PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ___________________
Commission File Number 0-1764
AMERICAN NUCLEAR CORPORATION
(Exact Name of Registrant as Specified In Its Charter)
Colorado 83-0178547
_____________________________ ____________________
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
550 North Poplar Street, Suite 6
Casper, Wyoming 82601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (307) 265-7912
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
issuer's classes of common stock, as of the close of the period
covered by this report.
4 cents par value common stock: 7,696,739 shares
This report consists of 11 pages including one page constituting the
cover page.
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PART I. FINANCIAL INFORMATION
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
MARCH 31, 1994 AND MARCH 31, 1993
(UNAUDITED)
Three Months Ended
March 31,
____________________________
1994 1993
___________ __________
NET LOSS BEFORE DISCONTINUED OPERATIONS $ -0- $ -0-
DISCONTINUED OPERATIONS
Byproduct material disposal .... -0- 18,057
General and administrative ..... 96,726 163,664
Mineral Property Impairment..... 4,200,000 -0-
Reclamation Expense............. 300,000 -0-
Interest Income (27,727) (31,593)
Interest Expense 49,972 41,654
___________ __________
NET LOSS $(4,618,971) $ (191,782)
PER SHARE:
NET LOSS BEFORE DISCONTINUED
OPERATIONS PER SHARE........... $ -0- $ -0-
DISCONTINUED OPERATIONS PER
SHARE.... $ (0.60) $ (0.02)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING ............ 7,696,739 7,696,539
DIVIDENDS PER SHARE ............. $ 0.00 $ 0.00
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AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
March 31, 1994 and December 31, 1993
March 31, December 31,
1994 1993
(Unaudited)
______________ ____________
ASSETS
Current Assets:
Cash ...................................... $ 93,825 $ 164,302
Accounts receivable ....................... -0- 3,392
Other current assets....................... 15,651 20,851
____________ ___________
Total current assets 109,476 188,545
Mining Properties:
Mineral Properties held
for sale ................................ 2,297,811 6,497,123
Plant and equipment (Net).................... 87,260 91,720
Other Assets:
Reclamation Deposit ....................... 3,030,640 3,011,871
Other ..................................... 55,550 55,550
____________ ___________
Total other assets ........................ 3,086,190 3,067,421
Total Assets ................................ $ 5,580,737 $ 9,844,809
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Note payable to stockholders ............. 2,031,200 2,031,200
Current maturities of equipment notes
payable ................................ 16,628 18,302
Accrued interest payable ................. 191,465 142,929
Trade accounts payable ................... 3,082 7,806
Deferred revenue ......................... 219,000 202,500
____________ ___________
Total current liabilities ............ 2,461,375 2,402,737
Estimated reclamation costs............... 3,040,290 2,740,290
Long term maturities of equipment notes
payable ................................ 41,759 45,498
Common Stockholders' equity:
Common stock ............................. 314,080 314,080
Additional paid-in capital ............... 13,304,849 13,304,849
Retained earnings ........................ (12,952,490) (8,333,519)
Less cost of treasury stock .............. (629,126) (629,126)
____________ ___________
Common Stockholders' equity ........... 337,313 4,656,284
Total liabilities and stockholders'
equity .................................. $ 5,580,737 $ 9,844,809
============ ===========
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AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(UNAUDITED)
Three Months Ended
March 31,
1994 1993
__________ __________
Cash flows from Operating Activities:
Net loss.................................... $(4,618,971) $ (191,782)
Adjustments to reconcile net loss to net cash
used by operating activities:
Mineral Property Impairment................ 4,200,000 -0-
Reclamation Expense........................ 300,000 -0-
Depreciation............................... 4,460 4,961
(Increase) Decrease in reclamation deposit. (18,769) (22,684)
(Increase) Decrease in other assets........ 8,592 48,415
(Decrease) Increase in accounts payable.... (4,724) (4,038)
(Decrease) Increase in interest payable.... 48,536 (90,752)
(Decrease) Increase in reclamation payable. -0- (24,772)
(Decrease) Increase in other liabilities... 14,826 10,000
__________ __________
Total Adjustments.......................... 4,552,921 (78,870)
__________ __________
Net cash used in operating activities....... (66,050) (270,652)
Cash Flows From Investing Activities:
Purchase of plant and office equipment ..... -0- -0-
Exploration and development costs of
