PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
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 No. 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.)
P.O. Box 2713 82602
Casper, Wyoming
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(307) 265-7912
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
None ----
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, 4 cent par value
------------------------------
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. /X/
Based upon the bid prices of the common stock on January 31, 1997 of
$0.001 per share, the aggregate market value of the voting stock held on
that date by non-affiliates of the registrant was $7,677.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of December 31, 1996: 4 cent par
value - 7,696,739
This report consists of pages, including 2 pages constituting the
cover page.
PAGE 2
PART I
------
Item 1. Business.
------- ---------
Discontinuance of Operations
The Company's uranium mining and milling activities were
discontinued in 1982 as a result of the depressed market price for
uranium concentrate. Thereafter the Company offered its inactive mill
tailings ponds as a location for the disposal and reclamation of large
amounts of mill tailings previously generated by another uranium
producer. Those efforts over several years did not result in award of a
disposal contract to the Company. In 1984 the Company began reclamation
of its milling site, as required by federal and state law. In 1988, the
Company decommissioned its uranium mill and began reclamation of the mill
site.
In 1990 the Company shifted its efforts from uranium, for which the
market price remained depressed, to the new and developing industry of
byproduct material disposal for various uranium ore processors. The
Company fulfilled several such disposal contracts between 1990 and 1993.
After extensive marketing efforts, it became apparent that the
byproduct disposal business would not produce revenues adequate to
sustain the Company's operations unless it raised adequate capital for
expanding the byproduct disposal business into a large commercial
byproduct disposal operation. The Company's efforts in 1992 and 1993 to
raise additional capital from investors were not successful. Starting in
1993, the Company advertised its mining properties for sale to raise
funds for development of the commercial disposal operation through a sale
of its principal asset, the Peach mining properties.
The Company's efforts to sell its mining properties in 1993 and
early 1994 were not successful. While potential purchasers continued to
express interest through early 1994, the Company did not receive any
offer greater than the amount of the debt due to Cycle Resource
Investment Corporation (CRIC) that was secured by a mortgage against the
properties. Inability to sell the mining properties, lack of capital,
and lack of revenues from both its uranium properties and its byproduct
disposal business deprived the Company of operating capital. The mining
properties were the only major asset of the Company, and selling them to
raise working capital was the Company's only remaining means to stay in
business. The Company determined to discontinue business operations
during May 1994, to liquidate its miscellaneous property, and to pay its
current liabilities and other expenses associated with an orderly closing
of business operations.
Marketability of Common Stock
Effective May 9, 1994, the Company's common stock was delisted and
removed from the NASDAQ Small Cap Market. There is no regular trading
market for the Company's common stock. Isolated trades may occur on the
electronic bulletin board.
PAGE 3
Development of Business Before Discontinuance in 1994
American Nuclear Corporation, the Company, was incorporated in 1955
as one of the first uranium exploration companies formed after the
commercial importance of uranium as a source of energy and fuel was
realized. The Company acquired uranium mining properties by locating
mining claims and purchasing other mining claims.
Uranium Mining for Atomic Energy Commission and Others
Starting in 1959 the Company was engaged, with its partner, Federal
Resources Corporation, in mining and milling uranium concentrates in the
Gas Hills area in central Wyoming for sale to the U.S. Atomic Energy
Commission and various utilities that supply electricity. The mining was
conducted by open pit surface mining. The mill was also operated on a
custom basis to mill uranium ores for other uranium producers. The
Atomic Energy Commission discontinued purchases in 1971 when its
inventory goals and strategic plans were met and a United States uranium
industry had been created. The partnership continued to operate its mill
for producing its own properties and custom milling of uranium ores for
other producers for sales to commercial users.
Expansion of Uranium Industry in the 1970's
The modern uranium industry was shaped in the 1970s in response to
growth in nuclear power generation by utilities. The embargoes of
imports of foreign oil in the early 1970s caused an energy crisis in the
United States and resulted in increased construction of nuclear power
plants and plans for more plants. Demand for uranium increased
significantly from spot prices for short-term deliveries of less than $10
per pound of uranium concentrate in 1971 to more than $40 per pound by
1978.
Tennessee Valley Authority Agreements
In 1972 the Company entered into an arrangement with the Tennessee
Valley Authority (TVA), an agency wholly owned by the United States, for
the joint acquisition of uranium properties to be produced for use by TVA
to fuel its nuclear power plants. In 1973 Federal American Partners
leased its mining properties to TVA. From 1979 through 1982, the
partnership mined its properties and milled its ores for TVA. In the
late 1970's annual production reached a level of 1.2 million pounds of
uranium concentrates per year. TVA discontinued the operations in 1982
because world-wide production of uranium concentrates exceeded demand and
it cost less to purchase from inventoried uranium stocks than to mine and
mill. A total of 14.5 million pounds of uranium concentrates had been
produced through the mill over its operating life.
PAGE 4
Termination of Tennessee Valley Authority Agreements
In 1984 the Company acquired the uranium mill and associated lands
from the partnership, and it also acquired approximately one-half of the
uranium lands it had jointly held and explored with TVA. These lands,
consisting of approximately 2,700 acres of uranium properties, are known
as the Peach properties. In May 1994 when the Company discontinued
business, the Peach properties were the Company's only principal asset.
They were subject to a mortgage held by Cycle Resource Investment
Corporation (CRIC), which commenced foreclosure in November 1995. The
Company subsequently lost title to the Peach properties as a result of
that foreclosure and the transfer of its equity of redemption.
