees that business cultures are compatible, maintaining employee
morale and retaining key employees, engaging with employee works councils
representing an acquired company’s non-U.S. employees, integrating
employees into the Company, correctly estimating employee benefit costs
and implementing restructuring
programs;
|
•
|
Coordinating
and combining administrative, manufacturing, and other operations,
subsidiaries, facilities and relationships with third parties in
accordance with local laws and other obligations while maintaining
adequate standards, controls and
procedures;
|
•
|
Achieving
savings from supply chain integration;
and
|
•
|
Managing
integration issues shortly after or pending the completion of other
independent transactions.
|
•
|
Ongoing
instability or changes in a country’s or region’s economic or political
conditions, including inflation, recession, interest rate fluctuations and
actual or anticipated military or political
conflicts;
|
•
|
Longer
accounts receivable cycles and financial instability among
customers;
|
•
|
Trade
regulations and procedures and actions affecting production, pricing and
marketing of products;
|
•
|
Local
labor conditions and
regulations;
|
•
|
Geographically
dispersed workforce;
|
•
|
Changes
in the regulatory or legal
environment;
|
•
|
Differing
technology standards or customer
requirements;
|
•
|
Import,
export or other business licensing requirements or requirements relating
to making foreign direct investments, which could affect our ability to
obtain favorable terms for labor and raw materials or lead to penalties or
restrictions;
|
•
|
Difficulties
associated with repatriating cash generated or held abroad in a
tax-efficient manner and changes in tax laws;
and
|
•
|
Fluctuations
in freight costs and disruptions in the transportation and shipping
infrastructure at important geographic points of exit and entry for our
products and shipments.
|
1.
|
An
expansion of the discussion under “Business” of the Company’s principal
products and services and our principal
competitors,
|
2.
|
An
expansion of the discussion in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of the extent to which
changes in the Company’s petrochemical revenues were caused by changes in
the prices charged or changes in the volumes
sold,
|
3.
|
Expansions
of the Company disclosures regarding executive compensation to (i) expand
the narrative discussion of the Company’s executive compensation tables,
including expanded discussion of the objectives and base year selection
for the Company’s cash bonus plan, (ii) discuss any potential
change-in-control payment plans, and (iii) disclosure the compensation of
the Company’s directors,
|
4.
|
Include
as exhibits in its filings copies of certain organizational documents and
agreements of AMAK,
|
5.
|
Address
the reasons why it was appropriate for the Company to include in the cost
of its investment in AMAK (i) the Company’s $2.4 million of accumulated
costs relating to the geophysical, geochemical and geologic work and
diamond core drilling performing in the Wadi Qatan and Jebel Harr, and
(ii) $3.7 million of costs the Company incurred in connection with the
organization of AMAK, and (iii) disclose how the Company determined that
the initial investment in AMAK was recorded at the lower of the cost or
market value of the assets transferred,
and
|
6.
|
Address
why the Company used the equity method to account for its investment in
AMAK through August 2009, why it was appropriate to change to the cost
method of
|
Name
|
Age
as of
December 31, 2009
|
Title (Held Office
Since)
|
Nicholas
N. Carter
|
62
|
President,
CEO, Chairman of the Board (2009)
|
Mark
A. Williamson
|
54
|
Vice
President – Marketing TOCCO (1996)
|
Connie
Cook
|
46
|
Chief
Accounting Officer (2008)
|
NASDAQ
|
||||||||
High
|
Low
|
|||||||
Fiscal
Year Ended December 31, 2009
|
||||||||
First Quarter ended March 31,
2009
|
$ | 1.99 | $ | 0.60 | ||||
Second Quarter ended June 30,
2009
|
$ | 3.64 | $ | 1.21 | ||||
Third Quarter ended September 30,
2009
|
$ | 3.97 | $ | 2.68 | ||||
Fourth Quarter ended December 31,
2009
|
$ | 3.45 | $ | 2.06 | ||||
Fiscal
Year Ended December 31, 2008
|
||||||||
First Quarter ended March 31,
2008
|
$ | 8.00 | $ | 6.00 | ||||
Second Quarter ended June 30,
2008
|
$ | 7.04 | $ | 4.50 | ||||
Third Quarter ended September 30,
2008
|
$ | 5.76 | $ | 3.20 | ||||
Fourth Quarter ended December 31,
2008
|
$ | 3.95 | $ | 0.41 | ||||
2009
|
2008 | * | 2007 | 2006 | 2005 | |||||||||||||||
Revenues
|
$ | 117,587 | $ | 154,630 | $ | 108,638 | $ | 98,502 | $ | 82,416 | ||||||||||
Net
Income (Loss)
|
$ | 6,627 | $ | (10,731 | ) | $ | 7,771 | $ | 7,875 | $ | 16,636 | |||||||||
Net
Income (Loss) Per Share-Diluted
|
$ | 0.28 | $ | (0. 46 | ) | $ | 0.33 | $ | 0.34 | $ | 0.73 | |||||||||
Total
Assets (at December 31)
|
$ | 90,487 | $ | 96,290 | $ | 84,221 | $ | 71,590 | $ | 66,974 | ||||||||||
Notes
Payable (at December 31)
|
$ | 12 | $ | 12 | $ | 11,012 | $ | 11,013 | $ | 11,026 | ||||||||||
Current
Portion of Long-Term Debt (at December 31)
|
$ | 1,400 | $ | 4,920 | $ | 31 | $ | 489 | $ | 1,426 | ||||||||||
Total
Long-Term Debt Obligations
(at
December 31)
|
$ | 23,439 | $ | 23,557 | $ | 9,078 | $ | 5,108 | $ | 9,839 |
•
|
Complete
the ore-treatment facility and related infrastructure under the NESMA
contract which includes commissioning of the plant for operational
start-up.
|
•
|
Complete
engineering, procurement, construction and commissioning of the
concentrate storage and handling facilities at the port of
Jizan.
|
•
|
Begin
underground mining activities to produce 700,000 tons per
year.
|
•
|
Complete
construction of the tailing-dam.
|
•
|
Negotiate
and enter into contracts for the transportation of copper and zinc
concentrate to the port of Jizan, for the transportation of gold and
silver to Jeddah, and for the transportation of tailings from the
ore-treatment plant to the tailing-dam
area.
|
•
|
Negotiate
and enter into an agreement with an international smelter and gold
refinery.
|
|
Liquidity
and Capital Resources
|
2009
|
2008 | * | 2007 | |||||||||
Net
cash provided by (used in)
|
(in
thousands)
|
|||||||||||
Operating
activities
|
$ | 6,515 | $ | (5,979 | ) | $ | 9,470 | |||||
Investing
activities
|
(3,184 | ) | (15,421 | ) | (11,130 | ) | ||||||
Financing
activities
|
(3,638 | ) | 19,369 | 3,511 | ||||||||
Increase
(decrease) in cash and equivalents
|
$ | (307 | ) | $ | (2,031 | ) | $ | 1,851 | ||||
Cash
and cash equivalents
|
$ | 2,452 | $ | 2,759 | $ | 4,790 |
•
|
Trade
receivables increased approximately $510,000 (due to additional foreign
sales with longer payment terms) as compared to an increase of only
$58,000 in 2008;
|
•
|
Income
tax receivable increased by about $4,297,000 (due to carry-back of the
current year taxable loss) as compared to a decrease of $641,000 in
2008;
|
•
|
Inventory
increased approximately $2,619,000 (due to increased volume and prices) as
compared to a decrease of about $441,000 (due to decreased prices but
increased volumes) in 2008;
|
•
|
Accounts
payable and accrued liabilities decreased approximately $2,146,000 (due to
the payment of derivative related items) while in 2008 the same accounts
increased by about $2,750,000 (due to outstanding derivative related
items);
|
•
|
Derivative
instrument deposits decreased $3,950,000 (due to return of previous margin
call deposits), as compared to an increase of $3,950,000 (due to the
payment of margin calls) in 2008;
|
•
|
Other
liabilities increased $773,000 (due to funds received from outside parties
for capital projects), as compared to no change in
2008;
|
•
|
Accrued
interest increased approximately $1,000 as compared to an increase of
about $62,000 in 2008 (due to increased long-term debt
balances);
|
•
|
Notes
receivable decreased about $582,000 as compared to a decrease of $711,000
in 2008 (due to notes receivable being paid down in
2009);
|
•
|
Prepaid
expenses and other assets decreased approximately $59,000 (due to
expensing of prepaid assets) as compared to an increase of $151,000 (due
to an increase in prepaid catalyst and insurance) in 2008;
and
|
•
|
Accrued
liabilities in Saudi Arabia decreased approximately $958,000 (due to the
payment of amounts owed to the previous President of the Company and
termination of some of the Saudi employees) while in 2008 there was a
increase of about $22,000.
|
2009
|
2008 | * |
Change
|
%Change
|
||||||||||||
(in
thousands)
|
||||||||||||||||
Petrochemical
Product Sales
|
$ | 109,179 | $ | 130,264 | $ | (21,085 | ) | (16.2 | %) | |||||||
Transloading
Sales
|
4,625 | 20,239 | (15,614 | ) | (77.1 | %) | ||||||||||
Processing
|
3,783 | 4,127 | (344 | ) | ( 8.3 | %) | ||||||||||
Gross
Revenue
|
$ | 117,587 | $ | 154,630 | $ | (37,043 | ) | (24.0 | %) | |||||||
Volume
of sales (thousand gallons)
|
49,909 | 46,311 | 3,598 | 7.8 | % | |||||||||||
Cost
of Materials
|
$ | 69,474 | $ | 131,665 | $ | (62,191 | ) | (47.2 | %) | |||||||
Total
Operating Expense
|
26,214 | 27,562 | (1,348 | ) | ( 4.9 | %) | ||||||||||
Natural
Gas Expense
|
4,572 | 7,310 | (2,738 | ) | (37.5 | %) | ||||||||||
General
& Administrative Expense
|
9,145 | 9,034 | 111 | 1.2 | % | |||||||||||
Capital
Expenditures
|
$ | 3,184 | $ | 15,031 | $ | (11,847 | ) | (78.8 | %) |
2008 | * | 2007 |
Change
|
%
Change
|
||||||||||||
(in
thousands)
|
||||||||||||||||
Petrochemical
Product Sales
|
$ | 130,264 | $ | 103,205 | $ | 27,059 | 26.2 | % | ||||||||
Transloading
Sales
|
20,239 | - | 20,239 | 100.0 | % | |||||||||||
Processing
|
4,127 | 5,433 | (1,306 | ) | (24.0 | %) | ||||||||||
Gross
Revenue
|
$ | 154,630 | $ | 108,638 | 45,992 | 42.3 | % | |||||||||
Volume
of sales (thousand gallons)
|
46,311 | 40,144 | 6,167 | 15.4 | % | |||||||||||
Cost
of Materials
|
$ | 131,665 | $ | 66,989 | $ | 64,676 | 96.5 | % | ||||||||
Total
Operating Expense
|
27,562 | 22,696 | 4,866 | 21.4 | % | |||||||||||
Natural
Gas Expense
|
7,310 | 6,109 | 1,201 | 19.7 | % | |||||||||||
General
& Administrative Expense
|
9,034 | $ | 7,619 | 1,415 | 18.6 | % | ||||||||||
Capital
Expenditures
|
$ | 15,031 | $ | 10,799 | $ | 4,232 | 39.2 | % |
2009
|
2008
|
Change
|
%Change
|
|||||||||||||
Petrochemical
Company
|
(in
thousands)
|
|||||||||||||||
General
& Administrative Expense
|
$ | 7,200 | $ | 6,636 | $ | 564 | 8.5 | % |
2008
|
2007
|
Change
|
%
Change
|
|||||||||||||
Petrochemical
Company
|
(in
thousands)
|
|||||||||||||||
General
& Administrative Expense
|
$ | 6,636 | $ | 5,441 | $ | 1,195 | 22.0 | % |
(in
thousands)
|
2009
|
2008
|
Change
|
%
Change
|
||||||||||||
General
corporate expenses
|
$ | 1,945 | $ | 2,398 | $ | (453 | ) | 18.9 | % |
(in
thousands)
|
2008
|
2007
|
Change
|
%
Change
|
||||||||||||
General
corporate expenses
|
$ | 2,398 | $ | 2,178 | $ | 220 | 10.1 | % |
Payments
due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less
than
1 year
|
1-3 years
|
3-5 years
|
More
than 5
years
|
|||||||||||||||
Long-Term
Debt Obligations
|
$ | 24,839,488 | $ | 1,400,000 | $ | 15,289,488 | $ | 2,800,000 | $ | 5,350,000 | ||||||||||
Operating
Leases
|
1,380,122 | 391,248 | 709,326 | 279,548 | - | |||||||||||||||
Total
|
$ | 26,219,610 | $ | 1,791,248 | $ | 15,998,814 | $ | 3,079,548 | $ | 5,350,000 |
Name;
