UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2001
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-1764
AMERICAN NUCLEAR CORPORATION
(Exact Name of Registrant as Specified In Its Charter)
Colorado 83-0178547
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 2713
Casper, Wyoming 82602
(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 share 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
PAGE 2
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATION
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2001 AND JUNE 30, 2000
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
2001 2000 2001 2000
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NET LOSS BEFORE
DISCONTINUED OPERATIONS $ -0- $ -0- $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Reclamation
Reimbursement 13,519 30,998 13,519 30,998
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Total revenue from
discontinued operations 13,519 30,998 13,519 30,998
DISCONTINUED EXPENSES
General and
administrative 5,253 12,742 12,228 22,918
Reclamation expense -0- 25,441 -0- 33,970
Interest income (527) (309) (1,012) (615)
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Total discontinued
expenses 6,448 37,874 11,216 56,273
NET INCOME (LOSS) $ (6,448) $ (6,876) 2,303 (25,275)
PER SHARE:
NET PROFIT (LOSS) BEFORE
DISCONTINUED OPERATIONS
PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
DISCONTINUED OPERATIONS
PER SHARE NET
PROFIT (LOSS) $ 0.00 $ 0.00 $ 0.00 $ 0.00
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,696,739 7,696,739 7,696,739 7,696,739
DIVIDENDS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
PAGE 3
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
JUNE 30, 2001 AND DECEMBER 31, 2000
June 30, Dec. 31,
2001 2000
(Unaudited) (Unaudited)
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ASSETS
Current assets:
Cash $ 87,740 $ 37,472
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Total current assets $ 87,740 $ 37,472
Other assets:
Other 8,000 45,587
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Total other assets 8,000 45,587
Total assets $ 95,740 $ 83,059
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable -0- -0-
Other current liabilities -0- -0-
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Total current liabilities -0- -0-
Common Stockholders' equity:
Common stock 314,080 314,080
Additional paid-in capital 13,304,849 13,304,849
Retained earnings (12,894,062) (12,906,744)
Less cost of treasury stock (629,126) (629,126)
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Common stockholders' equity 95,740 83,059
Total liabilities and stockholders'
equity $ 95,740 $ 83,059
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PAGE 4
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
Six Months Ended
June 30
2001 2000
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Cash flows from discontinued operations:
Net loss $ (2,302) $ (25,275)
Adjustments to reconcile net loss to net
cash used by operating activities:
(Increase) Decrease in other assets (8,000) 25,464
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Total adjustments (8,000) 25,464
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Net cash used in operating activities (5,698) 189
Net increase (decrease) in cash during the
period (5,698) 189
Cash at the beginning of the period 93,438 46,457
Cash at the end of the period $ 87,740 $ 46,646
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PAGE 5
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2001 AND 2000
(UNAUDITED)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Liquidation Basis
The accompanying financial statements have been prepared on a
liquidation basis, which recognized the realization of assets and the
satisfaction of a portion of the liabilities. The Company's current
assets exceeded its current liabilities by $87,740 and $93,437 at
June 30, 2001 and December 31, 2000 respectively. During 1994 the
Company discontinued operations due to lack of operating capital. For
financial reporting purposes, the Company has offset contractual
liabilities totaling $392,000. These liabilities were recognized as
income because the Company has no means of repaying the obligations
under liquidation basis accounting. The remaining Company cash
deposits are being utilized to maintain compliance as long as possible
with U.S. Nuclear Regulatory Commission (NRC) license requirements
pertaining to the Company's uranium mining reclamation site. The
Company discontinued the licensing requirements by transferring this
responsibility to the Wyoming DEQ.
The state of Wyoming declared the Company in default of its
reclamation obligations when the Company terminated its business
operations in May 1994. Subsequently the reclamation bond fund of
$3,213,255 was acquired by the Wyoming DEQ through forfeiture
proceedings. The state of Wyoming has consented to perform certain
reclamation obligations, but has declined to assume the NRC license and
the associated obligations. The reclamation requirements have changed
to require more work since the bond forfeiture, and the cash
requirements to continue reclamation have increased by an undetermined
amount. There is the potential of a cost overrun in the range of $3
million or considerably more. The Company has not recognized a
contingent liability for this amount because the Wyoming DEQ and NRC
have not agreed upon a final reclamation plan upon which to base a cost
estimate. By state of Wyoming statute, the Company is liable for any
cost overruns.
The Company remains liable for completion of its reclamation
obligations even though it does not have enough assets with which to
complete those obligations. The NRC has served the Company with notice
PAGE 6
that the Company's deliberate abandonment of its reclamation site would
constitute an intentional violation of the Atomic Energy Act of 1954
and could subject the Company to NRC enforcement actions and criminal
sanctions. The Company is complying with a NRC order to maintain and
comply with the terms of its NRC license. Further, the Company has an
agreement with the Wyoming DEQ to maintain its corporate existence in
order to receive Title X reclamation reimbursement funds from the U.S.