In 1984 TVA also placed approximately $3.8 million cash in a $4.1
million reclamation bond fund with the Wyoming Department of
Environmental Quality (DEQ) to assure the DEQ and the U.S. Nuclear
Regulatory Commission (NRC) that the reclamation obligations of TVA, the
Company and the partnership for the mill site would ultimately be
performed. The Company began reclamation of the land at the mill site in
1984. TVA also entered into a management agreement with the Company
under which, in exchange for management fees, the Company closed the
mining operations, returned leased mining equipment, and sold the other
mining equipment for TVA's account. The Company's entire financial
obligation to TVA for the Company's cost of acquiring and exploring its
interests in the uranium properties was eliminated.
Status of Uranium Business
After the Tennessee Valley Authority terminated its mining
activities in 1982 that were conducted through the Company's partnership
called Federal American Partners, the Company has ceased to be engaged in
mining or milling uranium. The Company identified significant quantities
of uranium resources in the ground among its uranium properties, but
market prices were never adequate thereafter to enable the properties to
be economically mined. The market for uranium remained low, and it was
still not economically feasible to mine the Company's uranium properties
at those prices. Imports of foreign uranium at low prices, especially
from Russia and Canada, and excess inventories of uranium were the
primary factors that dampened prices to a low of approximately $7.15 per
pound in 1991. In 1993 and 1994, spot prices for short-term deliveries
of uranium were approximately $9.50 per pound. In efforts to generate
working capital, the Company, during the fourth quarter of 1993, offered
its mineral properties for sale. No purchase offers that exceeded the
CRIC debt against the properties were received. Therefore, in May 1994
the Company was forced to discontinue all its business operations due to
lack of operating capital. For a more complete discussion of the uranium
properties formerly held by the Company, see Item 2, Properties.
PAGE 5
Reclamation of Mill Site and Tailings Ponds
Based upon the Company's determination in 1988 that use in the
future of its uranium processing mill would not comply with the revised
licensing requirements of the NRC, the Company began demolition of the
mill in 1988 and completed that work in 1989. Before the Company's
discontinuance of operations in 1994, the Company had undertaken
substantial reclamation work on the mill site as required by the NRC and
the DEQ. The mill and associated buildings were dismantled and the
building materials were buried in one of the two adjacent tailings ponds
where the processed ores produced by the mill (mill tailings) were
impounded after milling. The mill tailings in the two impoundments were
graded by earth moving equipment into mounds covering approximately 40
and 80 acres respectively. A cover of native earth was placed over the
mounds of mill tailings, and the tailings piles were allowed to settle
and compact naturally. The reclamation work is not complete and includes
filling and shaping the side slopes of the tailings piles to such a grade
as to preclude erosion of the soil cover that would allow erosion of the
tailings, placing a final cover of earth over the tailings to limit
emission of radon gas into the atmosphere to meet Environmental
Protection Agency (EPA) standards, applying erosion protection to the
piles and associated drainages, and revegetating and fencing the site.
Byproduct Material Disposal
Starting in 1990 the Company shifted most of its efforts to a
developing industry of byproduct material disposal. Byproduct material
consists of waste generated from ores processed by others for their
uranium or thorium content. Federal regulations require the generators
of these low level radioactive materials to dispose of them in licensed
depositories.
In part because the Company's mill site was undergoing reclamation
work to stabilize the mill tailings, which are low level radioactive
materials, the NRC initially granted permission in the fall of 1990 for
the Company to accept byproduct materials totaling 1,100 cubic yards from
four generators under four specific waste disposal contracts. After the
NRC authorized receipt of the initial byproduct material, the NRC amended
the Company's license in September of 1991 to authorize it to receive and
dispose of an additional 12,500 cubic yards of material from other
sources.
The material terms of the disposal contracts that were completed by
the Company required the generator of the byproduct materials to deliver
them to the Company's mill site. The byproduct material was placed on
the surface of the mill tailings impoundment number one, compacted and
covered with an interim cover of native soils. The addition of the
byproduct materials reduced the volume of earthen fill material that
ultimately must be placed on the mill tailings to meet the reclamation
design requirements.
The income received on account of past disposal contracts generated
revenues for the Company of $322,624, $318,814, and $120,352 from
operations in 1993, 1992, and 1991, respectively. These contracts were
completed, and there were no disposal revenues in 1994 or thereafter.
PAGE 6
During May 1994 the Company notified the NRC and the DEQ that it was
discontinuing all business operations and would be unable to perform
under the approved reclamation plan. All byproduct disposal activities,
which had been conducted as part of the approved reclamation work, were
discontinued at that time.
Abandonment of Efforts to License Commercial Byproduct Disposal
During 1993 the Company abandoned its efforts to obtain new licenses
from the NRC and DEQ to establish a commercial byproduct disposal
business near its mill site that was undergoing reclamation. In order to
complete the environmental studies required for the new licenses,
continue to pursue its license applications, and take other steps for
opening such a business, the Company sought to raise $5 million to $8
million through private placements of its common stock. When this effort
proved unsuccessful in 1993, the Company terminated further efforts to
enter the commercial byproduct disposal business.
Termination of Byproduct Disposal and Discontinuance of Business
The Company did not realize adequate revenues from its byproduct
disposal business commenced in 1990 to fund its operations. Since 1991
the Company relied for a large part of its operating capital upon loans
by Cycle Resource Investment Corporation (CRIC), holder of approximately
30 percent of the Company's outstanding stock. The Company was unable to
obtain additional loans from CRIC or any other source after 1993. The
Company's efforts to raise capital by placement of its common stock were
unsuccessful. The Company was not able to obtain joint ventures or long
term supply contracts for exploitation of its uranium properties in the
future when market prices for uranium were expected to be higher.
In efforts to repay its loan to CRIC and to raise additional capital
to continue its reclamation work over the next several years as required
by law, the Company in 1993 offered its uranium properties for sale.
Through May 1994, several prospective buyers expressed interest in
purchasing the uranium properties, but no purchase offers were received
that were greater than the CRIC debt. The uranium properties could not
be sold under those circumstances.