Current Positions Held
|
Age
|
Director
since
|
Term
expires at Annual meeting in
|
Hatem
El
Khalidi
Co-founder
and retired President & CEO of the Company
|
85
|
1968
|
2010
|
Nicholas
N. Carter ……………………………………………….
President,
Chief Executive Officer of the Company since July 2009, President of the
Petrochemical Company since 1987, Member of AMAK Board
|
62
|
2004
|
2011
|
Robert
E. Kennedy ……………………………………………….
Chairman
of the Audit and Compensation Committees; Member of Nominating Committee
and AMAK Board
|
65
|
2007
|
2012
|
Ghazi
Sultan
Chairman
of the Nominating Committee; Member of Compensation and Audit
Committees and AMAK Board
|
73
|
1993
|
2010
|
Allen
P.
McKee
Member
of the Audit, Compensation and Nominating
Committees
and AMAK Board
|
68
|
2009
|
2012
|
Mohammed
Al
Omair
Member
of Audit, Compensation and Nominating
Committees
|
66
|
2007
|
2011
|
Charles
W. Goehringer,
Jr.
General
Counsel
|
51
|
2007
|
2011
|
Name
|
Positions
|
Age
|
Appointed
|
Nicholas
N. Carter
|
President,
Chief Executive Officer and Director/President - TOCCO
|
62
|
2009/1987
|
Mark
Williamson
|
Vice
President of Marketing - TOCCO
|
54
|
1996
|
Connie
Cook
|
Chief
Accounting Officer, Secretary, Treasurer/Secretary, Treasurer -
TOCCO
|
46
|
2008/2004
|
·
|
Managed
successful completion of the derivative situation which occurred in
2008;
|
·
|
Entered
into a compromise agreement with Saudi shareholders settling the capital
structure of AMAK;
|
·
|
Produced
an EBITDA from continuing operations of approximately $15.0 million for
2009 compared to $12.5 million for
2005;
|
·
|
Managed
a 12% increase in total volume sold for 2009 during a global/US recession
period, when most US companies volumes were
down;
|
·
|
Utilized
20% of the new/additional capacity that was added in the fourth quarter of
2008;
|
·
|
Established
an International Sales and Marketing office in Madrid Spain for continued
development of International markets and opportunities, along with
addressing the EU REACH Program;
|
·
|
Added
an additional Account Manager to assume domestic responsibilities vacated
by GM to open International S&M office;
and
|
·
|
Established
a Risk Management Policy and Procedures
Manual.
|
Name
and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Restricted
Stock
Award(s)
($)
|
Option
Award(s)
($)(2)
|
All
Other
Compensation
($) (3)(4)(5)
|
Total
($)
|
||||||||||||||||||
Hatem El Khalidi
President
and Chief
Executive
Officer until June 30, 2009, Director
|
2009
|
$ | 36,000 | $ | 31,500 | -- | $ | 186,288 | $ | 40,000 | $ | 293,788 | |||||||||||||
2008
|
$ | 72,000 | -- | -- | -- | $ | 8,000 | $ | 80,000 | ||||||||||||||||
2007
|
$ | 72,000 | -- | -- | -- | $ | 8,000 | $ | 80,000 | ||||||||||||||||
Nicholas N. Carter
President and
Chief
Executive
Officer since July 1, 2009; previously
Executive
Vice President and Chief Operating Officer
|
2009
|
$ | 234,837 | $ | 42,552 | -- | -- | $ | 14,090 | $ | 291,479 | ||||||||||||||
2008
|
$ | 209,918 | $ | 78,665 | $ | 99,800 | -- | $ | 12,595 | $ | 400,978 | ||||||||||||||
2007
|
$ | 172,059 | $ | 96,506 | $ | 66,000 | -- | $ | 10,324 | $ | 344,889 | ||||||||||||||
Connie J. Cook
Chief
Accounting Officer
|
2009
|
$ | 142,208 | $ | 32,715 | -- | -- | $ | 8,533 | $ | 183,456 | ||||||||||||||
2008
|
$ | 133,009 | $ | 51,143 | $ | 49,900 | -- | $ | 7,981 | $ | 242,033 | ||||||||||||||
2007
|
$ | 108,500 | $ | 70,085 | $ | 33,000 | -- | $ | 6,510 | $ | 218,095 | ||||||||||||||
Mark D. Williamson
Vice
President of Marketing, Petrochemical Company
|
2009
|
$ | 227,500 | $ | 32,652 | -- | -- | $ | 13,650 | $ | 273,802 | ||||||||||||||
2008
|
$ | 240,705 | $ | 51,143 | $ | 49,900 | -- | $ | 14,442 | $ | 356,190 | ||||||||||||||
2007
|
$ | 190,393 | $ | 70,023 | -- | -- | $ | 11,424 | $ | 271,840 |
Name
and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Restricted
Stock
Award(s)
($)
|
Option
Award(s)
($)(2)
|
All
Other
Compensation
($) (3)(4)(5)
|
Total
($)
|
||||||||||||||||||
Gerardo Maldonado,
Account Representative
,
Petrochemical
Company
|
2009
|
$ | 192,543 | $ | 24,437 | -- | -- | $ | 11,553 | $ | 228,533 | ||||||||||||||
2008
|
$ | 134,358 | $ | 14,640 | -- | -- | $ | 10,749 | $ | 159,747 | |||||||||||||||
2007
|
$ | 142,443 | $ | 24,327 | -- | -- | $ | 8,546 | $ | 175,316 | |||||||||||||||
Marvin Kaufman
Manager
of
Manufacturing,
Petrochemical
Company
|
2009
|
$ | 130,532 | $ | 21,910 | -- | -- | $ | 7,832 | $ | 160,274 | ||||||||||||||
2008
|
$ | 122,603 | $ | 13,110 | -- | -- | $ | 7,356 | $ | 143,069 | |||||||||||||||
2007
|
$ | 112,534 | $ | 21,526 | -- | -- | $ | 6,752 | $ | 140,812 |
(1)
|
Includes
$31,500, $0 and $0 in retirement bonus compensation for the fiscal years
ended December 31, 2009, 2008, and 2007, respectively, that was deferred
at the election of Mr. El Khalidi. All present deferred
compensation owing to Mr. El Khalidi aggregating $31,500 is considered,
and future deferred compensation owing to Mr. El Khalidi, if any, will be
considered payable to Mr. El Khalidi on
demand.
|
(2)
|
Reflects
the dollar amount recognized by the Company for financial statement
reporting purposes relating to options
awards.
|
(3)
|
Includes
$4,000, $8,000, and $8,000 in termination benefits for each of the fiscal
years ended December 31, 2009, 2008, and 2007, respectively, that was
accrued for Mr. El Khalidi in accordance with Saudi Arabian employment
laws. The total amount of accrued termination benefits due to Mr. El
Khalidi as of December 31, 2009, was
$42,878.
|
(4)
|
Includes
$36,000, $0, and $0 in accrued retirement benefits for each of the fiscal
years ended December 31, 2009, 2008, and 2007, respectively, that was
deferred at the election of Mr. El Khalidi. The total amount of
accrued retirement benefits due to Mr. El Khalidi as of December 31, 2009,
was $36,000.
|
(5)
|
Includes
amounts as shown for Mr. Carter, Ms. Cook, and Mr. Williamson that were
contributed on the employee’s behalf into the Company’s 401(k)
plan.
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards
|
Estimated
Future Payouts under Equity Incentive Plan Awards
|
||||||||||||||||||||
Name
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
All
Other Stock Awards: Number of Shares of Stock or
Units (#)
|
All
Other Options Awards: Number of Securities
(#)(1)
|
Exercise
Price of Options ($/sh)
|
Closing
Market Price on Date of Option Grant ($/sh)
|
Grant
Date Fair Value of Stock
Awards
|
|||||||||
Hatem
El
Khalidi
|
07/02/09
|
200,000 | $ | 3.40 | $ | 3.40 | |||||||||||||||
Hatem
El
Khalidi
|
07/02/09
|
200,000 | $ | 3.40 | $ | 3.40 |
(1)
|
Represents
conditional stock option grants made on July 2, 2009 as follows: (a) an
option to purchase 200,000 shares of the Company’s common stock with an
exercise price equal to the closing sale price of such a share as reported
on the Nasdaq National Market System on July 2, 2009, provided that said
option may not be exercised until such time as the first shipment of ore
from the Al Masane mining project is transported for commercial sale by
AMAK, and further that said option shall terminate and be immediately
forfeited if not exercised on or before June 30, 2012; and (b) an option
to purchase 200,000 shares of the Company’s common stock with an exercise
price equal to the closing sale price of such a share as reported on the
Nasdaq Stock
Market
on July 2, 2009, provided that said option may not be exercised until such
time as the Company receives its first cash dividend distribution from
AMAK, and further that said option shall terminate and be immediately
forfeited if not exercised on or before June 30,
2019.