Department of Energy and transfer agreed upon amounts to the Wyoming
DEQ. The Company has no intention of entering into other businesses or
continuing its limited operations beyond the time when it has fulfilled
its obligations under the NRC license and those required by the state of
Wyoming.
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
for 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
unaudited financial statements included in the Company's Report on Form
10-K for the year ended December 31, 2000. In the opinion of
management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been
included.
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
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 that was secured by the mortgage against the
properties. Inability to sell the mining properties, depletion of
capital and lack of revenues deprived the Company of operating capital.
The Company determined to discontinue operations during May 1994 and to
liquidate its miscellaneous property and to pay and discharge its
current liabilities and other expenses associated with an orderly
closing of business operations.
PAGE 7
Marketability of Common Stock
Effective May 9, 1994 the Company's common stock was removed from
listing on the NASDAQ SmallCap Market. There are no trading markets
for the Company's common stock. Salt Ridge Energy, Inc., a corporation
owned by Mr. Salisbury, President, acquired 2,893,072 shares of common
stock during June 1998 and now owns 37.6% of the Company's
outstanding stock. The Company is aware of occasional trades on the
electronic bulletin board. the basis of these transactions is unknown.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company discontinued operations during May 1994. The Company
had no operating revenues during the period subject to this report or the
earlier comparable period. See the "Discontinuance of Operations" and
the "Liquidity and Capital Resources" sections in this report regarding
additional information about the Company's cessation of operations.
General and administrative expenses were $12,228 and $5,253 for the
six and three months ended June 30, 2001 compared to $22,918 and $12,742
for the comparable periods ended June 30, 2000.
Reclamation expenses were zero for the six and three months ended
June 30, 2001 and $33,970 and $25,441 for the comparable 2000 periods.
The Company discontinued the monitoring on January 1, 2001.
There was $1,012 interest income for the first half of 2001,
compared to $615 for the comparable period ending June 30, 2000. The
interest is due to the reimbursement of DOE funds to the Company. These
funds will be used for ongoing expenses as long as possible.
A net income of $2,303 was recognized during the first six months of
2001 compared to a loss of $25,275 for the same period in 2000. The
losses are expected to remain in the range of $7,000 per quarter as long
as the Company continues ongoing operations.
Liquidity and Capital Resources
The Company's working capital at June 30, 2001, was $87,740
while at December 31, 2000 it was $93,437. The decrease in working
capital at June 30, 2001 was due to the Company's ongoing general and
administrative expenses. During May 1994, the Company discontinued
operations because of its lack of funds. Before that decision was made,
the Company attempted to obtain additional loans, raise equity funds
through a private placement of its common stock, secure byproduct
disposal contracts, or sell its mineral properties. None of these
PAGE 8
efforts were successful. In addition, the Wyoming Department of
Environmental Quality (DEQ) declared forfeiture of the $3.2 million
reclamation bond fund to the DEQ to be used by the DEQ for completing
reclamation of the Company's Gas Hills mill site. The total cost of
the reclamation work will not be known for many years, and the funds
held by the DEQ are not expected to cover all the expenses. The
Company remains the licensee and owner of the reclamation site, and
the Company will not be released from the obligations of reclamation
that are imposed by the license until reclamation work is completed and
accepted by the regulatory agencies. The Company has applied, under
the federal program administered by the DOE, for reimbursement of some
of the reclamation work it has previously performed to clean up its
mining and milling site. The DOE program has been funded by Congress
and money has been allocated for the reimbursements. The Company
received approximately $46,000 from this program during 1999 and
approximately $107,000 during 2000 and $13,000 during 2001. Under the
prevailing law and the terms of the order of the U.S. Nuclear Regulatory
Commission that directs the Company to continue to reclaim and monitor
its reclamation site, the funds and any future funds that could be
received under this program will be applied to ongoing monitoring and
reclamation obligations over the next several years, including payments
to the Company's independent contractors to perform such services.
None of the money will be applied to claims of creditors, and no funds
will be available for distribution to shareholders because the
reclamation obligations are projected to substantially exceed the funds
that become available. The DEQ has entered into an agreement with the
Company providing that the state will not bring a deficiency action in
court if the Company transfers Title X funds to the state to be applied
to the deficiency for use by the state to perform reclamation. The
Tennessee Valley Authority (TVA), which had asserted a right to the
funds based on its 1984 contract with the Company, released the Company
from such claims due to an agreement between TVA and the state. The
agreement between the Company and DEQ provides that the Company and DEQ
will use the DOE Title X funds toward monitoring and reclamation of the
mill site in accordance with the NRC license.
PAGE 9
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
(signature)
August 15, 2001 By: -----------------------------------
William C. Salisbury
President
(signature)
August 15, 2001 By: -----------------------------------
Dennis A. Eckerdt
Secretary and Treasurer