Due to the lack of a sale of its uranium properties and limited
operating capital, the Company was compelled to discontinue all business
operations during May 1994. At the time the Company discontinued
business operations, it was unable to continue required reclamation work
at the level required by law. The DEQ declared the Company in default of
its reclamation obligations and began reclamation bond forfeiture
proceedings against the Company. These proceedings resulted in
forfeiture of the bond fund of $3,213,255 to the State of Wyoming in
October 1994. The Company has continued to monitor the reclamation site,
as ordered by the NRC and required by the terms of the NRC license. The
Company expects that reclamation of the mill site will ultimately be
performed by the DEQ to the extent of the available funds. The state of
Wyoming has assumed certain NRC license obligations under conditions that
limit its ultimate liability. The Company will continue to be the
licensee and responsible for all NRC license requirements. By statute
the DEQ may hold the company liable for any reclamation costs incurred by
the DEQ in excess of the bond. The total reclamation cost for which the
Company remains obligated will not be known for several years until
reclamation work is completed.
PAGE 7
Financial Information About Industry Segments
In 1991 the Company entered into the business of uranium byproduct
material disposal. Between 1982 and that time, the Company's only
business was winding down its former mining operations with the
partnership and TVA and maintaining its uranium properties with the
intent of eventually producing uranium concentrate.
Before it discontinued its business operations in May 1994, the
Company had no foreign operations or export sales. It had not segregated
its business activities into geographic areas within the United States
except to the extent that its operations were located within Wyoming.
Potential Unasserted Reclamation Liabilities
The Company's reclamation work and its discontinued byproduct
materials disposal business activities were and are highly regulated by
the NRC and Wyoming DEQ, which have licensing authority and jurisdiction.
The Company's reclamation fund of $3,213,255 was declared forfeited by
the DEQ in 1994 and acquired by the DEQ to be applied to the reclamation
costs of the mill site. Even though the Company discontinued its
business operations in May 1994, it remains liable for completion of the
reclamation and the cost of any reclamation work that is not funded by
the bond fund and other funds of the Company transferred to the state of
Wyoming.
Employees
As of December 31, 1996, the Company had no employees.
Item 2. Properties
------- ----------
The Peach properties previously held by the Company consisted of
unpatented mining claims located on the public domain of the United
States in the Gas Hills area of central Wyoming. The Company had been
unable to mine the properties or sell them to another uranium producer
because of the continued low market price for uranium.
The Peach properties, which were previously the Company's major
asset, were subject to a mortgage given to secure a loan made by Cycle
Resource Investment Corporation (CRIC). The Company was unable to pay
the loan, and in 1995 CRIC instituted foreclosure against the Peach
properties. The foreclosure sale was held in November 1995, and CRIC
was the high bidder at the foreclosure sale, bidding the principal loan
amount of $2,031,200 plus interest and costs. In 1996, before the end of
the Company's right to redeem the properties from foreclosure for a total
redemption price of approximately $3,000,000, which would have finally
terminated all interest of the Company in the Peach properties, the
Company transferred its interest in the properties, including its right
to redemption for approximately $146,000.
PAGE 8
Item 3. Legal Proceedings.
------- -----------------
There are no legal proceedings pending against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
------- ---------------------------------------------------
No matters for decision were submitted to a vote of shareholders
during the year ended December 31, 1996.
PART II
-------
Item 5. Market For Registrant's Common Equity and Related
Stockholder Matters.
------- -------------------------------------------------
Through January 1994 the common stock of the Company was traded
over-the-counter on the NASDAQ national market system. Effective
February 1, 1994 the Company's common stock began trading on the NASDAQ
small cap market under the symbol ANUC. Effective May 9, 1994 the
Company's common stock was delisted and removed from the NASDAQ small cap
market. Trades between market makers may occur on the over the counter
bulletin board. The range of high and low sales prices of the stock for
each calendar quarter period during the past three years through May 9,
1994, as quoted by NASDAQ, are given in the following table. The
over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down, or commission, and may not necessarily
represent actual transactions.
Price Ranges (closing bid)
For Calendar Years Ended December 31
------------------------------------
1996 1995 1994
------ ------ ------
Low High Low High Low High
---- ---- ---- ---- ---- ----
First Quarter ..... .001 .001 0.001 0.001 0.12 0.25
Second Quarter ..... .001 .001 0.001 0.001 0.09 0.15
Third Quarter ..... .001 .001 0.001 0.001 0.001 0.001
Fourth Quarter ..... .001 .001 0.001 0.001 0.001 0.001
<FN>
<F1> (a) The low and high prices for the stock on January 31, 1997 were $.001 and
$.001.
<F2> (b) Based solely upon the number of record holders, the approximate number of
stockholders of the common stock of the Company as of January 31, 1997 was
1716.
<F3> (c) No dividends have been declared with respect to the common stock during the
fiscal years ended December 31, 1996, 1995 and 1994.
</FN>
PAGE 9
Item 6. Selected Financial Data.
- ------- -----------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December December December December December
31,1996 31,1995 31,1994 31,1993 31,1992
(Unaudited) (Unaudited) (Unaudited)
-------- -------- -------- -------- --------
($000's are omitted except per share amounts)
INCOME STATEMENT
Revenue From
Discontinued
Operations $ -0- $ -0- $ -0- $ 323 $ 319
Net Income (Loss) $ 205 $ 386 $(4,991) $(4,074) $ (381)
BALANCE SHEET
Working Capital(1) $ 154 $ (62) $ (391) $(2,214) $(1,590)
Total Assets $ 257 $ 218 $ 72 $ 9,845 $13,413
Total Liabilities $ -0- $ 167 $ 406 $ 5,189 $ 4,683
Long-Term
Obligations $ -0- $ -0- $ -0- $ 2,786 $ 2,913
Common Stockholders'
Equity (Deficit) $ 257 $ 51 $ (335) $ 4,656 $ 8,730
LOSS PER COMMON
SHARE(2)
Income (loss) from
Operations $0.03 $ 0.05 $ (0.65) $ (0.53) $ (0.05)
Dividends Paid Per
Common Share $ -0- $ -0- $ -0- $ -0- $ -0-
<FN>
<F1> (1) Exclusive of assets held for sale.