|
Option
awards
|
Stock
awards
|
||||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
incentive plan awards: number of securities underlying unexercised
unearned options
(#)
|
Option
exercise price
($)
|
Option
Expiration date
|
Number
of Shares or units of stock that have not vested
(#)
|
Market
value of shares or unites of stock that have not vested
(#)
|
Equity
incentive plan awards: number of unearned shares, units or other rights
that have not vested (#)
|
Equity
incentive plan awards: market or payout value of unearned shares, units or
other rights that have not vested
($)
|
||||||||||||
Hatem
El
Khalidi
|
-- | 200,000 | -- | $ | 3.40 |
06/30/12
|
|||||||||||||||
Hatem
El
Khalidi
|
-- | 200,000 | -- | $ | 3.40 |
06/30/19
|
Name
|
Fees
Earned or
Paid
in Cash
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(3)
|
Total
($)
|
||||||||||||
Robert
Kennedy
|
$ | 74,000 | $ | 10,200 | $ | 9,730 | $ | 93,930 | ||||||||
Ghazi
Sultan
|
10,000 | 10,200 | 9,730 | 29,930 | ||||||||||||
Mohammed
Al Omair
|
25,000 | 10,200 | 9,730 | 44,930 | ||||||||||||
Ibrahim
Al-Moneef (resigned April 2009)
|
-- | -- | 9,730 | 9,730 | ||||||||||||
Charles
Goehringer, Jr.
|
10,000 | 10,200 | 9,730 | 29,930 | ||||||||||||
Allen
McKee (appointed April 2009)
|
2,500 | -- | -- | 2,500 |
(1)
|
Includes
committee fees for 2008 in the amount of $70,000, subsidiary board fees
for 2008 in the amount of $5,000, subsidiary board fees for 2009 in the
amount of $36,000 and per diem amounts for 2009 in the amount of
$10,500.
|
(2)
|
Represents
3,000 shares of restricted stock granted to each non-employee director for
2008 Board service at $3.40 per share based upon the closing price of the
Company’s common stock on the grant date of September 1,
2009.
|
(3)
|
Represents
7,000 shares of stock options granted to each non-employee director for
2008 Board service at an exercise price of $1.39 per share based upon the
closing price of the Company’s common stock on the grant date of January
2, 2009.
|
Name
and Address
Of
Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership
(1)(2)
|
Percent
of
Class
|
||||||
Fahad
Mohammed Saleh Al
Athel
c/o
Saudi Fal
P.
O. Box 4900
Riyadh,
Saudi Arabia 11412
|
3,898,851 | 16.4 | % | |||||
Wellington
Trust Company,
NA
Wellington
Management Company, LP
75
State Street
Boston,
MA 02109
|
1,808,243 | 7.6 | % | |||||
Mohammad
Salem ben
Mahfouz
c/o
National Commercial Bank
Jeddah,
Saudi Arabia
|
1,500,000 | 6.3 | % | |||||
Estate
of Harb S. Al
Zuhair
P.O.
Box 3750
Riyadh,
Saudi Arabia
|
1,423,750 | 6.0 | % | |||||
Prince
Talal Bin Abdul
Aziz
P.
O. Box 930
Riyadh,
Saudi Arabia
|
1,272,680 | 5.4 | % |
(1)
|
Unless
otherwise indicated, to the knowledge of the Company, all shares are owned
directly and the owner has sole voting and investment
power.
|
(2)
|
Wellington
Trust Company, NA and Wellington Management Company, LP filed with the
Commission on February 12, 2010, reporting that they or certain of their
affiliates beneficially owned an aggregate of 1,808,423 shares and that
they had shared voting power and shared dispositive power with respect to
those shares.
|
Name
of Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership
(1)
|
Percent
of
Class
|
||||||
Hatem
El
Khalidi
|
60,000 | (2) | 0.3 | % | ||||
Ghazi
Sultan
|
10,000 | (3) | 0.0 | % | ||||
Nicholas
N.
Carter
|
220,775 | 0.9 | % | |||||
Charles
W. Goehringer,
Jr.
|
42,967 | (3) | 0.2 | % |
Name
of Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership
(1)
|
Percent
of
Class
|
||||||
Robert
E.
Kennedy
|
20,000 | (3) | 0.1 | % | ||||
Mohammed
O. Al
Omair
|
11,667 | (3) | 0.0 | % | ||||
Allen
P.
McKee
|
20,000 | 0.1 | % | |||||
Connie
J.
Cook
|
32,850 | 0.1 | % | |||||
Mark
Williamson
|
20,000 | 0.1 | % | |||||
All
directors and executive officers as a group (9 persons)
|
438,259 | (4) | 1.8 | % |
(1)
|
Unless
otherwise indicated, to the knowledge of the Company, all shares are owned
directly and the owner has sole voting and investment
power. Includes shares of restricted
stock.
|
(2)
|
Excludes
400,000 shares which Mr. El Khalidi has the right to acquire through the
exercise of contingent stock options for which the contingencies were not
met at December 31, 2009. Also excludes 385,000 shares owned by
Ingrid El Khalidi, Mr. El Khalidi’s wife, and 443,000 shares owned by
relatives of Hatem El Khalidi.
|
(3)
|
Includes
7,000 shares which these directors have the right to acquire through the
exercise of presently exercisable stock
options.
|
(4)
|
Includes
28,000 shares which certain directors and executive officers have the
right to acquire through the exercise of stock options or other rights
exercisable presently or within 60 days. Excludes 385,000 shares owned by
Ingrid El Khalidi, the wife of Hatem El Khalidi, and 443,000 shares owned
by relatives of Hatem El Khalidi.
|
2009
|
2008
|
|||||||
Audit
Fees
|
$ | 258,477 | $ | 335,173 | ||||
Audit-Related
Fees
|
$ | 0 | $ | 0 | ||||
Tax
Fees
|
$ | 41,884 | $ | 33,545 | ||||
All
Other Fees *
|
$ | 45,232 | $ | 0 |
|
Reports
of Independent Registered Public Accounting
Firm.
|
|
Consolidated
Balance Sheets dated December 31, 2009 and
2008.
|
|
Consolidated
Statements of Operations for the three years ended December 31,
2009.
|
|
Consolidated
Statement of Stockholders’ Equity for the three years ended December 31,
2009.
|
|
Consolidated
Statements of Cash Flows for the three years ended December 31,
2009.
|
|
Notes
to Consolidated Financial
Statements.
|
|
Schedule
II -- Valuation and Qualifying Accounts for the three years ended December
31, 2009.
|
Exhibit
Number
|
Description
|
3(a)
|
-
Certificate
of Incorporation of the Company as amended through the Certificate of
Amendment filed with the Delaware Secretary of State on July 19, 2000
(incorporated by reference to Exhibit 3(a) to the Company’s Annual Report
on Form 10-K for the year ended December 31, 2000 (File No.
0-6247))
|
3(b)
|
-
Restated
Bylaws of the Company dated April 26, 2007 (incorporated by reference to
Item 5.03 to the Company’s Form 8-K dated April 26, 2007 (File No.
0-6247))
|
10(a)
|
-
Loan
Agreement dated January 24, 1979 between the Company, National Mining
Company and the Government of Saudi Arabia
(incorporated
by reference to Exhibit 10(b) to the Company’s Annual Report on Form 10-K
for the year ended December 31, 1999 (File No. 0-6247))
|
Exhibit
Number
|
Description
|
10(b)
|
-
Mining
Lease Agreement effective May 22, 1993 by and between the Ministry of
Petroleum and Mineral Resources and the Company
(incorporated
by reference to Exhibit 10(c) to the Company’s Annual Report on Form 10-K
for the year ended December 31, 1999 (File No. 0-6247))
|
10(c)
|
-
Equipment
Lease Agreement dated November 14, 2003, between Silsbee Trading and
Transportation Corp. and South Hampton Refining Company (incorporated by
reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2003 (File No. 0-6247))
|
10(d)
|
-
Addendum
to Equipment Lease Agreement dated August 1, 2004, between Silsbee Trading
and Transportation Corp. and South Hampton Refining Company (incorporated
by reference to Exhibit 10(q) to the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 (File No.
0-6247))
|
10(e)
|
-
Partnership
Agreement dated August 6, 2006 between Arabian American Development
Company, Thamarat Najran Company, Qasr Al-Ma’adin Corporation, and Durrat
Al-Masani’ Corporation (incorporated by reference to Exhibit 10(i) to the
Company’s Quarterly Report on Form 10-Q/A for the quarter ended September
30, 2006 (file No. 0-6247))
|
10(f)
|
-
Financial
Legal Service and Advice Agreement dated August 5, 2006 between Arabian
American Development Company, Nassir Ali Kadasa, and Dr. Ibrahim
Al-Mounif. (incorporated by reference to Exhibit 10(j) to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2006 (file No. 0-6247))
|
10(g)*
|
-
Retirement
Awards Program dated January 15, 2008 between Arabian American Development
Company and Hatem El Khalidi (incorporated by reference to Exhibit 10(h)
to the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2008 (file No. 001-33926))
|
10(h)*
|
-
Stock
Option Plan of Arabian American Development Company for Key Employees
adopted April 7, 2008 (incorporated by reference to Exhibit A to the
Company’s Form DEF 14A filed April 30, 2008 (file No.
001-33926))
|
10(i)*
|
-
Arabian
American Development Company Non-Employee Director Stock Option Plan
adopted April 7, 2008 (incorporated by reference to Exhibit B to the
Company’s Form DEF 14A filed April 30, 2008 (file No.
001-33926))
|
10(j)
|
-
Master
Lease Agreement dated February 3, 2009, between Silsbee Trading and
Transportation Corp. and South Hampton Resources, Inc. (incorporated by
reference to Exhibit 10(j) to the Company’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2009 (file No. 001-33926))
|
10(k)
|
-
Memorandum
of Understanding relating to formation of AMAK, dated May 21,
2006.
|
10(l)
|
-
Memorandum
of Understanding relating to formation of AMAK, dated June 10,
2006.
|
10(m)
|
-
Articles
of Association of Al Masane Al Kobra Mining Company, dated July 10,
2006.
|
10(n)
|
-
Bylaws
of Al Masane Al Kobra Mining Company
|
10(o)
|
-
Letter
Agreement dated August 5, 2009, between Arabian American Development
Company and the other Al Masane Al Kobra Company shareholders named
therein (incorporated by reference to Exhibit 10.1 to the Company’s Form
8-K filed on August 27, 2009 (file No. 001-33926))
|
14
|
-
Code
of Ethics for Senior Financial Officers (incorporated by reference to
Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2003 (File No. 0-6247))
|
16
|
-
Letter
re change in certifying accountant (incorporated by reference to Exhibit
16 to the Company’s Current Report on Form 8-K/A dated January 31, 2003
(File No. 0-6247))
|
21
|
-
Subsidiaries
|
23.1
|
-
Consent
of Independent Registered Public Accounting Firm
|
24
|
-
Power
of Attorney (set forth on the signature page hereto).
|
31.1
|
-
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
-
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32.1
|
-
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
-
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(b)
|
No
reports on Form 8-K were filed during the last quarter of the period
covered by this Report.
|
Signature
|
Title
|
/s/ Nicholas Carter
Nicholas
Carter
|
President,
Chief Executive Officer and Director (principal executive
officer)
|
/s/ Connie Cook
Connie
Cook
|
Chief
Accounting Officer
(principal
financial and accounting officer)
|
Hatem
El Khalidi
|
Director
|
/s/ Charles Goehringer, Jr.