mining properties...................... (688) (1,642)
__________ __________
Net cash provided by investing activities.... (688) (1,642)
Cash Flows From Financing Activities:
Net borrowings under note payable-shareholder -0- 186,132
Payments under notes payable-equipment ...... (3,739) (6,055)
---------- ----------
Net cash provided by (used for) financing
activities.............................. (3,739) 180,077
Net increase (decrease) in cash during the
period ..................................... (70,477) (92,217)
Cash at the beginning of the period.............. 164,302 118,814
Cash at the end of the period.................... $ 93,825 $ 26,597
========== ==========
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AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
MARCH 31, 1994 AND 1993
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Going Concern
-------------
The accompanying financial statements have been prepared on a
liquidation basis, which contemplates the realization of assets and
the satisfaction of a portion of the liabilities by June 30, 1994.
The Company's current liabilities exceeded its current assets by
$2,351,900 and $2,214,192 at March 31, 1994 and December 31, 1993,
respectively. Due to continued unfavorable uranium market
conditions, and despite extensive marketing efforts, the Company has
not received purchase offers for its mineral properties that exceed
the mortgage against the properties. Inability to sell the
properties after exhausting efforts to market them means that the
Company has been unable to produce the capital necessary to fund
future operations. The Company has not been able to obtain
additional waste disposal revenues or waste disposal contracts.
Because of the inability to generate sufficient cash to continue
operations, the Company announced on May 9, 1994 that it was
discontinuing operations immediately due to lack of funds. Cycle
Resource Investment Corporation (CRIC) holds a mortgage against the
Company's major asset, the Peach mineral properties, and the Company
expects that CRIC will foreclose because the Company is unable to pay
the mortgage of approximately $2.3 million due on June 30, 1994. In
addition, the Company expects that the Wyoming Department of
Environmental Quality (DEQ) will declare a forfeiture of the
reclamation bond fund in the approximate amount of $3.2 million to
the DEQ in order for the DEQ to complete reclamation of the Company's
Gas Hills mill site. The Company will liquidate its remaining assets
which consist primarily of office furniture and equipment and other
miscellaneous property to pay outstanding expenses and liabilities.
Because liabilities exceed assets, there will be no assets remaining
for distribution to shareholders. The March 31, 1994 financial
statements include a $4,200,000 mineral property impairment
adjustment to the "Mining Properties Held for Sale" classification
because the Company was unsuccessful in obtaining an adequate offer
for the mining properties, resulting in expected foreclosure of the
mortgage and loss of the properties.
Interim Financial Statements
----------------------------
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. The accompanying statements should be read in
conjunction with the audited financial statements included in the
Company's Report on Form 10-K for the year ended December 31, 1993.
In the opinion of management, all adjustments (consisting only of
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normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three
months ended March 31, 1994 are not necessarily indicative of the
results that may be expected for the full calendar year ending
December 31, 1994.
Mining Properties Held for Sale
-------------------------------
In December 1993, the Company determined that its decision to
sell its primary mineral properties rather than hold the properties
for future potential development required greater consideration be
given to in-ground market values and the Company's present financial
position. The Company determined its range of potential loss for the
mineral properties to be from approximately $3 million to
approximately $7 million. Because of the Company's continuing
process to solicit bids for its mineral properties, the lack of an
active market for in-ground uranium reserves, and uncertainties as to
the ultimate intent of the major shareholder which holds the mortgage
against the properties, management was unable to determine at that
time whether any amount in that range provided a better estimate than
any other amount. Therefore, in accordance with the requirements of
Statement of Financial Accounting Standards No. (Statement) 5,
Accounting for Contingencies, a $3 million mineral property
impairment was recognized during December 1993 which represented a
31% reduction in the mineral property valuation at December 31, 1993.