<F2> (2) The weighted average number of shares of common stock outstanding
during the years ended December 31, 1996, 1995, and 1994 were
7,696,739 all three years.
</FN>
PAGE 10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
------- -------------------------------------------------
(See, in addition to Selected Financial Data, the financial
statements of the Company referred to in Item 14)
Discontinuation of Operations
The Company's efforts to sell its mining properties, starting in
1993, were unsuccessful, preventing it from raising operating capital
necessary to continue in business. As a result, the Company discontinued
business operations in May 1994. Inability to sell its properties and
lack of capital and 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 a portion of its current
liabilities and other expenses associated with an orderly closing of
business operations. These financial statements have been prepared on a
liquidation basis.
Results of Operations
During 1996 the Company continued to monitor the reclamation site in
accordance with NRC and Wyoming DEQ regulations. The funds were provided
primarily through payments received during 1995 and 1996 from the U.S.
Department of Energy (DOE) program Title X federal funds.
During 1995 and 1996 the Company applied, under the Title X federal
program administered by the (DOE), for reimbursement of some of the
expenses of reclamation work it has previously performed to clean up its
mining and milling site. The Company's claim was for approximately
$734,000 of which the Company received $ 229,707 and $175,555 during 1995
and 1996 respectively. The remaining payment is expected to be paid over
the next several years. Under the prevailing law and agreements with the
Wyoming DEQ, and under the terms of the license and order of the U.S.
Nuclear Regulatory Commission that requires the Company to continue to
monitor the site, the funds and any future funds that may be received
under this program will be applied by the Wyoming DEQ and the Company to
reclamation and ongoing monitoring and maintenance obligations over the
next several years, including payments to the Company's independent
contractors to perform monitoring 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 exceed any of the funds that become available. The DEQ has
notified the Company that the reclamation bond may be deficient by as
much as $3 million. The DEQ has statutory authority to sue the Company
for the bond deficiency. 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 and used 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 primarily toward monitoring and reclamation of the
mill site in accordance with the NRC reclamation plan.
PAGE 11
During 1995 CRIC foreclosed upon the Company's Peach properties for
non-payment of its $2,031,200 loan. The loan plus accrued interest
totaled approximately $3,000,000 at November 28,1996, the end of the one
year redemption period the Company had to reacquire the properties.
General and administrative expenses increased approximately 43%
compared to the 1995 reported general and administrative expenses due to
the ongoing and ultimately the finalization of agreements between the
Company, NRC and DEQ and the sale of the Peach property redemption
rights. General and administrative expenses decreased approximately 54%
and 67% during the years ended December 31,1996 and 1995 compared to 1994
due to the discontinuance of operations during 1994.
In December 1993, the Company determined that its decision to sell
its primary uranium properties rather that hold the properties for future
potential development required greater consideration be given to
in-ground market values and the Company's 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,
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
property impairment was recognized during 1993 which represents a 31%
reduction in the mineral property valuation at December 31, 1993. In
March 1994, after the Company's efforts to sell the uranium properties
failed, the uranium properties were written down to the amount of the
CRIC notes, for which the uranium properties were collateral. Management
determined that a $4,200,000 write-down in the carrying value of the
Company's uranium properties was warranted. The valuation of the uranium
properties at approximately $2.2 million equaled the $2.2 million debt
obligations to CRIC. CRIC commenced foreclosure upon the properties
during 1995. During 1996 the Company sold its redemption rights for
approximately $146,000 since it had no way of repaying the outstanding
debt.
On August 31, 1994 the Company abandoned, through non-payment of the
$100 per claim annual rental fees due on that date, 500 mining claims
with a remaining book value of $-0-. During December 1993 and March
1994, mineral property impairments of $3 million and $4.2 million,
respectively, for the remaining mining claims were recorded. During 1996
and 1995 there were no property abandonments or mineral property
impairments.
Reclamation reimbursements of $175,555 and $229,707 were received
from the DOE during 1996 and 1995 respectively.
Interest expense for the year ended December 31, 1994 was $125,660.
Interest expense for the years ended December 31,1996 and 1995 were zero
due to the foreclosure by CRIC upon the Company's Peach properties.
PAGE 12
Liquidity and Capital Resources
During 1994 the Company discontinued operations due to the lack of
operating capital. For financial reporting purposes the Company has
offset its $219,000 contractual obligations towards incompleted byproduct
disposal contracts and $173,000 obligation to third parties for payments
they made to the Wyoming DEQ upon the reclamation bond forfeiture. These
liabilities totaling $392,000 were recognized as income because the
Company has no way of repaying the obligations under liquidation basis
accounting. The remaining Company cash deposits are being utilized to
maintain compliance as long as possible with the NRC license
requirements. 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 DEQ through forfeiture proceedings. The
bond fund had been funded in the full amount fixed by the DEQ, and
approved by the NRC, as the entire cost of completing the required
reclamation work and performing under the Company's license. The
reclamation requirements have been changed and the amount required to
perform the reclamation under the new requirements increased. By state
of Wyoming statute, the Company is liable for any cost overruns, none of
which exist at this time. The Company expects to be able to continue in
compliance with the licensing requirements through 1999.
The Company's working capital at December 31,1996 was $154,000
compared to a deficit at December 31, 1995 of $163,000, while at December
31, 1994 the deficit was $390,000. The increased working capital during
1996 is the direct result of the sale of the Company's redemption right
for $146,000 and DOE reclamation reimbursement of $176,000. The reduced
working capital deficit during 1995 occurred because of the method used
in reporting the unpaid liabilities as income during 1995. The reduced
working capital deficit during 1994 occurred because of the method used
in reporting the offset of the CRIC debt against the mineral properties.