Charles
Goehringer, Jr.
|
Director
|
/s/ Robert Kennedy
Robert
Kennedy
|
Director
|
/s/ Ghazi Sultan
Ghazi
Sultan
|
Director
|
/s/ Allen McKee
Allen
McKee
|
Director
|
/s/ Mohammed Al Omair
Mohammed
Al Omair
|
Director
|
INDEX
TO FINANCIAL STATEMENTS
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Report
of Independent Registered Public Accounting Firm on Internal
Control
Over Financial Reporting
|
F-2
|
Consolidated
Balance Sheets at December 31, 2009 and 2008
|
F-4
|
Consolidated
Statements of Operations For the Years Ended
December
31, 2009, 2008 and 2007
|
F-6
|
Consolidated
Statement of Stockholders’ Equity For the Years Ended
December
31, 2009, 2008 and 2007
|
F-7
|
Consolidated
Statements of Cash Flows For the Years Ended
December
31, 2009, 2008 and 2007
|
F-8
|
Notes
to Consolidated Financial Statements
|
F-10
|
INDEX
TO FINANCIAL STATEMENT SCHEDULES
|
|
Schedule
II – Valuation and Qualifying Accounts For the Three Years
Ended
December
31, 2009
|
F-38
|
December 31,
|
||||||||
2009
|
2008
|
|||||||
(restated)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 2,451,614 | $ | 2,759,236 | ||||
Trade
Receivables, net of allowance for doubtful accounts
of
$126,500 and $500,000, respectively
|
12,302,955 | 11,904,026 | ||||||
Current
portion of notes receivable, net of discount of $16,109
and
$53,628, respectively (Note 6)
|
372,387 | 528,549 | ||||||
Derivative
instrument deposits (Note 20)
|
-- | 3,950,000 | ||||||
Prepaid
expenses and other assets
|
739,989 | 799,342 | ||||||
Inventories
(Note 5)
|
5,065,169 | 2,446,200 | ||||||
Deferred
income taxes (Note 15)
|
640,057 | 8,785,043 | ||||||
Taxes
receivable (Note 15)
|
4,726,708 | 429,626 | ||||||
Total
current assets
|
26,298,879 | 31,602,022 | ||||||
PLANT,
PIPELINE, AND EQUIPMENT – AT COST
|
50,082,441 | 47,184,865 | ||||||
LESS
ACCUMULATED DEPRECIATION
|
(17,674,938 | ) | (14,649,791 | ) | ||||
PLANT,
PIPELINE, AND EQUIPMENT, NET (Note 7)
|
32,407,503 | 32,535,074 | ||||||
INVESTMENT
IN AMAK (Note 8)
|
31,146,157 | 31,146,157 | ||||||
MINERAL
PROPERTIES IN THE UNITED STATES (Note 9)
|
588,311 | 588,311 | ||||||
NOTES
RECEIVABLE, net of discount of $684 and
$16,793,
respectively, net of current portion (Note 6)
|
35,001 | 407,388 | ||||||
OTHER
ASSETS
|
10,938 | 10,938 | ||||||
TOTAL
ASSETS
|
$ | 90,486,789 | $ | 96,289,890 |
2009
|
2008
|
2007
|
||||||||||
Revenues
|
(restated)
|
|||||||||||
Petrochemical
product sales
|
$ | 109,178,541 | $ | 130,264,329 | $ | 103,204,565 | ||||||
Transloading
sales
|
4,624,681 | 20,238,841 | -- | |||||||||
Processing
|
3,783,457 | 4,127,064 | 5,433,550 | |||||||||
117,586,679 | 154,630,234 | 108,638,115 | ||||||||||
Operating
costs and expenses
|
||||||||||||
Cost
of petrochemical product sales and
Processing
(including depreciation of
$2,246,309,
$1,299,580, and $793,220,
respectively)
|
95,688,819 | 159,226,896 | 89,654,585 | |||||||||
Gross
Profit (Loss)
|
21,897,860 | (4,596,662 | ) | 18,983,530 | ||||||||
General
and Administrative Expenses
|
||||||||||||
General
and administrative
|
9,144,710 | 9,034,366 | 7,619,280 | |||||||||
Depreciation
|
443,538 | 331,703 | 281,542 | |||||||||
9,588,248 | 9,366,069 | 7,900,822 | ||||||||||
Operating
income (loss)
|
12,309,612 | (13,962,731 | ) | 11,082,708 | ||||||||
Other
income (expense)
|
||||||||||||
Interest
income
|
63,669 | 204,635 | 297,494 | |||||||||
Interest
expense
|
(1,327,530 | ) | (605,254 | ) | (142,696 | ) | ||||||
Equity
in loss from AMAK (Notes 2 and 8)
|
-- | (1,856,250 | ) | -- | ||||||||
Miscellaneous
income (expense)
|
(74,332 | ) | 4,165 | (62,794 | ) | |||||||
(1,338,193 | ) | (2,252,704 | ) | 92,004 | ||||||||
Income
(loss) before income tax expense (benefit)
|
10,971,419 | (16,215,435 | ) | 11,174,712 | ||||||||
Income
tax expense (benefit)
|
4,343,968 | (4,978,846 | ) | 3,426,243 | ||||||||
|
||||||||||||
Net
income (loss)
|
6,627,451 | (11,236,589 | ) | 7,748,469 | ||||||||
Net
loss attributable to Noncontrolling Interest
|
-- | 505,424 | 22,912 | |||||||||
Net
income (loss) attributable to Arabian
American
Development Company
|
$ | 6,627,451 | $ | (10,731,165 | ) | $ | 7,771,381 | |||||
Net
income (loss) per common share
|
||||||||||||
Basic
earnings (loss) per share
|
$ | 0.28 | $ | (0.46 | ) | $ | 0.34 | |||||
Diluted
earnings (loss) per share
|
$ | 0.28 | $ | (0.46 | ) | $ | 0.33 | |||||
Weighted
average number of common
|
||||||||||||
shares
outstanding
|
||||||||||||
Basic
|
23,733,955 | 23,409,458 | 22,895,394 | |||||||||
Diluted
|
23,800,499 | 23,409,458 | 23,291,669 |
ARABIAN AMERICAN DEVELOPMENT
STOCKHOLDERS
|
||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||
Additional
|
Other
|
Retained
|
Non-
|
|||||||||||||||||||||||||||||
Common Stock
|
Paid-In
|
Comprehensive
|
Earnings
|
Controlling
|
Total
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Income (Loss)
|
(Deficit)
|
Total
|
Interest
|
Equity
|
|||||||||||||||||||||||||
DECEMBER
31, 2006
|
22,571,994 | $ | 2,257,199 | $ | 37,087,206 | $ | - | $ | 5,403,069 | $ | 44,747,474 | $ | 817,558 | $ | 45,565,032 | |||||||||||||||||
Common
Stock
|
||||||||||||||||||||||||||||||||
Issued
to Employees
|
30,000 | 3,000 | 96,000 | - | - | 99,000 | - | 99,000 | ||||||||||||||||||||||||
Net
Income (Loss)
|
- | - | - | - | 7,771,381 | 7,771,381 | (22,912 | ) | 7,748,469 | |||||||||||||||||||||||
DECEMBER
31, 2007
|
22,601,994 | $ | 2,260,199 | $ | 37,183,206 | $ | - | $ | 13,174,450 | $ | 52,617,855 | $ | 794,646 | $ | 53,412,501 | |||||||||||||||||
Common
Stock
Issued
for Services in
connection
with
AMAK
|
750,000 | 75,000 | 3,637,500 | - | - | 3,712,500 | - | 3,712,500 | ||||||||||||||||||||||||
Issued
to Directors
|
30,001 | 3,000 | 226,501 | - | - | 229,501 | - | 229,501 | ||||||||||||||||||||||||
Issued
to Employees
|
40,000 | 4,000 | 278,000 | - | - | 282,000 | - | 282,000 | ||||||||||||||||||||||||
Unrealized
Loss on
|
||||||||||||||||||||||||||||||||
Interest
Rate Swap
|
||||||||||||||||||||||||||||||||
(net
of income tax
|
||||||||||||||||||||||||||||||||
benefit
of $ 577,007)
|
- | - | - | (1,120,072 | ) | - | (1,120,072 | ) | - | (1,120,072 | ) | |||||||||||||||||||||
Net
Loss
|
(10,731,165 | ) | (10,731,165 | ) | (505,423 | ) | (11,236,588 | ) | ||||||||||||||||||||||||
Comprehensive
Loss
|
- | - | - | - | - | (11,851,237 | ) | - | - | |||||||||||||||||||||||
DECEMBER
31, 2008
(restated)
|
23,421,995 | $ | 2,342,199 | $ | 41,325,207 | $ | (1,120,072 | ) | $ | 2,443,285 | $ | 44,990,619 | $ | 289,223 | $ | 45,279,842 | ||||||||||||||||
Stock
options
|
||||||||||||||||||||||||||||||||
Issued
to Directors
|
- | - | 234,922 | - | - | 234,922 | - | 234,922 | ||||||||||||||||||||||||
Issued
to Employees
|
- | - | 4,439 | - | - | 4,439 | - | 4,439 | ||||||||||||||||||||||||
Stock
issued to Directors
|
12,000 | 1,200 | 39,600 | - | - | 40,800 | - | 40,800 | ||||||||||||||||||||||||
Unrealized
Gain on
Interest
Rate Swap (net
of
income tax expense
of
$143,612)
|
- | - | - | 278,775 | - | 278,775 | - | 278,775 | ||||||||||||||||||||||||
Net
Income
|
- | - | - | - | 6,627,451 | 6,627,451 | - | 6,627,451 | ||||||||||||||||||||||||
Comprehensive
Income
|
- | - | - | - | - | 6,906,226 | - | - | ||||||||||||||||||||||||
DECEMBER
31, 2009
|
23,433,995 | $ | 2,343,399 | $ | 41,604,168 | $ | (841,297 | ) | $ | 9,070,736 | $ | 52,177,006 | $ | 289,223 | $ | 52,466,229 | ||||||||||||||||
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Operating
activities
|
||||||||||||
Net
income (loss) attributable to Arabian
American
Development Co.
