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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 QUARTER ENDED DECEMBER 31, 1999
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. 0-15474
AMERALIA, INC.
-------------------------------------------------
(Exact name of Company as specified in its charter)
A Utah Corporation
I.R.S. Employer Identification No. 87-0403973
311 RALEIGH ROAD, KENILWORTH, IL 60043
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(Address of Principal Executive Offices)
(847) 256 9021
--------------------------------
(Company's telephone number, including area code)
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.
As of February 1, 2000 the number of shares outstanding of the company's $.01
par value common stock was 8,059,066 and the number of shares of $.05 par value
preference stock was 2,986.
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AMERALIA, INC.
INDEX TO FORM 10-Q
Page
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Balance Sheets - December 31, 1999 and June 30, 1999 1
Statements of Operations for the Quarters and Half Years
ending December 31, 1999 & 1998 and from the beginning of
Development Stage on July 1,1992 to December 31, 1999 3
Statements of Cash Flows for the Half Years ending December
31, 1999 & 1998 and from the beginning of Development Stage on
July 1, 1992 to December 31, 1999 4
Notes to Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations. 7
PART II: OTHER INFORMATION
Item 2: Changes in Securities 8
SIGNATURE 9
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AMERALIA INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31 June 30
1999 1999
--------- --------
ASSETS
Current Assets:
Cash at bank $ 36,862 $ 312,104
Restricted cash 90,863 991,305
Prepaid expenses 75,516 30,082
Interest receivable 2,013 1,167
Related party receivables 88,008 43,008
----------- -----------
Total Current Assets: $ 293,262 $ 1,377,666
Fixed Assets $ 21,884 $ 24,202
Other Assets:
Lease acquisition and exploration costs $ 3,023,287 $ 3,023,287
Plant construction 6,692,335 1,250,000
Deferred financing costs 538,706 110,000
Note receivable - related party 20,000 25,000
Deposits 25,906 25,906
----------- -----------
Total Assets: $10,615,380 $ 5,836,061
=========== ===========
(Continued over page)
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AMERALIA INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31 June 30
1999 1999
----------- ----------
LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Accounts payable $ 973,059 $ 232,017
Royalties payable 316,667 279,167
Bank overdraft -- 5,702
Accrued expenses 14,392 88,219
Due to related parties 33,137 9,333
Notes payable - current portion 4,504,000 4,000
Interest payable 20,720 1,290
---------- ----------
Total current liabilities $5,861,975 $ 619,728
Long term liabilities -- --
---------- ----------
Total liabilities $5,861,975 $ 619,728
---------- ----------
Commitments and contingent liabilities -- 303,800
SHAREHOLDERS' EQUITY
Preferred stock, $0.05 par value; 1,000,000 authorized; 2,986
issued at December 31 and June 30, 1999: 149 149
Common stock, $.01 par value; 100,000,000 shares authorized;
Issued at Dec 31, 1999: 8,059,066 and at June 30, 1999: 7,659,766: 80,591 76,598
Subscriptions receivable 450,000 --
Additional paid in capital 17,316,103 16,545,797
Accumulated deficit (13,093,438) (11,710,011)
------------ ------------
Total Shareholders' Funds: $ 4,753,405 $ 4,912,533
------------ ------------
Total Liabilities & Shareholders' Equity: $ 10,615,380 $ 5,836,061
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AMERALIA INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
From the
Beginning of
Development
Qtr Qtr Half yr Half yr Stage on
ending ending ending ending Jul 1, 1992 to
Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
1999 1998 1999 1998 1999
----------- ----------- ------------ ----------- -----------
REVENUES $ -- $ -- $ -- $ -- $ --
EXPENSES
General & administrative 572,917 294,870 1,158,890 454,554 7,225,002
Depreciation & amortization 2,517 1,089 5,180 3,246 75,150
----------- ----------- ------------ ----------- -----------
Total Expenses: $ 575,434 $ 295,959 $ 1,164,070 $ 457,800 7,300,152
----------- ----------- ------------ ----------- -----------
(LOSS) FROM OPERATIONS $ (575,434) $ (295,959) $ (1,164,070) $ (457,800) $(7,300,152)
----------- ----------- ------------ ----------- -----------
OTHER INCOME (EXPENSE)
Other income -- -- -- -- 29
Investment income -- -- -- -- 89,760
Interest income 23,019 1,133 37,822 8,107 317,338
Interest expense (93,182) (4,666) (107,880) (13,268) (744,928)