The past three years the Company has relied upon the payment of
funds from the DOE Title X reclamation reimbursements to continue the
required ongoing reclamation and monitoring obligations of the Company.
On August 24, 1993, the Company reached an agreement with Cycle
Resource Investment Corporation (CRIC), a stockholder, for CRIC to
increase its total loans to $2,031,200. The Company was not able to
repay the notes on August 31, 1993 when due. On January 20, 1994, the
payment date for this $2,031,200 debt plus approximately $143,000 in
accrued interest was extended to June 30, 1994. CRIC foreclosed upon the
Company's Peach properties in the approximate amount of $2,750,000 during
1995. Since the Company was not able to sell the properties prior to the
extended due date of the notes on June 30, 1994, and had no other funds
to continue as a going concern, the Company was unable to prevent
foreclosure of the Peach properties. The remaining Company cash deposits
are being utilized to maintain compliance, as long as possible, with the
NRC license monitoring requirements. During 1996 the Company sold its
redemption rights related to the Peach mineral properties for
approximately $146,000.
PAGE 13
Income Taxes
See Note 2 to Financial Statements included in Item 14 herein.
Item 8. Financial Statements and Supplementary Data.
------- -------------------------------------------
See Item 14 of this report.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
------- ---------------------------------------------
Due to the Company's discontinuance of business operations in 1994,
the Company dismissed its independent auditors, Mitchell - Finley and
Company, on January 26, 1995.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.
-------- --------------------------------------------------
The following table sets forth certain information concerning
directors and executive officers of the Company:
Year
Name and All Positions First Became
Currently Held With A Director/
the Corporation Age Officer
--------------- --- ------------
William C. Salisbury, President 49 1993
Director 1993
Dennis A. Eckerdt, Secretary 48 1994
Chief Financial Officer 1991
Director 1992
<FN>
The executive officers of the Company serve at the pleasure of the
Board of Directors and do not have fixed terms.
</FN>
Business Experience of Directors and Officers
The principal occupations of each officer for at least the past five
years are as follows:
PAGE 14
William C. Salisbury was appointed President of the Company in
August 1993. He served in that office until August 1995 when he became
the Secretary and Treasurer of the Company. He was reappointed President
during 1996. He is currently self-employed as a consultant providing
land management, environmental and regulatory services to the Company and
other natural resources companies. From October 1991 until his
appointment as President, he was Vice President of the Company, and from
October 1990 to October 1991 he was manager of special projects for the
Company. From July 1983 to October 1990 he was a self-employed
consultant providing land management, environmental and regulatory
services to the Company and other natural resource companies. From
November 1970 to July 1983 he was manager of land and contracts for the
Company. He was appointed to the Board of Directors in August 1993.
Dennis A. Eckerdt became President of the Company in August 1995.
He resigned as President during 1996 and was reappointed as
Secretary/Treasurer. He was previously the Chief Financial Officer since
November 1991. He is currently General Manager of a Denver Colorado
Corporation. From July 1995 through January 1997 he was employed as
Controller for a Boulder Colorado Corporation. Prior to July, 1995, he
was self-employed. Prior to his self-employment, he was Controller for
Centennial Media Corporation and Denver Directory Company from November
1988, through August 1991. From November 1985, to November 1988, he was
employed as Controller for Video Exchange, Inc. From February 1972, to
November 1988, he held various accounting titles and positions with the
Company including Controller and Chief Financial Officer. He was also a
Director of the Company from 1984 through 1988 and was reappointed to the
Board of Directors in August 1992.
The Company's executive officers and directors are required to file
reports of ownership and changes in ownership of the Company's securities
with the Securities and Exchange Commission as required under provisions
of the Securities Exchange Act of 1934. Based solely on the information
provided to the Company by individual directors and executive officers,
the Company believes that during the last fiscal year all directors and
executive officers have complied with applicable filing requirements.
Item 11. Executive Compensation.
-------- -----------------------
Cash Compensation
The following table shows all cash compensation paid or to be paid
by the Company or any of its subsidiaries, as well as other compensation
paid or accrued during the fiscal years indicated to the Chief Executive
Officer and the four other highest paid executive officers of the Company
as of the end of the Company's last fiscal year whose salary and bonus
for such period in all capacities in which the executive officer served
exceed $100,000.
PAGE 15
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- --------------------- -----------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted All
Annual Stock LTIP Other
Name and Principal Compen- Award Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation($) ($) SARs ($) sation($)
- ------------------ ---- --------- -------- --------- ---------- -------- ------- ---------
William C. Salisbury(1) 1996 --- --- --- --- --- --- ---
President 1995 --- --- --- --- --- --- $37,360(3)
1994 $46,896 --- $6,558(2) --- --- --- $53,500(3)
- -----
<FN>
<F1> President from August 1993 until August 1995 then from May 1996
to the present time.
<F2> Contributions to the Company's money purchase pension plan
established to provide retirement benefits to employees. The
plan was terminated in 1994.
<F3> After employment as chief executive officer was terminated as of
May 31, 1994, upon the close of the Company's business, other
compensation was received for services performed in winding up
the Company's business and reclamation obligations.
</FN>
The executive officers of the company serve at the pleasure of the
Board of Directors and do not have fixed terms. Executive officers
generally are elected at the annual director meeting immediately
following the annual stockholder meeting. Any officer elected or
appointed by the Board of Directors may be removed by the Board whenever
in its judgment the best interests of the Company will be served thereby
without prejudice, however to contractual rights, if any, of the person
so removed. The Company's policy is to pay employees, upon termination
of employment by the Company, severance pay equal to one week of their
salary for each full year of employment. The officers are not employees
of the company. There are no family relationships among the directors.