Due to the lack of acceptable offers on the mineral properties
through May 6, 1994, the Company recognized an additional $4.2
million mineral property impairment during March 1994. The mineral
property has been valued at the approximate amount of the mortgage
for financial reporting purposes.
Per Share Amounts
Earnings per share calculations are computed on the weighted
average number of common shares outstanding during the respective
periods. Shares under option and warrants have been disregarded
because their effect is anti-dilutive.
Discontinuance of Operations
The Company determined to discontinue operations during May 1994
and to liquidate its miscellaneous office furniture and equipment and
other miscellaneous property and to pay a portion of its current
liabilities and other expenses associated with an orderly close of
business operations. Management began seeking a purchaser for its
mining properties in the third quarter of 1993. While potential
purchasers continued to express interest, the Company did not receive
any offer greater than the amount of the debt due to CRIC that is
secured by the mortgage against the properties. The mineral
properties will become subject to foreclosure on June 30, 1994 when
the debt is due because the Company will be unable to pay the
mortgage.
Note Payable to Stockholder
The Company has two separate loans from Cycle Resource
Investment Corporation (CRIC), a stockholder, evidenced by promissory
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notes. The two notes total $2,031,200 plus interest and are due on
June 30, 1994. The notes are collateralized by a mortgage against
the Peach uranium properties plus revenues from certain contracts for
byproduct disposal. In the event that CRIC forecloses, as expected,
the Company would lose its most valuable asset, the "Peach" mineral
properties. See the "Discontinuance of Operations" and "Liquidity
and Capital Resources" sections of this report for further details
about these circumstances and the Company's financial condition.
MARKETABILITY OF COMMON STOCK ON NASDAQ SMALL CAP MARKET
Effective February 1, 1994 the Company's common stock was
removed from the National NASDAQ market and began trading on the
NASDAQ Small Cap Market.
Due to the decrease in the market value of public float to
approximately $800,000 during late February, 1994, the Company
expects that its stock will be delisted in the near term from the
NASDAQ Small Cap Market.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company decided to discontinue operations during May 1994
therefore there were no operating revenues or operating losses
reported during the first quarter of 1994. The fiscal quarter of
1993 has been reclassified as discontinued operations for purposes of
comparibility. See the "Discontinuance of Operations" and the
"Liquidity and Capital Resources" sections regarding additional
information about the Company's ceasing of operations.
Byproduct material disposal expense represents the direct costs
associated with the site preparation and the actual receipt and
disposal of byproduct material from third parties. There were no
such costs during the first quarter of 1994 due to the lack of
contracts for delivery during 1994.
General and administrative expenses were $66,000 or 60% less for
the current quarter ended March 31, 1994 compared to the comparable
quarter ended March 31, 1993. The reduction is due primarily to
termination of employment of the past president that occurred when
efforts toward developing a commercial disposal facility were
terminated.
A $4.2 million property impairment was recognized during March
1994 to value the mineral properties near the amount of the CRIC
debt. This impairment was recognized during March 1994 because the
Company did not receive any offers greater than the $2.3 million debt
secured by a mortgage against the mineral properties. The Company
will be unable to pay the mortgage when due on June 30, 1994. These
mineral properties will become subject to foreclosure after that date
by CRIC, a major shareholder, which holds the mortgage. See the
"Note Payable to Stockholder" for additional information.
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Reclamation expense of $300,000 was recognized during March 1994
because it is likely that the reclamation bond fund will be forfeited
to the Wyoming DEQ. This forfeiture eliminates the estimated cost
savings the Company would have realized if it had performed the
reclamation work.