Foreign currency gain (loss) -- 10,192 -- 10,204 (63,572)
----------- ----------- ------------ ----------- -----------
Total other income (expense) (70,163) 6,659 (70,058) 5,043 (401,373)
----------- ----------- ------------ ----------- -----------
NET LOSS BEFORE
INCOME TAX EXPENSE $ (645,597) $ (289,300) $ (1,234,128) $ (452,757) $(7,701,525)
----------- ----------- ------------ ----------- -----------
Income tax expense -- -- -- -- --
----------- ----------- ------------ ----------- -----------
NET LOSS $ (645,597) $ (289,300) $ (1,234,128) $ (452,757) $(7,701,525)
----------- ----------- ------------ ----------- -----------
BASIC NET LOSS PER SHARE $ (0.080) $ (0.049) $ (0.157) $ (0.078)
DILUTED NET LOSS PER SHARE $ (0.058) $ (0.034) $ (0.114) $ (0.057)
WEIGHTED AVERAGE
SHARES OUTSTANDING (`000) 8,059 5,947 7,860 5,825
FULLY DILUTED AVERAGE
SHARES OUTSTANDING (`000) 11,045 8,580 10,846 7,970
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AMERALIA INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
From the
Beginning of
Development
Half yr Half yr Stage on
ending ending Jul 1, 1992 to
Dec 31 Dec 31 Dec 31
1999 1998 1999
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($1,234,128) ($ 452,757) ($7,701,525)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Bad debt -- -- 624,798
Stock issued for services rendered -- -- 65,000
Depreciation & amortisation 136,013 3,246 215,561
Exchange (gain) loss (10,204) (168,556)
Change in Operating Assets and Liabilities:
(Increase) Decrease in:
Prepayments -- -- 18,000
Notes receivable -- -- 1,300,497
Restricted cash 900,442 -- (90,863)
Accounts & interest receivable (846) -- (1,348)
Related parties receivables (45,000) (2,886) (88,008)
Prepaid expenses (45,434) (78,150) (75,516)
Deposits -- -- (25,906)
Other assets (109,539) -- (219,539)
Increase (decrease) in:
Bank overdraft (5,702) -- --
Due to related parties 23,804 22,972 (48,165)
Accounts payable and royalties payable 474,742 (21,527) 1,227,122
Accrued expenses (73,827) -- (53,991)
Royalties payable 37,500 279,167
Interest payable 19,430 430 (98,346)
----------- ----------- -----------
Cash flows from operating activities 39,955 (501,376) (5,120,785)
CASH FLOWS FROM INVESTING ACTIVITIES
Lease exploration & development expenditure -- (135,000) (2,177,890)
Plant construction (5,442,335) -- (6,692,335)
Purchase of property & equipment (2,862) (10,828) (94,391)
Cash paid on note receivable - related 5,000 -- (20,000)
Liquidation of RIT investment -- -- 418,346
Cash received from notes receivable -- -- (144,853)
----------- ----------- -----------
Cash flows from investing activities (5,440,197) (145,828) (8,711,123)
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AMERALIA INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
From the
Beginning of
Development
Half yr Half yr Stage on
ending ending Jul 1, 1992 to
Dec 31 Dec 31 Dec 31
1998 1998 1998
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from issuance of stock $ 625,000 $ 1,068,216 $ 8,916,596
Additional capital contributed -- -- 307,372
Cash received from notes 4,500,000 -- 5,257,222
Payments on notes -- (2,193) (612,658)
----------- ----------- -----------
Cash flows from financing activities 5,125,000 1,041,023 13,868,532
NET INCREASE (DECREASE) IN CASH (275,242) 393,819 36,624
Cash and cash equivalents at beginning of period 312,104 707,199 238
----------- ----------- -----------
Cash and cash equivalents at end of period $ 36,862 $ 1,101,018 $ 36,862
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Income taxes $ -- $ -- $ --
Interest $ 88,450 $ 12,838 $ 367,823
NON CASH FINANCING ACTIVITIES
Common stock issued for payment of obligations $ -- $ 223,750 $ 608,781
Common stock issued for services rendered $ -- $ -- $ 65,000
Payment of preferred stock dividends through
the issuance of additional common and preferred stock $ 149,300 $ 134,565 $ 1,294,113
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AMERALIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
As at December 31 and June 30, 1999
and for the Periods ended December 31, 1999 and 1998
NOTE 1. MANAGEMENT ADJUSTMENTS
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements should be
read in conjunction with AmerAlia's June 30, 1999 Annual Report on Form 10-K.
The results of operations for the periods ended December 31, 1999 and 1998 are
not necessarily indicative of operating results for the full years.
The Financial Statements and other information furnished herein reflect
all adjustments which are, in the opinion of AmerAlia's management, necessary
for a fair presentation of the results of the interim periods covered by this
report.