There are no arrangements of understandings between any director and any
other person pursuant to which that director was elected.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
-------- --------------------------------------------------------------
The following table shows beneficial ownership of shares of the
Company's outstanding common stock as of the record date (i) by all
persons, insofar as is known to the Company, owning more than 5% of such
stock and (ii) by each director, each director nominee, each of the
executive officers named in the tables under "Executive compensation" and
all directors and executive officers as a group:
PAGE 16
Amount and
Nature of
Name of Positions and Beneficial Percent of
Title of Class Beneficial Owner Offices Held Ownership Class
- -------------- ---------------- ------------ --------- ----------
Common Stock William C. Salisbury President 4,024 *
Director
Common Stock Dennis A. Eckerdt Secretary 0 0%
Director
Common Stock Cycle Resource Shareholder 2,300,000 29.9%
Investment Corporation
300 Atlantic Avenue
Stamford, CT 06901
Common Stock General Electric Capital Shareholder 593,072 7.7%
Corporation
260 Long Ridge Road
Stamford, CT 06902
Common Stock All directors and Officers and 4,024 *
executive officers as Directors
a group (2 persons)
- ---------------
<FN>
*Less than one percent
</FN>
Item 13. Certain Relationships and Related Transactions
-------- ----------------------------------------------
Cycle Resource Investment Corporation (CRIC), a wholly owned
subsidiary of NUKEM, Inc., loaned the Company a total of $2,031,200 for
operating capital. The loan was evidenced by notes due June 30, 1994
with interest at three percent over the prime rate. The notes were
considered paid in full upon foreclosure of the Peach properties by CRIC
in 1995.
Salt Ridge Energy, Inc., which is wholly owned by Mr. Salisbury, was
paid $77,769 during 1996 and $51,000 during 1995 for site monitoring
work, reclamation obligations, and winding up the Company's business
during October 1995 through December 1997.
PAGE 17
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
-------- -------------------------------------------------------
(a) The following documents are filed as a part of this report:
1. Financial Statements:
- Balance Sheets, December 31, 1996 (unaudited), December
31, 1995, (Unaudited) and December 31, 1994
(Unaudited).
- Statements of Operations and Retained Earnings
(Accumulated Deficit) for the years ended December
31,1996 (Unaudited), 1995, (Unaudited), and 1994
(Unaudited).
- Statements of Cash Flows for the years ended December 31,
1996 (Unaudited), 1995 (Unaudited), and 1994
(Unaudited).
- Notes to Financial Statements for the years ended
December 31, 1996 (Unaudited), 1995 (Unaudited), and
1994 (Unaudited).
All other schedules are omitted because of the absence of the
conditions under which they are required or because the required
information is included in the financial statements or notes thereto.
(b) Reports on Form 8-K.
--------------------
A report on Form 8-K was filed on January 27, 1995, reporting the
Company's dismissal of its independent auditors due to the Company's
discontinuance of business operations in 1994.
c) Exhibits.
--------
Exhibit Sequential
Number Description Page No.
- ------- -----------
EX-3.1(i).1 Restated Articles of Incorporation, dated October 28,
1991 (incorporated herein by reference from the
exhibits to Registrant's report filed on Form 10-Q
dated September 30, 1992).
EX-3.(ii).1 Bylaws, dated August 15, 1980 (incorporated herein by
reference from the exhibits to Registrant's report
filed on Form 10-Q dated October 10, 1980).
EX-3.(ii).2 Amendment to Bylaws, dated December 7, 1994 incorporated
herein by reference from the exhibits to Registrant's
Report filed on Form 8-K dated January 27, 1995.
EX-27 Financial Data Schedule.
PAGE 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
REGISTRANT: AMERICAN NUCLEAR CORPORATION
By: (Signature)
--------------------------------
William C. Salisbury, President
Date: March 15, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
By: (Signature)
---------------------------------------
Dennis A. Eckerdt, Secretary,
Treasurer and Director
Date: March 15, 1997
By: (Signature)
---------------------------------------
William C. Salisbury, President,
and Director
Date: March 15, 1997
PAGE 19
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS DECEMBER 31, 1996 (Unaudited), 1995 (Unaudited), and 1994 (Unaudited)
ASSETS
- ------
December 31, December 31, December 31,
1996 1995 1994
NOTES (Unaudited) (Unaudited) (Unaudited)
----- ----------- ----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 154,137 $ 3,974 $ 16,121
----------- ----------- ----------
Total current assets 154,137 3,974 16,121
----------- ----------- ----------
OTHER ASSETS:
Reclamation deposit 1 113,232
Other 102,700 101,358 55,841
----------- ----------- ---------
Total other assets 102,700 214,590 71,962
----------- ----------- ----------
TOTAL $ 256,837 $ 218,564 $ 71,962
=========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Trade accounts payable $ 53,979 $ 14,724
Deferred revenue 219,000
Other current liabilities 113,232 173,000
----------- ----------- ----------
Total current liabilities -0- 167,211 406,724
----------- ----------- ----------
ESTIMATED RECLAMATION COSTS 1
COMMITMENTS AND CONTINGENCIES 1
REDEEMABLE PREFERRED STOCK 3
PAGE 20
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS DECEMBER 31, 1996 (Unaudited), 1995, (Unaudited), and 1994 (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
December 31, December 31, December 31,
1996 1995 1994
NOTES (Unaudited) (Unaudited) (Unaudited)
----- ----------- ----------- -----------
STOCKHOLDERS' EQUITY: 3
Common stock (7,696,739
shares standing) 314,080 314,080 314,080
Additional paid-in capital 13,304,849 13,304,849 13,304,849
Retained earnings
(accumulated deficit) (12,732,965) (12,938,450) (13,324,545)
Less cost of common stock
held in treasury (629,126) (629,126) (629,126)
------------ ----------- -----------
Stockholders' equity (deficit) 256,837 51,353 (334,762)
------------ ----------- -----------
TOTAL $ 256,837 $ 218,564 $ 71,962
============ =========== ===========
See notes to financial statements.