|
$ | 6,627,451 | $ | ( 10,731,165 | ) | $ | 7,771,381 | |||||
Adjustments
to reconcile net income (loss)
|
||||||||||||
to
Arabian American Development Co. to Net
cash
provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
2,689,847 | 1,631,283 | 1,074,762 | |||||||||
Accretion
of notes receivable discounts
|
(53,628 | ) | (101,619 | ) | (148,355 | ) | ||||||
Accretion
of unrealized gross profit
|
- | - | (52,137 | ) | ||||||||
Unrealized
(gain) loss on derivative instruments
|
(6,976,232 | ) | 5,485,914 | (972,504 | ) | |||||||
Share-based
compensation
|
280,161 | 282,000 | 99,000 | |||||||||
Provision
for doubtful accounts
|
111,154 | 465,000 | - | |||||||||
Deferred
income taxes
|
8,977,317 | (5,528,129 | ) | 137,131 | ||||||||
Postretirement
obligation
|
23,378 | 202,000 | 621,500 | |||||||||
Impairment
loss
|
- | 496,306 | - | |||||||||
Loss
attributable to noncontrolling interest
|
- | (505,423 | ) | (22,912 | ) | |||||||
Equity
in loss from AMAK
|
- | 1,856,250 | - | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Increase
in trade receivables
|
(510,083 | ) | (58,465 | ) | (3,417,379 | ) | ||||||
Decrease
in notes receivable
|
582,177 | 711,396 | 806,447 | |||||||||
(Increase)
decrease in income tax receivable
|
(4,297,082 | ) | 640,781 | (450,809 | ) | |||||||
(Increase)
decrease in inventories
|
(2,618,969 | ) | 441,436 | 688,681 | ||||||||
(Increase)
decrease in prepaid expenses and
other
assets
|
59,353 | (151,029 | ) | (28,254 | ) | |||||||
(Increase)
decrease in derivative instruments
deposits
|
3,950,000 | (3,950,000 | ) | 1,500,000 | ||||||||
Increase
in other liabilities
|
773,000 | - | - | |||||||||
Increase
(decrease) in accounts payable and
accrued
liabilities
|
(2,146,279 | ) | 2,750,258 | 2,076,607 | ||||||||
Increase
in accrued interest
|
1,077 | 61,909 | 25,695 | |||||||||
Increase
(decrease) in accrued liabilities in
Saudi
Arabia
|
(957,876 | ) | 22,355 | (238,456 | ) | |||||||
Net
cash provided by (used in) operating
activities
|
6,514,766 | (5,978,942 | ) | 9,470,398 | ||||||||
Investing
activities
|
||||||||||||
Additions
to mineral properties in Saudi Arabia
|
- | (390,579 | ) | (331,058 | ) | |||||||
Additions
to property, pipeline and equipment
|
(3,184,140 | ) | (15,030,593 | ) | (10,799,205 | ) | ||||||
Reductions
in mineral properties in the United
States
|
- | - | 94 | |||||||||
Net
cash used in investing activities
|
(3,184,140 | ) | (15,421,172 | ) | (11,130,169 | ) | ||||||
Financing
Activities
|
||||||||||||
Additions
to long-term debt
|
2,530,761 | 25,900,000 | 6,000,000 | |||||||||
Repayment
of long-term debt
|
(6,169,009 | ) | (6,530,574 | ) | (2,488,827 | ) | ||||||
Repayment
of note to stockholders
|
- | - | (500 | ) | ||||||||
Net
cash provided (used) in financing activities
|
(3,638,248 | ) | 19,369,426 | 3,510,673 |
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Net
increase (decrease) in cash
|
(307,622 | ) | (2,030,688 | ) | 1,850,902 | |||||||
Cash
and cash equivalents at beginning of year
|
2,759,236 | 4,789,924 | 2,939,022 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 2,451,614 | $ | 2,759,236 | $ | 4,789,924 |
2009
|
2008
|
2007
|
||||||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Cash
payments for interest
|
$ | 1,334,453 | $ | 918,845 | $ | 294,206 | ||||||
Cash
payments (net of refunds) for taxes
|
$ | (278,622 | ) | $ | 4,814 | $ | 3,585,000 | |||||
Supplemental
disclosure of non-cash items:
|
||||||||||||
Capital
expansion amortized to depreciation expense
|
$ | 621,864 | $ | 630,731 | $ | 584,348 | ||||||
Investment
in AMAK
|
$ | -- | $ | 33,002,407 | -- | |||||||
Issuance
of common stock for settlement of accrued
Directors’
compensation
|
$ | -- | $ | 229,501 | $ | -- | ||||||
Unrealized
loss/(gain) on interest rate swap, net of tax
benefit/expense
|
$ | (278,775 | ) | $ | 1,120,072 | $ | -- |
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
|
Business
and Operations of the Company
|
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – Continued
|
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – Continued
|
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – Continued
|
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – Continued
|
|
NOTE
1 - BUSINESS AND OPERATIONS OF THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – Continued
|
December 31, 2008
|
||||||||
As
Reported
|
As
Restated
|
|||||||
Consolidated
Balance Sheet
|
||||||||
Investment
in AMAK
|
$ | 33,002,407 | $ | 31,146,157 | ||||
Total
Assets
|
98,146,140 | 96,289,890 | ||||||
Retained
Earnings
|
4,299,535 | 2,443,285 | ||||||
Total
Arabian American Development
Company
Stockholders’ Equity
|
46,846,869 | 44,990,619 | ||||||
Total
Equity
|
47,136,092 | 45,279,842 | ||||||
Total
Liabilities and Equity
|
98,146,140 | 96,289,890 |
December 31, 2008
|
||||||||
As
Reported
|
As
Restated
|
|||||||
Consolidated
Statement of Operations
|
||||||||
Equity
in loss from AMAK
|
$ | -- | $ | (1,856,250 | ) | |||
Loss
before income tax benefit
|
(14,359,185 | ) | (16,215,435 | ) | ||||
Net
loss
|
(9,380,339 | ) | (11,236,589 | ) | ||||
Net
loss attributable to Arabian American
Development
Company
|
(8,874,915 | ) | (10,731,165 | ) | ||||
Net
loss per common share
|
||||||||
Basic
|
$ | (0.38 | ) | $ | (0.46 | ) | ||
Diluted
|
$ | (0.38 | ) | $ | (0.46 | ) |
December 31, 2008
|
||||||||
As
Reported
|
As
Restated
|
|||||||
Consolidated
Statement of Stockholders’ Equity
|
||||||||
Comprehensive
loss
|
$ | (9,994,987 | ) | $ | (11,851,237 | ) |
December 31, 2008
|
||||||||
As
Reported
|
As
Restated
|
|||||||
Consolidated
Statement of Cash Flows
|
||||||||
Operating
Activities
|
||||||||
Net
loss attributable to Arabian American
Development
Company
|
$ | (8,874,915 | ) | $ | (10,731,165 | ) | ||
Equity
in loss from AMAK
|
$ | -- | $ | 1,856,250 |
Fair
Value Measurements Using
|
||||||||||||||||
December
31, 2009
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Interest
Rate Swap
|
$ | 1,274,692 | - | $ | 1,274,692 | - |
Fair
Value Measurements Using
|
||||||||||||||||
December
31, 2008
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Financial
Swaps on Feedstock
|
$ | 5,855,850 | $ | 5,855,850 | $ | - | $ | - | ||||||||
Options
on Crude
|
1,120,382 | - | 1,120,382 | - | ||||||||||||
Interest
Rate Swap
|
1,697,079 | - | 1,697,079 | - | ||||||||||||
Total
|
$ | 8,673,311 | $ | 5,855,850 | $ | 2,817,461 | - |
2009
|
2008
|
|||||||
Raw
material
|
$ | 3,376,943 | $ | 1,291,400 | ||||
Finished
products
|
1,688,226 | 1,154,800 | ||||||
Total
inventory
|
$ | 5,065,169 | $ | 2,446,200 |
2009
|
2008
|
|||||||
Note
with processing customer (A)
|
$ | 424,181 | $ | 914,394 | ||||
Less
discount
|
(16,793 | ) | (68,612 | ) | ||||
407,388 | 845,782 | |||||||
Note
with processing customer (B)
|
-- | 91,964 | ||||||
Less
discount
|
-- | (1,809 | ) | |||||
-- | 90,155 | |||||||
Total
long-term notes receivable
|
407,388 | 935,937 | ||||||
Less
current portion
|
372,387 | 528,549 | ||||||
Total
long-term notes receivable, less current portion
|
$ | 35,001 | $ | 407,388 | ||||
|
(A)
|
The
Company has notes receivable from a long term processing customer for
capital costs incurred in making adjustments to the processing unit at
their request. The payment term is 5 years with interest
imputed at a rate of 8%. Payments of $40,851 are due
monthly.
|
|
(B)
|
The
Company had notes receivable from a long term processing customer for
capital costs incurred in making adjustments to the processing unit at
their request. The payment term was 3 years with interest
imputed at a rate of 8%. Payments of $18,432 were due
monthly. This note was paid off during
2009.
|
|
Payments
from long-term notes for the next five years ending December 31 are as
follows:
|
Year
Ending December 31,
|
Long-Term
Notes
Receivable
|
|||
2010
|
388,496 | |||
2011
|
35,685 | |||
424,181 | ||||
Less:
discount
|
16,793 | |||
$ | 407,388 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Platinum
catalyst
|
$ | 1,497,285 | $ | 1,318,068 | ||||
Land
|
689,363 | 552,705 | ||||||
Property,
pipeline and equipment
|
47,885,793 | 45,304,092 | ||||||
Construction
in progress
|
10,000 | 10,000 | ||||||
Total
property, pipeline and equipment
|
50,082,441 | 47,184,865 | ||||||
Less
accumulated depreciation
|
(17,674,938 | ) | (14,649,791 | ) | ||||
Net
property, pipeline and equipment
|
$ | 32,407,503 | $ | 32,535,074 |
Accumulated
costs of mineral Interests in Saudi Arabia
|
$ | 40,289,907 | ||
Contribution
of AMAK organization costs
|
3,712,500 | |||
Loan
payable assumed by AMAK
|
(11,000,000 | ) | ||
Net
investment in AMAK
|
$ | 33,002,407 |
Initial
investment in AMAK
|
$ | 33,002,407 | ||
Share
of net loss of AMAK
|
(1,856,250 | ) | ||
Investment
in AMAK at December 31, 2008
|
$ | 31,146,157 |
2009
|
2008
|
|||||||
Notes
payable:
|
||||||||
Other
|
12,000 | 12,000 | ||||||
Total
|
$ | 12,000 | $ | 12,000 | ||||
Long-term
debt:
|
||||||||
Capital
lease with affiliated party (A)
|
-- | 19,010 | ||||||
Revolving
note to domestic bank (B)
|
12,489,488 | 14,458,726 | ||||||
Term
note to domestic bank (C)
|
12,350,000 | 14,000,000 | ||||||
Total
long-term debt
|
24,839,488 | 28,477,736 | ||||||
Less
current portion
|
1,400,000 | 4,920,442 | ||||||
Total
long-term debt, less current portion
|
$ | 23,439,488 | $ | 23,557,294 |
|
(A)
|
On
August 1, 2004, South Hampton entered into a $136,876 capital lease with a
transportation company owned by a Company officer for the purchase of a
diesel powered manlift. The lease bore interest of 6.9% over a
5 year term with a monthly payment of $3,250. Title transferred
to South Hampton at the end of the term in July 2009. The
original cost of the diesel powered manlift was $136,876 with accumulated
depreciation of $74,141 and $60,454 at December 31, 2009, and 2008,
respectively.
|
(B)
|
On
May 25, 2006 South Hampton entered into a $12.0 million revolving loan
agreement with a domestic bank secured by accounts receivable and
inventory. The original agreement was due to expire October 31,
2008. An amendment was entered into on July 8, 2009 which
extended the termination date to June 30, 2011. Additional
amendments were entered into during 2008 and 2009 which ultimately
increased the availability of the line to $21.0 million and subsequently
reduced it to $18,000,000 based upon the Company’s accounts receivable and
inventory. At December 31, 2009, there was a long-term amount
outstanding of $12,489,488. The credit agreement contains a sub-limit of
$3.0 million available to be used in support of the hedging
program. The interest rate on the loan varies according to
several options and the amount outstanding. At December 31,
2009 the rate was 3.0%, and no amounts were available to be
drawn. A commitment fee of 0.25% is due quarterly on the unused
portion of the loan. If the amount outstanding surpasses the
amount calculated by the borrowing base, a principal payment would be due
to reduce the amount outstanding to the calculated
base. Interest is paid
monthly. Covenants that must be maintained include EBITDA,
capital expenditures, dividends payable to parent, and leverage
ratio.