Interest income for the first quarter of 1994 declined by 12%
from the comparable period of 1993. This decrease is due to the
continued reduction in the interest rates paid on certificates of
deposit in the Company's reclamation deposit held by the Wyoming
Department of Environmental Quality.
Interest expense increased by 20% for the first quarter of 1994
compared to the comparable period of 1993. The increase is related
directly to increased borrowings from Cycle Resource Investment
Corporation (CRIC), a stockholder. The outstanding loans from
stockholders increased from $1,805,638 at March 31, 1993 to
$2,031,200 at March 31, 1994.
The net loss increased by $4,427,000 or 23 times during the
first quarter of 1994 compared to the same period in 1993 due
primarily to the mineral property impairment expenses previously
described.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital deficit at March 31, 1994 was
$2,351,900 while at December 31, 1993 it was $2,214,192. The
increased working capital deficit at March 31, 1994 was due to no
byproduct disposal revenue derived from operations during the first
quarter of 1994. Cash available as of this date is not adequate for
the Company to remain in business, no revenues are anticipated in the
near term, and no revenues are assured in the future. The Company's
primary capital resource, the Peach properties, are subject to a
mortgage that the Company is unable to pay, and loss of them through
foreclosure is expected.
During May 1994 the Company decided to discontinue operations
because of the lack of funds. Over the past year the Company has
used its best efforts but has not succeeded in obtaining additional
loans, raising equity funds through a proposed private placement of
its common stock, securing significant byproduct disposal contracts,
or selling its mineral properties. The Company does not have
adequate cash to continue in operation, and therefore it ceased
operations during May 1994. It is very likely that CRIC will begin
foreclosure upon the mineral properties when the Company does not pay
the mortgage due June 30, 1994. In addition, it is likely that the
Wyoming Department of Environmental Quality (DEQ) will declare
forfeiture of the $3.2 million reclamation bond fund to the DEQ in
order for the DEQ to complete reclamation of the Company's Gas Hills
mill site.
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) (11) Statement regarding computation of per share
earnings (loss).
(b) Two reports on Form 8-K were filed during the quarter ended
March 31, 1994, reporting the following:
By a form 8-K dated January 21, 1994 the Company reported
that on January 20, 1994 Cycle Resource Investment Corporation (CRIC)
agreed to forbear until June 30, 1994 from enforcing any of CRIC's
rights or remedies as lender against the Company as borrower on
account of loans by CRIC that matured on August 31, 1993. As of
January 20, 1994 the unpaid principal balance of the loans was
$2,031,200 plus interest.
Also in the form 8-K dated January 21, 1994 the Company
again reported its public announcements that its uranium properties
are for sale.
By a form 8-K dated January 31, 1994 the Company reported
that on January 28, 1994 the Company was notified by Nasdaq that an
exception to the bid price and market value of the public float
requirements of the Nasdaq National Market would not be granted.
Accordingly the securities of American Nuclear Corporation will be
moved to the Nasdaq SmallCap Market effective February 1, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
their behalf by the undersigned thereunto being authorized.
AMERICAN NUCLEAR CORPORATION
Registrant
May 9, 1994 William C. Salisbury
DATE William C. Salisbury
President
May 9, 1994 Dennis A. Eckerdt
DATE Dennis A. Eckerdt
Chief Financial Officer
and Accounting Officer
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ITEM 6
EXHIBIT (a)(11)
Earnings (loss) per share calculations are computed on the
weighted average number of common shares outstanding during the
respective periods. Shares under option and warrants have been
disregarded because their effect is anti-dilutive.
Three Months Ended
March 31,
______________________
1994 1993
_________ _________
Weighted average shares
outstanding ................ 7,852,183 7,851,983
Less shares in treasury ...... (155,444) (155,444)
_________ _________
Weighted average
shares outstanding
including common
stock equivalents .......... 7,696,739 7,696,539