PAGE 21
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (ACCUMULATED DEFICIT) FOR THE YEARS
ENDED DECEMBER 31, 1996 (Unaudited), 1995 (Unaudited), and 1994 (Unaudited)
Year Ended Year Ended Year Ended
December December December
31, 1996 31, 1995 31, 1994
NOTES (Unaudited) (Unaudited) (Unaudited)
----- ----------- ----------- -----------
REVENUE FROM DISCONTINUED
OPERATIONS:
Total revenues from
discontinued operations -0- -0- -0-
------------ ------------ ------------
DISCONTINUED EXPENSES:
General and administrative 96,936 67,786 208,701
Reclamation 1 80,984 182,180 668,146
Impairments and abandonments 1 4,200,000
------------ ------------ ------------
Total discontinued operating
expenses 177,920 249,966 5,076,847
OTHER INCOME (EXPENSE):
Reclamation Reimbursement 175,555 229,707
DEQ Interest income 9,624 4,374 178,833
Gain (loss) on sale of
investments and other 10,000 32,628
Interest expense (125,660)
Other Income 198,226 392,000
------------ ------------ ------------
NET INCOME (LOSS) 205,485 386,115 (4,991,046)
RETAINED EARNINGS
(Accumulated Deficit):
Beginning of period (12,938,450) (13,324,565) (8,333,519)
------------ ------------ ------------
End of period $(12,732,965) $(12,938,450) $(13,324,565)
============ ============ ============
NET LOSS BEFORE DISCONTINUED
OPERATION PER SHARE $ -0- $ -0- $ -0-
DISCONTINUED OPERATION PER SHARE $ 0.03 $ 0.05 $ (0.65)
------------ ------------ ------------
NET INCOME (LOSS) PER COMMON SHARE $ 0.03 $ 0.05 $ (0.65)
============ ============ ============
WEIGHTED-AVERAGE NUMBER OF
SHARES OUTSTANDING 1 7,696,739 7,696,739 7,696,739
============ ============ ============
See notes to financial statements.
PAGE 22
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1996 (Unaudited),
1995 (Unaudited), AND 1994 (Unaudited)
Year Year Year
Ended Ended Ended
December December December
31, 1996 31, 1995 31, 1994
(Unaudited) (Unaudited) (Unaudited)
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 205,485 $ 386,115 $(4,991,046)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Mining property impairment 4,200,000
Depreciation and amortization 6,544
Reclamation Expense 473,000
Decrease (increase) in Assets:
Reclamation deposit 113,232 (113,232) 3,011,871
Reclamation deposit income
receivable 3,392
Plant and Equipment (Net) 85,176
Other assets (1,343) (45,517) 20,560
Increase (decrease) in Liabilities:
Accrued interest payable (142,929)
Trade accounts payable (53,979) 39,255 6,918
Deferred revenue (219,000) 16,500
Other liabilities (113,232) (59,768)
Estimated reclamation costs ( 3,213,290)
----------- ----------- -----------
Net cash from operating
activities 150,163 (12,147) (523,304)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities (2,772,000)
Proceeds from sale or maturity of
investment securities 2,772,000
Additions to mining properties,
plant and equipment (688)
----------- ----------- -----------
Net cash flows from investing
activities -0- -0- (688)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds recorded from pending
foreclosure on mineral properties 2,297,811
Borrowing (payments to/from) stockholder (2,031,200)
Borrowings from others 173,000
Borrowing (payments on long-term debt) (63,800)
----------- ----------- -----------
(Continued on following page)
PAGE 23
Net cash flows from financing
activities -0- -0- 375,811
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 150,163 (12,147) (148,181)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,974 16,121 164,302
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD 154,137 $ 3,974 $ 16,121
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ -0- $ -0- $ 129,908
=========== =========== ===========
Issuance of stock for ESOP
contribution $ -0- $ -0- $ -0-
=========== =========== ===========
Issuance of stock for stock bonus $ -0- $ -0- $ -0-
=========== =========== ===========
See notes to financial statements.
PAGE 24
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1996
(Unaudited), 1995 (Unaudited), AND 1994 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liquidation Basis of Presentation
---------------------------------
The accompanying unaudited 1996, 1995 and 1994 financial statements
have been prepared on a liquidation basis, which recognized the
realization of assets and the satisfaction of a portion of the
liabilities during 1996, 1995 and 1994. The statements of operations and
retained earnings and cash flows for the years ended December 31, 1996,
1995 and 1994 are unaudited. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
As of December 31, 1996 the Company's current assets exceed current
liabilities by approximately $154,000. The Company's current assets are
reserved for site reclamation and mill site monitoring.
For financial reporting purposes the Company has offset its $219,000
contractual obligations towards uncompleted byproduct disposal contracts
and $173,000 obligation to third parties for payments they made to the
Wyoming DEQ upon the reclamation bond forfeiture. These liabilities
totaling $392,000 were recognized as income during 1995 because the
company has no way of repaying the obligations under liquidation basis
accounting. The remaining Company cash deposits are being utilized to
maintain compliance with the NRC license requirements as long as
possible.
Per Share Amounts
-----------------
Per share amounts are computed on the weighted-average number of
shares outstanding during the respective periods. Shares under option
and warrants have been disregarded because their effect is anti-dilutive.
Major Customer
----------------
The Company had no customers in 1996, 1995 and 1994.
Statement of Cash Flows
-----------------------
For purposes of the Statements of Cash Flows, the Company considers
all highly liquid debt instruments purchased with an original maturity of
three months or less to be cash equivalents.
PAGE 25
Reclamation of Mill Site and Tailings Ponds
-------------------------------------------
Liabilities for estimated reclamation costs are recognized and
charged to operations for remedial activities when the cleanup becomes
probable and the cost can be reasonable estimated. Based upon the
Company's determination that use in the future of its uranium processing
mill would not comply with the revised licensing requirements of the
Nuclear Regulatory Commission (NRC), the Company began demolition of the
mill in 1988 and completed that work in 1989. Since then the Company has
undertaken substantial reclamation work on the mill site as required by
the NRC and the Wyoming Department of Environmental Quality (DEQ). The
mill and associated buildings have been dismantled and the building
materials buried in one of the two adjacent tailings ponds where the
processed ores produced by the mill (mill tailings) were impounded after
milling. The mill tailings in the two impoundments have been graded by
earth moving equipment into mounds covering approximately 40 and 80 acres
respectively. A cover of native earth has been placed over the mounds of
mill tailings, and the tailings piles are being allowed to settle and
compact naturally. The remaining reclamation work consists of filling
and shaping the side slopes of the tailings piles to such a grade as to
preclude soil erosion and exposure of the tailings, placing a final cover
of earth over the tailings to limit emission of radon gas into the
atmosphere to meet Environmental Protection Agency (EPA) standards,
applying erosion protection to the piles and associated drainages, and
revegetating and fencing the site.
When the Company discontinued business operations, the DEQ began
reclamation bond forfeiture proceedings against the Company. These
proceedings resulted in bond forfeiture in October 1994. The reclamation
of the mill site will now be performed by the DEQ to the extent of the
available funds. The Company continues to be responsible for all NRC
license requirements until such time as the license is terminated or
transferred to another responsible entity by the NRC. The state of
Wyoming has indicated that it will not assume the NRC license, but will
consent to certain reclamation obligations. By statute the DEQ may
recover reclamation costs in excess of the bonded amount from the
Company. The total reclamation cost will not be known for several years
but the State has notified the Company that a potential $3 million cost
overrun may exist and the Company remains liable for any costs in excess
of the reclamation deposit.
2. INCOME TAXES.
The Company adopted Statement 109, Accounting for Income Taxes, as
of January 1, 1993. There was no cumulative effect of this change in
accounting for income taxes. Prior years' financial statements have not
been restated to apply the provisions of Statement 109.
At December 31, 1996 the Company had approximately $20.0 million of
net operating loss carryovers which expire during 1997 through 2009. The
Company also has investment tax and new jobs credit carryovers of
approximately $40,000 and $200,000, respectively, which are available to
be offset against future income taxes through 1999. The future
utilization of both net operating loss and credit carry-overs are subject
to rules and regulations of the internal revenue service that could be
significant.
PAGE 26
3. STOCKHOLDERS' EQUITY
The Company has authorized 25,000,000 shares of $.04 par value
common stock. Changes in common stock issued and outstanding during the
years ended December 31, 1994, 1995 and 1996 were as follows:
Common Stock
-----------------------------------------
Held in
Issued Treasury (at cost) Additional
------------------- ------------------- Paid-in
Shares Amount Shares Amount Capital
--------- -------- ------- --------- -----------
Balance, December 31, 1994 7,852,183 $314,080 155,444 $(629,126) $13,304,849
--------- -------- ------- --------- -----------
Balance, December 31, 1995 7,852,183 $314,080 155,444 $(629,126) $13,304,849
--------- -------- ------- --------- -----------
Balance, December 31, 1996 7,852,183 $314,080 155,444 $(629,126) $13,304,849
========= ======== ======== ========= ===========
Redeemable Preferred Stock
--------------------------
The Company has authorized 15,000,000 shares of $1 par value Series
A preferred stock with a liquidation value of $10.00 per share. There
were no outstanding preferred shares during the periods ended December
31, 1996, 1995 and 1994.
Stock Warrants
-------------
The Company had warrants outstanding for the purchase of 49,020
shares of common stock, exercisable at $0.875 per share, which expired on
August 26, 1995.
Employee Stock Ownership Plan
------------------------------
The Company had an Employee Stock Ownership Plan (ESOP) for the
benefit of its employees. Contributions to the Plan were made at the
Company's discretion. On March 6, 1992 the Board of Directors resolved
to terminate the ESOP and replace it with a money purchase plan. The
money purchase plan received approval by a vote of the shareholders on
June 17, 1992. During the year ended December 31, 1992, the Company made
contributions to the Plan of 5,272 shares of the Company's common stock.
At December 31, 1994 the Plan held 4,235 shares of the Company's common
stock for the account of prior participating employees that cannot be
located. On December 31, 1996, 1995 and 1994 the common stock had
relatively no market value.
PAGE 27
Non-qualified Stock Options
---------------------------
There were no options exercised during the three years ended
December 31, 1996 and there were no outstanding options under this Plan
at December 31,1996.
1992 Incentive Stock Option Plan
--------------------------------
As of December 31,1996 there were no stock options outstanding under
the 1992 Incentive Stock Option Plan.
1992 Stock Option Plan In Lieu of Directors Fees
------------------------------------------------
This plan was terminated by the Board of Directors on January 13,
1994 because the extremely low price of the Company's common stock
resulting in the granting of options in amounts which were considered
excessive by the Board of Directors.
Money Purchase Pension Plan
---------------------------
During 1992 the Company adopted a Money Purchase Pension Plan
(herein "Plan"), with a plan year ending each December 31, whereby the
Company contributed to all participants. The Company accrued
contributions of $11,705, for 1994. The Money Purchase Pension Plan was
terminated in 1994 upon termination of all of the Company's employees.
Employment Agreements
---------------------
The Company had no employment contracts with any employees at
December 31, 1996.