|
(C)
|
On
September 19, 2007 South Hampton entered into a $10.0 million term loan
agreement with a
|
|
Principal
payments of long-term debt for the next five years and thereafter ending
December 31 are as follows:
|
Year
Ending December 31,
|
Long-Term
Debt
|
|||
2010
|
$ | 1,400,000 | ||
2011
|
13,889,488 | |||
2012
|
1,400,000 | |||
2013
|
1,400,000 | |||
2014
|
1,400,000 | |||
Thereafter
|
5,350,000 | |||
Total
|
$ | 24,839,488 |
|
NOTE 11 – ACCRUED
LIABILITIES
|
2009
|
2008
|
|||||||
Accrued
state taxes
|
$ | 103,573 | $ | 147,221 | ||||
Accrued
payroll
|
546,720 | 514,218 | ||||||
Accrued
directors’ fees
|
105,387 | -- | ||||||
Accrued
officers’ compensation
|
76,001 | -- | ||||||
Other
liabilities
|
504,538 | 368,251 | ||||||
Total
|
$ | 1,336,219 | $ | 1,029,690 |
2009
|
2008
|
|||||||
Salaries
|
$ | 202,920 | $ | 602,503 | ||||
Termination
benefits
|
213,649 | 807,944 | ||||||
Other
liabilities
|
54,711 | 18,709 | ||||||
Total
|
$ | 471,280 | $ | 1,429,156 |
Year
ending December 31,
|
||||
2010
|
$ | 391,248 | ||
2011
|
369,990 | |||
2012
|
339,336 | |||
2013
|
216,048 | |||
2014
|
63,500 | |||
Total
|
$ | 1,380,122 |
Expected
volatility
|
227%
|
Expected
dividends
|
None
|
Expected
term (in years)
|
10
|
Risk
free interest rate
|
0.5%
|
Expected
volatility
|
227%
|
Expected
dividends
|
None
|
Expected
term (in years)
|
10
|
Risk
free interest rate
|
0.50%
|
Expected
volatility
|
139-402%
|
Expected
dividends
|
None
|
Expected
term (in years)
|
1.5-7
|
Risk
free interest rate
|
0.98%-3.14%
|
Stock
Options
|
Weighted
Average
Exercise
Price
Per
Share
|
Weighted
Average
Remaining
Contractual
Life
|
Intrinsic
Value
(in
thousands)
|
|||||||||||||
Outstanding
at December 31, 2008, and 2007
|
500,000 | $ | 1.20 | |||||||||||||
Granted
|
439,000 | 3.22 | ||||||||||||||
Expired
|
(100,000 | ) | 2.00 | |||||||||||||
Cancelled
|
(400,000 | ) | 1.00 | |||||||||||||
Outstanding
at December 31, 2009
|
439,000 | $ | 3.22 | 6.3 | -- | |||||||||||
Exercisable
at December 31, 2009
|
39,000 | $ | 1.36 | 9.0 |
|
NOTE
15 – INCOME TAXES
|
Year
ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Current
federal provision
|
$ | (4,866,532 | ) | $ | 376,030 | $ | 3,357,184 | |||||
Current
state provision (benefit)
|
89,571 | 173,323 | (68,103 | ) | ||||||||
Deferred
federal provision (benefit)
|
8,959,098 | (5,388,895 | ) | 141,443 | ||||||||
Deferred
state provision (benefit)
|
161,831 | (139,304 | ) | (4,281 | ) | |||||||
Income
tax expense (benefit)
|
$ | 4,343,968 | $ | (4,978,846 | ) | $ | 3,426,243 |
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Income
taxes at U.S. statutory rate
|
$ | 3,736,766 | $ | (5,513,248 | ) | $ | 3,807,192 | |||||
State
taxes, net of federal benefit
|
230,187 | (42,141 | ) | 166,685 | ||||||||
Prior
year overpayments
|
(13,998 | ) | (49,872 | ) | (145,250 | ) | ||||||
Refund
from amended state return
|
- | - | (158,000 | ) | ||||||||
Permanent
and other items
|
25,720 | (4,710 | ) | (244,384 | ) | |||||||
Increase
in valuation allowance
|
365,293 | 631,125 | - | |||||||||
Total
tax expense (benefit)
|
$ | 4,343,968 | $ | (4,978,846 | ) | $ | 3,426,243 |
December
31,
|
||||||||
2009
|
2008
|
|||||||
Deferred
tax liabilities:
|
(restated)
|
|||||||
Plant,
pipeline and equipment
|
$ | (4,863,610 | ) | $ | (4,122,410 | ) | ||
Deferred
tax assets:
|
||||||||
Accounts
receivable
|
148,174 | 265,901 | ||||||
Inventory
|
42,726 | 635,865 | ||||||
Mineral
interests
|
365,293 | 365,293 | ||||||
Capital
loss carry-forward
|
1,228,090 | 1,228,090 | ||||||
Unrealized
losses on swap agreements
|
-- | 7,306,270 | ||||||
Unrealized
loss on interest rate swap
|
433,395 | 577,007 | ||||||
Post
retirement benefits
|
314,758 | 400,149 | ||||||
Investment
in AMAK
|
631,125 | 631,125 | ||||||
Stock-based
compensation
|
81,383 | - | ||||||
Acquisition
costs
|
135,597 | - | ||||||
Charitable
contributions
|
14,723 | - | ||||||
Gross
deferred tax assets
|
3,395,264 | 7,287,290 | ||||||
Valuation
allowance
|
(2,224,508 | ) | (1,859,215 | ) | ||||
Net
deferred tax assets (liabilities)
|
$ | (3,692,854 | ) | $ | 5,428,075 |
2009
|
2008
|
|||||||
(restated)
|
||||||||
Current
deferred tax asset
|
$ | 640,057 | $ | 8,785,043 | ||||
Non-current
deferred tax liability:
|
||||||||
Deferred
tax assets
|
2,755,207 | 2,624,657 | ||||||
Deferred
tax liability
|
(4,863,610 | ) | (4,122,410 | ) | ||||
Valuation
allowance
|
(2,224,508 | ) | (1,859,215 | ) | ||||
Non-current
deferred tax liability, net
|
(4,332,911 | ) | (3,356,968 | ) | ||||
Deferred
tax assets (liabilities), net
|
$ | (3,692,854 | ) | $ | 5,428,075 |
December
31, 2009
|
||||||||||||||||
Petrochemical
|
Mining***
|
Corporate
And Other**
|
Total
|
|||||||||||||
Continuing
operations
|
||||||||||||||||
Revenue
from external customers
|
$ | 117,586,679 | $ | - | $ | - | $ | 117,586,679 | ||||||||
Depreciation*
|
2,688,705 | - | 1,142 | 2,689,847 | ||||||||||||
Operating
income (loss)
|
14,255,160 | - | (1,945,548 | ) | 12,309,612 | |||||||||||
Total
assets
|
$ | 58,752,321 | $ | - | $ | 31,734,468 | $ | 90,486,789 |
December
31, 2008
(restated)
|
||||||||||||||||
Petrochemical
|
Mining***
|
Corporate
And Other**
|
Total
|
|||||||||||||
Continuing
operations
|
||||||||||||||||
Revenue
from external customers
|
$ | 154,630,234 | $ | - | $ | - | $ | 154,630,234 | ||||||||
Depreciation*
|
1,630,428 | - | 856 | 1,631,284 | ||||||||||||
Operating
income (loss)
|
(11,563,597 | ) | (995,474 | ) | (1,403,660 | ) | (13,962,731 | ) | ||||||||
Total
assets
|
$ | 64,555,422 | $ | 588,311 | $ | 31,146,157 | $ | 96,289,890 |
December
31, 2007
|
||||||||||||||||
Petrochemical
|
Mining
|
Corporate
And Other**
|
Total
|
|||||||||||||
Continuing
operations
|
||||||||||||||||
Revenue
from external customers
|
$ | 108,638,115 | $ | - | $ | - | $ | 108,638,115 | ||||||||
Depreciation*
|
1,073,620 | - | 1,142 | 1,074,762 | ||||||||||||
Operating
income (loss)
|
13,261,809 | (329,113 | ) | (1,849,988 | ) | 11,082,708 | ||||||||||
Total
assets
|
$ | 42,077,819 | $ | 40,983,945 | 1,159,001 | $ | 84,220,765 | |||||||||
Year
ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Revenues
|
||||||||||||
United
States
|
$ | 117,587 | $ | 154,630 | $ | 108,638 | ||||||
Long-lived
assets
|
||||||||||||
United
States
|
$ | 32,996 | $ | 33,123 | $ | 20,851 | ||||||
Saudi
Arabia
|
- | - | 39,899 | |||||||||
$ | 32,996 | $ | 33,123 | $ | 60,750 | |||||||
Investment
in AMAK
|
$ | 31,146 | $ | 31,146 | $ | - |
Year
ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(restated)
|
||||||||||||
Net
income (loss)
|
$ | 6,627,451 | $ | (10,731,165 | ) | $ | 7,711,381 | |||||
Basic
earnings (loss) per common share:
|
||||||||||||
Weighted
average shares outstanding
|
23,727,995 | 23,409,458 | 22,895,394 | |||||||||
Per
share amount
|
$ | 0.28 | $ | (0.46 | ) | $ | 0.34 | |||||
Diluted
earnings (loss) per common share:
|
||||||||||||
Weighted
average shares outstanding
|
23,800,449 | 23,409,458 | 23,291,669 | |||||||||
Per
share amount
|
$ | 0.28 | $ | (0.46 | ) | $ | 0.33 |
Year
ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Weighted
average shares-denominator
basic
computation
|
23,727,995 | 23,409,458 | 22,895,394 | |||||||||
Effect
of dilutive stock options
|
72,454 | - | 396,275 | |||||||||
Weighted
average shares, as adjusted
denominator
diluted computation
|
23,800,449 | 23,409,458 | 23,291,669 |
Year
Ended December 31, 2009
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||||||
Revenues
|
$ | 27,397 | $ | 28,585 | $ | 30,648 | $ | 30,957 | $ | 117,587 | ||||||||||
Gross
profit (loss)
|
8,962 | 6,426 | 4,294 | 2,216 | 21,898 | |||||||||||||||
Net
income (loss)
|
4,173 | 2,564 | 528 | (638 | ) | 6,627 | ||||||||||||||
Basic
EPS
|
$ | 0.18 | $ | 0.11 | $ | 0.02 | $ | (0.03 | ) | $ | 0.28 | |||||||||
Diluted
EPS
|
$ | 0.18 | $ | 0.11 | $ | 0.02 | $ | ( 0.03 | ) | $ | 0.28 |
Year
Ended December 31, 2008
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||||||
(restated)
|
(restated)
|
|||||||||||||||||||
Revenues
|
$ | 31,234 | $ | 42,611 | $ | 47,742 | $ | 33,043 | $ | 154,630 | ||||||||||
Gross
profit (loss)
|
4,878 | 6,846 | (9,110 | ) | (7,211 | ) | (4,597 | ) | ||||||||||||
Net
income (loss)
|
1,416 | 3,172 | (6,931 | ) | (8,388 | ) | (10,731 | ) | ||||||||||||
Basic
EPS
|
$ | 0.06 | $ | 0.14 | $ | (0.30 | ) | $ | (0.36 | ) | $ | (0.46 | ) | |||||||
Diluted
EPS
|
$ | 0.06 | $ | 0.13 | $ | (0.30 | ) | $ | ( 0.36 | ) | $ | (0.46 | ) |
|
NOTE
20 – DERIVATIVE INSTRUMENTS
|
December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Realized
gain (loss)
|
$ | (5,856 | ) | $ | 1,721 | $ | 3,367 | |||||
Write
off of derivative premiums
|
- | (14,103 | ) | - | ||||||||
Unrealized
gain (loss)
|
6,976 | (6,793 | ) | 973 | ||||||||
Net
gain (loss)
|
$ | 1,120 | $ | (19,175 | ) | $ | 4,340 |
December
31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of derivative liability
|
$ | - | $ | 6,976 |
December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Other
Comprehensive Loss
|
||||||||||||
Cumulative
loss
|
$ | (1,275 | ) | $ | (1,697 | ) | $ | - | ||||
Deferred
tax benefit
|
434 | 577 | - | |||||||||
Net
cumulative loss
|
$ | (841 | ) | $ | (1,120 | ) | $ | - | ||||
Interest
expense reclassified from other
comprehensive
loss
|
$ | 510 | $ | 93 | $ | - |
December
31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of derivative liability
|
$ | 1,275 | $ | 1,697 |
|
In
June 2009 the Company’s Board of Directors awarded Mr. El Khalidi a
retirement bonus in the amount of $31,500 for 42 years of faithful
service. This amount was outstanding at December 31, 2009, and
was included in post retirement
benefits.