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AMERALIA, INC.
(A DEVELOPMENT STAGE COMPANY)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The future conduct of AmerAlia is dependent upon a number of factors
and there is no assurance that AmerAlia will be able to conduct its operations
as contemplated in this report. Certain statements contained in this report
using the terms `may', `expects to', and other terms denoting future
possibilities, are forward-looking statements. The accuracy of these statements
cannot be guaranteed as they are subject to a variety of risks which are beyond
AmerAlia's ability to predict or control. These risks can cause actual results
to differ materially from the projections or estimates contained in this report.
These risks include, but are not limited to, the possibility that the described
operations, reserves, or exploration or production activities will not be
completed on economic terms, if at all, as well as our significant working
capital deficit at December 31, 1999 and other risks described below and in our
annual report on Form 10-K for the year ended June 30, 1999. The exploration,
development and mining of mineral properties is an enterprise attendant with
high risk. Many of these risks are described in this report and it is important
that each person reviewing this report understands the significant risks which
accompany the establishment of AmerAlia's proposed operations.
Liquidity and Capital Resources
AmerAlia does not generate any operating income and, therefore,
continues to rely on raising capital from its existing shareholders and from
private offerings of its securities. During the six months to December 31, 1999
we borrowed $4.2 million from a commercial bank and $300,000 from an
unaffiliated investor; and raised $625,000 from the sale of common stock for
cash to accredited investors. Since December we have borrowed a further $1
million from the commercial bank and raised a further $250,000 from the sale of
common stock to an accredited investor. The commercial bank loans are guaranteed
by AmerAlia's principal shareholder as explained in our current filing on Form
10K at Item 13(a) - "Certain Relationships and Related Party Transactions".
Additional funding of $475,000 was derived through an increase in accounts and
royalties payable. A contingent liability disclosed in the company's accounts at
June 30, 1999 for $303,800 as a result of a dispute with a contractor was
settled in January 2000 for $250,000 and the liability at December 31, 1999 was
adjusted to the settlement amount.
At December 31, 1999, AmerAlia had a working capital deficit of more
than $5,568,000, and also has an intention to complete the construction of its
processing plant near Rifle, Colorado, under the Design/Build Agreement with US
Filter for a fixed price of $33.2 million. AmerAlia has been able to pay its
current liabilities as they have become due through financing provided by
accredited investors, and by extending the maturity date of certain obligations.
When the Company achieves permanent financing acceptable to US Filter, US Filter
will advance the funds necessary to complete the construction of the plant.
AmerAlia is continuing negotiations with a financing source for the necessary
permanent financing, but approval of the permanent financing has not been
granted. Although there can be no assurance that it will be able to do so,
AmerAlia will continue to attempt to meet its current obligations through funds
made available to it by shareholders and other accredited investors.
Under its Design/Build Agreement with US Filter, funding has been held
in an Escrow account. This funding has now been paid to US Filter to progress
the design and construction of the facilities proposed for the Rock School
Lease. A total of $5.1 million has been paid to US Filter in the six months to
December 31, 1999 and a further $300,000 expended in the drilling of holes on
the lease. In addition, the Bureau of Land Management has now issued the
necessary permits to enable construction on the lease to proceed. The
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costs of obtaining these permits have been written off in the company's
accounts. Funding has also been applied to sustaining the operating loss for the
period, an increase of $45,000 in related party receivables and $45,000 in
prepaid expenses. Accrued expenses have been reduced by $74,000. The company has
incurred costs in establishing its debt facilities as discussed above. Of these
costs, $450,000 will be satisfied by the issuance of shares based on a formula
related to the company's share price. This liability is recorded as
Subscriptions Receivable in the Company's accounts.
Results of Operations
The Company's net loss for the quarter was $645,600 compared with
$289,300 for the same period of the previous year. For the half year the loss
was $1,234,000 compared with $452,760 for the prior period. The increase is due
to higher staffing, consultant and travelling costs which can be expected to
continue as the company increases its efforts to fund and develop its operating
facilities as discussed above. However, as the level of debt carried by the
company has increased significantly, interest expense has increased to $93,200
for the December quarter ($108,000 for the half year).
Impact of Inflation
The Company believes that its activities are not materially affected by
inflation.
PART II: OTHER INFORMATION
Item 2: Changes in Securities
From September 30, 1999 through December 31, 1999 there were no changes
in securities.
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SIGNATURE
Pursuant to the requirements 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.
AMERALIA, INC.
February 18, 1999 By: /s/ Robert van Mourik
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Robert van Mourik
Executive Vice President, Chief Financial Officer
and principal financial and accounting officer.
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EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule