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, 1997
( ) 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 83-0178457
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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
This report consists of 9 pages including one page constituting the cover
page.
PAGE
PAGE 2
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATION
FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND MARCH 31, 1996
(UNAUDITED)
Three Months Ended
March 31
1997 1996
------ ------
NET LOSS BEFORE DISCONTINUED
OPERATIONS $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Reclamation Reimbursement 21,048 -0-
---------- ----------
Total revenue from
discontinued operations 21,048 -0-
DISCONTINUED EXPENSES
General and administrative 12,806 7,249
Reclamation expense 8,086 18,119
Interest income -0- <779>
---------- ----------
Total discontinued expenses 20,892 24,589
NET INCOME (LOSS) $ 156 $ <24,589>
PER SHARE:
NET PROFIT (LOSS) BEFORE
DISCONTINUED OPERATIONS PER
SHARE $ 0.00 $ <0.00>
DISCONTINUED OPERATIONS PER
SHARE NET PROFIT (LOSS) $ 0.00 $ <0.00>
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,696,739 7,696,739
DIVIDENDS PER SHARE $ 0.00 $ 0.00
PAGE 3
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
March 31, 1997 and December 31, 1996
March 31, Dec. 31,
1997 1996
(Unaudited) (Unaudited)
-------------- ---------------
ASSETS
Current assets:
Cash $ 140,086 $ 154,138
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Total current assets $ 140,086 $ 154,138
Other assets:
Other 116,906 102,700
----------- ------------
Total other assets 116,903 102,700
Total assets $ 256,992 $ 256,838
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable -0- -0-
Other current liabilities -0- -0-
----------- ------------
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 <12,732,965> <12,732,965>
Less cost of treasury stock <629,126> <629,126>
----------- ------------
Common stockholders' equity 256,992 256,838
Total liabilities and stockholders'
equity $ 256,992 $ 256,838
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/TABLE
PAGE
PAGE 4
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED March 31, 1997 AND 1996
(UNAUDITED)
Three Months Ended
September 30
1997 1996
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Cash flows from discontinued operations:
Net loss $ 156 $ <24,589>
Adjustments to reconcile net loss to net
cash used by operating activities:
(Increase) Decrease in other assets <14,206> 26,204
----------- -----------
Total adjustments <14,050> 26,204
----------- -----------
Net cash used in operating activities <14,050> 1,615
Net increase (decrease) in cash during the
period <14,050> 1,615
Cash at the beginning of the period 154,136 3,974
Cash at the end of the period $ 140,086 $ 5,589
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/TABLE
PAGE
PAGE 5
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
(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 $140,086 and $154,138 at March
31, 1997 and December 31, 1996 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
reclamation site. The Company expects to be able to continue in
compliance with the licensing requirements through 1999.
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 declined to assume the NRC
license, but has consented to perform certain reclamation obligations.
The reclamation requirements have changed since the bond forfeiture, and
the cash requirements have increased by an undetermined amount with a
potential $3 million cost overrun. 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
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 intends to monitor its reclamation site for as
long as possible in order to comply with requirements of its license.
PAGE
PAGE 6
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, 1996. 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 is 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 a portion of its current
liabilities and other expenses associated with an orderly closing of
business operations.
PAGE
PAGE 7
Marketability of Common Stock on NASDAQ Small Cap Market
Effective May 9, 1994 the Company's common stock was removed from
listing on the NASDAQ Small Cap Market. There are no trading markets for
the Company's common stock.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company discontinued operations during May 1994. There were no
operating revenues or operating losses reported during the first quarters
of 1997 or 1996. See the "Discontinuance of Operations" and the
"Liquidation and Capital Resources" sections regarding additional
information about the Company's cessation of operations.
General and administrative expenses were $12,806 and $7,249 for the
three months ended March 31, 1997 and 1996. This represents an increase
of 77% for the three months ended March 31, 1997 from the comparable 1996
period. The increase was due to the increased activity between the
Company, the NRC and Wyoming DEQ.
Reclamation expenses of $8,086 and $18,119 for the three months
ended March 30, 1997 and 1996 were recognized because of the continuing
reclamation obligations of the Company. These costs represent the
ongoing costs of monitoring the Company's mill site, which is undergoing
reclamation.
There was no interest income for the first quarter of 1997 compared
to the three month period ending 1996. This decrease is due to the
forfeiture of the certificates of deposit in the Company's reclamation
deposit held by the Wyoming Department of Environmental Quality.
A net profit of $156 was recognized during the first quarter of 1997
compared to a $24,589 loss for the same period in 1996. The losses are
expected to remain in the range of $25,000 per quarter as long as the
Company continues to receive some of the reclamation reimbursements for
continued monitoring of the reclamation site.
Liquidity and Capital Resources
The Company's working capital at March 31, 1997 was $140,086, while
at December 31, 1996 it was $154,138. The decrease in working capital at
March 31, 1997 was due to ongoing minimal operations.
PAGE
PAGE 8
During May 1994, the Company discontinued operations because of its
lack of funds. Before that decision was made, the Company used its best
efforts to obtain additional loans, raise equity funds through a proposed
private placement of its common stock, secure byproduct disposal
contracts, or sell its mineral properties. None of these efforts were
successful. Contingent reclamation liabilities exceed assets, and
therefore, there will be no shareholder distributions. These financial
statements are prepared on the basis that the mineral properties were
foreclosed when the Company did not pay the mortgage due June 30, 1994.
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 may not 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 U.S. Department of
Energy (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 $229,000 from this
program during the last quarter of 1995 and approximately $176,000 during
the third quarter of 1996. If Congress continues funding this Title X
program, of which there is no assurance, the Company may receive
additional DOE reimbursements during 1997. 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 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 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 toward
monitoring of the mill site in accordance with the NRC reclamation plan.
PAGE
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)
May 12, 1997 By: -----------------------------------
William C. Salisbury
President
(signature)
May 12, 1997 By: -----------------------------------
Dennis A. Eckerdt
Secretary and Treasurer