|
Description
|
Beginning
balance
|
Charged
(credited)
to earnings
|
Deductions(a)
|
Ending
balance
|
||||||||||||
ALLOWANCE FOR DEFERRED
TAX ASSET
|
||||||||||||||||
December
31, 2007
|
1,336,451 | (108,361 | ) | - | 1,228,090 | |||||||||||
December
31, 2008, restated
|
1,228,090 | 631,125 | - | 1,859,215 | ||||||||||||
December
31, 2009
|
1,859,215 | 365,293 | - | 2,224,508 |
Description
|
Beginning
balance
|
Charged
to earnings
|
Deductions
|
Ending
balance
|
||||||||||||
ALLOWANCE FOR DOUBTFUL
ACCOUNTS
|
||||||||||||||||
December
31, 2007
|
35,000 | - | - | 35,000 | ||||||||||||
December
31, 2008
|
35,000 | 465,000 | - | 500,000 | ||||||||||||
December
31, 2009
|
500,000 | 111,154 | (484,654 | ) | 126,500 |
1.
|
First
Party:
Engineer Hazem
Al-Khalidi
, the executive president of Arabian Shield Development
Company, the owner of the franchise, issued by virtue of Royal Decree No.
137 dated 5/11/1413 H.
|
2.
|
Second
Party:
Engineer Muhammad
Mane’a Abal Ola
, representing
Thamarat Najran Company,
a company established pursuant to the Regulations of the Kingdom of
Saudi Arabia, Commercial Registration No. 5950010275 dated 6/1/1426 H.,
whose Head Office is in the City of
Najran.
|
1.
|
Arabian Shield Development
Company,
a company formed pursuant to the Public Companies Laws of
Delaware State, whose address is 10830 North Central Express Y-Dallas-
75231, United States of America, represented for the signing of the
Agreement by Mr. Hatem Al-Khalidi, in his capacity as the Company’s
General Manager, hereinafter referred to as (
First
Party
)
|
2.
|
Thamarat Najarat Company,
a company formed pursuant to the Regulations of the Kingdom of
Saudi Arabia, Commercial Registration No. 5950010275, dated 6/1/1426 H.,
whose main office is in the city of Najran, represented for the signing of
the Agreement by Engineer Ayman bin Abdul Rahman AL-Shibil in his capacity
a s the Company’s representative, hereinafter referred to as (
Second Party – The
Developer
)
|
First:
|
The
above mentioned preamble shall be an integral part of this
Memorandum.
|
Second:
|
The
Second Party (the Developer) shall seek to form a Saudi company, with a
proposed name “Al-Masane’a Mining Company”, referred to at any stage of
the Agreement as “The Saudi Company”, and shall have all the powers to
select the shareholders therein, as well as all the powers to make the
material and administrative arrangements for the Saudi
Company.
|
Third:
|
The
First Party and the Saudi Company shall form a company with a mixed
capital under the name of “The Mining Major Factories Company”, provided
the Saudi Company shall have all the powers necessary for the executive
management of the mixed Company.
|
Fourth:
|
The
Company’s capital shall be US$140,000,000 (a hundred forty
million)
|
Fifth:
|
The
shares shall be distributed between the shareholders as follows: 50% for
each shareholder. The Mixed Company’s Board of Directors shall comprise
six persons: three to represent the First Party and three to represent the
Saudi Company. Their powers and the validity of their resolutions shall be
determined in separate contracts of in the Articles of Association of the
Mixed Company.
|
Sixth:
|
The
Second Party acknowledges his consent to the assessment of the effort,
expertise and assets of the First Party, as well as the franchise granted
to him which is issued by Royal Decree No. 137 dated 5/11/1413 H., and
estimated at US$35,000,000 (thirty five million), which the Second Party
shall pump into the Company’s capital, and which represents the fair
amount for the obtaining by the Saudi Company of 50% against all the
mining activities, the assets and the tangible and intangible assets,
including the mining franchise, which the First Party has preformed since
1967 up till now.
|
Seventh:
|
The
Saudi Company shall pump UD$35,000,000 (thirty five million) for
initiating the purchase of equipment and equipping the present site of the
factories for mining production of the base minerals and the associated
minerals.
|
Eighth:
|
The
First Party shall seek to obtain bank facilities on the basis of the
assistance and guarantee of the Saudi Company, without any other
additional costs, for a sum of US$35,000,000 (thirty five million), which
the First Party shall repay from his share in the annual profits of the
Company.
|
Ninth:
|
It
is agreed that the activity of the Company which is to be formed shall be
the mining of base ores known as copper, zinc, and the associated gold and
silver minerals, under the franchise granted to Arabian Shield Development
Company, the production and sale of copper condenser, zinc condenser,
silver and gold ingots, under the franchise granted to him and issued by
virtue of Royal Decree No. 137 dated 5/11/1413
H.
|
Tenth:
|
It
is agreed by the two Parties that Arabian Shield Development Company has
carried out exploration activities in the Major Factories area, which it
shall assign to the Mining Major Factories Company after the formation
thereof for subsequently obtaining the exploration license and
franchise.
|
Eleventh:
|
The
mining franchise issued to the First Party shall be transferred to the
Mixed Company after the formation
thereof.
|
Twelfth:
|
the
application for licensing the exploration that was filed in the name of
the First Party shall be transferred to the Mixed Company after the
formation thereof.
|
Thirteenth:
|
This
Memorandum shall be binding on its two Parties upon signing its final form
by the First Party and the Second Party and the approval of the Board of
Directors of the two companies and the activities shall be conducted on
the basis there of and pursuant thereto. Moreover, each of the First Party
and the Second Party shall work jointly and in full cooperation for
realizing their objective. The two Parties shall commence the
implementation of the provisions of this Memorandum and shall commence the
formalities relating to the formation of Mining Major Factories Company,
as mixed Saudi-American Company within ninety days of the singing of the
Memorandum. They shall also work within the framework of the work plan
indicated in the mining franchise issued by virtue of Royal Decree No. 137
dated 5/11/1413 H.
|
Fourteenth:
|
This
Memorandum has been drawled up in three counterparts of which each Party
has kept one in order to act in accordance therewith. The third
counterpart shall be kept by Kadasa Law Firm for Legal
Consultations.
|
|
Allah
is the bestower of success.
|
First
Party
|
Second
Party
|
Arabian
Shield Development Company
|
Thamarat
Najran Company
|
Name:
Hatem Hussein Al-Khalidi
|
Muhd
bin Mane’a Abal Ola
|
Capacity:
Company President
|
Capacity:
Company Representative
|
Signature:
/s/ Hatem El-Khalidi
|
Signature:
/s/ Muhd bin Mane'a Abal Ola
|
1-
|
Arabian
Shield Development Company,
a company organized under the General
Companies Act of the State of Delaware, Having its main office at 10830
North Central Express Way-Dallas-75231, USA, represented herein by its
president r Hatem El-Khalidi, hereinafter referred to as (
First
Party
)
|
2-
|
Thamarat
Najran Company,
a company organized under the laws of the Kingdom
of Saudi Arabia, CR No. 5950010275, having its main office in Najran,
represented herein by Mohamed Abal’ala, hereinafter referred to as (Second
Party –
Developer
),
|
a-
|
The
capital shares shall be equally distributed between the two partners, 50%
each.
|
b-
|
The
Board of Directors of the joint company shall be of six members: three
representing the First Party and three representing the Saudi Partners.
The powers of directors shall be specified in separate contracts or in the
articles of association of the joint company. The Chairman shall be from
among the directors representing the Saudi
Partners.
|
1.
|
Arabian American Development
Company
, formerly: Arabian Shield Development Company , a company
duly organized and existing under the laws of the State of Delaware, with
its place of business at 10830 North Central Express Way, Dallas 75231,
United States of America;
|
2.
|
Dorrat Al Masane'e Trading
Establishment,
an establishment having Commerical Registration
No.
1010220094
dated 10/15/14277 H., and having its place of business at
Riyadh, Propr.
Mr. Mohammed Mane'a
Sultan Aba
Al-Ola
, Civil
Registration No.
1056784334
dated
22/08/1397 H., a civil servant by profession, born in
1379H.;
|
3.
|
Al-Sha’er Trading,
Manufacturing and Contracting Company
, a company registered in the
commercial register under No. 4030017174 dated 30/02/1399 H. and whose
Articles of Association are notarized by the 1
st
Notarization Department of Jeddah under No. 79, Sheet 91 of Volume
3/TA for the year 1409H.;
|
4.
|
Qasser Al Ma'aden Trading
Establishment,
an establishment having Commerical
Registration No. 1010220095 dated 10/05/1427 H., and having its place of
business at Riyadh, Prop.
His Royal
Highness Prince Nawaf bin Mishel bin Saud Al Saud
, Civil
Registration No. 1057765933 dated 19/091406H., a trader by profession,
born in 1377 H.;
|
5.
|
Mr. Ibraheem Ali Hussain
Moslem
, a citizen of Saudi Arabia by virtue of Civil Registration
No. 100188279 issued at Jeddah on 25/11/1427 H,, a civil servant by
profession, and born in 1368 H.;
|
6.
|
Mr. Majed Ali Hussain
Moslem
, a citizen of Saudi Arabia by virtue of Civil Registration
No. 1001882859 issued at Jeddah on 16/5/1418 H,. a student by profession,
and born in 1398 H.;
|
7.
|
Thamarat Najran Co. Ltd.,
a company registered in the Commercial Registry of the city of
Najran under Number 5950010275 dated 06/01/1426 H., and whose Articles of
Association are notarized by the Najran Notary Public, Volume No. 497/2,
Sheet 100-102 on 16/12/1425 H.;
|
8.
|
Saudi Establishment for Trading
& Construction
, an establishment having Commercial Registration
No. 2050000782 dated 22/09/1378 H., and having its place of business at
Dammam Civil Registration No. 1054514045 dated 21/10/1395H., Prop.
Omar bin Ali bin Omar
Babtain,
a trader by profession, born in 1379;
|
Founder
Shareholders
|
Total
Shares
|
Unit
Value
|
Total
Capital
|
Capital
paid up
|
%
|
|||||||||||||||
Arabian
American Development Company
|
22500000 | 10 | 22500000 | 112500000 | 50 | |||||||||||||||
Mr. Mohammed Mane’a Sultan Aba
Al-Ola,
owner of
Dorrat Al Masane’e Trading
Establishment
|
7200000 | 10 | 7200000 | 36000000 | 16 | |||||||||||||||
Al-Sha’er Trading,
Manufacturing and Contracting Company
,
|
4500000 | 10 | 4500000 | 22500000 | 10 | |||||||||||||||
His Royal Highness Prince Nawaf
bin Mishel bin Saud Al Saud
, owner of
Qasser Al Ma’aden Trading
Establishment
|
3600000 | 10 | 3600000 | 18000000 | 8 | |||||||||||||||
Mr. Ibraheem Ali Hussain
Moslem
|
2250000 | 10 | 2250000 | 11250000 | 5 | |||||||||||||||
Mr.
Majed Ali Hussain Moslem
|
2250000 | 10 | 2250000 | 11250000 | 5 | |||||||||||||||
Thamarat
Najran Co. Ltd.
|
1800000 | 10 | 1800000 | 9000000 | 4 | |||||||||||||||
Omar bin Ali bin Omar
Babtain
, owner of
the Saudi Establishment for Trading & Construction
|
900000 | 10 | 900000 | 4500000 | 2 | |||||||||||||||
Total
|
45000000 | 10 | 45000000 | 225000000 | 100 |
Founder
Shareholders
|
Signatures
|
|
1.
|
Arabian
American Development Company
|
/s/ Raad G. Kadasa (on behalf of all shareholders) |
2.
|
Mr. Mohammed Mane’a Sultan Aba
Al-Ola,
owner of
Dorrat Al Masane’e Trading
Establishment
|
|
3.
|
Al-Sha’er Trading,
Manufacturing and Contracting Company
,
|
|
4.
|
His Royal Highness Prince Nawaf
bin Mishel bin Saud Al Saud
, owner of
Qasser Al Ma’aden Trading
Establishment
|
|
5.
|
Mr. Ibraheem Ali Hussain
Moslem
|
|
6.
|
Mr.
Majed Ali Hussain Moslem
|
|
7.
|
Thamarat
Najran Co. Ltd.
|
|
8.
|
Omar bin Ali bin Omar
Babtain
, owner of
the Saudi Establishment for Trading & Construction
|
a-
|
The
right to receive a certain percentage of the net profits, not less than 5%
of the share par value after deduction of the statutory reserve and before
any distribution of the profits of the
Company.
|
b-
|
The
right of priority to recover the value of their shares in capital upon
liquidation of the Company and to receive a certain percentage of the
liquidation proceeds.
|
1-
|
Dispose
of the Company’s assets, properties, estates, effect and approve purchase,
pay the price, to mortgage, to de-mortgage, sell, vacate and receive the
price. The Board minutes of meeting shall include the following within the
recitals, provide that:
|
a-
|
To
specify the reasons and justifications for such
acts.
|
b-
|
To
state that the sale price, in the event of sale, shall be close to a price
specified according to the established accounting
practices.
|
c-
|
The
sale price shall be immediately paid, except where necessary and with
sufficient guarantee.
|
d-
|
Such
acts will not bring about the obstruction of any of
the Company’s activities, impair its competence or create any
additional obligations.
|
2-
|
The
Board of Directors shall have the right to obtain loans
for terms not exceeding the Company’s term, subject to the
following conditions:
|
a-
|
The
value of loans the Board may execute during any one fiscal year shall not
exceed 50 % of the Company’s
capital;
|
b-
|
The
Board shall specify in its resolution the manner in which the
proceeds of the loan will be used and the manner of payment thereof;
and
|
c-
|
The
conditions of the loan and the securities provided in relation thereto
shall be without prejudice to the Company, the shareholders and the
general guarantees of creditors.
|
3-
|
The
Board of Directors may represent the Company in it relations with third
parties and before the courts, Board of Grievances, Labor Office, Labor
Committees, Securities Committees, Judicial Committees, Arbitration
Authorities, Civil Rights Departments, Police Offices, governmental
authorities, Chamber of Commerce and Industry, various companies and
corporations; participate in bids, receive and make
payments, acknowledge, claim, defend, plead, dispute,
reconcile, accept and reject judgments, arbitrate on behalf of Company,
request execution of judgments, oppose same and receive the proceeds
thereof;
|
4-
|
The
Board of Directors may sign all contracts, documents and instruments,
including without limitation: articles of association of companies in
which the Company is shareholder, with all amendments and annexes,
amendment resolutions; sign agreements and instruments before the notary
public and governmental authorities, make guarantees to companies for
their loans and those of their subsidiaries, issue powers of attorney on
behalf of the Company, appoint employees and representatives and fix their
remuneration and terminate the services of same, receive and deliver, rent
and lease, open accounts, credits, withdraw, deposit in banks, issue bank
guarantees, sign all checks, documents and bank
transactions.
|
a.
|
That
such discharge shall take place at least one year after the date on which
the debt has originated,
|
b.
|
That
such discharge shall be limited to a certain maximum amount for each year
and for each individual debtor; and
|
c.
|
That
such discharge shall be the right of the Board and may not be delegated to
others.
|
|
a-
A member of the Board of Directors may not act on behalf of more than one
Board Member at the same meeting;
|
|
b- The
proxy shall be in writing; and
|
1.
|
Prepare
for Board meetings;
|
2.
|
Enforce
Board resolutions;
|
3.
|
Prepare
the estimative annual balance sheets in accordance with the generally
acceptable accounting principles and Board
resolutions;
|
4.
|
Run
the affairs of the Company, supervise the performance of the officers in
charge of the Company’s management and the Company’s employees in
conformity with the regulations;
|
5.
|
Issue
and authorize others to issue orders pertaining to the Company’s expenses
as per the approved annual balance
sheets;
|
6.
|
Exercise
the powers vested in him by Board resolutions and under the Company’s
bylaws and regulations;
|
7.
|
Delegate
such powers to other officers in charge as he may deem appropriate subject
to the Company’s bylaws and
regulations;
|
8.
|
Sign
and authorize others to sign contracts, and purchase, sell, transfer, and
accept real estate on behalf of the Company pursuant to the resolutions
issued by the Board approving such
acts;
|
9.
|
Sell,
purchase, and receive the price of moveable and immovable assets and
conclude or revoke transactions based on resolutions issued by the
Board.
|
10.
|
Open,
operate, or close all types of accounts with any Saudi or foreign
financial institutions, subject to the approval of the Board; open
documentary accounts in favour of the Company’s financers; sign, transfer,
accept, deduct, guarantee, warrantee, and pay all transfers; draw cheques
on the accounts of the Company with banks pursuant to the schedule of
powers approved by the Board; and
|
11.
|
Have
such any other powers as the Board may
determine.
|
1-
|
To
verify subscription to the capital and fulfillment of the relevant
provisions in accordance with the Companies Law at the minimum value as
allocated for the share value;
|
2-
|
To
draw up the final provisions of the Company’s
bylaws;
|
3-
|
To
appoint the members of the first Board of Directors for a term not
exceeding five years and the first auditor, if these have not been
appointed in the Articles of Association or in the Bylaws of the Company;
and
|
4-
|
To
deliberate on the incorporators’ report for the operations and expenses
required for the incorporation the
Company.
|
1.
|
An
amount equal to ten per cent (10 %) of the net profits shall be set aside
for the formation of the statutory reserve. The Ordinary General Meeting
may, when such reserve shall have reached one half of the capital,
discontinue the setting aside of said
reserve;
|
2.
|
The
Ordinary General Meeting may, upon the proposal of the Board of Directors,
set aside a certain percentage of the net profits for the formation of
other reserves intended for a specific purpose or
purposes;
|
3.
|
Out
of the outstanding balance, an initial payment equal to 5 % of the paid up
capital shall be distributed among the
shareholders;
|
4.
|
Following
the deduction of expenses, depreciation, and reserves, an amount of SR
200,000.00, not exceeding 10 % of the outstanding balance of profits,
shall be paid to the Board members.
|
5.
|
The
outstanding balance shall be distributed amongst the shareholders as a
bonus share in the profits or it shall be carried forward to the next
years in such a manner as may be approved by the General
Meeting.
|
1.
|
Pioche-Ely
Valley Mines, Inc. is a Nevada corporation doing business under its
corporate name. The Company beneficially owns approximately 55%
of the capital stock of Pioche-Ely Valley Mines,
Inc.
|
2.
|
American
Shield Refining Company is a Delaware corporation doing business under its
corporate name. The Company owns 100% of the capital stock of
American Shield Refining Company.
|
3.
|
South
Hampton Resources International, S.L. is a Spanish corporation doing
business under its corporate name. The Company owns 100% of the
capital stock of South Hampton Resources International,
S.L.
|
4.
|
Texas
Oil & Chemical Co. II, Inc. is a Texas corporation doing business
under its corporate name. American Shield Refining Company owns
100% of the capital stock of Texas Oil & Chemical Co. II.
Inc.
|
5.
|
South
Hampton Resources, Inc. is a Texas corporation doing business under its
corporate name. Texas Oil & Chemical Co. II, Inc. owns 100%
of the capital stock of South Hampton Resources,
Inc.
|
6.
|
Gulf
State Pipe Line Company is a Texas corporation doing business under its
corporate name. South Hampton Resources, Inc. owns 100% of the
capital stock of Gulf State Pipe Line
Company.
|
1.
|
I
have reviewed this annual report on Form 10-K of Arabian American
Development Company;
|
2.
|
Based
on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in
this report;
|
4.
|
The
registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a.
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b.
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles:
|
c.
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d.
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent
functions):
|
a.
|
all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
b.
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
|
1.
|
I
have reviewed this annual report on Form 10-K of Arabian American
Development Company;
|
2.
|
Based
on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in
this report;
|
4.
|
The
registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a.
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b.
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles:
|
c.
|
evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d.
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent
functions):
|
a.
|
all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
b.
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
|